Notices. Final rule; correcting amendments

79,907 words·~363 min read·/register/2006/12/13/06-9674

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BILLING CODE 4160-01-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 51, 96, and 97 [EPA-HQ-OAR-2004-0076; FRL-8254-7] RIN 2060-AM99 Clean Air Interstate Rule

(CAIR)and Federal Implementation Plans for CAIR; Corrections AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule; correcting amendments. SUMMARY: In this rule, EPA is making minor corrections to the Clean Air Interstate Rule

(CAIR)and the Federal Implementation Plans

(FIPs)for the CAIR to clarify text that may potentially be misleading. This corrections rule does not change any of CAIR or CAIR FIPs rule requirements or substantively change the rules in any way. DATES: *Effective Date:* These correcting amendments are effective on December 13, 2006. ADDRESSES: The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2004-0076. Documents related to the CAIR are available in the rulemaking docket under Docket ID No. EPA-HQ-OAR-2003-0053; documents related to the CAIR FIPs are available in the rulemaking docket under Docket ID No. EPA-HQ-OAR-2004-0076. All documents in the dockets are listed on the *http://www.regulations.gov* Web site. Although listed in the indexes, some information is not publicly available, *e.g.* , CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the EPA Docket Center (Air Docket), EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744. Note: The EPA Docket Center suffered damage due to flooding during the last week of June 2006. The Docket Center is continuing to operate. However, during the cleanup, there will be temporary changes to Docket Center telephone numbers, addresses, and hours of operation for people who wish to visit the Public Reading Room to view documents. Consult EPA's **Federal Register** notice at 71 FR 38147 (July 5, 2006) or the EPA Web site at *http://www.epa.gov/epahome/dockets.htm* for current information on docket status, locations and telephone numbers. FOR FURTHER INFORMATION CONTACT: Carla Oldham, U.S. EPA, Office of Air Quality Planning and Standards, Air Quality Policy Division, C539-04, Research Triangle Park, NC 27711; telephone number

(919)541-3347, e-mail address: *oldham.carla@epa.gov.* SUPPLEMENTARY INFORMATION: I. Background On May 12, 2005, EPA published the Clean Air Interstate Rule

(CAIR)in a final rule entitled, “Rule to Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to NO X SIP Call” (70 FR 25162). On April 28, 2006, EPA published Federal Implementation Plans for the CAIR as part of a final rule entitled, “Rulemaking on Section 126 Petition From North Carolina to Reduce Interstate Transport of Fine Particulate Matter and Ozone; Federal Implementation Plans To Reduce Interstate Transport of Fine Particulate Matter and Ozone; Revisions to the Clean Air Interstate Rule; Revisions to the Acid Rain Program” (71 FR 25328). The CAIR requires States to reduce emissions of nitrogen oxides and sulfur dioxide that contribute significantly to nonattainment and maintenance problems in downwind States with respect to the national ambient air quality standards for fine particulate matter (PM 2.5 ) and 8-hour ozone. The CAIR FIPs ensure that the emissions reductions required by the CAIR are achieved on schedule. As the control strategy for the FIPs, EPA adopted the model cap-and-trade programs for power plants that EPA provided in the CAIR as a control option for States, with minor changes to account for Federal, rather than State, implementation. The EPA will withdraw the FIP for any State once that State's own State implementation plan for meeting the CAIR requirements is fully approved. For a detailed description of the CAIR and CAIR FIPs, please see the rulemaking actions which are available on EPA's Web site at *http://www.epa.gov/cair* and in the **Federal Register** at and 70 FR 25162; May 12, 2005 and 71 FR 25328; April 28, 2006. II. Why Are the Corrections Needed? The CAIR and CAIR FIP contain minor errors that may prove to be misleading and are in need of clarification. As itemized in the regulatory text below, this corrections rule corrects typographical errors, makes minor word corrections, and corrects or provides more specificity in references to other paragraphs or sections within the regulatory text. It does not make any substantive changes to the CAIR or CAIR FIPs or change any of the rule requirements. III. What Is the Rulemaking Procedure? The EPA is issuing this final rule without prior proposal or the opportunity for public comment. Section 553 of the Administrative Procedure Act (APA), 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 public interest, the Agency may issue a rule without providing notice and an opportunity to comment. The EPA has determined that there is good cause for making this action final without prior proposal or opportunity to comment because the changes to the CAIR and CAIR FIPS correct minor, nonsubstantive errors, are noncontroversial, and are consistent with the technical basis for the rules. Thus, notice and public procedure are not necessary. The EPA finds this constitutes good cause under 5 U.S.C. 553(b)(B). (See also the final sentence of section 307(d)(1) of the Clean Air Act (CAA), indicating that the good cause provisions of the APA continue to apply to rulemaking under section 307(d) of the CAA.) Section 553(d)(3) allows an agency, upon a finding of good cause, to make a rule effective immediately. Because this action corrects errors and helps to clarify requirements in the underlying rules, EPA finds good cause to make these corrections effective immediately. IV. Statutory and Executive Order Reviews Under Executive Order 12866, Regulatory Planning and Review (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget. This action is not a “major rule” as defined by 5 U.S.C. 804(2). The corrections do not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Because EPA has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the APA or any other statute, 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. 104B4). 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 the UMRA. The corrections do not have substantial direct effects on the States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, Federalism (64 FR 43255, August 10, 1999). This action also does not significantly or uniquely affect the communities of Tribal governments, as specified in Executive Order 13175, Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000). The corrections also are not subject to Executive Order 13045, Protection of Children from Environmental Health and Safety Risks (62 FR 19885, April 23, 1997) because this action is not economically significant. The corrections are not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) because this action is not a significant regulatory action under Executive Order 12866. The corrections do not involve changes to technical standards related to test methods or monitoring methods; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272) do not apply. The corrections also do not involve special consideration of environmental justice-related issues as required by Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994). The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 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. The EPA will submit a report containing this final action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the U.S. prior to publication of this action in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). The final rule will be effective on December 13, 2006. The EPA's compliance with the above statutes and Executive Orders for the underlying rules are discussed in Section X of the CAIR at 70 FR 25305 and in Section IX of the CAIR FIPs at 71 FR 25365. List of Subjects 40 CFR Part 51 Environmental protection. Administrative practice and procedure, Air pollution control, Electric utilities, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide. 40 CFR Parts 96 and 97 Environmental protection. Administrative practice and procedure, Air pollution control, Electric utilities, intergovernmental relations, Nitrogen oxides, Reporting and recordkeeping requirements, Sulfur dioxide. Dated: December 7, 2006. Stephen L. Johnson, Administrator. For the reasons set forth in the preamble, parts 51, 96, and 97, of title 40, chapter I of the Code of Federal Regulations are amended as follows: PART 51—[AMENDED] 1. The authority citation for part 51 continues to read as follows: Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q. § 51.123 [Amended] 2. Section 51.123 is amended as follows: a. In paragraph (p)(1)(ii)(C)(2), by revising the words “in (97.143” to read “in § 97.143”; b. In paragraphs (q)(1)(iii)(B) and (q)(3), by revising the words “paragraph (e)(2)” to read “paragraph (q)(2)”; and c. In paragraph

(cc)in the definition of “Useful thermal energy”, by revising in paragraph

(2)the words “heat” to read “heating”. § 51.124 [Amended] 3. Section 51.124 is amended, in paragraph

(q)in the definition of “Useful thermal energy”, by revising in paragraph

(2)the words “heat” to read “heating”. PART 96—[Amended] 4. The authority citation for part 96 continues to read as follows: Authority: 42 U.S.C. 7401, 7403, 7410, 7601, and 7651, *et seq.* § 96.102 [Amended] 5. Section 96.102 is amended as follows: a. In the definition of “CAIR NO X Annual Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(o)(1) or (2)”; b. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(aa)(1) or

(2)(and (bb)(1)), (bb)(2), or (dd)”; and c. In the definition of “CAIR SO 2 Trading Program”, by revising the words “§ 51.124” to read “§ 51.124(o)(1) or (2)”. § 96.105 [Amended] 6. Section 96.105 is amended, in paragraph (a)(1), by revising the words “(subparts BB and EE” to read “subparts BB and EE”. § 96.115 [Amended] 7. Section 96.115 is amended, in paragraph

(c)introductory text, by revising the words “Administrator that” to read “Administrator, that”. 8. The heading for § 96.120 is amended to read as follows: § 96.120 General CAIR NO X Annual Trading Program permit requirements. § 96.143 [Amended] 9. Section 96.143 is amended, in paragraph

(c)introductory text and paragraph (c)(2) introductory text, by revising the words “CAIR NO X emissions” to read “the CAIR NO X emissions”. § 96.151 [Amended] 10. Section 96.151 is amended, in paragraph (b)(2) introductory text and paragraph (b)(4) introductory text, by revising the words “representative or alternate” to read “representative and alternate”. § 96.184 [Amended] 11. Section 96.184 is amended, in paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”. § 96.187 [Amended] 12. Section 96.187 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR NO X unit that” to read “CAIR NO X opt-in unit that”. § 96.202 [Amended] 13. Section 96.202 is amended as follows: a. In the definition of “Alternate CAIR designated representative”, by revising the words “source in accordance” to read “source, in accordance”. b. In the definition of “CAIR NO X Annual Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(o)(1) or (2)”; c. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(aa)(1) or

(2)(and (bb)(1)), (bb)(2), or (dd)”; d. In the definition of “CAIR SO 2 allowance” in paragraph (4), by revising the words “(Program, provisions” to read “Program, provisions”. e. In the definition of “CAIR SO 2 Trading Program”, by revising the words “§ 51.124” to read “§ 51.124(o)(1) or (2)”. § 96.206 [Amended] 14. Section 96.206 is amended, in paragraph (c)(4), by revising the words “subparts FFF and GGG” to read “subparts FFF, GGG, and III”. § 96.215 [Amended] 15. Section 96.215 is amended, in paragraph

(c)introductory text, by revising the words “Administrator that” to read “Administrator, that”. § 96.251 [Amended] 16. Section 96.251 is amended, in paragraph (b)(2) introductory text and paragraph (b)(4) introductory text, by revising the words “ *representative or alternate* ” to read “ *representative and alternate* ”. § 96.254 [Amended] 17. Section 96.254 is amended, in paragraph (e), by revising the words “of this section) and” to read “of this section and”. § 96.271 [Amended] 18. Section 96.271 is amended, in paragraph (d)(2), by revising the words “include: Replacement” to read “include: replacement”. § 96.284 [Amended] 19. Section 96.284 is amended, in paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”. § 96.287 [Amended] 20. Section 96.287 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR SO 2 unit that” to read “CAIR SO 2 opt-in unit that”. § 96.302 [Amended] 21. Section 96.302 is amended as follows: a. In the definition of “Alternate CAIR designated representative”, by revising the words “source in accordance” to read “source, in accordance”. b. In the definition of “CAIR NO X Annual Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(o)(1) or (2)”; c. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the words “§ 51.123” to read “§ 51.123(aa)(1) or

(2)(and (bb)(1)), (bb)(2), or (dd)”; d. In the definition of “CAIR SO 2 Trading Program”, by revising the words “§ 51.124” to read “§ 51.124(o)(1) or (2)”. e. In the definition of “Commence commercial operation” in paragraph (1)(i), by revising the word “97.304” to read “96.304”. § 96.304 [Amended] 22. Section 96.304 is amended, in paragraph (a)(1), by revising the words “part: Any” to read “part: any”. § 96.342 [Amended] 23. Section 96.342 is amended, in paragraph (c)(2), by revising the words “NO X allowances” to read “NO X Ozone Season allowances” and by revising the words “February 1 of” to read “February 1 before”. § 96.351 [Amended] 24. Section 96.351 is amended, in paragraph (b)(2) introductory text and paragraph (b)(4) introductory text, by revising the words “ *representative or alternate* ” to read “ *representative and alternate* ”. § 96.371 [Amended] 25. Section 96.371 is amended, in paragraph (d)(2), by revising the words “include: Replacement” to read “include: replacement”. § 96.384 [Amended] 26. Section 96.384 is amended, in paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”. § 96.387 [Amended] 27. Section 96.387 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR NO X Ozone Season unit that” to read “CAIR NO X Ozone Season opt-in unit that”. PART 97—[AMENDED] 28. The authority citation for part 97 continues to read as follows: Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 7651, *et seq.* § 97.102 [Amended] 29. Section 97.102 is amended as follows: a. In the definition of “Alternate CAIR designated representative”, by revising the words “source in accordance” to read “source, in accordance”; and b. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the words “accordance with under subparts AAAA through IIII” to read “accordance with subparts AAAA through IIII of part 96”. § 97.113 [Amended] 30. Section 97.113 is amended, in paragraph (a)(4)(iv), by revising the words “(Where there are” to read “Where there are”. § 97.143 [Amended] 31. Section 97.143 is amended, in paragraph

(c)introductory text and paragraph (c)(2) introductory text, by revising the words “CAIR NO X emissions” to read “the CAIR NO X emissions”. § 97.144 [Amended] 32. Section 97.144 is amended, in paragraph (c)(2), by revising the words “State(s compliance” to read “State's compliance”. § 97.184 [Amended] 33. Section 97.184 is amended, in paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”. § 97.187 [Amended] 34. Section 97.187 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR NO X unit that” to read “CAIR NO X opt-in unit that”. § 97.202 [Amended] 35. Section 97.202 is amended as follows: a. In the definition of “Alternate CAIR designated representative”, by revising the words “source in accordance” to read “source, in accordance”; b. In the definition of “CAIR NO X Annual Trading Program”, by revising the word “(§ 51.123(p)” to read “§ 51.123(p)”; and c. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the word “(§ 51.123(ee)” to read “§ 51.123(ee)” and by revising the words “accordance with under subparts AAAA through IIII” to read “accordance with subparts AAAA through IIII of part 96”. § 97.283 [Amended] 36. Section 97.283 is amended as follows: a. In paragraph (a)(2)(iii), by revising the words “Is not, and” to read “Is not and,”; and b. In paragraph (a)(2)(iv),by revising the words “stack, and” to read “stack; and”. § 97.284 [Amended] 37. Section 97.284 is amended as follows: a. In paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”; b. In paragraph (c)(2), by revising the words “unit(s” to read “unit's”; and c. In paragraph (d)(2), by revising the words “and (b)(2)” to read “and (2)”. § 97.287 [Amended] 38. Section 97.287 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR SO 2 unit that” to read “CAIR SO 2 opt-in unit that”. § 97.302 [Amended] 39. Section 97.302 is amended as follows: a. In the definition of “Alternate CAIR designated representative”, by revising the words “source in accordance” to read “source, in accordance”; b. In the definition of “CAIR NO X Ozone Season Trading Program”, by revising the words “accordance with under subparts AAAA through IIII” to read “accordance with subparts AAAA through IIII of part 96”; c. In the definition of “Reference method”, by revising the words “( 75.22” to read “§ 75.22”; and d. In the definition of “State”, by revising with words “( 52.35” to read “§ 52.35”. § 97.371 [Amended] 40. Section 97.371 is amended, in paragraph (d)(2), by revising the words “include: Replacement” to read “include: replacement”. § 97.384 [Amended] 41. Section 97.384 is amended, in paragraph

(c)introductory text, by revising the words “heat rate” to read “heat input”. § 97.387 [Amended] 42. Section 97.387 is amended, in paragraph (b)(2)(ii), by revising the words “CAIR NO X Ozone Season unit that” to read “CAIR NO X Ozone Season opt-in unit that” and by revising the words “( 97.304” to read “§ 97.304”. [FR Doc. E6-21199 Filed 12-12-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2006-0902; FRL-8105-5] Clothianidin; Pesticide Tolerances AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes tolerances for residues of clothianidin in or on sorghum (grain, forage, and stover) and cotton (undelinted and gin byproducts). Bayer CropScience requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA). In addition, this establishes time-limited tolerances for residues of clothianidin, in or on beet, sugar, roots, and beet, sugar, tops. This action is in response to EPA's granting of an emergency exemption under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) authorizing use of the pesticide on sugar beet seeds. This regulation establishes a maximum permissible level for residues of clothianidin in these food commodities. The tolerances for sugar beet commodities expire and are revoked on December 31, 2009. This regulation establishes tolerances for residues of clothianidin in or on grapes, potatoes, and potatoes, granules/flakes. Arvesta Corporation requested these tolerances under the FFDCA, as amended by the Food Quality Protection Act of 1996 (FQPA). DATES: This regulation is effective December 13, 2006. Objections and requests for hearings must be received on or before February 12, 2007, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION) . ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2006-0902. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

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

(703)305-5805. FOR FURTHER INFORMATION CONTACT: Kable Bo Davis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:

(703)306-0415; e-mail address: *Davis.Kable@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers. • Animal production (NAICS 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers. • Food manufacturing (NAICS 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators. • Pesticide manufacturing (NAICS 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users. This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT . B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this **Federal Register** document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at *http://www.epa.gpo/opptsfrs/home/guidelin.htm* C. Can I File an Objection or Hearing Request? Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0902. in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 12, 2007. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0902., by one of the following methods: • *Federal eRulemaking Portal:* *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs

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

(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of December 8, 2004 (69 FR 71036) (FRL-7687-4), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 4F6869) by Arvesta Corporation, 15401 Weston PKWY Suite 150, Cary, North Carolina 27513. The petition requested that 40 CFR 180.586 be amended by establishing tolerances for residues of the insecticide clothianidin, (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in or on grapes at 0.5 parts per million (ppm), raisins at 1.0 ppm, and potatoes at 0.1 ppm. That notice included a summary of the petition prepared by Arvesta Corporation, the registrant. There were no comments received in response to the notice of filing. In the **Federal Register** of June 16, 2004 (69 FR 33635) (FRL-7350-6), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 3F6792) by Bayer CropScience, 2 T.W. Alexander Drive, Research Triangle Park, North Carolina 27709. The petition requested that 40 CFR 180.586 be amended by establishing tolerances for residues of the insecticide clothianidin, (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in or on sorghum, grain at 0.01 ppm, sorghum, forage at 0.01 ppm, and sorghum, stover at 0.01 ppm. That notice included a summary of the petition prepared by Bayer CropScience, the registrant. There were no comments received in response to the notice of filing. In the **Federal Register** of December 14, 2005 (70 FR 74003) (FRL-7747-4), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 5F6908) by, Bayer CropScience, 2 T.W. Alexander Drive Research Triangle Park, North Carolina 27709. The petition requested that 40 CFR 180.586 be amended by establishing tolerances for residues of the insecticide clothianidin, (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in or on cotton, undelinted at 0.01 ppm, and cotton, gin byproducts at 0.01 ppm. That notice included a summary of the petition prepared by Bayer CropScience, the registrant. There were no comments received in response to the notice of filing. Upon completing review of the current clothianidin database, the Agency concluded that the appropriate tolerance levels for clothianidin residues in or on pending crops should be established as follows: Sorghum, grain at 0.01 ppm, sorghum, forage at 0.01 ppm, sorghum, stover at 0.01 ppm, cotton, undelinted seed at 0.01 ppm, cotton, gin byproducts at 0.01 ppm, grape at 0.60 ppm, potato at 0.05 ppm, and potato, granules/flakes at 0.08 ppm. In addition, the proposed tolerance for raisins was withdrawn because based on available processing data, a tolerance for this commodity is not needed. EPA is also establishing time-limited tolerances for combined residues of the insecticide, clothianidin, in or on beet, sugar, roots, and beet, sugar, tops at 0.02 ppm. These tolerances expire and are revoked on December 31, 2009. The beet tolerances are being established in response to a regional crisis exemption request on behalf of Colorado, North Dakota, and Wyoming under FIFRA section 18 for the emergency use of clothianidin as a seed treatment on sugar beet seeds to control the beet leafhopper, which is a vector of the beet curly top virus in certain sugar beet growing regions throughout the western United States. As part of its assessment of this emergency exemption request, EPA assessed the potential risks presented by residues of clothianidin in or on beet, sugar, roots, and beet, sugar, tops. In doing so, EPA considered the safety standard in section 408(b)(2) of the FFDCA, and EPA decided that the necessary tolerances under section 408(l)(6) of the FFDCA would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address the urgent non-routine situation and to ensure that the resulting food is safe and lawful, EPA is issuing the tolerances without notice and opportunity for public comment as provided in section 408(l)(6) of the FFDCA. Although these tolerances expire and are revoked on December 31, 2009, under section 408(l)(5) of the FFDCA, residues of the pesticide not in excess of the amount specified in the tolerances remaining in or on beet, sugar, roots, and beet, sugar, tops after that date will not be unlawful, provided the pesticide is applied in a manner that was lawful under FIFRA, and the residues do not exceed a level that was authorized by this tolerance at the time of that application. EPA will take action to revoke these tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe. Because the tolerances are being approved under emergency conditions, EPA has not made any decisions about whether clothianidin meets EPA's registration requirements for use on beet, sugar, roots, and beet, sugar, tops or whether permanent tolerances for this use would be appropriate. Under these circumstances, EPA does not believe that these tolerances serve as a basis for registration of clothianidin by a State for special local needs under FIFRA section 24(c). Nor do these tolerances serve as the basis for any States other than Oregon, Colorado, North Dakota, and Wyoming to use this pesticide on this crop under section 18 of FIFRA without following all provisions of EPA's regulations implementing FIFRA section 18 as identified in 40 CFR part 166. For additional information regarding the emergency exemption for clothianidin, contact the Agency's Registration Division at the address provided under FOR FURTHER INFORMATION CONTACT. Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see *http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm* . III. Aggregate Risk Assessment and Determination of Safety Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of FFDCA, for tolerances for residues of clothianidin (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in or on grapes at 0.60 ppm, potatoes at 0.05 ppm, potatoes, granules/flakes at 0.08 ppm, sorghum, grain at 0.01 ppm, sorghum, forage at 0.01 ppm, sorghum, stover at 0.01 ppm, cotton, undelinted at 0.01 ppm, and cotton, gin byproducts at 0.01 ppm, and beet, sugar, roots at 0.02 ppm, and beet, sugar, tops at 0.02 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows. A. Toxicological Profile EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the toxic effects caused by clothianidin as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at *http://www.epa.gov/EPA-PEST/2003/May/Day-30/p13564.htm.* B. Toxicological Endpoints For hazards that have a threshold below which there is no appreciable risk, the dose at which the NOAEL are observed from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the LOAEL of concern are identified is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor

(UF)is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify non-threshold hazards such as cancer. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk, estimates risk in terms of the probability of occurrence of additional cancer cases. More information can be found on the general principles EPA uses in risk characterization at *http://www.epa.gov/pesticides/health/human.htm* . A summary of the toxicological endpoints for clothianidin used for human risk assessment can be found at www.regulations.gov (pages 18-20) in Docket ID EPA-HQ-OPP-2006-0902. To locate this information on the regulations.gov website follow these steps: 1. Select “Advanced Search”, then “Docket Search” 2. In “Keyword” field type the chemical name or insert the applicable “Docket ID number.” (example: EPA-HQ-OPP-2005-9999). 3. Click the “Submit” button. Follow the instructions on the regulations.gov website to view the index for the docket and access available documents. C. Exposure Assessment 1. *Dietary exposure from food and feed uses* . Tolerances have been established (40 CFR 180.586) for the residues of clothianidin, in or on a variety of raw agricultural commodities. Tolerances have also been established for residues of clothianidin in milk. Risk assessments were conducted by EPA to assess dietary exposures from clothianidin in food as follows: i. *Acute exposure* . Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a one-day or single exposure. In conducting the acute dietary exposure assessment EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID TM ), which incorporates food consumption data as reported by respondents in the United States Department of Agriculture

(USDA)1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII), and accumulated exposure to the chemical for each commodity. The following assumptions were made for the acute exposure assessments: The acute dietary exposure assessment is based on maximum residues of clothianidin observed in clothianidin and thiamethoxam field trials and assumed 100 percent crop treated (%CT). ii. *Chronic exposure* . In conducting the chronic dietary exposure assessment EPA used the DEEM-FCID TM , which incorporates food consumption data as reported by respondents in the USDA 1994-1996 and 1998 Nationwide CSFII, and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: The chronic assessment is based on average residues from clothianidin field trials and also assumes 100% CT. iii. *Cancer* . Because clothianidin has been classified as a “not likely human carcinogen”, a cancer risk assessment is not required. iv. *Anticipated residue and percent crop treated

(PCT)information* . Section 408(b)(2)(E) of the FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide chemicals that have been measured in food. If EPA relies on such information, EPA must pursuant to section 408(f)(1) require that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. Following the initial data submission, EPA is authorized to require similar data on a time frame it deems appropriate. For the present action, EPA will issue such data call-ins for information relating to anticipated residues as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Such data call-ins will be required to be submitted no later than 5 years from the date of issuance of this tolerance. The Agency used PCT information as follows: The acute assessment is based on maximum residues of clothianidin observed in clothianidin field trials and assumes 100% CT. The chronic assessment is based on average residues from clothianidin field trials and also assumes 100% CT. The Agency believes that the three conditions listed have been met. With respect to Condition 1, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions 2 and 3, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which clothianidin may be applied in a particular area. 2. *Dietary exposure from drinking water* . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for clothianidin in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of clothianidin. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at *http://www.epa.gov/oppefed1/models/water/index.htm* . Based on the First Index Reservoir Screening Tool (FIRST) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated environmental concentrations

(EECs)of clothianidin for acute exposures are 7.29 parts per billion

(ppb)for surface water and 5.84 ppb for ground water. The EECs for chronic exposures are 1.35 ppb for surface water and 5.84 ppb for ground water. 3. *From non-dietary exposure* . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Clothianidin is currently registered for use on the following residential non-dietary sites: Turfgrass. The risk assessment was conducted using the following residential exposure assumptions: The following exposure scenarios were assessed for residential post-application risks: toddlers playing on treated turf, adults performing yard work on treated turf, and adults and youths playing golf on treated turf. Additional information on residential exposure assumptions can be found at www.regulations.gov (Docket ID EPA-HQ-OPP-2006-0902, pages 27 through 29). 4. *Cumulative effects from substances with a common mechanism of toxicity* . Section 408(b)(2)(D)(v) of the FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” Clothianidin is a member of the neonicotinoid class of pesticides and is a metabolite of another neonicotinoid, thiamethoxam. Structural similarities or common effects do not constitute a common mechanism of toxicity. Evidence is needed to establish that the chemicals operate by the same, or essentially the same sequence of major biochemical events (EPA, 2002). Although clothianidin and thiamethoxam bind selectively to insect nicotinic acetylcholine receptors (nAChR), the specific binding site(s)/receptor(s) for clothianidin, thiamethoxam, and the other neonicotinoids are unknown at this time. Additionally, the commonality of the binding activity itself is uncertain, as preliminary evidence suggests that clothianidin operates by direct competitive inhibition, while thiamethoxam is a non-competitive inhibitor. Furthermore, even if future research shows that neonicotinoids share a common binding activity to a specific site on insect nicotinic acetylcholine receptors, there is not necessarily a relationship between this pesticidal action and a mechanism of toxicity in mammals. Structural variations between the insect and mammalian nAChRs produce quantitative differences in the binding affinity of the neonicotinoids towards these receptors, which, in turn, confers the notably greater selective toxicity of this class towards insects, including aphids and leafhoppers, compared to mammals. While the insecticidal action of the neonicotinoids is neurotoxic, the most sensitive regulatory endpoint for clothianidin is based on unrelated effects in mammals, including changes in body and thymus weights, delays in sexual maturation, and still births. Additionally, the most sensitive toxicological effect in mammals differs across the neonicotinoids (e.g., testicular tubular atrophy with thiamethoxam; mineralized particles in thyroid colloid with imidaclopid). Thus, there is currently no evidence to indicate that neonicotinoids share common mechanisms of toxicity, and EPA is not following a cumulative risk approach based on a common mechanism of toxicity for the neonicotinoids. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism released by EPA's Office of Pesticide Programs on EPA's website at *http://www.epa.gov/pesticides/cumulative/* . Note that because clothianidin is a major metabolite of thiamethoxam, EPA has combined exposure to clothianidin resulting both from thiamethoxam use and from use of clothianidin as an active ingredient and has compared this aggregate exposure estimate to relevant endpoints for clothianidin. EPA has taken the further conservative step of assuming that, in instances where both thiamethoxam and clothianidin are registered for use on a crop, both pesticides will, in fact, be used on that crop. D. Safety Factor for Infants and Children 1. *In general* . Section 408 of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a margin of exposure

(MOE)analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. In applying this provision, EPA either retains the default value of 10X when reliable data do not support the choice of a different factor, or, if reliable data are available, EPA uses a different additional safety factor value based on the use of traditional uncertainty factors and/or special FQPA safety factors, as appropriate. 2. *Prenatal and postnatal sensitivity* . In the developmental neurotoxicity study, toxicity in the offspring was observed at a lower dose level than the dose that caused toxicity in the maternal animals. Maternal effects included decreased body weights, body weight gains, and food consumption. Effects seen in the offspring included decreased body weights, body weight gains, motor activity, and acoustic startle response in the females. However, EPA determined that the degree of concern for the developmental neurotoxicity study is low and there are no residual uncertainties for prenatal and/or postnatal toxicity due to the results of the developmental neurotoxicity study because the observed effects are well characterized and there are clear NOAELs/LOAELs. In the two-generation reproduction study, offspring toxicity (decreased body weight gains, delayed sexual maturation in males, decreased absolute thymus weights in F1 pups of both sexes, and an increase in stillbirths in both generations) was seen at a lower dose than the dose that caused parental toxicity. Based on evidence of decreased absolute and adjusted organ weights of the thymus and spleen in multiple studies in the clothianidin data base and on evidence of increased quantitative susceptibility of juvenile rats, compared to adults, in the two-generation reproduction study to these effects. EPA has required that testing be conducted to assess immune system function in adults and in young animals following exposure during the period of organogenesis. No quantitative or qualitative susceptibility was observed in either of the developmental rat or rabbit studies. In the rat, no developmental toxicity was observed at the highest dose tested, although this dose level induced decreases in body weight gain and food consumption in the dams. In the rabbit, premature deliveries, decreased gravid uterine weights, an increase in litter incidence of a missing lobe of the lung, and a decrease in the litter average for ossified sternal centra per fetus were noted at a dose level in which maternal death, a decrease in food consumption, and clinical signs (scant feces and orange urine) were observed. Since the developmental effects observed in the rabbit study were seen in the presence of maternal toxicity, they are not considered to be qualitatively more severe than the maternal effects. 3. *Conclusion* . The exposure data for clothianidin are complete or are estimated based on data that reasonably accounts for potential exposures. The acute dietary exposure assessment is based on maximum residues of clothianidin observed in clothianidin and thiamethoxam field trials and assumes 100% CT. The chronic assessment is based on average residues from clothianidin and thiamethoxam field trials and also assumes 100% CT. For water, the highest acute estimate from conservative models was used for both the acute and the chronic dietary exposure analyses. By using these conservative assessments, acute and chronic exposures/risks will not be underestimated. The residential exposure assessment utilizes residential standard operation procedures

(SOPs)to assess post-application exposure to children as well as incidental oral ingestion by toddlers. The residential SOPs are based on reasonable worst-case assumptions and will not likely underestimate exposure/risk. These assessments are unlikely to underestimate the potential exposure to infants and children resulting from the use of clothianidin. The toxicology data base for clothianidin, however, is not complete for FQPA purposes. A complete complement of acceptable developmental, reproduction, developmental neurotoxicity, mammalian neurotoxicity and special neurotoxicity studies are available; however, due to evidence of decreased absolute and adjusted organ weights of the thymus and spleen in multiple studies in the clothianidin data base, and because juvenile rats in the two-generation reproduction study appear to be more susceptible to these effects, EPA has determined that testing should be conducted to assess immune system function in adults and in young animals following developmental exposures. Given the levels at which this testing should be conducted it could result in selection of a more protective (i.e., lower) regulatory endpoint. Due to the uncertainty with regard to potential effects on immune system function in young animals, EPA cannot conclude that there are reliable data supporting selection of a children's safety factor different from the presumptive 10X factor. Therefore, the 10X FQPA children's safety factor will be retained. This safety factor will be in the form of a database uncertainty factor to account for the lack of the testing with regard to immune system function with clothianidin. E. Aggregate Risks and Determination of Safety 1. *Acute risk* . Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food to clothianidin will occupy 11% of the acute population adjusted dose

(aPAD)for the U.S. population, 8% of the aPAD for females 13-49 years, 31% of the aPAD for all infants ( < 1 year old), and 45% of the aPAD for children 1-2 years old. The acute aggregate risks associated with the registered and proposed uses of clothianidin do not exceed the Agency's level of concern for the general U.S. population or any population subgroup. 2. *Chronic risk* . For the chronic exposure assessments the residues of concern are clothianidin. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to clothianidin from food and water will utilize 5% of the chronic population adjusted dose

(cPAD)for the U.S. population, 13% of the cPAD for all infants ( < 1 year old), and 16% of the cPAD for children 1-2 years old. Based on the use pattern, chronic residential exposure to residues of clothianidin is not expected. The long-term aggregate risks associated with clothianidin exposure resulting from the registered and proposed uses of clothianidin and from the registered uses of thiamethoxam do not exceed the Agency's level of concern for the general U.S. population or any population subgroup. 3. *Short-term/Intermediate-term risk* . Short-term aggregate and intermediate-term aggregate exposures takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Clothianidin is currently registered for use that could result in short-term and intermediate-term residential exposure and the Agency has determined that it is appropriate to aggregate chronic food and water and short-term exposures for clothianidin. EPA has determined that, for clothianidin, the toxicological effects are the same across oral, dermal, and inhalation routes of exposure and has selected the same endpoint and dose for short-term and intermediate-term exposure scenarios. Therefore, the exposures are simply summed (combined/aggregated) for use in risk calculations. Short-term and intermediate aggregate risk estimates range from an MOE of 1,100 for toddlers (food + water + treated turf + treated soil + dermal) to 22,000 for youth golfers (food + water + post-application treated turf). The short-term and intermediate-term aggregate risks associated with the registered and proposed uses of clothianidin do not exceed the Agency's level of concern for the general U.S. population or any population subgroup. 4. *Aggregate cancer risk for U.S. population* . Clothianidin has been classified as a “not likely human carcinogen.” It is not expected to pose a cancer risk. 5. *Determination of safety* . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to clothianidin residues. IV. Other Considerations A. Analytical Enforcement Methodology Adequate LC/MS/MS methods are available for both collecting data and enforcing tolerances for clothianidin residues in plant (Bayer Methods 00552 and 109240-1) and animal (Bayer Method 00624) commodities. The validated limit of quantitation

(LOQ)for clothianidin in plant commodities is 0.010 ppm, except for wheat straw (0.020 ppm), and the validated LOQs are 0.010 ppm in milk and 0.020 ppm in animal tissues. All three of these methods have been approved for tolerance enforcement, and forwarded to FDA for inclusion in PAM Volume II. In addition, Arvesta has submitted another LC/MS/MS method (Morse Method #Meth-164) for enforcing tolerances and collecting data on residues of clothianidin and TMG in grape and potato commodities. This newer method is similar to Method 00552 and involves extraction of residues with acetonitrile/water, cleanup using solid phase extraction

(SPE)cartridges, and the separate analysis of clothianidin and *N* -(2-chloro-5-thiazolymethyl)- *N'* -methylguanidine

(TMG)by LC/MS/MS. The validated LOQ for each analyte is 0.020 ppm in all grape and potato matrices, except for potato chips and raisins (with LOQs of 0.040 ppm). The method was adequately validated in conjunction with the field trials and processing studies and has undergone a successful independent laboratory validation

(ILV)trial. B. International Residue Limits Canadian maximum residue limits

(MRLs)have been established for residues of clothianidin at 0.01 milligram/kilogram (mg/kg) in milk, corn and canola. As of February 2006, there are no Canadian, Mexican, or Codex MRLs or tolerances for cotton, sorghum, grapes, or potatoes. C. Response to Comments There were no comments received in response to the notice of filing. V. Conclusion Therefore, the tolerances are established for residues of clothianidin, (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in or on grapes at 0.60 ppm, potatoes at 0.05 ppm, potatoes, granules/flakes at 0.08 ppm, sorghum (grain, forage, and stover) at 0.01 ppm, and cotton (undelinted and gin byproducts) at 0.01 ppm. Time-limited tolerances are also established for residues of clothianidin in or on beet, sugar, roots, and beet, sugar, tops at 0.02 ppm. VI. Statutory and Executive Order Reviews This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget

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

(UMRA)(Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA or are established under section 408(1)(6), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 *et seq.* ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled *Federalism* (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. VII. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: december 1, 2006. Lois Rossi, Director, Registration Division, Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. Section 180.586 is amended by alphabetically adding commodities to the table in paragraph

(a)to read as follows, and by revising paragraph

(b)as follows: § 180.586 Clothianidin; tolerances for residues.

(a)* * * Commodity Parts per million * * * * * Cotton, gin byproducts 0.01 Cotton, undelinted seed 0.01 * * * * * Grape 0.60 * * * * * Potato 0.05 Potato, granules/flakes 0.08 Sorghum, forage, grain, stover 0.01

(b)*Section 18 emergency exemptions* . Time-limited tolerances are established for the residues of the insecticide clothianidin, (E)-1-(2-chloro-1,3-thiazol-5-ylmethyl)-3-methyl-2-nitroguanidine, in connection with use of the pesticide under section 18 emergency exemptions granted by EPA. These tolerances will expire and are revoked on the dates specified in the following table: Commodity Parts per million Expiration/revocation date Beet, sugar, roots 0.02 December 31, 2009 Beet, sugar, tops 0.02 December 31, 2009 [FR Doc. E6-20898 Filed 12-12-06; 8:45 am] BILLING CODE 6560-50-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2002-0043; FRL-8064-3 ] Pesticide Tolerance Nomenclature Changes; Technical Amendment AGENCY: Environmental Protection Agency (EPA). ACTION: Direct Final rule; technical amendment. SUMMARY: This document makes minor revisions to the terminology of certain commodity terms listed under 40 CFR part 180, subpart C. EPA is taking this action to establish a uniform listing of commodity terms. DATES: This Direct Final Rule is effective on February 26, 2007 without notice, unless EPA receives adverse comment by February 12, 2007. If EPA receives adverse comments, EPA will publish a **Federal Register** document to withdraw the direct final rule before the effective date. If this Direct Final Rule becomes effective any person may file objections and request for hearings on those objections. Objections and requests for hearing must be filed with 60 days of issuance of the final rule. For direct final rules, the date of issuance is considered to be the effective date. Objections and requests for hearings must be received on or before April 27, 2007, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2002-0043. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

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

(703)305-5805. FOR FURTHER INFORMATION CONTACT: Stephen Schaible, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:

(703)308-9362; e-mail address: schaible.stephen@epa.gov. SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers. • Animal production (NAICS 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers. • Food manufacturer (NAICS 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators. • Pesticide manufacturer (NAICS 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users. This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT. B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this “ **Federal Register** ” document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at http://www.gpoaccess.gov/ecfr. To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at *http://www.epa.gpo/opptsfrs/home/guidelin.htm.* C. Can I File an Objection or Hearing Request? Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2002-0043 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 12, 2007. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2002-0043, by one of the following methods. • *Federal eRulemaking Portal* : *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* . Office of Pesticide Programs

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

(703)305-5805. II. Background EPA's Office of Pesticide Programs

(OPP)has developed a commodity vocabulary data base entitled “Food and Feed Commodity Vocabulary.” The data base was developed to consolidate all the major OPP commodity vocabularies into one standardized vocabulary. As a result, all future pesticide tolerances issued under 40 CFR part 180 will use the “preferred commodity term” as listed in the aforementioned data base. This is the fifth in a series of documents revising the terminology of commodity terms currently in tolerances in 40 CFR part 180. Final rules, revising pesticide tolerance nomenclature, were published in the **Federal Register** on June 19, 2002 (67 FR 41802) (FRL-6835-2); June 21, 2002 (67 FR 42392) (FRL-7180-1), on July 1, 2003(68 FR 39428) (FRL-7308-9), and (68 FR 39435) (FRL-7316-9). A. What Action is the Agency Taking? In this rule, EPA is making the following format changes to the terminology of the commodity terms in 40 CFR part 180 to the extent the terminology is not already in this format: 1. The first letter of the commodity term is capitalized. All other letters, including the first letter of proper names, are changed to lower case. 2. Commodity terms are listed in the singular although there are the following exceptions: “leaves”, “roots”, “tops”, “greens”, “hulls”, “vines”, “fractions”, “shoots”, and “byproducts”. 3. Commodity terms are amended so that generic terms, such as “corn” and “pea”, precede modifying terms, such as “field”, “dry” and “summer”. 4. Parentheses are replaced with commas. Example: “Pea (succulent)” is replaced with “Pea, succulent”. 6. Crop group terms are revised to standardize with the “Food and Feed Vocabulary”. Examples: i. “Brassica, leafy” is replaced with “Vegetable, brassica, leafy, group 5”. ii. “Fruit, citrus group is replaced with “Fruit, citrus, group 10”. iii. “Leafy vegetables (except Brassica)” is replaced with “Vegetable, leafy, except brassica, group 4”. iv. “Vegetable, brassica, head and stem, subgroup 5a” is replaced with “Brassica, head and stem, subgroup 5A”. v. “Tree nut” is replaced with “Nut, tree, group 14”. B. Additional Changes In addition to format changes to the commodity terms, this document also includes many revisions to the commodity terms. These revisions replace certain commodity terms that are no longer used by EPA with the appropriate matching term in the “Food and Feed Commodity Vocabulary”. For example, “Alfalfa, fresh ' is replaced with “Alfalfa, forage”, “Barley, fodder” is replaced with “Barley, straw”. “Bean, dried” is replaced with “Bean, dry, seed”. “Cottonseed” and “Cotton seed” are replaced with “Cotton, undelinted seed”. “Dry bulb onion” is replaced with “Onion, bulb”. “Coffee bean” is replaced with “Coffee, bean, green”. “Corn, sweet, kernal plus cob with husks removed”; “Corn, sweet, kernel + cob with husks removed”; “Corn sweet, kernels plus cob with husks removed”; “Corn, fresh, kernel plus cob with husks removed”; “Corn, fresh (including sweet), kernel plus cob with husks removed”; “Corn, fresh (inc. sweet, kernel plus cob with husks removed)” and “Sweet corn, kernel plus cob with husks removed” are replaced with the term “Corn, sweet, kernel plus cob with husks removed”. This document also deletes certain terms that are not needed to identify the tolerance commodities. Examples: i. The terms “nutmeat” and “nutmeats” when used in association with the tree nut crops or peanut are not needed. For tree nut crops, nutmeat and almond hulls are the only edible portions of the crop consumed. Therefore, OPP's Food and Feed Commodity Vocabulary uses the commodity terms “Almond”, “Pecan”, “Walnut”, etc. for the tree nuts and the commodity term “Peanut” is used in place of “Peanut, nutmeat”. Since “almond hulls” are fed to livestock, tolerances may be established for “Almond, hulls”. ii. The term “Endive (escarole)” is changed to “Endive” since the term “Endive” includes escarole. iii. The term “Blueberry (huckleberry)” is changed to “Blueberry” since the term “Blueberry” includes huckleberries. iv. The term “Banana (whole)” is changed to “Banana” since the “Food and Feed Vocabulary” uses the term “Banana” to refer to the whole banana. III. Statutory and Executive Order Reviews This final rule makes technical amendments to the Code of Federal Regulations which have no substantive impact on the underlying regulations, and it does not otherwise impose or amend any requirements. As such, the Office of Management and Budget

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

(RFA)(5 U.S.C. 601et seq.) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental organizations. After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This action proposes technical amendments to the Code of Federal Regulations which have no substantive impact on the underyling regulations. This technical amendment will not have any negative economic impact on any entities, including small entities. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999).Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this final rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government andIndian tribes.” This final rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this final rule. IV. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). Lists of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure,Agricultural commodities, Pesticides and pest, Reporting and recordkeeping requirements. Dated: December 1, 2006. James Jones, Director, Office of Pesticide Programs. Therefore, 40 CFR chapter I, part 180 is amended as follows: PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. Part 180, subpart C is amended as follows: In Section In Paragraph Remove the term Add in its place the term 180.103

(a)table Blueberry (huckleberry) Blueberry 180.103

(a)table Cantaloups Cantaloupe 180.103

(a)table Onion, dry bulb Onion, bulb 180.106

(a)table Pea, field vines Pea, field, vines 180.106

(a)table Peppermint, hay Peppermint, tops 180.106

(a)table Trefoil, birdsfoot, forage Trefoil, forage 180.106

(a)table Trefoil, birdsfoot, hay Trefoil, hay 180.110

(a)table Bean (dry form) Bean, dry, seed 180.110

(a)table Endive (escarole) Endive 180.110

(a)table Sweet corn, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.111 (a)(1) table Dates Date 180.111 (a)(1) table Flax seed Flax, seed 180.111 (a)(1) table Pecans Pecan 180.111 (a)(1) table Peanut, forage Peanut, hay 180.111 (a)(1) table Peavines Pea, field, vines 180.111 (a)(1) table Trefoil, birdsfoot, forage Trefoil, forage 180.111 (a)(1) table Trefoil, birdsfoot, hay Trefoil, hay 180.114

(a)table Blueberry (huckleberry) Blueberry 180.117 table Vegetables, leafy Vegetable, leafy 180.117 table Vegetables, root crop Vegetable, root 180.117 table Vegetables, seed and pod Vegetable, seed and pod 180.121

(a)table Alfalfa, fresh Alfalfa, forage 180.121

(a)(table Almond, hull Almond, hulls 180.121

(a)table Bean, dried Bean, dry, seed 180.121

(a)table Cotton, seed Cotton, undelinted seed 180.121

(a)table Pea, field vines Pea, field, vines 180.121

(e)table Trefoil, birdsfoot, forage Trefoil, forage 180.121

(e)table Trefoil, birdsfoot, hay Trefoil, hay 180.122

(a)table Alfalfa, fresh Alfalfa, forage 180.122

(a)table Cotton, seed Cotton, undelinted seed 180.142 (a)(3) table Leafy vegetables Vegetable, leafy 180.142 (a)(3) table Root crop vegetables Vegetable, root 180.142 (a)(3) table Seed and pod vegetables Vegetable, seed and pod 180.142 (a)(3) table Small fruit Fruit, small 180.142 (a)(12)(i) and (a)(13)(i) Sugarcane molasses Sugarcane, molasses 180.142 (a)(13)(iii) introductory text potable water water, potable 180.142

(b)introductory text and

(b)table Wild rice Rice, wild, grain 180.154

(a)table Trefoil, birdsfoot, hay Trefoil, hay 180.163

(a)table Bean (dry form) Bean, dry, seed 180.163

(a)table Cantaloups Cantaloupe 180.163

(a)table Pecans Pecan 180.163

(a)table Spearmint, hay Spearmint, tops 180.169 (a)(1) table Corn, fresh (including sweet), kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.169 (a)(1) table Endive (escarole) Endive 180.169 (a)(1) table Pecans Pecan 180.169 (a)(1) table Peavines Pea, field, vines 180.169 (a)(1) table Trefoil, birdsfoot, forage Trefoil, forage 180.169 (a)(1) table Trefoil, birdsfoot, hay Trefoil, hay 180.172

(a)table Pecans Pecan 180.176

(b)table Ginseng, root Ginseng 180.182 (a)(1) table Alfalfa, fresh Alfalfa, forage 180.185

(a)table Cantaloups Cantaloupe 180.185

(a)table Yams, true, tuber Yam, true, tuber 180.200 (a)(1) table Endive (escarole) Endive 180.204

(a)table Endive (escarole) Endive 180.204

(a)table Pecans Pecan 180.205

(a)table Coffee bean Coffee, bean, green 180.205

(a)table Pea, field vines Pea, field, vines 180.205

(a)table Pea (succulent) Pea, succulent 180.205

(a)Table Small fruit Fruit, small 180.205

(c)Table Yams, true, tuber Yam, true, tuber 180.206

(a)table Coffee bean 1 Coffee, bean, green 1 180.208

(a)table Trefoil, birdsfoot, forage Trefoil, forage 180.208

(a)table Trefoil, birdsfoot, hay Trefoil, hay 180.213 (a)(1) table Corn, fresh (inc. sweet, kernel plus cob with husks removed) Corn, sweet, kernel plus cob with husks removed 180.213 (a)(1) table Pecans Pecan 180.215 (a)(1) table Bean

(dry)Bean, dry, seed 180.215 (a)(1) table Pea (succulent) Pea, succulent 180.220 (a)(1) table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.226 (a)(2)(i) table Hop, dried cone Hop, dried cones 180.226 (a)(2)(i) table Vegetables, leafy Vegetable, leafy 180.226 (a)(2)(i) table Vegetables, seed and pod Vegetable, seed and pod 180.227 (a)(1) table Sugarcane molasses Sugarcane, molasses 180.232

(a)table Corn, sweet, kernel, plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.236 table Pecans Pecan 180.242 (a)(1) table Bean

(dry)Bean, dry, seed 180.249 table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.253

(a)table Endive (escarole) Endive 180.253

(a)table Hop, dried cone 1 Hop, dried cones 1 180.253

(a)table Pecans Pecan 180.253

(a)table Vegetables, root crop Vegetable, root 180.254

(a)table Alfalfa, fresh (of which no more than 5 ppm are carbamates) Alfalfa, forage (of which no more than 5 ppm are carbamates) 180.254

(a)table Coffee bean Coffee, bean, green 180.258

(a)table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.258

(a)table Yams, true, tuber Yam, true, tuber 180.259

(a)table Hop, dried cone Hop, dried cones 180.259

(a)table Peanut, forage Peanut, hay 180.261

(a)table Pea, field vines Pea, field, vines 180.262

(a)table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.269

(a)table Bean

(dry)Bean, dry, seed 180.269

(a)table Coffee bean Coffee, bean, green 180.269

(a)table Pecans Pecan 180.274 (a)(1) table Rice, polishings Rice, polished rice 180.274 (a)(2) table Rice, polishings Rice, polished rice 180.275 (a)(1) table Bean

(dry)Bean, dry, seed 180.275 (a)(1) table Coffee bean Coffee, bean, green 180.275 (a)(1) table Parsnip, root Parsnip, roots 180.275

(b)table Ginseng, root Ginseng 180.287

(a)table Poultry meat byproducts Poultry, meat byproducts 180.292 (a)(2) table Oat, milled fractions (exc flour) Oat, groats/rolled oats 180.292 (a)(3) table Oat, milled fractions (exc flour) Oat, groats/rolled oats 180.298

(a)table Pecans Pecan 180.300

(a)table Coffee bean Coffee, bean, green 180.303 (a)(1) table Peppermint, hay Peppermint, tops 180.303 (a)(1) table Root crop vegetables Vegetable, root 180.303 (a)(1) table Spearmint, hay Spearmint, tops 180.314

(a)table Pea, field vines Pea, field, vines 180.317

(a)table Endive (escarole) Endive 180.324 (a)(1) table Grass, canary, annual, straw Canarygrass, annual, hay 180.324 (a)(2) Cotton gin byproducts Cotton, gin byproducts 180.328

(a)table Coffee bean Coffee, bean, green 180.330

(a)table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.339

(a)table Grass, canary, annual, straw Canarygrass, annual, hay 180.339

(a)table Peavines Pea, field, vines 180.339

(a)table Vegetables, seed and pod Vegetable, seed and pod 180.342 (a)(1) table Corn, fresh (inc. sweet, kernel plus cob with husks removed) Corn, sweet, kernel plus cob with husks removed 180.342 (a)(1) table Tree nut Nut, tree, group 14 180.342 (a)(2) table Soybean forage Soybean, forage 180.350

(a)table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.356

(a)table Hop, dried cone Hop, dried cones 180.356

(a)table Hop, vine Hop, vines 180.356

(a)table Pecans Pecan 180.362

(a)table Milk fat Milk, fat 180.362

(a)table Pecans Pecan 180.368 (a)(1) table Barley, fodder Barley, straw 180.368 (a)(1) table Corn, fresh, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.368 (a)(3) table Vegetable, brassica, head and stem, subgroup 5A Brassica, head and stem, subgroup 5A 180.371

(a)table Pecans Pecan 180.378

(b)table Alfalfa, fresh Alfalfa, forage 180.378

(b)table Leafy vegetables (except Brassica) Vegetable, leafy, except brassica, group 4 180.378

(c)table Milk fat (reflecting 0.25 ppm in whole milk) Milk, fat (reflecting 0.25 ppm in whole milk) 180.379 (a)(1) table Bean, dried Bean, dry, seed 180.379 (a)(1) table Caneberries Caneberry subgroup 13A 180.379 (a)(1) table Pecans Pecan 180.381

(a)table Dates Date 180.399 (a)(1) table Caneberries Caneberry subgroup 13A 180.399 (a)(1) table Ginseng, root Ginseng 180.401

(b)table Endive (escarole) Endive 180.408

(a)table Ginseng, root Ginseng 180.408

(a)table Hop, dried cone Hop, dried cones 180.408

(a)table Hop, viine Hop, vines 180.408

(a)table Soybean, grain Soybean, seed 180.408

(d)table Barley, fodder Barley, straw 180.411 (a)(2) table Pecans Pecan 180.412

(a)table Pea, field vines Pea, field, vines 180.412

(a)table Tree nut Nut, tree, group 14 180.414 (a)(1) table Leafy vegetables (except Brassica) Vegetable, leafy, except brassica, group 4 180.414

(d)table Corn, sweet, kernels plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.415

(a)table Caneberries Caneberry subgroup 13A 180.415

(a)table Ginseng, root Ginseng 180.415

(a)table Hop, dried cone Hop, dried cones 180.418 (a)(1) table Brassica, leafy Vegetable, brassica, leafy group 5 180.418 (a)(1) table Pecans Pecan 180.418 (a)(2) table Brassica, leafy Vegetable, brassica, leafy group 5 180.418 (a)(2) table Pecans Pecan 180.420

(c)table Leafy vegetables Vegetable, leafy 180.420

(c)table Seed and pod vegetables Vegetable, seed and pod 180.420

(c)table Small fruit Fruit, small 180.425

(a)table Pea (succulent) Pea, succulent 180.431

(a)table Barley, forage Barley, hay 180.434

(c)table Rice, wild Rice, wild, grain 180.435 (a)(1) table Almond hulls Almond, hulls 180.435 (a)(1) table Corn, sweet, kernel + cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.436 (a)(1) table Cotton, seed Cotton, undelinted seed 180.436

(1)table Hop, vine Hop, vines 180.442 (a)(1) table Hop, dried cone Hop, dried cones 180.443

(a)table Almond nutmeat Almond 180.443

(a)table Cotton seed Cotton, undelinted seed 180.443

(a)table Raisins Grape, raisin 180.443

(b)table Hop, dried cone Hop, dried cones 180.449

(a)table Cotton gin byproducts Cotton, gin byproducts 180.449

(a)table Cotton seed Cotton, undelinted seed 180.449

(a)table Hop, dried cone Hop, dried cones 180.450

(a)table Banana (whole) 1 Banana 1 180.450

(a)table Corn, fresh (including sweet), kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.457 Table Banana (whole) Banana 180.458 (a)(3) table Leafy petioles subgroup 4B Leaf petioles subgroup 4B 180.464

(a)table Corn, sweet, kernal plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.464

(a)table Tuberous and corm vegetables Vegetable, tuberous and corm, subgroup 1C 180.467 Table Almond nutmeat Almond 180.470 Table Soybean, grain Soybean, seed 180.472

(a)table Hop, dried cone Hop, dried cones 180.472

(a)table Pecans Pecan 180.472

(d)table Sweet corn, kernel plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.474 (b)(1) table Sunflower, oil Sunflower, refined oil 180.474 (b)(2) table Eggs Egg 180.478

(a)table Potato, tubers Potato 180.479 (a)(2) table Corn, sweet, kernel + cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.479 (a)(2) table Cotton, gin by-products Cotton, gin byproducts 180.479 (a)(2) table Vegetables, fruiting, group 8 Vegetable, fruiting, group 8 180.482 (a)(1) table Citrus oil Citrus, oil 180.482 (a)(1) table Leafy petioles subgroup 4B Leaf petioles subgroup 4B 180.484 (a)(1) table Peanut hay Peanut, hay 180.487

(a)table Cotton gin byproducts Cotton, gin byproducts 180.489

(a)table Corn, sweet, kernels plus cob with husks removed (of which no more than 0.10 ppm is TMS) Corn, sweet, kernel plus cob with husks removed (of which no more than 0.10 ppm is TMS) 180.489

(a)table Cotton, gin by-products (of which no more than 35 ppm is TMS) Cotton, gin byproducts (of which no more than 35 ppm is TMS) 180.489

(a)Table Fruit, citrus group Fruit, citrus, group 10 180.490 (a)(1) table Peanut nutmeat Peanut 180.495

(a)table Cotton gin byproducts Cotton, gin byproducts 180.495

(a)table Fruit, citrus group Fruit, citrus, group 10 180.500

(a)table Goats, fat Goat, fat 180.500

(a)table Goats, kidney Goat, kidney 180.500

(a)table Goats, meat Goat, meat 180.500

(a)table Horses, fat Horse, fat 180.500

(a)table Horses, meat Horse, meat 180.505 (a)(1) table Cotton, gin byproduct Cotton, gin byproducts 180.506

(a)table Cotton gin byproducts Cotton, gin byproducts 180.507 (a)(1) table Hops, dried cones Hop, dried cones 180.507 (a)(1) table Pecans Pecan 180.507 (a)(1) table Tree nut Nut, tree, group 14 180.510 (a)(1) table Black sapote Sapote, black 180.510 (a)(1) table Logan Loganberry 180.510 (a)(1) table Mamey sapote Sapote, mamey 180.510 (a)(1) table Tree nut Nut, tree, group 14 180.511

(a)table Black sapote Sapote, black 180.511

(a)table Fruit, pome, Crop Group 11 Fruit, pome, group 11 180.511

(a)table Logan Loganberry 180.511

(a)table Mamey sapote Sapote, mamey 180.513 (a)(1) table Vegetables, fruiting, group 8 Vegetable, fruiting, group 8 180.515

(a)table Almond, hull Almond, hulls 180.515

(a)table Hops, dried cones Hop, dried cones 180.515

(a)table Vegetable, cucurbit, group 09 Vegetable, cucurbit, group 9 180.515

(b)table Hop, dried cone Hop, dried cones 180.516

(a)table Cotton gin byproducts Cotton, gin byproducts 180.516

(a)table Peanut hay Peanut, hay 180.517

(a)table Hog Meat Hog, meat 180.517

(a)table Poultry Meat Byproducts Poultry, meat byproducts 180.518 (a)(1) table Citrus oil Citrus, oil 180.535

(a)table Barley, forage Barley, hay 180.543

(a)table Peanut nutmeat Peanut 180.544 (a)(1) table Black sapote Sapote, black 180.544 (a)(1) table Corn, sweet, kernal plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.544 (a)(1) table Mamey sapote Sapote, mamey 180.547

(a)table Peanut hay Peanut, hay 180.553

(a)table Almond, hull Almond, hulls 180.555

(a)table Hop, dried cone Hop, dried cones 180.555

(a)table Peanut hay Peanut, hay 180.555

(a)table Potato, tubers Potato 180.556

(a)table Cotton gin byproducts Cotton, gin byproducts 180.556

(a)table Hop, dried cone Hop, dried cones 180.556

(a)table Pecans Pecan 180.561

(a)table Leafy vegetables Vegetable, leafy 180.564 (a)(1) table Cotton gin byproducts Cotton, gin byproducts 180.565

(a)table Corn, sweet, kernal plus cob with husks removed Corn, sweet, kernel plus cob with husks removed 180.565

(a)table Hog meat Hog, meat 180.565

(a)table Pecans Pecan 180.565

(b)table Bean, dried Bean, dry, seed 180.568

(a)table Cottonseed Cotton, undelinted seed 180.572 (a)(1) table Hop, dried cone Hop, dried cones 180.575 (a)(1) table Barley, pearled, postharvest Barley, pearled barley, postharvest 180.575 (a)(1) table Cocoa bean, postharvest Cacao bean, roasted bean, postharvest 180.575 (a)(1) table Corn pop, grain, postharvest Corn, pop, grain, postharvest 180.575 (a)(1) table Corn, aspirated grain fractions, postharvest Grain, aspirated fractions, postharvest 180.575 (a)(1) table Cottonseed, postharvest Cotton, undelinted seed, postharvest 180.575 (a)(1) table Eggs, dried Egg, dried 180.575 (a)(1) table Ham Hog, meat 180.575 (a)(1) table Herbs and spices, group 19, postharvest Herbs and spices group 19, postharvest 180.575 (a)(1) table Oat, rolled, postharvest Oat, groats/rolled oats, postharvest 180.575 (a)(1) table Rice, polished, postharvest Rice, polished rice, postharvest 180.575 (a)(1) table Vegetables, legume, group 6, postharvest Vegetable, legume, group 6, postharvest 180.578 (a)(1) table Fruit, citrus group Fruit, citrus, group 10 180.578 (a)(1) table Tuberous and corm vegetables Vegetable, tuberous and corm, group 1 180.579 (a)(1) table Vegetable, cucurbit, group 09 Vegetable, cucurbit, group 9 180.585

(a)table Cotton, gin byproduct Cotton, gin byproducts 180.589 (a)(1) table Almond hulls Almond, hulls 180.589 (a)(1) table Vegetable, legume, succulent shelled pea and bean, subgroup 6B, except cowpea Pea and bean, succulent shelled, subgroup 6B, except cowpea 180.589

(d)table Flax seed Flax, seed 180.592 (a)(2) table Goats, kidney Goat, kidney 180.592 (a)(2) table Goats, liver Goat, liver 180.598

(a)table Eggs Egg 180.607 (a)(1) table Vegetable, brassica, head and stem, subgroup 5A Brassica, head and stem, subgroup 5A 180.608 (a)(1) table Fruit, citrus, crop group 10 Fruit, citrus, group 10 180.608 (a)(1) table Fruit, pome, crop group 11 Fruit, pome, group 11 180.608 (a)(1) table Fruit, stone, crop group 12 Fruit, stone, group 12 180.608 (a)(1) table Nut, tree, crop group 14 Nut, tree, group 14 3. Section 180.123 is revised to read as follows: § 180.123 Inorganic bromide residues resulting from fumigation with methyl bromide; tolerances for residues.

(a)*General.*

(1)Tolerances are established for residues of inorganic bromides (calculated as Br) in or on the following food commodities which have been fumigated with the antimicrobial agent and insecticide methyl bromide after harvest (with the exception of strawberry): Commodity Parts per million Alfalfa, hay, postharvest 50.0 Almond, postharvest 200.0 Apple, postharvest 5.0 Apricot, postharvest 20.0 Artichoke, jerusalem, postharvest 30.0 Asparagus, postharvest 100.0 Avocado, postharvest 75.0 Barley, grain, postharvest 50.0 Bean, lima, postharvest 50.0 Bean, postharvest 50.0 Bean, snap, succulent, postharvest 50.0 Bean, succulent, postharvest 50.0 Beet, garden, roots, postharvest 30.0 Beet, sugar, roots, postharvest 30.0 Blueberry, postharvest 20.0 Butternut, postharvest 200.0 Cabbage, postharvest 50.0 Cantaloupe, postharvest 20.0 Carrot, roots, postharvest 30.0 Cashew, postharvest 200.0 Cherry, sweet, postharvest 20.0 Cherry, tart, postharvest 20 Chestnut, postharvest 200.0 Cippolini, bulb, postharvest 50.0 Citron, citrus, postharvest 30.0 Cacao bean, roasted bean, postharvest 50.0 Coconut, copra, postharvest 100.0 Coffee, bean, green, postharvest 75.0 Corn, field, grain, postharvest 50.0 Corn, pop, postharvest 240.0 Corn, sweet, kernel plus cob with husks removed, postharvest 50.0 Cotton, undelinted seed, postharvest 200.0 Cucumber, postharvest 30.0 Cumin, seed, postharvest 100.0 Eggplant, postharvest 20.0 Garlic, postharvest 50.0 Ginger, roots, postharvest 100.0 Grapefruit, postharvest 30.0 Grape, postharvest 20.0 Hazelnut, postharvest 200.0 Horseradish, postharvest 30.0 Kumquat, postharvest 30.0 Lemon, postharvest 30.0 Lime, postharvest 30.0 Mango, postharvest 20.0 Melon, honeydew, postharvest 20.0 Muskmelon, postharvest 20.0 Nectarine, postharvest 20.0 Nut, brazil, postharvest 200.0 Nut, hickory, postharvest 200.0 Nut, macadamia, postharvest 200.0 Oat, postharvest 50.0 Okra, postharvest 30.0 Onion, bulb, postharvest 20.0 Onion, green, postharvest 20.0 Orange, postharvest 30.0 Papaya, postharvest 20.0 Parsnip, roots, postharvest 30.0 Peach, postharvest 20.0 Peanut, postharvest 200.0 Pear, postharvest 5.0 Pea, blackeyed, postharvest 50.0 Pea, postharvest 50.0 Pecan, postharvest 200.0 Pepper, postharvest 30.0 Pimento, postharvest 30.0 Pineapple, postharvest 20.0 Pistachio, postharvest 200.0 Plum, postharvest 20.0 Pomegranate, postharvest 100.0 Potato, postharvest 75.0 Pumpkin, postharvest 20.0 Quince, postharvest 5.0 Radish, postharvest 30.0 Rice, grain, postharvest 50.0 Rutabaga, roots, postharvest 30.0 Rutabaga, tops, postharvest 30.0 Rye, grain, postharvest 50.0 Salsify, roots, postharvest 30.0 Sorghum, grain, grain, postharvest 50.0 Soybean, postharvest 200.0 Squash, summer, postharvest 30.0 Squash, winter, postharvest 20.0 Squash, zucchini, postharvest 20.0 Strawberry, postharvest 60.0 Sweet potato, postharvest 75.0 Tangerine, postharvest 30.0 Timothy, hay, postharvest 50.0 Tomato, postharvest 20.0 Turnip, roots, postharvest 30.0 Walnut, postharvest 200.0 Watermelon, postharvest 20.0 Wheat 50.0

(2)Inorganic bromide may be present as a residue in certain processed food in accordance with the following conditions:

(i)When inorganic bromide residues are present as a result of fumigation of the processed food with methyl bromide or from such fumigation in addition to the authorized use of methyl bromide on the source raw agricultural commodity, as provided for in this part, the total residues of inorganic bromides (calculated as Br) shall not exceed the following levels:

(A)400 parts per million in or on egg, dried and herb, processed and spice.

(B)325 parts per million in or on cheese, parmesan and cheese, roquefort cheese.

(D)125 parts per million in or on processed food other than those listed above.

(ii)When inorganic bromide residues are present in malt beverage, fermented in accordance with 21 CFR 172.730(a)(2), the amount shall not exceed 25 parts per million (calculated as Br).

(iii)Where tolerances are established on both the raw agricultural commodities and processed food made therefrom, the total residues of inorganic bromides in or on the processed food shall not be greater than those designated in paragraph (a)(2) of this section, unless a higher level is established elsewhere in this part.

(3)Tolerances are established for residues of inorganic bromides (calculated as Br) as follows:

(i)400 parts per million for residues in or on dog food, resulting from fumigation with methyl bromide.

(ii)125 parts per million for residues in or on processed commodities for animal feedstuffs from barley, corn, grain sorghum, oat, rice, rye and wheat, resulting directly from fumigation with methyl bromide or from carryover and concentration of residues of inorganic bromides from fumigation of the grains with methyl bromide.

(b)*Section 18 emergency exemptions.* [Reserved]

(c)*Tolerances with regional registrations.* A tolerance with regional registration, as defined in § 180.1(n), is established for residues of inorganic bromides (calculated as Br) in or on the following food commodity grown in soil fumigated with methyl bromide. Commodity Parts per million Ginger, roots, postharvest 100

(d)*Indirect or inadvertent residues.* [Reserved] 4. Section 180.127 is revised to read as follows: § 180.127 Piperonyl butoxide; tolerances for residues.

(a)*General.*

(1)Tolerances for residues of the insecticide piperonyl butoxide [(butyl carbityl)(6-propyl piperonyl)ether] are established in or on the following food commodities: Commodity Parts per million Almond, postharvest 8 Apple, postharvest 8 Barley, postharvest 20 Bean, postharvest 8 Birdseed, mixtures, postharvest 20 Blackberry, postharvest 8 Blueberry, postharvest 8 Boysenberry, postharvest 8 Buckwheat, grain, postharvest 20 Cattle, fat 0.1 Cattle, meat byproducts 0.1 Cattle, meat 0.1 Cherry, sweet, postharvest 8 Cherry, tart, postharvest 8 Cacoa bean, roasted bean, postharvest 8 Coconut, copra, postharvest 8 Corn, field, grain, postharvest 20 Corn, pop, postharvest 20 Cotton, undelinted seed, postharvest 8 Crabapple, postharvest 8 Currant, postharvest 8 Dewberry, postharvest 8 Egg 1 Fig, postharvest 8 Flax, seed, postharvest 8 Goat, fat 0.1 Goat, meat byproducts 0.1 Goat, meat 0.1 Gooseberry, postharvest 8 Grape, postharvest 8 Guava, postharvest 8 Hog, fat 0.1 Hog, meat byproducts 0.1 Hog, meat 0.1 Horse, fat 0.1 Horse, meat byproducts 0.1 Horse, meat 0.1 Loganberry, postharvest 8 Mango, postharvest 8 Milk, fat 0.25 Muskmelon, postharvest 8 Oat, postharvest 8 Orange, postharvest 8 Peach, postharvest 8 Peanut, postharvest 8 Pea, postharvest 8 Pear, postharvest 8 Pineapple, postharvest 8 Plum, prune, fresh, postharvest 8 Potato, postharvest 0.25 Poultry, fat 3 Poultry, meat byproducts 3 Poultry, meat 3 Raspberry, postharvest 8 Rice, postharvest 20 Rye, postharvest 20 Sheep, fat 0.1 Sheep, meat byproducts 0.1 Sheep, meat 0.1 Sorghum, grain, postharvest 8 Sweet potato, postharvest 0.25 Tomato, postharvest 8 Walnut, postharvest 8 Wheat, postharvest 20

(2)Piperonyl butoxide may be safely used in accordance with the following prescribed conditions:

(i)It is used or intended for use in combination with pyrethrins for control of insects:

(A)In cereal grain mills and in storage areas for milled cereal grain products, whereby the amount of piperonyl butoxide is at least equal to but not more than 10 times the amount of pyrethrins in the formulation.

(B)On the outer ply of multiwall paper bags of 50 pounds or more capacity in amounts not exceeding 60 milligrams per square foot, whereby the amount of piperonyl butoxide is equal to 10 times the amount of pyrethrins in the formulation. Such treated bags are to be used only for food, dried.

(C)On cotton bags of 50 pounds or more capacity in amounts not exceeding 55 milligrams per square foot of cloth, whereby the amount of piperonyl butoxide is equal to 10 times the amount of pyrethrins in the formulation. Such treated bags are constructed with waxed paper liners and are to be used only for food, dried that contain 4 percent fat or less.

(D)In two-ply bags consisting of cellophane/polyolefin sheets bound together by an adhesive layer when it is incorporated in the adhesive. The treated sheets shall contain not more than 50 milligrams of piperonyl butoxide per square foot (538 milligrams per square meter). Such treated bags are to be used only for packaging plum, prune, dried; grape, raisin; and other fruit, dried and are to have a maximum ratio of 3.12 milligrams of piperonyl butoxide per ounce of fruit (0.10 milligram of piperonyl butoxide per gram of product).

(E)In food processing and food storage areas: Provided, That the food is removed or covered prior to such use.

(ii)It is used or intended for use in combination with pyrethrins and N-octylbicycloheptene dicarboximide for insect control in accordance with 21 CFR 178.3730.

(iii)A tolerance of 10 parts per million is established for residues of piperonyl butoxide in or on:

(A)Grain, cereal, milled fractions when present therein as a result of its use in cereal grain mills and in storage areas for milled cereal grain products.

(B)Food, dried when present as a result of migration from its use on the outer ply of multiwall paper bags of 50 pounds or more capacity.

(C)Food treated in accordance with 21 CFR 178.3730.

(D)Food, dried that contain 4 percent fat, or less, when present as a result of migration from its use on the cloth of cotton bags of 50 pounds or more capacity constructed with waxed paper liners.

(E)Food treated in accordance with paragraph (a)(2)(i)(D) and

(E)of this section.

(iv)To assure safe use of the pesticide, its label and labeling shall conform to that registered with the U.S. Environmental Protection Agency, and it shall be used in accordance with such label and labeling.

(v)Where tolerances are established on both raw agricultural commodities and processed food made therefrom, the total residues of piperonyl butoxide in or on the processed food shall not be greater than that permitted by the larger of the two tolerances.

(3)Piperonyl butoxide may be safely used in accordance with the following prescribed conditions:

(i)It is used or intended for use in combination with pyrethrins for control of insects:

(A)On the outer ply of multiwall paper bags of 50 pounds or more capacity in amounts not exceeding 60 milligrams per square foot.

(B)On cotton bags of 50 pounds or more capacity in amounts not exceeding 55 milligrams per square foot of cloth. Such treated bags are constructed with waxed paper liners and are to be used only for feed, dried that contain 4 percent fat or less.

(ii)It is used in combination with pyrethrins, whereby the amount of piperonyl butoxide is equal to 10 times the amount of pyrethrins in the formulation. Such treated bags are to be used only for feed, dried.

(iii)A tolerance of 10 parts per million is established for residues of piperonyl butoxide when present as the result of migration:

(A)In or on feed, dried from its use on the outer ply of multiwall paper bags of 50 pounds or more capacity.

(B)In or on feed, dried that contain 4 percent fat, or less, from its use on cotton bags of 50 pounds or more capacity constructed with waxed paper liners.

(iv)To assure safe use of the pesticide, its label and labeling shall conform to that registered with the U.S. Environmental Protection Agency.

(v)Where tolerances are established on both the raw agricultural commodities and food, processed made therefrom, the total residues of piperonyl butoxide in or on the processed food shall not be greater than that permitted by the larger of the two tolerances.

(b)*Section 18 emergency exemptions.* [Reserved]

(c)*Tolerances with regional registrations.* [Reserved]

(d)*Indirect or inadvertent residues.* [Reserved] 5. Section 180.128 is revised to read as follows: § 180.128 Pyrethrins; tolerances for residues.

(a)*General.*

(1)Tolerances for residues of the insecticide pyrethrins (insecticidally active principles of *Chrysanthemum cinerariaefolium* ) are established in or on the following food commodities: Commodity Parts per million Almond, postharvest 1 Apple, postharvest 1 Barley, postharvest 3 Bean, postharvest 1 Birdseed, mixtures, postharvest 3 Blackberry, postharvest 1 Blueberry, postharvest 1 Boysenberry, postharvest 1 Buckwheat, grain, postharvest 3 Cattle, fat 0.1(N) Cattle, meat byproducts 0.1(N) Cattle, meat 0.1(N) Cherry, sweet, postharvest 1 Cherry, tart, postharvest 1 Cacao bean, roasted bean, postharvest 1 Coconut, copra, postharvest 1 Corn, field, grain, postharvest 3 Corn, pop, grain, postharvest 3 Cotton, undelinted seed, postharvest 1 Crabapple, postharvest 1 Currant, postharvest 1 Dewberry, postharvest 1 Egg 0.1(N) Fig, postharvest 1 Flax, seed, postharvest 1 Goat, fat 0.1(N) Goat, meat byproducts 0.1(N) Goat, meat 0.1(N) Gooseberry, postharvest 1 Grape, postharvest 1 Guava, postharvest 1 Hog, fat 0.1(N) Hog, meat byproducts 0.1(N) Hog, meat 0.1(N) Horse, fat 0.1(N) Horse, meat byproducts 0.1(N) Horse, meat 0.1(N) Loganberry, postharvest 1 Mango, postharvest 1 Milk, fat 0.5 Muskmelon, postharvest 1 Oat, grain, postharvest 1 Orange, postharvest 1 Peach, postharvest 1 Peanut, postharvest 1 Pea, postharvest 1 Pear, postharvest 1 Pineapple, postharvest 1 Plum, prune, fresh, postharvest 1 Potato, postharvest 0.05 Poultry, fat 0.2 Poultry, meat byproducts 0.2 Poultry, meat 0.2 Raspberry, postharvest 1 Rice, grain, postharvest 3 Rye, postharvest 3 Sheep, fat 0.1(N) Sheep, meat byproducts 0.1(N) Sheep, meat 0.1(N) Sorghum, grain, grain, postharvest 1 Sweet potato, postharvest 0.05 Tomato, postharvest 1 Walnut, postharvest 1 Wheat, postharvest 3

(2)Pyrethrins may be safely used in accordance with the following prescribed conditions:

(i)It is used or intended for use in combination with piperonyl butoxide for control of insects:

(A)In cereal grain mills and in storage areas for milled cereal grain products, whereby the amount of pyrethrins is from 10 percent to 100 percent of the amount of piperonyl butoxide in the formulation.

(B)On the outer ply of multiwall paper bags of 50 pounds or more capacity in amounts not exceeding 6 milligrams per square foot, whereby the amount of pyrethrins is equal to 10 percent of the amount of piperonyl butoxide in the formulation. Such treated bags are to be used only for food, dried.

(C)On cotton bags of 50 pounds or more capacity in amounts not exceeding 5.5 milligrams per square foot of cloth, whereby the amount of pyrethrins is equal to 10 percent of the amount of piperonyl butoxide in the formulation. Such treated bags are constructed with waxed paper liners and are to be used only for food, dried that contain 4 percent fat or less.

(D)In two-ply bags consisting of cellophane/polyolefin sheets bound together by an adhesive layer when it is incorporated in the adhesive. The treated sheets shall contain not more than 10 milligrams of pyrethrins per square foot (107.6 milligrams per square meter). Such treated bags are to be used only for packaging plum, prune, dried; grape, raisin; and other fruit, dried, and are to have a maximum ratio of 0.31 milligram of pyrethrins per ounce of fruit (0.01 milligram of pyrethrins per gram of product).

(E)In food processing areas and food storage areas: *Provided,* That the food is removed or covered prior to such use.

(ii)It is used or intended for use in combination with piperonyl butoxide and *N* -octylbicycloheptene dicarboximide for insect control in accordance with § 180.367(a)(2).

(iii)A tolerance of 1 part per million is established for residues of pyrethrins in or on:

(A)Grain, cereal, milled fractions when present as a result of its use in cereal grain mills and in storage areas for grain, cereal, milled products.

(B)Food, dried when present as the result of migration from its use on the outer ply of multiwall paper bags of 50 pounds or more capacity.

(C)Food treated in accordance with § 180.367(a)(2).

(D)Food, dried that contain 4 percent fat, or less, when present as a result of migration from its use on the cloth of cotton bags of 50 pounds or more capacity constructed with waxed paper liners.

(E)Food treated in accordance with paragraphs (a)(2)(i)(D) and (a)(2)(i)(E)) of this section.

(v)Where tolerances are established on both the raw agricultural commodities and food, processed made therefrom, the total residues of pyrethrins in or on the food, processed shall not be greater than that permitted by the larger of the two tolerances.

(3)Pyrethrins may be safely used in accordance with the following prescribed conditions:

(i)It is used or intended for use in combination with piperonyl butoxide for control of insects:

(A)On the outer ply of multiwall paper bags of 50 pounds or more capacity in amounts not exceeding 6 milligrams per square foot.

(B)On cotton bags of 50 pounds or more capacity in amounts not exceeding 5.5 milligrams per square foot of cloth. Such treated bags are constructed with waxed paper liners and are to be used only for feed, dried that contain 4 percent fat or less.

(ii)It is used in combination with piperonyl butoxide, whereby the amount of pyrethrins is equal to 10 percent of the amount of piperonyl butoxide in the formulation. Such treated bags are to be used only for feed, dried.

(iii)A tolerance of 1 part per million is established for residues of pyrethrins when present as the result of migration:

(A)In or on feed, dried from its use on the outer ply of multiwall paper bags of 50 pounds or more capacity.

(B)In or on feed, dried that contain 4 percent fat, or less, from its use on cotton bags of 50 pounds or more capacity constructed with waxed paper liners.

(iv)To assure safe use of the pesticide, its label and labeling shall conform to that registered with the U.S. Environmental Protection Agency.

(v)Where tolerances are established on both raw agricultural commodities and food, processed made therefrom, the total residues of pyrethrins in or on the food, processed shall not be greater than that permitted by the larger of the two tolerances.

(b)*Section 18 emergency exemptions.* [Reserved]

(c)*Tolerances with regional registrations.* [Reserved]

(d)*Indirect or inadvertent residues.* [Reserved] 6. Section 180.145 is revised to read as follows: § 180.145 Fluorine compounds; tolerances for residues.

(a)*General.*

(1)Tolerances are established for combined residues of the insecticidal fluorine compounds cryolite and synthetic cryolite (sodium aluminum fluoride) in or on the following agricultural commodities: Commodity Parts per million Apricot 7 Blackberry 7 Blueberry 7 Boysenberry 7 Broccoli 7 Brussels sprouts 7 Cabbage 7 Cauliflower 7 Collards 7 Cranberry 7 Cucumber 7 Dewberry 7 Eggplant 7 Fruit, citrus 7 Grape 7 Kale 7 Kohlrabi 7 Lettuce, head 7 Lettuce, leaf 7 Loganberry 7 Melon 7 Nectarine 7 Peach 7 Pepper 7 Plum, prune, fresh 7 Pumpkin 7 Raspberry 7 Squash, summer 7 Squash, winter 7 Strawberry 7 Tomato 7 Youngberry 7

(2)Time-limited tolerances are established for residues of the insecticidal fluorine compounds cryolite and synthetic cryolite (sodium aluminum fluoride) in or on the commodities as follows: Commodity Parts per million Expiration/revocation date Potato 2.0 11/21/2001 Potato, processed potato waste 22.0 11/21/2001

(3)Tolerances are established for residues of fluoride in or on the following commodities from the postharvest fumigation with sulfuryl fluoride for the control of insects: Commodity Parts per million All processed food commodities not otherwise listed 70 Barley, bran, postharvest 45.0 Barley, flour, postharvest 45.0 Barley, grain, postharvest 15.0 Barley, pearled barley, postharvest 45.0 Cattle, meat, dried 40 Cheese 5.0 Cacao bean, roasted bean, postharvest 20 Coconut, postharvest 40 Coffee, bean, green, postharvest 15 Corn, field, flour, postharvest 35.0 Corn, field, grain, postharvest 10.0 Corn, field, grits, postharvest 10.0 Corn, field, meal, postharvest 30.0 Corn, pop, grain, postharvest 10.0 Cotton, undelinted seed, postharvest 70 Egg, dried 900 Fruit, dried , postharvest (other than raisin) 3.0 Ginger, postharvest 70 Grain, aspirated fractions, postharvest 55.0 Grape, raisin, postharvest 7.0 Hog, meat 20 Herbs and spices group 19, postharvest 70 Milk, powdered 5.0 Millet, grain, postharvest 40.0 Nut, pine, postharvest 20 Nut, tree, Group 14, postharvest 10.0 Oat, flour, postharvest 75.0 Oat, grain, postharvest 25.0 Oat, groats/rolled oats 75.0 Peanut, postharvest 15 Pistachio, postharvest 10.0 Rice, bran, postharvest 31.0 Rice, flour, postharvest 45 Rice, grain, postharvest 12.0 Rice, hulls, postharvest 35.0 Rice, polished rice, postharvest 25.0 Rice, wild, grain, postharvest 25.0 Sorghum, grain, postharvest 40.0 Triticale, grain, postharvest 40.0 Vegetable, legume, group 6, postharvest 70 Wheat, bran, postharvest 40.0 Wheat, flour, postharvest 125.0 Wheat, germ, postharvest 130.0 Wheat, grain, postharvest 40.0 Wheat, milled byproducts, postharvest 130.0 Wheat, shorts, postharvest 40.0

(b)*Section 18 emergency exemptions.* [Reserved]

(c)*Tolerances with regional registrations.* Tolerances with regional registration, as defined by § 180.1(n), are established for the combined residues of the insecticidal fluorine compounds, cryolite and synthetic cryolite (sodium aluminum fluoride), in or on the following raw agricultural commodities: Commodity Parts per million Kiwifruit 15

(d)*Indirect or inadvertent residues.* [Reserved] 7. In § 180.206 in the table to paragraph

(a)revise the entry for “Coffee bean 1 ” and footnote 1 to read as follows: § 180.206 Phorate; tolerances for residues.

(a)* * * Commodity Parts per million * * * * * Coffee, bean, green 1 0.02 * * * * * 1 There are no U.S. registrations as of September 1, 1993 for coffe, bean, green. 8. In § 180.225 by revising paragraph (a)(3) to read as follows: § 180.225 Phosphine; tolerances for residues.

(a)* * *

(3)Residues resulting from fumigation of processed food: Commodity Parts per million Processed food 0.01 § 180.268 [Removed] 9. Remove § 180.268. 10. In § 180.291 by revising paragraph

(a)to read as follows: § 180.291 Pentachloronitrobenzene; tolerance for residues.

(a)A tolerance of 0.1 part per million is established for negligible residues of the fungicide pentachloronitrobenzene in or on the raw agricultural commodity cotton, undelinted seed. 11. In § 180.293 by revising paragraph (a)(2) to read as follows: § 180.293 Endothall; tolerances for residues.

(a)* * *

(2)An interim tolerance of 0.2 parts per million is established for residues of the herbicide endothall (7 - oxabicyclo[2.2.1] heptane-2,3-dicarboxylic acid) in water, potable from use of its potassium, sodium, di- *N, N* -dimethylalkylamine, and mono- *N-N,* -dimethylalkylamine salts as algicides or herbicides to control aquatic plants in canals, lakes, ponds, and other potential sources of water, potable. 12. Section 180.319 is revised to read as follows: § 180.319 Interim tolerances. While petitions for tolerances for negligible residues are pending and until action is completed on these petitions, interim tolerances are established for residues of the listed pesticide chemicals in or on the following raw agricultural commodities: Substances Uses Tolerance in parts per million Raw agricultural commodity Carbaryl (1-naphthyl N-methylcarbamate and its metabolite 1-naphthol, calculated as carbaryl Insecticide 0.5 Egg Coordination product of zinc ion and maneb Fungicide 1.0 (Calculated as zinc ethylenebisdithiocarbamate) Potato Endothall (7-oxabicyclo-(2,2,1) heptane 2,3- dicarboxylic acid) Herbicide 0.2 Beet, sugar Isopropyl carbanilate

(IPC)Herbicide 5.0 Alfalfa, hay; clover, hay; and grass, hay 2.0 Alfalfa, forage; clover, forage; and grass, forage 0.1 Flax, seed; lentil; lettuce, head and lettuce, leaf; pea; safflower, seed; spinach; and beet, sugar, roots and beet, sugar, tops 0.5 Egg; cattle, fat; cattle meat; cattle, meat byproducts; goat, fat; goat, meat; goat, meat byproducts; hog, fat; hog, meat; hog, meat byproducts; horse, fat; horse, meat; horse, meat byproducts; milk; sheep, fat; sheep meat; sheep, meat byproducts; poultry, fat; poultry, meat; poultry, meat byproducts Isopropyl m-chlorocarbanilate (CIPC). Herbicide 0.05 Milk; cattle, fat; cattle, meat; cattle, meat byproducts; goat, fat; goat, meat; goat, meat byproducts; hog, fat; hog, meat; hog, meat byproducts; horse, fat; horse, meat; horse, meat byproducts; sheep, fat; sheep meat; sheep, meat byproducts Parathion (O,O-diethyl-O-p-nitrophenythiophosphate) or its methyl homolog Herbicide 0.5 Rye Pentachloronitrobenzene Fungicide 1.0 Peanut 0.1 Bean, broccoli, Brussels sprouts, cabbage, cauliflower, garlic, pepper, potato, and tomato 13. Section 180.342 is amended by revising the introductory text of paragraph (a)(4) to read as follows: § 180.342 Chlorpyrifos; tolerances for residues.

(a)* * *

(4)A tolerance of 0.1 part per million is established for residues of chlorpyrifos, per se, in or on food commodities (other than those already covered by a higher tolerance as a result of use on growing crops) in food service establishments where food and food products are prepared and served, as a result of the application of chlorpyrifos in microencapsulated form. § 180.364 [Amended] 14. In § 180.364, amend the table to paragraph

(a)by removing the entry for “Peanut, forage”. 15. In § 180.379, paragraph (a)(2)(i) is revised to read as follows: § 180.379 Cyano(3-phenoxyphenyl)methyl-4-chloro-α-(1-methylethyl) benzeneacetate; tolerances for residues.

(a)* * *

(2)* * *

(i)In or on food commodities (other than those already covered by a higher tolerance as a result of use on growing crops) in food-handling establishments where food products are held, processed, or prepared. § 180.399 [Amended] 16. In § 180.399, in the table to paragraph (a)(1) by removing the entry for “Peanut hay”. 17. In § 180.422, by revising paragraph (a)(2)(i) to read as follows: § 180.422 Tralomethrin; tolerances forresidues.

(a)* * *

(2)* * *

(i)In or on food commodities (other than those covered by a higher tolerance as a result of use on growing crops) in food-handling establishments. 18. By revising § 180.438 to read as follows: § 180.438 Lambda-cyhalothrin and an isomer gamma-cyhalothrin; tolerances for residues.

(a)*General* .

(1)Tolerances are established for the combined residues of the pyrethroid lambda-cyhalothrin, 1:1 mixture of ( *S* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and ( *R* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *S* ,3 *S* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and its epimer expressed as epimer of lambda-cyhalothrin, a 1:1 mixture of ( *S* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *S* ,3 *S* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and ( *R* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate, on plants and livestocks, as indicated in the following table. Commodity Parts per million Alfalfa, forage 5.0 Alfalfa, hay 6.0 Almond, hulls 1.5 Apple, wet pomace 2.50 Avocado, imported 0.20 Brassica, head and stem, subgroup 5A 0.4 Canola, refined oil 2.0 Canola, seed 1.0 Cattle, fat 3.0 Cattle, meat 0.2 Cattle, meat byproducts 0.2 Corn, field, grain 0.05 Corn, field, grain, flour 0.15 Corn, field, forage 6.0 Corn, field, stover 1.0 Corn, pop, grain 0.05 Corn, pop, grain, flour 0.05 Corn, pop, stover 1.0 Corn, sweet, forage 6.0 Corn, sweet, stover 1.0 Corn, sweet, kernel plus cob with husks removed 0.05 Cotton, undelinted seed 0.05 Egg 0.01 Fruit, pome, group 11 0.30 Fruit, stone, group 12 0.50 Garlic 0.1 Goat, fat 3.0 Goat, meat 0.2 Goat, meat byproducts 0.2 Grain, aspirated fractions 2.0 Hog, fat 3.0 Hog, meat 0.2 Hog, meat byproducts 0.2 Hop, dried cones 10.0 Horse, fat 3.0 Horse, meat 0.2 Horse, meat byproducts 0.2 Lettuce, head 2.0 Lettuce, leaf 2.0 Milk, fat (reflecting 0.2 ppm in whole milk) 5.0 Nut, tree, group 14 0.05 Onion, bulb 0.1 Pea and bean, dried shelled, except soybean, subgroup 6C 0.10 Pea and bean, succulent shelled, subgroup 6B 0.01 Peanut 0.05 Peanut, hay 3.0 Poultry, fat 0.03 Poultry, meat 0.01 Poultry, meat byproducts 0.01 Rice, grain 1.0 Rice, hulls 5.0 Rice, straw 1.8 Sheep, fat 3.0 Sheep, meat 0.2 Sheep, meat byproducts 0.2 Soybean 0.01 Sorghum, grain, grain 0.2 Sorghum, grain, forage 0.30 Sorghum, grain, stover 0.50 Sugarcane, cane 0.05 Sunflower, forage 0.2 Sunflower, seed, hulls 0.50 Sunflower, refined oil 0.30 Sunflower, seed 0.2 Tomato 0.1 Tomato, dry pomace 6.0 Tomato, wet pomace 6.0 Vegetables, fruiting, group 8 0.20 Vegetables, legume, edible podded, subgroup 6A 0.20 Wheat, grain 0.05 Wheat, forage 2.0 Wheat, hay 2.0 Wheat, straw 2.0 Wheat, bran 0.2

(2)Tolerances 1 are established for the combined residues of the pyrethroid [gamma-cyhalothrin (the isolated active isomer of lambda-cyhalothrin) ( *S* )-′-cyano-3-phenoxybenzyl ( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate)) and its epimer ( *R* )-′-cyano-3-phenoxybenzyl ( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclo propanecarboxylate in/on the following commodities: Commodity Parts per million Alfalfa, forage 5 Alfalfa, hay 6 Almond, hulls 1.5 Apple, wet pomace 2.50 Avocado, imported 0.20 Brassica, head and stem, subgroup 5A 0.4 Canola, seed 0.15 Cattle, fat 3 Cattle, meat 0.2 Cattle, meat byproducts 0.2 Corn, field, forage 6.0 Corn, field, grain 0.05 Corn, field, grain, flour 0.15 Corn, field, stover 1.0 Corn, pop, grain 0.05 Corn, pop, stover 1.0 Corn, sweet, forage 6.0 Corn, sweet, kernel plus cob with husks removed 0.05 Corn, sweet, stover 1.0 Cotton, undelinted seed 0.05 Egg 0.01 Fruit, pome, group 11 0.30 Fruit, stone, group 12 0.50 Garlic 0.10 Goat, fat 3.0 Goat, meat 0.2 Goat, meat byproducts 0.2 Grain, aspirated fractions 2.0 Hog, fat 3.0 Hog, meat 0.2 Hog, meat byproducts 0.2 Horse, fat 3.0 Horse, meat 0.2 Horse, meat byproducts 0.2 Lettuce, head 2.0 Lettuce, leaf 2.0 Milk, fat (reflecting 0.20 ppm in whole milk 5.0 Nut, tree, group 14 0.05 Onion, bulb 0.1 Pea and bean, dried shelled, except soybean, subgroup 6C 0.10 Pea and bean, succulent shelled, subgroup 6B 0.01 Peanut 0.05 Peanut, hay 3.0 Poultry, fat 0.03 Poultry, meat 0.01 Poultry, meat byproducts 0.01 Rice, grain 1.0 Rice, hulls 5.0 Rice, straw 1.8 Sheep, fat 3.0 Sheep, meat 0.2 Sheep, meat byproducts 0.2 Sorghum, grain, forage 0.30 Sorghum, grain, grain 0.20 Sorghum, grain, stover 0.50 Soybean 0.01 Sugarcane 0.05 Sunflower, forage 0.20 Sunflower, seed hulls 0.50 Sunflower, refined oil 0.30 Sunflower, seed 0.20 Tomato 0.10 Tomato, dry pomace 6.0 Tomato, wet pomace 6.0 Vegetables, fruiting, group 8 0.20 Vegetable, legume, edible podded, subgroup 6A 0.20 Wheat, grain 0.05 Wheat, forage 2.0 Wheat, hay 2.0 Wheat, straw 2.0 Wheat, bran 2.0 1 The analytical enforcement methods for lambda-cyhalothrin are applicable for determination of gamma-cyhalothrin residues in plant and animal commodities.

(3)A food additive tolerance of 0.01 part per million is established for residues of the insecticide [1α( *S* *),3α( *Z* )]-(±)-cyano(3-phenoxyphenyl)methyl 3-(2-chloro-3,3,3-trifluoro-1-propenyl)-2,2-dimethylcyclopropanecarboxylate (lambda-cyhalothrin) as follows:

(i)In or on all food commodities (other than those already covered by a higher tolerance as a result of use on growing crops) in food-handling establishments where food products are held, processed, or prepared.

(ii)Application shall be limited solely to spot and/or crack and crevice treatment with a spray solution maximum of a 0.06-percent active ingredient by weight. Food must be removed or covered during treatment. Spray should not be applied directly to surfaces or utensils that may come into contact with food. Food-contact surfaces and equipment should be thoroughly cleaned with an effective cleaning compound and rinsed with potable water before using.

(iii)For spot treatment, a coarse low-pressure spray shall be used. Limit individual spot treatments to an area no larger than 20 percent of the surface area. Any individual spot treatment shall not exceed 2 square feet.

(iv)For crack and crevice treatment, equipment capable of delivering a pin-stream of spray directly into the cracks and crevices shall be used.

(v)To assure safe use of the additive, its label and labeling shall conform to that registered with the U.S. Environmental Protection Agency, and it shall be used in accordance with such label and labeling.

(b)*Section 18 emergency exemptions* . Time-limited tolerances are established for combined residues of the insecticide lambda-cyhalothrin (a 1:1 mixture of ( *S* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and (R)-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *S* ,3 *S* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and its epimer a 1:1 mixture of ( *S* )-α-cyano-3-phenoxybenzyl-( *Z* )-(1 *S* ,3 *S* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and ( *R* )-α-cyano-3-phenoxybenzyl -( *Z* )-(1 *R* ,3 *R* )-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclo-propanecarboxylate in connection with use of the pesticide under section 18 emergency exemptions granted by EPA. The tolerances will expire and are revoked on the dates specified in the following table: Commodity Parts per million Expiration/revocation date Barley, bran 0.2 12/31/08 Barley, grain 0.05 12/31/08 Barley, hay 2.0 12/31/08 Barley, straw 2.0 12/31/08 Clover, forage 5.0 12/31/08 Clover, hay 6.0 12/31/08 Grass, forage 5.0 12/31/08 Grass, hay 6.0 12/31/08 Rice, wild, grain 1.0 12/31/08

(c)*Tolerances with regional registrations* . [Reserved]

(d)*Indirect or inadvertent residues* . [Reserved] § 180.484 [Amended] 19. In § 180.484, in the table to paragraph (a)(1) by removing the entry for “Sheep, milk.” 20. In § 180.501, by revising the introductory text of paragraph

(a)to read as follows: § 180.501 Hydroprene; tolerances for residues.

(a)*General.* A tolerance of 0.2 part per million is established for residues of hydroprene [(S)-(Ethyl (2E,4E,7S)-3,7,11-trimrthyl-2,4-dodecadienoate)], (CAS Reg. No. 65733-18-8) on food commodities in food-handling establishments in accordance with the following prescribed conditions: 21. In § 180.519 by revising the introductory text of paragraph

(a)to read as follows: § 180.519 Bromide ion and residual bromine; tolerances for residues.

(a)*General.* The food additives, bromide ion and residual bromine, may be present in water, potable in accordance with the following conditions: 22. Section 180.522 is revised to read as follows: § 180.522 Fumigants for processed grains used in production of fermented malt beverage; tolerances for residues.

(a)*General* . Fumigants for processed grain may be safely used, in accordance with the following conditions.

(1)Methyl bromide. Total residues of inorganic bromides (calculated as Br) from the use of this fumigant shall not exceed 125 parts per milion.

(2)Methyl bromide is used to fumigate corn grits and cracked rice in the production of fermented malt beverage.

(3)To assure safe use of the fumigant, its label and labeling shall conform to the label and labeling registered by the U.S. Environmental Protection Agency, and the usage employed should conform with such label or labeling.

(4)The total residue of inorganic bromides in fermented malt beverage, resulting from the use of corn grits and cracked rice fumigated with the fumigant described in paragraph (a)(2) of this section plus additional residues of inorganic bromides that may be present from uses in accordance with other regulations in this chapter promulgated under section 408 and/or 409 of the Act, does not exceed 25 parts per million bromide (calculated as Br).

(b)*Section 18 emergency exemptions* . [Reserved]

(c)*Tolerances with regional registrations* . [Reserved]

(d)*Indirect or inadvertent residues* . [Reserved] 23. Section 180.525 is revised to read as follows: § 180.525 Resmethrin; tolerances for residues.

(a)*General* . Tolerances are established for residues of the insecticide resmethrin [5-(phenylmethyl)-3-furanyl] methyl 2,2-dimethyl-3-(2-methyl-1-propenyl) cyclopropanecarboxylate in or on food commodities at 3.0 ppm resulting from use of the insecticide in food handling and storage areas as a space concentration for spot/or crack and crevice treatment and shall be limited to a maximum of 3.00 percent of the active ingredient by weight, and as a space treatment shall be limited to a maximum of 0.5 fluid ounce of 3.0 percent active ingredient by weight per 1000 cubic feet of space provided that the food is removed or covered prior to such use. To assure safe use of the additive, its label and labeling shall conform to that registered with the U.S. Environmental Protection Agency, and shall be used in accordance with such label and labeling.

(b)*Section 18 emergency exemptions* . [Reserved]

(c)*Tolerances with regional registrations* . [Reserved]

(d)*Indirect or inadvertent residues* . [Reserved] 24. By revising § 180.538 to read as follows: § 180.538 Copper; tolerances for residues.

(a)*General* . A tolerance of 1 part per million is established in water, potable for residues of copper resulting from the use of the algicides or herbicides basic copper carbonate (malachite), copper sulfate, copper monoethanolamine, and copper triethanolamine to control aquatic plants in reservoirs, lakes, ponds, irrigation ditches, and other potential sources of potable water.

(b)*Section 18 emergency exemptions* . [Reserved]

(c)*Tolerances with regional registrations* . [Reserved]

(d)*Indirect or inadvertent residues* . [Reserved] 25. In § 180.545 paragraph (a)(2) is revised to read as follows: § 180.545 Prallethrin (RS)-2-methyl-4-oxo-3-(2-propynyl)cyclopent-2-enyl (1RS)-cis, trans-chrysanthemate; tolerances for residues.

(a)* * *

(2)In or on food commodities in food handling establishments where food and food products are held, processed, prepared and/or served. [FR Doc. E6-21025 Filed 12-12-06; 8:45 am] BILLING CODE 6560-50-S FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 64 [CG Docket No. 02-386; FCC 06-134] Rules and Regulations Implementing Minimum Customer Account Record Exchange Obligations on All Local and Interexchange Carriers AGENCY: Federal Communications Commission. ACTION: Final rule. SUMMARY: In this document, the Commission adopts minor modifications of the Commission's customer account record exchange

(CARE)rules. The Commission concluded that minor modifications to its rules are needed to clarify carriers' respective obligations under that section in order to ensure accurate billing of end user customers, and to execute end user customer requests in a timely manner. DATES: The rules in this document contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a document in the **Federal Register** announcing the effective date for these rules. Written comments by the public on the new and modified information collections are due February 12, 2007. ADDRESSES: Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: David Marks, Consumer & Governmental Affairs Bureau at

(202)418-0347 (voice), or e-mail *David.Marks@fcc.gov.* SUPPLEMENTARY INFORMATION: On February 25, 2005, the Commission released a Report and Order and Further Notice of Proposed Rulemaking ( *Report and Order* ), *Rules and Regulations Implementing Minimum Customer Account Record Exchange Obligations on All Local and Interexchange Carriers,* published at 70 FR 32258, June 2, 2005 in which it established mandatory, minimum standards governing the exchange of customer account information between local exchange carriers

(LECs)and interexchange carriers (IXCs). On August 9, 2005, the Commission released a public notice requesting comment on proposed clarifications and modifications to the rules ( *see* Consumer & Governmental Affairs Bureau Seeks Comment on Proposed Modifications/Clarifications to Rules Governing the Exchange of Customer Account Information Between Local and Long Distance Carriers, CG Docket No. 02-386, Public Notice, DA 05-2266, 70 FR 53137 (Sept. 7, 2005) ( *Public Notice* )). This is a summary of the Commission's *Order on Reconsideration,* CG Docket No. 02-386, FCC 06-134, adopted September 6, 2003, and released September 13, 2006. This document contains new information collection requirements subject to the PRA of 1995, Public Law 104-13. These requirements will be submitted to OMB for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new information collection requirements contained in this proceeding. In addition to filing comments with the Secretary, a copy of any comments on the Paperwork Reduction Act

(PRA)information collection requirements contained herein should be submitted to Leslie Smith, Federal Communications Commission, Room 1-C216, 445 12th Street, SW., Washington, DC 20554, or via the Internet to *Leslie.Smith@fcc.gov,* and to Allison E. Zaleski, OMB Desk Officer, Room 10236 NEOB, 725 17th Street, NW., Washington, DC 20503, via the Internet to *Allison E. Zaleski@omb.eop.gov* or via fax at

(202)395-6466. Copies of any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this document may be purchased from the Commission's duplicating contractor, Best Copy and Printing, at Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact the Commission's duplicating contractor at its Web site: *http://www.bcpiweb.com* or call 1-800-378-3160. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to *fcc504@fcc.gov* or call the Consumer & Governmental Affairs Bureau at

(202)418-0530 (voice) or

(202)418-0432 (TTY). Paperwork Reduction Act of 1995 Analysis This document contains new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public to comment on the information collection requirements contained in the *Order on Reconsideration* as required by the Paperwork Reduction Act

(PRA)of 1995, Public Law 104-13. Public and agency comments are due February 12, 2007. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, *see* 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” In the present document, the Commission undertook to minimize the burden of the new rules on small businesses and small entities. For example, the rules adopted here do not require the use of particular CARE codes for the exchange of customer account information. The Commission also does not adopt specific performance measurements for the timeliness and completeness of the transfer of customer account information between LECs and IXCs. Finally, the Commission notes that carriers subject to these requirements may use a variety of transmission mediums ( *e.g.,* facsimile, mail, electronic mail, cartridge) for the required information exchanges. These measures should substantially alleviate any burdens on businesses with fewer than 25 employees. Synopsis In this *Order on Reconsideration,* the Commission concludes that minor modifications to § 64.4002 are needed to clarify carriers' respective obligations under that rule section. Section 64.4002(d) is modified to require that a LEC notify an IXC when the LEC has removed at its local switch a presubscribed customer of the IXC in connection with the customer's selection of “no-PIC” status. In this context, the selection of “no-PIC” status by the customer refers to the selection of no carrier for interLATA service or no carrier for intraLATA service. The Commission concludes that this modification is needed to ensure that an IXC does not continue billing a customer for non-usage-related monthly charges where that customer has contacted his current LEC or his current IXC to select “no-PIC” status. Section 64.4002(e) of the Commission's rules is modified to include the effective date of any changes to a customer's local service account and the carrier identification code of the customer's IXC among the categories of information that must be provided to the IXC by the LEC. The Commission concludes that knowing the effective date of account changes will help IXCs to maintain accurate customer account information and that including the carrier identification code of the customer's IXC will enable an IXC to verify that it is the proper recipient of the transmitted information. Section 64.4002(g) of the Commission's rules is modified to make the information categories included in § 64.4002(g) consistent with those included in other LEC notification requirements. Section 64.4002(g) also is modified to require that when a customer changes LECs, but wishes to retain his current PIC, the new LEC must so notify the current PIC so that the current PIC does not erroneously assume, absent additional notification from the new LEC, that the customer also wishes to cancel his current PIC. Sections 64.4002(a)(6), (b)(6), (d)(5) and (f)(5) of the Commission's rules are modified to substitute the phrase “carrier identification code of the IXC” for the phrase “carrier identification code of the submitting LEC.” This “mirroring” of information back to the IXC by the LEC serves as a “handshake” and is needed to confirm that the LEC has properly identified the intended recipient of a particular notification. Final Regulatory Flexibility Certification The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which:

(1)Is independently owned and operated;

(2)is not dominant in its field of operation; and

(3)satisfies any additional criteria established by the Small Business Administration (SBA). On August 9, 2005, the Commission released a Public Notice seeking comment on the Coalition's proposed clarifications and modifications to § 64.4002 of the Commission's rules. This *Order on Reconsideration* adopts clarifications and modifications that are in the nature of technical corrections to the Commission's customer account record exchange rules that do not have a significant economic impact on entities subject to those rules. First, our modification to § 64.4002(d) makes this provision consistent with similar notification requirements adopted in the CARE *Order* simply by requiring a LEC to confirm its receipt of a particular IXC-initiated notification with an appropriate response. Similarly, we adopt modifications to §§ 64.4002(e) and

(g)to include within the information exchanges prescribed by those section, the same standard categories of information that carriers routinely must provide in connection with other notification obligations adopted in the CARE *Order.* Changing these two sections to parallel other sections of the Commission's CARE rules simplifies and, thereby, reduces the compliance burden. Lastly, we modify §§ 64.4002(a)(6), (b)(6), (d)(5) and (f)(5) to change the phrase “carrier identification code of the submitting LEC” to read “carrier identification code of the submitting IXC.” This change adds no additional compliance burden. The Commission believes that the compliance burden, and resulting economic impact on entities subject thereto, will be *de minimis* . Therefore, we certify for purposes of the RFA that the clarifications and modifications we adopt in this *Order on Reconsideration* will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the *Order on Reconsideration,* including a copy of this Final Regulatory Flexibility Certification ( *FRFC* ), to the Chief Counsel for Advocacy of the SBA. This final certification will also be published in the **Federal Register** . Congressional Review Act The Commission will send a copy of the *Order on Reconsideration,* including the FRFC, in a report to be sent to Congress and the Comptroller General pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the *Order on Reconsideration,* including this *FRFC,* to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the *Order on Reconsideration* and *FRFC* (or summaries thereof) will also be published in the **Federal Register** . ( *See* 5 U.S.C. 604(b)). Ordering Clauses Pursuant to the authority contained in sections 1-4, 201, 202, 222, 258, and 303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-154, 201, 202, 222, 258, and 303(r), the Order on Reconsideration Is Adopted. Pursuant to the authority contained in sections 1-4, 201, 202, 222, 258, and 303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-154, 201, 202, 222, 258, and 303(r), part 64 of the Commission's rules, 47 CFR part 64, Is Amended as set forth below. Because many of the rules and requirements contained in this *Order on Reconsideration* and as set forth below contain information collection requirements under the PRA, the rules and requirements Shall Not Become Effective until the information collection requirements have been approved by OMB. The Commission will publish a document in the **Federal Register** announcing the effective date of these rules. Pursuant to the authority contained in sections 1-4, 201, 202, 222, 258, and 303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-154, 201, 202, 222, 258, and 303(r), and § 1.407 of the Commission's rules, 47 CFR 1.407, the Request for Modification filed by AT&T Corp, BellSouth Corporation, Sprint Corporation, Qwest Communications International Inc., and VerizonCommunications, Inc. on April 15, 2005, and June 15, 2005, is granted in part and denied in part, to the extent provided herein. List of Subjects in 47 CFR Part 64 Reporting and recordkeeping requirements, telecommunications, telephone. Federal Communications Commission. Marlene H. Dortch, Secretary. Rule Changes For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows: PART 64—MISCELLANEOUS RULES RELATING TO COMMON CARRIERS 1. The authority citation continues to read as follows: Authority: 47 U.S.C. 154, 254(k); secs. 403(b)(2)(B), (c), Pub. L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 222, 225, 226, 228, and 254(k) unless otherwise noted. 2. Section 64.4002 is revised to read as follows: § 64.4002 Notification obligations of LECs. To the extent that the information is reasonably available to a LEC, the LEC shall provide to an IXC the customer account information described in this section consistent with § 64.4004. Nothing in this section shall prevent a LEC from providing additional customer account information to an IXC to the extent that such additional information is necessary for billing purposes or to properly execute a customer's PIC order.

(a)*Customer-submitted PIC order.* Upon receiving and processing a PIC selection submitted by a customer and placing the customer on the network of the customer's preferred interexchange carrier at the LEC's local switch, the LEC must notify the IXC of this event. The notification provided by the LEC to the IXC must contain all of the customer account information necessary to allow for proper billing of the customer by the IXC including but not limited to:

(1)The customer's billing telephone number, working telephone number, and billing name and address;

(2)The effective date of the PIC change;

(3)A statement describing the customer type (i.e., business or residential);

(4)A statement indicating, to the extent appropriate, that the customer's telephone service listing is not printed in a directory and is not available from directory assistance or is not printed in a directory but is available from directory assistance;

(5)The jurisdictional scope of the PIC installation (i.e., intraLATA and/or interLATA and/or international);

(6)The carrier identification code of the IXC; and

(7)If relevant, a statement indicating that the customer's account is subject to a PIC freeze. The notification also must contain information, if relevant and to the extent that it is available, reflecting the fact that a customer's PIC selection was the result of:

(i)A move (an end user customer has moved from one location to another within a LEC's service territory);

(ii)A change in responsible billing party; or

(iii)The resolution of a PIC dispute.

(b)*Confirmation of IXC-submitted PIC order.* When a LEC has placed a customer on an IXC's network at the local switch in response to an IXC-submitted PIC order, the LEC must send a confirmation to the submitting IXC. The confirmation provided by the LEC to the IXC must include:

(1)The customer's billing telephone number, working telephone number, and billing name and address;

(2)The effective date of the PIC change;

(3)A statement describing the customer type (i.e., business or residential);

(5)The jurisdictional scope of the PIC installation (i.e., intraLATA and/or interLATA and/or international); and

(6)The carrier identification code of the IXC. If the PIC order at issue originally was submitted by an underlying IXC on behalf of a toll reseller, the confirmation provided by the LEC to the IXC must indicate, to the extent that this information is known, a statement indicating that the customer's PIC is a toll reseller.

(c)*Rejection of IXC-submitted PIC order.* When a LEC rejects or otherwise does not act upon a PIC order submitted to it by an IXC, the LEC must notify the IXC and provide the reason(s) why the PIC order could not be processed. The notification provided by the LEC to the IXC must state that it has rejected the IXC-submitted PIC order and specify the reason(s) for the rejection (e.g., due to a lack of information, incorrect information, or a PIC freeze on the customer's account). The notification must contain the identical data elements that were provided to the LEC in the original IXC-submitted PIC order (i.e., mirror image of the original order), unless otherwise specified by this paragraph. If a LEC rejects an IXC-submitted PIC order for a multi-line account (i.e., the customer has selected the IXC as his PIC for two or more lines or terminals associated with his billing telephone number), the notification provided by the LEC rejecting that order must explain the effect of the rejection with respect to each line (working telephone number or terminal) associated with the customer's billing telephone number. A LEC is not required to generate a line-specific or terminal-specific response, however, and may communicate the rejection at the billing telephone level, when the LEC is unable to process an entire order, including all working telephone numbers and terminals associated with a particular billing telephone number. In addition, the notification must indicate the jurisdictional scope of the PIC order rejection (i.e., intraLATA and/or interLATA and/or international). If a LEC rejects a PIC order because:

(1)The customer's telephone number has been ported to another LEC; or

(2)The customer has otherwise changed local service providers, the LEC must include in its notification, to the extent that it is available, the identity of the customer's new LEC.

(d)*Customer contacts LEC or new IXC to change PIC(s) or customer contacts LEC or current IXC to change PIC to No-PIC.* When a LEC has removed at its local switch a presubscribed customer from an IXC's network in response to a customer order, upon receipt of a properly verified PIC order submitted by another IXC, or in response to a notification from the customer's current IXC relating to the customer's request to change his or her PIC to No-PIC, the LEC must notify the customer's former IXC of this event. The LEC must provide to the IXC the customer account information that is necessary to allow for proper final billing of the customer by the IXC including but not limited to:

(1)The customer's billing telephone number, working telephone number, and billing name and address;

(2)The effective date of the PIC change;

(3)A description of the customer type (i.e., business or residential);

(4)The jurisdictional scope of the lines or terminals affected (i.e., intraLATA and/or interLATA and/or international); and

(5)The carrier identification code of the IXC. If a customer changes PICs but retains the same LEC, the LEC is responsible for notifying both the old PIC and new PIC of the PIC change. The notification also must contain information, if relevant and to the extent that it is available, reflecting the fact that a customer's PIC removal was the result of:

(i)The customer moving from one location to another within the LEC's service territory, but where there is no change in local service provider;

(ii)A change of responsible party on an account; or

(iii)A disputed PIC selection.

(e)*Particular changes to customer's local service account.* When, according to a LEC's records, certain account or line information changes occur on a presubscribed customer's account, the LEC must communicate this information to the customer's PIC. For purposes of this paragraph, the LEC must provide to the appropriate IXC account change information that is necessary for the IXC to issue timely and accurate bills to its customers including but not limited to:

(1)The customer's billing telephone number, working telephone number, and billing name and address;

(2)The customer code assigned to that customer by the LEC;

(3)The type of customer account (i.e., business or residential);

(4)The status of the customer's telephone service listing, to the extent appropriate, as not printed in a directory and not available from directory assistance, or not printed in a directory but available from directory assistance; and

(5)The jurisdictional scope of the PIC installation (i.e., intraLATA and/or interLATA and/or international);

(6)The effective date of any change to a customer's local service account; and

(7)The carrier identification code of the IXC. If there are changes to the customer's billing or working telephone number, customer code, or customer type, the LEC must supply both the old and new information for each of these categories.

(f)*Local service disconnection.* Upon receipt of an end user customer's request to terminate his entire local service account or disconnect one or more lines (but not all lines) of a multi-line account, the LEC must notify the PIC(s) for the billing telephone number or working telephone number on the account of the account termination or lines disconnected. In conjunction with this notification requirement, the LEC must provide to a customer's PIC(s) all account termination or single/multi-line disconnection change information necessary for the PIC(s) to maintain accurate billing and PIC records, including but not limited to:

(1)The effective date of the termination/disconnection; and

(2)The customer's working and billing telephone numbers and billing name and address;

(3)The type of customer account (i.e., business or residential);

(4)The jurisdictional scope of the PIC installation (i.e., intraLATA and/or interLATA and/or international); and

(5)The carrier identification code of the IXC.

(g)*Change of local service provider.* When a customer changes LECs, the customer's former LEC must notify the customer's PIC(s) of the customer's change in LEC and, if known, the identity of the customer's new LEC. If the customer also makes a PIC change, the customer's former LEC must also notify the customer's former PIC(s) of the change. When a customer only changes LECs, the new LEC must notify the customer's current PIC(s) that the customer's PIC selection has not changed. If the customer also makes a PIC change, the new LEC must notify the customer's new PIC of the customer's PIC selection. If the customer's former LEC is unable to identify the customer's new LEC, the former LEC must notify the customer's PIC(s) of a local service disconnection as described in paragraph (f).

(1)The required notifications also must contain information, if relevant and to the extent that it is available, reflecting the fact that an account change was the result of:

(i)The customer porting his number to a new LEC;

(ii)A local resale arrangement (customer has transferred to local reseller); or

(iii)The discontinuation of a local resale arrangement;

(2)The notification provided by the LEC to the IXC must include:

(i)The customer's billing telephone number, working telephone number, and, billing name and address;

(ii)The effective date of the change of local service providers or PIC change;

(iii)A description of the customer type (i.e., business or residential);

(iv)The jurisdictional scope of the lines or terminals affected (i.e., intraLATA and/or interLATA and/or international); and

(v)The carrier identification code of the IXC.

(h)*IXC requests for customer BNA information.* Upon the request of an IXC, a LEC must provide the billing name and address information necessary to facilitate a customer's receipt of a timely, accurate bill for services rendered and/or to prevent fraud, regardless of the type of service the end user receives/has received from the requesting carrier (i.e., presubscribed, dial-around, casual). In response to an IXC's BNA request for ANI, a LEC must provide the BNA for the submitted ANI along with:

(1)The working telephone number for the ANI;

(2)The date of the BNA response;

(3)The carrier identification code of the submitting IXC; and

(4)A statement indicating, to the extent appropriate, if the customer's telephone service listing is not printed in a directory and is not available from directory assistance, or is not printed in a directory but is available from directory assistance. A LEC that is unable to provide the BNA requested must provide the submitting carrier with the identical information contained in the original BNA request (i.e., the mirror image of the original request), along with the specific reason(s) why the requested information could not be provided. If the BNA is not available because the customer has changed local service providers or ported his telephone number, the LEC must include the identity of the new provider when this information is available. [FR Doc. E6-20911 Filed 12-12-06; 8:45 am] BILLING CODE 6712-01-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 97 [WT Docket No. 04-140; DA 06-2379] Amateur Service Rules AGENCY: Federal Communications Commission. ACTION: Correcting amendments. SUMMARY: This document contains corrections to the final regulations which were published in the **Federal Register** on Wednesday, November 15, 2006, (71 FR 66460). This amendment will clarify that the 500 Hz limitation in the definition applies only to the emission types that were added to the definition of data when these emissions transmitted on amateur service frequencies below 30 MHz. DATES: Effective December 15, 2006. FOR FURTHER INFORMATION CONTACT: William T. Cross, Wireless Telecommunications Bureau at

(202)418-0691, or TTY

(202)418-7233. SUPPLEMENTARY INFORMATION: Background On October 10, 2006, the Commission released a *Report and Order* , FCC 06-149, at 71 FR 66460, November 15, 2006, which incorrectly defined some of the “Data. Telemetry, telecommand and computer communications emissions” under 47 CFR 97.3(c)(2)(ii) and (c)(2)(iii) in the Amateur Radio Service proceeding in WT Docket No. 04-140. The *Erratum* corrects the rule amendments in §§ 97.3(c)(2)(ii) and (c)(2)(iii) of the *Report and Order* . The overall effect of this action is to revise § 97.3(c)(2) to conform the rule to the pertinent discussion in the text of the *Report and Order* . Need for Correction As published, the final regulations contain errors which may prove to be misleading and need to be clarified. List of Subjects in 47 CFR Part 97 Radio. Accordingly, 47 CFR part 97 is corrected by making the following correcting amendments: PART 97—AMATEUR RADIO SERVICE 1. The authority citation for part 97 continues to read as follows: Authority: 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303. Interpret or apply 48 Stat. 1064-1068, 1081-1105, as amended; 47 U.S.C. 151-155, 301-809, unless otherwise noted. 2. Revise paragraph (c)(2) of § 97.3 to read as follows: § 97.3 Definitions.

(c)* * *

(2)Data. Telemetry, telecommand and computer communications emissions having

(i)designators with A, C, D, F, G, H, J or R as the first symbol, 1 as the second symbol, and D as the third symbol;

(ii)emission J2D; and

(iii)emissions A1C, F1C, F2C, J2C, and J3C having an occupied bandwidth of 500 Hz or less when transmitted on an amateur service frequency below 30 MHz. Only a digital code of a type specifically authorized in this part may be transmitted. Federal Communications Commission. Katherine M. Harris, Deputy Chief, Mobility Services Division. [FR Doc. E6-21004 Filed 12-12-06; 8:45 am] BILLING CODE 6712-01-P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Part 571 [Docket No. NHTSA-2006-26299] Federal Motor Vehicle Safety Standards; Brake Hoses AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of Transportation. ACTION: Final rule; delay of effective date. SUMMARY: NHTSA published a final rule in December 2004 that amended the Federal motor vehicle safety standard on brake hoses, and announced an effective date of December 20, 2006. The agency has received several petitions for reconsideration of the rule and a petition to delay the effective date of the final rule. To allow for more time to respond to petitions for reconsideration, and to give industry more time to meet new requirements, this document delays the effective date of the final rule for one year, to December 20, 2007. This decision was made after NHTSA published a notice of proposed rulemaking on November 15, 2006, soliciting public comment on whether the effective date should be extended. All commenters wrote in support of extending the effective date. DATES: The effective date of the final rule amending 49 CFR 571.106 published at 69 FR 76298 on December 20, 2004 is delayed until December 20, 2007. Optional early compliance continues to be permitted as of February 18, 2005. Any petitions for reconsideration of today's final rule must be received by NHTSA not later than January 29, 2007. ADDRESSES: Petitions for reconsideration should refer to the docket number for this action and be submitted to: Administrator, National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 20590. FOR FURTHER INFORMATION CONTACT: For technical issues you may call: Mr. Jeff Woods, Vehicle Dynamics Division, Office of Crash Avoidance Standards, at

(202)366-6206. Mr. Woods' FAX number is:

(202)366-4921. For legal issues, you may call Ms. Dorothy Nakama, Office of the Chief Counsel, at

(202)366-2992. Her FAX number is:

(202)366-3820. You may send mail to both of these officials at the National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 20590. SUPPLEMENTARY INFORMATION: Background Federal Motor Vehicle Safety Standard No. 106, Brake hoses (49 CFR 571.106) (FMVSS No. 106), specifies labeling and performance requirements for motor vehicle brake hose, brake hose assemblies, and brake hose end fittings. The purpose of FMVSS No. 106 is to reduce deaths and injuries occurring as a result of brake system failure from pressure or vacuum loss due to hose or hose assembly rupture. 2004 Final Rule On December 20, 2004 (69 FR 76298)(DMS Docket No. NHTSA-2003-14483), NHTSA published a final rule amending FMVSS No. 106 to update the standard and incorporate the most recent substantive technical requirements of several Society of Automotive Engineers

(SAE)Recommended Practices relating to hydraulic brake hoses, vacuum brake hoses, air brake hoses, plastic air brake tubing, and end fittings. The final rule specified an effective date of December 20, 2006 for these amendments. Optional early compliance with the final rule was permitted as of February 18, 2005. Petitions for Reconsideration In early 2005, NHTSA received petitions for reconsideration of the December 20, 2004 final rule from Cooper Standard Automotive (Fluid Division), Degussa Corporation, George Apgar Consulting, MPC, Inc., and Parker Hannifin Corporation (with separate comments from its Brass Division and from its Hose Products Division). The petitions addressed a wide range of FMVSS No. 106 subjects. Petition for Extension of the Effective Date In a submission dated September 12, 2006, Legris (a division of Groupe Legris Industries) petitioned NHTSA for a delay of the December 20, 2004 final rule for an additional year, to December 20, 2007. Legris stated that it learned of the changes to FMVSS No. 106 “within the past few months” and stated that it cannot make all necessary changes to its brake hose products before the December 20, 2006 effective date. Legris asserted that without the extension, its business and customer base will be jeopardized and it will “be faced with a considerable loss of both sales revenue and profits, as well as losses from products already manufactured but which could not be installed in vehicles until after December 20, 2006.” Notice of Proposed Extension of Effective Date The petitions for reconsideration asked NHTSA to amend many of the December 20, 2004 final rule's provisions on brake hoses, brake hose assemblies, and end fittings. Our response to those petitions could affect the designs of certain types of brake hoses. The numerous issues raised in the petitions are complex. In some cases, the petitioners ask for changes that differ from those requested by other petitioners. The agency is in the process of developing its response to the petitions. A 12-month delay of the effective date, to December 20, 2007, would preserve the status quo until then. On November 15, 2006 (71 FR 66480) (DMS Docket No. NHTSA-2006-26299), NHTSA published a **Federal Register** notice proposing to delay the effective date for one year, to December 20, 2007. NHTSA stated that if made final, the NPRM would make no substantive change to the standard, but would only delay the effective date of the December 20, 2006 final rule for another year while the agency responds to the petitions for reconsideration of the rule. Because the agency sought to provide as much lead time as possible about its final determination whether the effective date will be delayed, a 15-day comment period on the issue of the delay of the December 20, 2004 final rule's effective date was provided. Public Comments and Final Rule In response to the November 15, 2006 NPRM, NHTSA received comments from: the Truck Manufacturers Association; the Alliance of Automobile Manufacturers; Mr. George B. Apgar, Chairman of the Society of Automotive Engineers Fluid Conductors and Conductors Technical Committee, Nonmetallic Airbrake Tubing and Fittings Subcommittee; and from four manufacturers of air brake hoses, other brake hose products or brake system components. All commenters wrote in support of delaying the effective date of the FMVSS No. 106 final rule to December 20, 2007. One commenter wrote that it “just learned of the changes to FMVSS No. 106 within the last week.” After considering the comments, NHTSA has decided to delay to December 20, 2007, the effective date of the December 20, 2004 final rule amending FMVSS No. 106. This Document Takes Effect Immediately Because December 20, 2006 (the original effective date for the FMVSS No. 106 final rule) is fast approaching, NHTSA also finds for good cause that this action delaying the effective date should take effect immediately. Today's final rule makes no substantive change to FMVSS No. 106, but delays the effective date of the December 20, 2004 final rule for one year while the agency responds to the petitions for reconsideration of the rule. Rulemaking Analyses and Notices A. Executive Order 12866, Regulatory Planning and Review, and DOT Regulatory Policies and Procedures We have considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed under E.O. 12866, “Regulatory Planning and Review.” Further, we have determined that this action is not “significant” within the meaning of the Department of Transportation's regulatory policies and procedures (44 FR 11034; February 26, 1979). This rule delays the effective date of a December 20, 2004 final rule amending FMVSS No. 106. There are no additional costs associated with the delay of the effective date. Since the safety benefits from the December 20, 2004 final rule cannot be quantified, and are likely minor, the impact of this extension is also minor. B. Regulatory Flexibility Act NHTSA has considered the impacts of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). I certify that the rule will not have a significant economic impact on a substantial number of small entities. This rule does not impose any new requirements or costs on manufacturers. It only preserves the status quo for an additional year. C. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. Since it only delays the effective date of a final rule, this final rule does not impose any new collection of information requirements for which a 5 CFR part 1320 clearance must be obtained. D. National Environmental Policy Act We have analyzed this rule for the purposes of the National Environmental Policy Act. We have determined that implementation of this action will not have any significant impact on the quality of the human environment. E. Executive Order 13132, Federalism This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. F. Civil Justice Reform This rule will not have any retroactive effect. A petition for reconsideration or other administrative proceedings are not required before parties may file suit in court. G. Unfunded Mandates Reform Act This rule will not result in costs of $100 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act. Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegations of authority at 49 CFR 1.50 and 501.8. Issued on: December 8, 2006. Stephen R. Kratzke, Associate Administrator for Rulemaking. [FR Doc. E6-21207 Filed 12-12-06; 8:45 am] BILLING CODE 4910-59-P 71 239 Wednesday, December 13, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 78 [Docket No. APHIS-2006-0183] RIN 0579-AC21 Brucellosis in Cattle; Research Facilities AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule. SUMMARY: We are proposing to amend the brucellosis regulations in order to facilitate research to be conducted on brucellosis-exposed or infected animals. Under the current regulations, such research could adversely affect a State's brucellosis classification. For example, the criteria for achieving and maintaining Class Free status provide that all cattle herds in the State or area must be released from quarantine and remain free of brucellosis for 12 consecutive months. Because the current definition of *herd* includes animals held in a research facility, a State could lose its Class Free status by allowing such research. By providing an exception for brucellosis-exposed or infected animals held within federally approved research facilities, this proposed rule would enable the initiation of necessary brucellosis research in Class Free States. DATES: We will consider all comments that we receive on or before February 12, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* , select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0183 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0183, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road, Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0183. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call

(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Debra Donch, National Brucellosis Epidemiologist, National Center for Animal Health Programs, VS, APHIS, 4700 River Road, Unit 43, Riverdale, MD 20737-1231;

(301)734-5952. SUPPLEMENTARY INFORMATION: Background Brucellosis is a contagious disease affecting animals and humans, caused by bacteria of the genus *Brucella* . The brucellosis regulations, contained in 9 CFR part 78 (referred to below as the regulations), provide a system for classifying States or portions of States according to the rate of *Brucella* infection present and the general effectiveness of a brucellosis control and eradication program. The classifications are Class Free, Class A, Class B, and Class C. States or areas that do not meet the minimum standards for Class C are required to be placed under Federal quarantine. The brucellosis Class Free classification is based on a finding of no known brucellosis in cattle for the 12 months preceding classification as Class Free. The Class C classification is for States or areas with the highest rate of brucellosis. Class A and Class B fall between these two extremes. Restrictions on moving cattle interstate become less stringent as a State approaches or achieves Class Free status. The regulations require that, to achieve and retain Class Free status, a State or area must have no cattle herds under quarantine. As a practical matter, this precludes any brucellosis research in Class Free States or areas, since infected animals may be used for such research, and the animals held in a research facility would be considered a herd under the current definition of that term. In § 78.1, *herd* is defined, in part, as, “all animals under common ownership or supervision that are grouped on one or more parts of any single premises (lot, farm, or ranch).” Currently, 48 of the 50 States are classified as brucellosis Class Free. Since research expertise and infrastructure potentially applicable to this country's brucellosis eradication efforts can be found in many Class Free States, this limitation may impede the progress of brucellosis research and delay eradication of the disease in the United States. We are proposing, therefore, to amend the definition of *herd* to specifically exclude animals that are contained within a federally approved research facility. While primarily intended to facilitate brucellosis research in Class Free States, this proposed change to the definition of *herd* would ensure that the presence of infected animals held for brucellosis research would not adversely affect the State's brucellosis classification. In order to gain Federal approval, a research facility must first adopt and demonstrate compliance with a series of guidelines established by the Animal and Plant Health Inspection Service (APHIS) and the Agricultural Research Service. These guidelines address, among other things, biological security, recordkeeping, identification, and sanitation standards. Additionally, each study conducted in a federally approved research facility must be approved by the State animal health official and the APHIS Area Veterinarian in Charge. Currently, certain facilities in Colorado, Idaho, Iowa, and Louisiana are approved to conduct brucellosis research under these guidelines. Our proposed change to the definition of *herd* would remove an obstacle to the initiation of brucellosis research, primarily in Class Free States, by ensuring that the animals held for such research are not considered a “herd” for the purposes of assigning or renewing a State's brucellosis status. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. Brucellosis is a contagious, costly disease of ruminants that also affects humans. Although brucellosis can infect other animals, it is primarily a threat to cattle, bison, and swine. In animals, the disease causes weight loss, decreased milk production, loss of young, infertility, and lameness. There is no cure for brucellosis in animals, nor is there a preventative vaccine that is 100 percent effective. Given the potential for costly consequences related to an outbreak of brucellosis, additional research is needed in order to eradicate this economically damaging disease. In 1952, when brucellosis was widespread throughout the United States, annual losses from lowered milk production, aborted calves and pigs, and reduced breeding efficiency were estimated at $400 million. Subsequent studies show that if eradication efforts were stopped, the costs of producing beef and milk would increase by an estimated $80 million annually in less than 10 years. We expect that the groups affected by this proposed action would be herd owners and the entities that would operate any brucellosis research facilities established in Class Free States. To the extent that it would allow for more research with the goal of eradicating brucellosis in the United States, this proposed rule would benefit all herd owners over time. Brucellosis research facilities in Class Free States would be operated by the State in which they were located or exist as part of colleges or universities that have government contracts to conduct brucellosis research. The latest agricultural census data show that there were 732,660 farms in the United States primarily engaged in beef cattle ranching and farming and dairy cattle and milk production that reported sales in 2002. Of those farms, over 99 percent were classified as small entities according to Small Business Association

(SBA)standards. There were 82,028 farms in the United States primarily engaged in raising hogs and pigs that reported sales in 2002. Of those farms, over 90 percent were classified as small entities by the SBA. Most, if not all, of the farms primarily engaged in bison production are classified as small entities under SBA standards. Accordingly, the majority of herd owners potentially affected by this proposed rule are considered small entities. For herd owners, any economic effects stemming from this proposed rule would result from advances made toward the eradication of brucellosis in the United States. As such, these economic effects would be positive, but long-term and generalized. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted:

(1)All State and local laws and regulations that are in conflict with this rule will be preempted;

(2)no retroactive effect will be given to this rule; and

(3)administrative proceedings will not be required before parties may file suit in court challenging this rule. Paperwork Reduction Act This proposed rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq* ). List of Subjects in 9 CFR Part 78 Animal diseases, Bison, Cattle, Hogs, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, we propose to amend 9 CFR part 78 as follows: PART 78—BRUCELLOSIS 1. The authority citation for part 78 would continue to read as follows: Authority: 7 U.S.C. 8301-8317; 7 CFR 2.22, 2.80, and 371.4. 2. In § 78.1, the definition of **herd** would be revised to read as follows: § 78.1 Definitions *Herd* .

(a)All animals under common ownership or supervision that are grouped on one or more parts of any single premises (lot, farm, or ranch); or

(b)All animals under common ownership or supervision on two or more premises which are geographically separated but on which animals from the different premises have been interchanged or had contact with each other.

(c)For the purposes of this part, the term **herd** does not include animals that are contained within a federally approved research facility. Done in Washington, DC, this 6th day of December 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-21172 Filed 12-12-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 93 [Docket No. APHIS-2006-0013] RIN 0579-AC00 Standards for Permanent, Privately Owned Horse Quarantine Facilities AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule; withdrawal and reproposal. SUMMARY: We are proposing to amend the regulations pertaining to the importation of horses to establish standards for the approval of permanent, privately owned quarantine facilities for horses. We are taking this action because demand for quarantine services for horses exceeds the space available at existing facilities. This proposed rule replaces a previously published proposed rule, which we are withdrawing as part of this document, that contained substantially different restrictions on ownership and substantially different requirements for the physical plant, operating procedures, and compliance date. We believe that allowing imported horses to be quarantined in permanent, privately owned quarantine facilities that meet these newly proposed criteria would facilitate the importation of horses while continuing to protect against the introduction of communicable diseases of horses. DATES: We will consider all comments that we receive on or before February 12, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0013 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0013, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0013. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call

(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Freeda Isaac, Staff Veterinarian, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231;

(301)734-8364. SUPPLEMENTARY INFORMATION: Background The regulations in 9 CFR part 93 govern the importation into the United States of specified animals and animal products in order to help prevent the introduction of various animal diseases into the United States. The regulations in part 93 require that some of these animals be quarantined upon arrival in the United States as a condition of entry. The Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture

(USDA)operates animal quarantine facilities and authorizes the use of privately owned quarantine facilities for certain animal importations. The regulations in subpart C of part 93 (9 CFR 93.300 through 93.326, referred to below as the regulations) pertain to the importation of horses and include requirements for privately owned quarantine facilities for horses. These requirements are for the approval and establishment of temporary quarantine facilities for the purpose of quarantining imported horses for a specific event. In addition to operating Federal animal quarantine facilities and authorizing the operation of temporary, privately owned quarantine facilities for horses, APHIS currently authorizes the operation of one permanent, privately owned quarantine facility for horses, located in Los Angeles County, CA. The demand for import quarantine facilities for horses has risen in recent years as the amount of trade between the United States and other countries has risen. From 1992 to 2003, the number of horses imported annually into the United States increased substantially. In some cases, the demand for quarantine services for horses has exceeded the space available at existing Federal facilities. In addition, the geographic distribution of the currently operating horse quarantine facilities can make it difficult or costly to import horses to some areas; in some geographically isolated locations, such as Hawaii and Puerto Rico, no facilities exist for quarantining imported horses, reducing the ability of importers to profitably bring horses to those States. The demand for quarantine services for horses cannot always be filled by temporary, privately owned quarantine facilities because such facilities are established, approved, and operated by importers on a temporary basis to handle only horses imported for a unique importation, race, or show. We have considered the possible need for permanent, privately owned quarantine facilities for horses in the past. On September 6, 1989, we published in the **Federal Register** (54 FR 36986-36996, Docket No. 85-061) a proposed rule that would have

(1)allowed the operation of permanent, privately owned quarantine facilities for horses;

(2)added new requirements for the approval of temporary, privately owned quarantine facilities for horses; and

(3)required payment from each privately owned quarantine facility for services provided by APHIS at the facility. These changes would have been made in 9 CFR part 92; however, a 1990 final rule reorganized part 92, and the proposed provisions were no longer consistent with the new format of the part. Because of this inconsistency and for other reasons, we withdrew the proposed rule and reopened the issue for public discussion in a notice of withdrawal and an advance notice of proposed rulemaking published in the **Federal Register** on February 26, 1996 (61 FR 7079, Docket No. 95-084-1). Then, on May 6, 1996, we published a notice (61 FR 20189-20190, Docket No. 95-084-2) that we were reopening and extending the public comment period for the advance notice of proposed rulemaking and holding a public meeting on May 17, 1996, regarding the issue of permanent, privately owned quarantine facilities for horses. We received 10 comments during the 2 comment periods and at the public meeting just described. Some commenters supported the concept of permanent, privately owned quarantine facilities for horses, and some commenters were opposed. We considered the comments and decided to propose regulations that would allow the establishment of permanent, privately owned horse quarantine facilities that would operate under the oversight of an APHIS veterinarian. On July 1, 2002, we published in the **Federal Register** (67 FR 44097-44111, Docket No. 99-012-1) a proposal to establish requirements in the regulations for the approval and operation of such facilities. We solicited comments concerning our proposal for 60 days ending August 30, 2002. We subsequently extended the deadline for comments until October 15, 2002, in a document published in the **Federal Register** on September 30, 2002 (67 FR 61293, Docket No. 99-012-2). We received 59 comments by the close of the extended comment period. They were from import-export brokers, horse traders, operators of quarantine facilities, and representatives of State governments. The majority of these comments came from import-export brokers who supported the proposed rule on the grounds that current shortages in USDA quarantine space were negatively impacting their businesses. However, commenters raised issues about proposed ownership requirements, physical plant requirements, operating procedures, compliance, and other provisions that led us to rethink aspects of the proposed rule. As a consequence, we are withdrawing the July 2002 proposed rule mentioned above and replacing it with an alternative proposal. This alternative proposal retains many of the provisions of the July 2002 proposed rule, but incorporates numerous suggestions made by commenters and proposes a few new requirements. The most significant new provisions and changes in this reproposal are: A new provision that would require that the operator or any person responsibly connected with the business of a permanent, privately owned facility not act as a broker for the sale or importation of horses; several amended provisions that would change the biosecurity safeguards relating to disease transmission between lot-holding areas; a new provision that would allow necropsies to be conducted off-site from the facility; and a change to prohibit vaccinations from being performed at the facility. The full text of the proposed regulations appears in the rule portion of this document. Our discussion of the proposed provisions follows. We have incorporated our responses to comments we received concerning the July 2002 proposed rule into our discussion of the provisions in this proposed rule. General Discussion We intend to maintain the current requirements in the regulations for the approval of temporary, privately owned quarantine facilities for horses. We believe that these requirements are sufficient for facilities that are intended to quarantine horses imported only for a particular event. Temporary facilities are generally used to quarantine small numbers of animals in a single group and are in operation for only a short period of time before all the animals are removed and the facility is closed. We continue to believe that permanent, privately owned horse quarantine facilities, constructed and operated using the proper safeguards, would provide an effective and efficient means of bringing horses into the United States without compromising our ability to protect against the introduction of communicable diseases of horses. We are, therefore, proposing to add requirements to the regulations for the establishment and approval of permanent, privately owned quarantine facilities for horses. These proposed requirements are designed to maintain the same level of biological security standards as other permanent quarantine facilities operated by APHIS. We believe that the permanent, privately owned facilities must be designed, equipped, and monitored similarly to APHIS quarantine facilities in order to provide sufficient protection against the introduction of disease. Like an APHIS facility, a permanent, privately owned quarantine facility could be occupied on a continuing basis by a large number of horses imported from many different regions. These circumstances dictate that security measures must be tighter, and disease detection and prevention measures must be different, at permanent facilities than at temporary ones. While the requirements for temporary facilities allow for variation in physical plants, the proposed requirements for permanent facilities would ensure a greater degree of consistency in the physical plants of those facilities. Such consistency should help ensure a greater degree of biological security. The proposed requirements for permanent facilities would also set out the operational and monitoring procedures necessary to prevent the spread of disease into, within, and from the facilities in much more detail than the requirements for temporary facilities. In response to the July 2002 proposed rule, which also sought to ensure that permanent, privately owned facilities were similar to APHIS facilities, one commenter argued that it would be inappropriate to require a level of biological security similar to that of current APHIS quarantine facilities because APHIS facilities handle other livestock such as cattle and goats in addition to handling horses. In this commenter's view, horses require less stringent biological security measures than other animals, because the purpose of quarantining horses is to isolate the horses while blood tests are run and to monitor horse health, rather than to diagnose communicable diseases of horses. Thus, the commenter argued, the level of biological security that would be required under the standards described in the July 2002 proposed rule was excessive and would not have resulted in an appreciable reduction of risk. The purpose of horse quarantine is to observe imported horses for any sign of communicable animal diseases, not just to determine whether the horses are affected with any of the diseases for which APHIS requires imported horses to be tested. The requirements described in the July 2002 proposed rule were designed to ensure that horses would be observed for signs of disease in a facility that presented the smallest possible risk of disease being transmitted into the domestic horse population, while ensuring that the horses in the facility were properly cared for, fed, and handled. The proposed requirements were developed specifically to address the unique problems and risks posed in quarantining horses. Given the myriad foreign animal diseases that may be detected only under proper quarantine scrutiny and the continuing risk that such diseases may be transmitted into the domestic horse population, we believe that lowering the level of biological security required by the standards described in the July 2002 proposed rule would be inconsistent with APHIS' duty to prevent the introduction of dangerous foreign animal diseases. Therefore, we have made no changes to the approach of the July 2002 proposed rule in response to this comment. The same commenter stated that no evidence exists to justify biological security measures for permanent facilities that are more restrictive than the biological security measures already in place at the one currently operating permanent, privately owned horse quarantine facility. The commenter noted that no equine disease has ever passed from imported horses quarantined in the currently operating permanent facility into the general horse population, and requested that APHIS conduct a risk assessment to determine exactly what level of biological security is necessary for horse quarantine facilities. In guarding against the introduction of foreign animal diseases into the United States, APHIS, among other things, examines the possible ways that such diseases could be spread among or from animals being held in quarantine, and determines what measures are necessary to guard against such spread. While it is true that the measures in place at the one currently operating permanent, privately owned facility serve to a great extent to mitigate the risk of such spread, based on the nature of diseases affecting horses and our own experience quarantining horses intended for entry into the United States, we consider more restrictive measures to be necessary to mitigate the risk of disease spread from horses entered into any permanent, privately owned horse quarantined facility. APHIS based the requirements in the July 2002 proposed rule for permanent facilities on an evaluation of our experience in mitigating the risk of disease introduction via imported horses, and modeled the proposed risk mitigation measures on those in place at APHIS-operated and -approved quarantine facilities. In those cases where commenters on the July 2002 proposed rule asserted that certain specific mitigating measures were not necessary, and the available evidence supported their claims, we have removed those measures from this new proposal. The fact that no equine diseases are known to have passed through the currently operating permanent, privately owned facility into the general horse population to date does not in itself address potential risks. Changes in Our Approach With Respect to Lot-Holding Areas We have modified one aspect of our approach to biological security in response to various comments we received. The July 2002 proposed rule included numerous biological security requirements intended to prevent disease transmission between lots of horses held within the quarantine facility. A lot of horses is a group of horses that, while held on a premises or conveyance, have had opportunity for physical contact with other horses in the group or with their excrement or discharges at any time during their shipment to the United States. The lot-holding area, therefore, is that area in a permanent, privately owned quarantine facility in which a single lot of horses is held at one time. A lot-holding area can comprise a stall, a group of stalls, or an entire building, provided that the physical plant and operational requirements relating to a lot-holding area are met. The July 2002 proposed rule included proposed safeguards designed to prevent the transmission of any diseases that might be present in one lot of horses to another lot of horses held in the same quarantine facility. These safeguards included: Separate drainage and heating, ventilation, and air conditioning

(HVAC)systems; physical barriers including lockable doors; and operational safeguards including showering and changing clothing when moving between lot-holding areas. While these safeguards would meet the goal of reducing exposure between lots of horses, they do not in all cases reflect the construction of the permanent horse quarantine facilities operated by APHIS or the operational procedures in place at those facilities. We do not believe it is appropriate to require that permanent, privately owned quarantine facilities meet biosecurity standards different from those that have been determined and proven by APHIS to be effective when employed at our own facilities. Therefore, the proposed requirements related to lot-holding areas, which are discussed later in this document, have been adjusted. In all cases, when addressing issues related to lot-holding areas in this reproposal, we have either retained the proposed requirements presented in the July 2002 proposed rule or have provided more options for complying with the requirements while continuing to prevent the transmission of diseases between lots of horses and from the quarantine facility to domestic horses. These changes to the July 2002 proposed rule make the construction standards and the operating procedures described in this reproposal consistent with those of the permanent horse quarantine facilities operated by APHIS. The construction standards and the operating procedures of these facilities have been reviewed repeatedly by APHIS veterinarians and disease biologists and found to be adequate to prevent the transmission of disease between lots of horses. Under both the July 2002 proposed rule and this reproposal, permanent, privately owned horse quarantine facilities would operate under continuous APHIS oversight to ensure that operating procedures are correctly followed to prevent the spread of disease between lots. In addition, if there was a disease outbreak in a permanent, privately owned horse quarantine facility, APHIS would conduct tracebacks for any horses that had been quarantined in the facility at the time the infected horse was quarantined there, as is standard procedure at APHIS-operated horse quarantine facilities. For these reasons, we believe that the safeguards against the transmission of disease between lot-holding areas that we would require in this reproposal are adequate to prevent the spread of disease within and from a permanent, privately owned quarantine facility. Definitions We are proposing to add to § 93.300 definitions for the terms *permanent, privately owned quarantine facility* and *temporary, privately owned quarantine facility* to make clear the differences between the two types of facilities. A permanent, privately owned quarantine facility would be one that offers quarantine services for horses to the general public on a continuing basis and that is owned and operated by an entity other than the Federal government. A temporary, privately owned quarantine facility would be one that offers quarantine services for a special event and that is owned and operated by an entity other than the Federal government. Throughout the rest of this document, use of the term “permanent facility” means a permanent, privately owned quarantine facility for horses, and use of the term “temporary facility” means a temporary, privately owned quarantine facility for horses. We are proposing to revise the definition for *operator* contained in § 93.300. *Operator* is currently defined as “for the purposes of § 93.308, any person operating an approved quarantine facility.” The revised definition of *operator* would read: “A person other than the Federal government who owns or manages and has responsibility for the services provided by a temporary, privately owned quarantine facility or a permanent, privately owned quarantine facility.” We are proposing this change because we want to emphasize that, although private entities would own these facilities, they would be subject to APHIS approval and oversight. We would also add definitions for the terms *lot, lot-holding area, quarantine area,* and *nonquarantine area.* We would define a lot as a group of horses that, while held on a conveyance or premises, have had opportunity for physical contact with other horses in the group or with their excrement or discharges at any time during their shipment to the United States. A lot-holding area would be an area in a facility in which a single lot of horses is held at one time. The quarantine area of a facility would be the area of a facility that comprises all of the lot-holding areas in the facility and any other areas that the horses have access to, including loading docks for receiving and releasing horses. The quarantine area would also include any areas in the facility that are used to conduct examinations of horses and take samples or areas where samples are processed and examined. The nonquarantine area of a facility would include offices, storage areas, and other areas that are outside the quarantine area and off limits to horses, samples taken from horses that have not yet been prepared or packaged for shipment to laboratories, and any other objects or substances that have been in the quarantine area during quarantine of horses. Nonsubstantive Changes The requirements for temporary facilities are currently located in § 93.308(b) and (c). Although we are not proposing to make any substantive changes to these requirements, we are proposing to make some nonsubstantive changes to update the language. We are also proposing to combine paragraphs

(b)and (c), so that all of the requirements pertaining to the establishment and operation of temporary facilities are located in paragraph (b). (We would make minor editorial changes to these requirements as well.) We would place the proposed regulations pertaining to permanent facilities in the newly vacated § 93.308(c). We would also correct an error in footnote numbering in the regulations. In addition, we are proposing to revise the heading for § 93.309 to indicate more clearly that the section pertains to payment information for use of all quarantine facilities, including privately owned temporary and permanent quarantine facilities, and quarantine facilities owned by APHIS. The section heading currently reads “Horse quarantine facilities”; we believe a more helpful heading would be “Horse quarantine facilities; payment information.” Therefore, as proposed, § 93.308(a) would contain general information about quarantine requirements for imported horses; § 93.308(b) would contain requirements for temporary facilities; § 93.308(c) would contain requirements for permanent facilities; and § 93.309 would contain information about payment for services provided at all quarantine facilities. Section 93.303 of the regulations pertains to ports designated for the importation of horses. Paragraph

(e)of that section pertains to ports used by persons who quarantine horses at temporary facilities. The paragraph heading in § 93.303(e) currently reads “Ports and quarantine facilities provided by the importer for horses,” and the text of the paragraph also refers to quarantine facilities provided by the importer. We are proposing to revise the paragraph heading and text because, under this proposed rule, the owner of a permanent facility would be prohibited from acting as a paid agent (broker) for the importation or subsequent sale of horses. (The July 2002 proposed rule did not include this proposed restriction on quarantine facility ownership; the restriction is discussed in more detail below under the heading “Approval Requirements.”) The new paragraph heading for § 93.303(e) would read “Ports for horses to be quarantined at privately owned quarantine facilities,” and the text would refer to privately owned quarantine facilities rather than to facilities provided by the importer. We would continue to allow brokers to establish temporary, privately owned quarantine facilities. Section 93.304 contains permit requirements for horses imported from certain regions affected by contagious equine metritis. Paragraphs (a)(1) and (a)(2) contain references to quarantine facilities provided by importers of horses. Under this proposed rule, all quarantine facilities provided by importers of horses could only be temporary, privately owned quarantine facilities. However, we would need to require a permit for importation of horses from these regions into permanent, privately owned facilities as well. Therefore, we are proposing to revise those paragraphs to refer to privately owned quarantine facilities. Proposed Requirements for Permanent Facilities We are proposing to add to the regulations information about how to apply for approval of a permanent facility and information concerning denial and withdrawal of approval. Owners of any currently approved quarantine facilities, whether temporary or permanent, who wish to convert to, or be recognized as, a permanent facility would need to meet the proposed requirements for permanent facilities described below and apply for approval as a permanent facility. Under this proposed rule, any permanent, privately owned quarantine facility operating under APHIS authorization at the time these regulations went into effect would have 1 year to be approved by APHIS; otherwise, it would have to cease operations as a horse quarantine facility. Under the July 2002 proposed rule, that approval would have to have been secured by the effective date of the final rule following that proposal in order for the facility to continue quarantine operations. We made this change to the proposed regulations in response to a comment received regarding the economic analysis of the July 2002 proposed rule; the rationale behind this change is discussed in the context of the economic analysis in this proposed rule, under the heading “Executive Order 12866 and Regulatory Flexibility Act.” Approval of Permanent Facilities Application Process Proposed § 93.308(c)(1)(i) sets out procedures for applying for approval of a permanent facility. Under the proposed regulations, interested persons would be required to write to the Administrator, c/o National Center for Import and Export, Veterinary Services, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231. The application letter would have to include: • The full name and mailing address of the applicant; • The location and street address of the facility for which approval is sought; • Blueprints of the facility; • A description of the financial resources available for construction, operation, and maintenance of the facility; • The anticipated source or origin of horses to be quarantined as well as the expected size and frequency of shipments; • A contingency plan for horses needing emergency veterinary care; and • A contingency plan for the disposal of all the horses capable of being housed in the facility. The July 2002 proposed rule would not have required the application letter to include a contingency plan for horses needing emergency veterinary care. We believe having such a plan is important to the success of a quarantine facility at preventing the transmission of diseases of horses, and therefore we have included that requirement in this reproposal. If APHIS determines that a submitted application is complete and merits further consideration, we would require that the person applying for facility approval enter into a service agreement with APHIS wherein the applicant agrees to pay the cost of all APHIS services 1 associated with APHIS' evaluation of the application and facility. This service agreement would apply only to fees accrued during the application process. If the facility is approved by APHIS, facility owners would have to enter into a new compliance agreement in accordance with § 93.308(c)(2) of the proposed regulations. 1 APHIS charges for evaluation services at hourly rates listed in 9 CFR § 130.30. Requests for approval would have to be submitted to APHIS at least 120 days prior to the date of application for local building permits in order to ensure that APHIS has adequate time to evaluate the plans for the facility, assess potential environmental effects, and determine that adequate APHIS personnel are available to staff the facility. Requests for approval of a proposed facility would be evaluated on a first-come, first-served basis. Approval Requirements Proposed § 93.308(c)(1)(ii) lists the basic criteria that a permanent facility would have to meet to be approved by APHIS. A permanent facility would have to meet all the requirements in § 93.308(c). The facility would also have to meet any additional requirements that may be imposed by the Administrator to ensure that the quarantine is adequate to determine the horses' health status and to prevent the transmission of diseases into, within, and from the facility. These additional requirements would be specified in the compliance agreement that would be required under proposed § 93.308(c)(2). Finally, we are proposing that, to be approved as a permanent facility, the Administrator must determine that sufficient APHIS personnel (including veterinarians and animal health technicians) are available to ensure the biological security of the facility. This determination would be based on the expected size and frequency of shipments to the facility, as described in the application for approval of a permanent facility, as well as any other pertinent information in the application. Only if a facility met all of the other proposed requirements and APHIS personnel were available would APHIS approve the facility and assign personnel to it. Because the assignment of APHIS personnel would be handled on a “first-come, first-served” basis, the deployment of APHIS personnel at one permanent facility might result in another facility not being approved for lack of necessary APHIS personnel. The Administrator would have sole discretion in determining the number of APHIS personnel to be assigned to the facility. One commenter on the July 2002 proposed rule objected to the requirement that approval be contingent upon the availability of sufficient APHIS personnel. The commenter doubted that, given perceived staffing shortages, any APHIS personnel would be available to serve at these facilities and suggested that this would constitute a barrier to entry for persons applying to own or operate permanent facilities. The commenter further asserted that the presence of APHIS personnel at a permanent facility was unnecessary to ensure the safety of the horses. While we realize that there may not be enough APHIS personnel available to serve every permanent, privately owned horse quarantine facility that persons may wish to operate, we believe that APHIS personnel must be present at these facilities in order to provide continuous oversight and other technical services, as needed, to ensure the biological security of the facility. Therefore, we would only approve facilities for which sufficient APHIS personnel would be available to ensure the biological security of the facility. Proposed § 93.308(c)(1)(iii) would require that the operator of a permanent, privately owned horse quarantine facility continue to comply with the requirements of proposed § 93.308(c) and the terms of the compliance agreement executed in accordance with proposed § 93.308(c)(2) in order to maintain APHIS approval. Proposed § 93.308(c)(1)(iv) sets out procedures for denying or withdrawing approval of permanent facilities. This paragraph would also establish due process procedures regarding a denial or withdrawal of approval and an opportunity for a hearing when there is a dispute of material fact regarding the denial or withdrawal and would provide that the withdrawal of approval for an existing facility will become effective prior to a final disposition of the matter when the Administrator determines it necessary to protect animal health or the public health, interest, or safety. This paragraph would also provide for approval to be withdrawn automatically by the Administrator when the owner notifies, in writing, the Veterinarian in Charge for the State in which the facility is located that the facility is no longer in operation. Under the proposed regulations, the approval of a permanent facility may be denied or withdrawn if: • Any requirement of § 93.308 or the compliance agreement is not complied with; • The operator fails to pay for APHIS services rendered; • The operator or a person responsibly connected with the business of the permanent facility acts as a paid agent (broker) for the importation or subsequent sale of horses; • The operator or a person responsibly connected with the business of the permanent facility is or has been found by a court of competent jurisdiction to have violated any law or regulation pertaining to the importation or quarantine of any animal; • The operator or a person responsibly connected with the business of the permanent facility is or has been convicted of any crime involving fraud, bribery, or extortion or any other crime involving a lack of integrity needed for the conduct of operations affecting the importation of animals; or • The approved permanent facility has not been in use to quarantine horses for a period of at least 1 year. The proposed regulations would provide that a person is responsibly connected with the business of the permanent facility if the person has an ownership, mortgage, or lease interest in the facility's physical plant, or if such person is a partner, officer, director, holder or owner of 10 percent or more of its voting stock, or an employee in a managerial or executive capacity for the operation of the permanent facility. The July 2002 proposed rule did not include any provisions that would have prohibited the operator or a person responsibly connected with the business of the permanent facility from acting as a paid agent or broker for the importation or subsequent sale of horses. We have added this prohibition to the reproposal in response to a request from four of the commenters on the July 2002 proposal. These commenters asserted that a person holding both these positions would face conflicts of interest while housing, treating, and caring for horses imported by other brokers. We agree that the potential for conflicts of interest is a concern. It is possible that an owner of a permanent, privately owned horse quarantine facility who also engaged in the sale and transport of horses for profit might block a competitor from using the owner's quarantine space, or cancel the competitor's reservations if the owner determined that the competitor's imports would affect the profitability of the owner's brokering business. Similarly, an owner of a permanent, privately owned horse quarantine facility who also is engaged in the sale and transport of horses might choose to weaken competitors in the brokerage business by charging exorbitant fees for quarantine space that could not be obtained elsewhere, as USDA quarantine facilities are filled most of the time; the owner would have even greater leverage if the quarantine facility in question was operating in a geographical area not served by other facilities. Compliance Agreement Proposed § 93.308(c)(2) would require permanent facilities to operate in accordance with a compliance agreement executed by the owner and by the APHIS Administrator that must be renewed on an annual basis. The compliance agreement would provide that the facility is required to meet all applicable requirements of § 93.308 of the regulations and that the facility's quarantine operations are subject to the oversight of APHIS representatives. The compliance agreement would also state that the operator of the facility agrees to be responsible for all the costs associated with operating a permanent facility, including: • All costs associated with its maintenance and operation; • All costs associated with the hiring of employees and other personnel to attend to the horses as well as to maintain and operate the facility; • All costs associated with the care of quarantined horses, such as feed, bedding, medicines, inspections, testing, laboratory procedures, and necropsy examinations; and • All APHIS charges for the services of APHIS representatives in accordance with 9 CFR part 130. The compliance agreement would also state that the operator agrees to bar from the facility any employee or other personnel at the facility who fail to comply with the proposed regulations in § 93.308(c), other regulations in 9 CFR part 93, any terms of the compliance agreement, or related instructions from APHIS representatives. These proposed requirements are identical to those in the July 2002 proposed rule. Physical Plant Requirements Proposed § 93.308(c)(3) sets out physical plant requirements. The proposed requirements for the physical plant of permanent facilities are designed to ensure that permanent facilities are capable of preventing the spread of diseases to horses outside the facility. A permanent facility would have to meet these requirements before horses were admitted to the facility. Location To minimize the risk of disease introduction from imported horses moving from the port of entry to the permanent facility, proposed § 93.308(c)(3)(i) would require that the facility be located in proximity to a port authorized under § 93.303(e). While requiring that a permanent facility be located in proximity to the port, we decided for several reasons not to require that the port and the facility be located within a certain distance of one another. Some ports will be in large metropolitan areas with the nearest concentration of livestock many miles away. Other ports may be in towns with rural areas and concentrations of livestock within a very short distance of the port. Considering the diversity of places in which persons may consider locating permanent facilities, it would be difficult to stipulate a maximum distance from the port of entry. The specific routes for the movement of horses from the port to the permanent facility would have to be approved by the Administrator. In evaluating the suitability of a particular site for a permanent facility, the Administrator would consider whether the site of the proposed facility or the routes for movement of horses from the port of entry to the proposed facility would put the animals in a position that could result in the transmission of communicable diseases. In the July 2002 proposed rule, we proposed to require that the facility be located at least one-half mile from any premises holding livestock or horses. One commenter stated that the other safeguards in the proposed rule provide adequate biological security to mitigate the risk that a communicable disease of horses might be transmitted into the domestic horse population from horses in the quarantine facility. We agree that the distance requirement would be unnecessary if all other procedures described in this proposed rule were followed at a private, permanently owned horse quarantine facility. In addition, just as the diversity of places in which persons may consider locating permanent facilities makes it difficult to stipulate a maximum distance from the port of entry, that diversity also makes it difficult to stipulate a minimum distance from existing horse populations. Therefore, we are not including in this reproposal a requirement that a permanent, privately owned horse quarantine facility must be located at least one-half mile from any premises holding livestock or horses from this reproposal, and we have indicated in this reproposal that the location would simply have to be approved by the Administrator in advance based on consideration of whether the site would put the horses in a position that could result in the transmission of communicable diseases to domestic horses. Construction Proposed requirements for facility construction would be contained in § 93.308(c)(3)(ii). We are proposing to require that the facility be of sound construction, in good repair, and properly designed to prevent the escape of horses from quarantine. The facility would be required to have the capacity to receive and house shipments of horses as lots on an “all-in, all-out” basis, whereby separate lots could be received and housed without contact with any other lots being quarantined at the facility. We would also require that the facility be enclosed by a security fence of sufficient height and design to prevent unauthorized persons, horses, and other animals from outside the facility from having contact with horses quarantined in the facility. One commenter on the July 2002 proposed rule questioned the need for a security fence, stating that sound horse fencing should be used and that the entrance should be gated to prevent public access in lieu of a security fence. However, the fence enclosing the facility is intended to ensure not only that horses do not escape quarantine but also to prevent the unauthorized entry of persons, horses, and other animals. Sound horse fencing would not provide adequate protection against unauthorized entry. We would also require that all entryways into the nonquarantine area of the facility be equipped with a secure and lockable door. Further, while horses are in quarantine, all access to the quarantine area for horses would have to be from within the building, and each such entryway to the quarantine area would have to be equipped with a series of solid self-closing double doors. Emergency exits would be permitted in the quarantine area, but such exits would have to be constructed so as to permit their being opened only from the inside of the facility in order to ensure the security of the horses in quarantine and the integrity of quarantine operations. The July 2002 proposed rule included a requirement that entryways to each lot-holding area be equipped with a solid, lockable door. We are not including that provision in this reproposal, for the reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas.” We propose to require that the facility be constructed so that any windows or other openings in the quarantine area are double-screened with screening of sufficient gauge and mesh to prevent the entry or exit of insects and other vectors of diseases of horses and to provide ventilation sufficient to ensure the comfort and safety of all horses in the facility. The interior and exterior screens would have to be separated by at least 3 inches (7.62 cm). The screens would have to be easily removable for cleaning, but otherwise remain locked and secure at all times in a manner satisfactory to APHIS representatives to ensure the biological security of the facility. In response to the July 2002 proposed rule, one commenter recommended that we amend the proposed specifications for windows or other openings in the quarantine area to require adequate ventilation. In this reproposal, we have included the requirement that the window screens would have to provide ventilation sufficient to ensure the comfort and health of all horses in the facility. We believe this language will ensure that windows in permanent facilities provide sufficient ventilation to prevent horses from becoming uncomfortable or suffering injury for that reason. The entire facility, including its stalls and hallways, would have to have adequate lighting to ensure that horses are moved and kept safely and that permanent facility employees can safely do their work. Proposed paragraph § 93.308 (c)(3)(ii)(E) would provide that a facility must have separate loading docks for receiving and releasing animals and for general receiving and pickup, unless a single dock used for both purposes is cleaned and disinfected after each use according to the procedures set out in proposed paragraph § 93.308(c)(4)(iv)(F). That paragraph states that if the facility has a single loading dock, the loading dock would have to be immediately cleaned and disinfected after each use under the oversight of an APHIS representative with a disinfectant authorized in 9 CFR part 71 or otherwise approved by the Administrator. (Disinfectants are currently approved in 9 CFR part 71 under §§ 71.10, 71.11, and 71.12.) The July 2002 proposed rule would have required that the facility have two separate loading docks. One would have been part of the quarantine area and would have been used for receiving and releasing horses, and one would have been part of the nonquarantine area and would have been used for general receiving and pickup. One commenter on the July 2002 proposed rule suggested that separate docks would be unnecessary; if a single dock were properly cleaned and disinfected after each use, the facility would achieve adequate protection against the risk that communicable diseases of horses might be transmitted. We agree with this comment and have modified the July 2002 proposed rule as suggested by the commenter. We believe this proposed requirement would adequately protect against the transmission of communicable diseases of horses while providing facility owners with greater flexibility. We would require that the facility be constructed so that the floor surfaces with which horses have contact in the facility are nonslip and wear-resistant. All floor surfaces with which the horses, their excrement, or discharges have contact would have to provide for adequate drainage. All floor and wall surfaces with which the horses, their excrement, or discharges have contact would have to be impervious to moisture and be able to withstand frequent cleaning and disinfection without deterioration. Ceilings and wall surfaces with which the horses, their excrement, or discharges do not have contact would have to be able to withstand cleaning and disinfection between shipments of horses. The cleaning and disinfection of all of these surfaces would help ensure that disease agents would not be spread from one lot of horses to another. We would further require that surfaces with which the horses could have contact must not have any sharp edges that could cause injury to the horses. The July 2002 proposed rule would have additionally required floor surfaces to have drains of at least 8 inches in diameter. One commenter suggested that it was unnecessary for us to specify the required diameter for the floor drains, since the proposed rule prescribed that all floor surfaces must provide for adequate drainage. We agree that it would be better to allow facility designers flexibility to achieve the adequate drainage requirement, and we are not including a specific diameter requirement for the floor drains in these facilities in this reproposal. In proposed § 93.308(c)(3)(ii)(G), we would require that the stalls in which horses are held be large enough to allow each animal to make normal postural and social adjustments (including turning around and making way for other humans or horses) with adequate freedom of movement. Horses that do not have adequate space for movement could be at risk for poor conditioning due to lack of movement, malnutrition due to refusal to eat, rapid weight loss, increased stress, depression, or abnormal behavior patterns. These could increase the likelihood of the horses exhibiting clinical symptoms of disease or, if disease is present, transmitting or becoming infected with disease. The stall size requirement would also allow the stalls to be cleaned more easily by facilitating access to the stalls for quarantine facility personnel. To help prevent transmission of disease between horses in permanent facilities, we would require that the aisleways used by horses within the quarantine area be wide enough to provide for safe movement of horses, including allowing horses to turn around in the aisleway, to prevent horses in facing stalls from coming into contact with horses in the aisleway, and to adequately ventilate the stalls. Narrow aisleways can lead to injury to horses and personnel and can allow direct physical contact between horses, which could facilitate the spread of disease. The facility would have to be constructed so that different lots of horses held at the facility at the same time would be separated by physical barriers in such a manner that horses in one lot could not have physical contact with horses in another lot or with the excrement or discharges of horses in another lot. In addition, we would require that permanent facilities include stalls capable of isolating any horses exhibiting signs of illness. This provision would help ensure that horses infected with or exposed to disease do not spread the disease or expose other horses in the facility to the disease. To prevent dissemination of disease via persons at the facility, we are proposing to require that the facility contain showers for use before entering and after exiting the quarantine area. A shower would also be needed at the entrance to the necropsy area if necropsies will be conducted onsite. (The proposed requirements for the necropsy area are described in greater detail later in this document.) We would also require that a clothes-storage and clothes-changing area be provided at each end of each shower area, and that there be one or more receptacles near each shower so that clothing that has been worn into the quarantine area can be deposited in a receptacle prior to entering the shower. The July 2002 proposed rule would have required that the facility have showers at the entrance to each lot-holding area in a facility in which it is not possible to move to any lot-holding area except by first passing through another lot-holding area. It would also have required that all persons granted access to the quarantine area shower before entering a lot-holding area if previously exposed from access to another lot-holding area. This reproposal removes these proposed requirements, for the reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas.” Because of the need for APHIS representatives assigned to a permanent facility to examine horses and draw samples for testing, we would require that permanent facilities contain adequate space for these purposes and that the space include equipment to provide for the safe inspection of horses. In this reproposal, we are also proposing to require that the space provided to conduct examinations and testing include a refrigerator-freezer in which to store samples, which would facilitate conducting disease tests. The facility would have to include adequate storage space for the necessary equipment and supplies, work space for preparing and packaging samples for mailing, and storage space for duplicate samples. We would further require that the facility include a secure, lockable office space with enough room to contain a desk, chair, and filing cabinet for APHIS use. Proposed § 93.308(c)(3)(ii)(L) would require that the facility either have a necropsy area or designate an alternate facility for conducting necropsies. A necropsy area would be necessary to perform post mortem inspection of horses that die in the permanent facility and to collect samples for laboratory diagnosis. These actions would be needed to determine whether the death of a horse was associated with a disease, or if it was caused by other factors, such as colic or physical injury. If the facility has a necropsy area, it would have to be of sufficient size to perform necropsies on horses and be equipped with adequate lighting, hot and cold running water, a drain, a cabinet for storing instruments, a refrigerator-freezer for storing specimens, and an autoclave to sterilize veterinary equipment. If the facility does not have such an area, it would have to specify an alternate facility at which a suitable necropsy area is available, a route from the quarantine facility to the alternate facility's necropsy area, and the safeguards that will be in place to ensure that communicable diseases of horses are not spread during transit. This alternate facility and transport methodology would have to be approved by the Administrator under the procedures for requesting variances in these proposed regulations for permanent facilities as outlined in § 93.308(c)(6). This provision would require the operator to submit a request for a variance from the requirements for the construction of the facility prior to approval of the facility; because facilities would generally be required to have a necropsy area onsite, a request to designate an alternate facility for necropsies would be a request for a variance from the facility construction requirements. If a facility did not have either a necropsy area that met the requirements of proposed § 93.308(c)(3)(ii)(L) or an alternate facility approved under the variances provision in proposed § 93.308(c)(6), it would not be approved. The July 2002 proposed rule did not provide for the use of an alternative facility to perform necropsies. Three commenters asserted that requiring the construction of a necropsy area onsite at a permanent facility would be excessively costly, since the necropsy area would be expected to be used only rarely. Two commenters expressed a desire to designate an alternate facility at which necropsies and carcass incineration could be performed if necessary. We agree that, if carried out with the proper safeguards and notification, an alternate facility for necropsies could be used, and we have added provisions for designating an alternate facility, as described above. We believe that this change to the July 2002 proposed rule will ensure that biological security is maintained while allowing owners and operators some flexibility in design and construction of permanent, privately owned horse quarantine facilities. These commenters also stated that the construction of a carcass incinerating facility should not be required; however, neither the July 2002 proposed rule nor this reproposal would require the construction of a carcass incinerating facility, but instead would require that the facility have the capability to dispose of carcasses safely and without spreading disease. We are also proposing to require that the facility have sufficient storage space for equipment and supplies used in quarantine operations. Storage space would have to include separate, secure storage for pesticides and for medical and other biological supplies, as well as a separate vermin-proof storage area for feed and bedding, if feed and bedding are to be stored at the facility. We are proposing to require that separate storage space be provided for each lot-holding area for any reusable equipment and supplies that are not disinfected after each use in accordance with 9 CFR part 71. The July 2002 proposed rule included a provision that each lot-holding area have separate storage space for equipment and supplies; we are not including this requirement in this reproposal, for the reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas.” We are proposing to require that the facility have an area for washing and drying clothes, linens, and towels and an area for cleaning and disinfecting equipment used in the facility. The facility would also have to include a work area for the repair of equipment. These areas are essential to ensure the continuity of quarantine operations. The facility would have to have permanent restrooms in both the quarantine and nonquarantine areas of the facility so that persons do not need to leave or enter the quarantine area simply to use a restroom. Leaving the quarantine area would necessitate the person showering prior to entering the nonquarantine area, and then again upon reentering the quarantine area. The July 2002 proposed rule included a provision that the facility have an area within the quarantine area for breaks and meals in order to eliminate the need for workers to leave the quarantine area for breaks. One commenter on the July 2002 proposed rule opposed this requirement, stating that a break area in the quarantine area would not play any role in providing biological security and should not be mandatory. We agree with this comment; additionally, we recognize that, unlike use of the restroom, movement into and out of the quarantined area for breaks could be planned to some extent. Therefore, we have removed the break area requirement from this reproposal. We would also require that the facility be constructed with an air handling system capable of controlling and maintaining the ambient temperature, air quality, humidity, and odor at levels that are not injurious or harmful to the health of horses in quarantine. We would prohibit air supplied to the quarantine areas from being recirculated or reused for other ventilation needs. Further, air handling systems for quarantine areas would have to be separate from air handling systems for other operational and administrative areas of the facility in order to ensure that air from the quarantine areas is not diverted into nonquarantine areas of the facility. The July 2002 proposed rule would have specifically required the facility to have a heating, ventilation, and air conditioning

(HVAC)system. In this reproposal, rather than refer to an HVAC system, we refer to an “air handling system.” This change is intended to indicate that any air handling system may be used provided that it is capable of controlling and maintaining the ambient temperature, air quality, humidity, and odor at levels that are not injurious or harmful to the health of horses in quarantine. In some cases, an HVAC system may be necessary to fulfill this requirement; the less specific language, however, provides us with the flexibility to decide that matter on a case-by-case basis. The July 2002 proposed rule would have required that each lot-holding area within the quarantine facility have its own separate HVAC system. For the reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas,” this reproposal would require that the air handling system be adequate to ensure that there is no cross-contamination of air between the separate lot-holding areas. This would provide protection against transmission of communicable diseases of horses without placing an undue burden on facility operators. One commenter maintained that if the necropsy room is enclosed, it should have a separate air handling system to prevent the possible transmission of disease from carcasses to live horses. As discussed above, air inside the quarantine area would not be recirculated, but rather ventilated directly to the outside; thus, any airborne disease agents would be vented from inside the quarantine area. Therefore, we believe that requiring a separate air handling system for the necropsy area would not appreciably enhance the biological security at quarantine facilities. The facility, including the lot-holding areas, would have to be equipped with a fire alarm voice communication system so that personnel working in those areas can be readily warned of any potential emergency and can warn other personnel. The July 2002 proposed rule would have required that the facility also have a television monitoring system or other arrangement sufficient to provide a full view of the quarantine area or areas, excluding the clothes-changing area. One commenter questioned the necessity of the television monitoring system given that the proposed rule also would have required that a full-time security service monitor the facility or that an electronic alarm system be used to indicate the entry of unauthorized persons into the facility. The proposed requirement for a television monitoring system was intended to facilitate surveillance within the quarantine facility, so that any persons attempting to gain unauthorized access could be detected. We believe the commenter is correct in stating that the television monitoring system would be unnecessary given the other proposed requirements, and we have not included a requirement for a television monitoring system in this reproposal. The facility would also have to have a communication system between the nonquarantine and quarantine areas of the facility. Such a system would allow persons working in the quarantine area to communicate with persons working in the nonquarantine area and vice versa without moving from one area to the other. Sanitation To ensure that proper animal health and biological security measures are observed, proposed § 93.308(c)(3)(iii) would require that permanent facilities have the equipment and supplies necessary to maintain the facility in clean and sanitary condition, including pest control equipment and supplies and cleaning and disinfecting equipment with adequate capacity to disinfect the facility and equipment. We would require that any reusable equipment and supplies that are not disinfected after each use in accordance with 9 CFR part 71 be kept separately for each lot of horses. The July 2002 proposed rule would have required that facilities keep separate equipment and supplies for each lot of horses; we are not including this requirement in this reproposal for the reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas.” Equipment and supplies to be used in the quarantine area would have to be maintained separately from equipment and supplies used in the nonquarantine area. We would require facilities to maintain a supply of potable water adequate to meet all watering and cleaning needs at the facility. We would require that water faucets for hoses be located throughout the facility to ensure that personnel would not need to drag hoses across areas that have already been cleaned and disinfected. We would also require that an emergency supply of water for horses in quarantine be maintained at the facility. Facilities would also need to maintain a stock of disinfectant authorized in 9 CFR part 71, or otherwise approved by the Administrator, sufficient to disinfect the entire facility. We would also require permanent facilities to have the capability to dispose of wastes, including manure, urine, and used bedding, by means of burial, incineration, or public sewer. Facilities would have to handle other waste material in a manner that minimizes spoilage and the attraction of pests and would have to dispose of the waste material by incineration, public sewer, or other preapproved manner that prevents the spread of disease. Disposal of wastes would have to be carried out under the oversight of APHIS representatives. We would further require permanent facilities to have the capability to dispose of horse carcasses in a manner approved by the Administrator and under conditions that minimize the risk of disease spread from carcasses. This requirement is necessary to prevent the dissemination of any disease agents that may be present in horse carcasses. For incineration to be carried out at the facility, the facility would have to have incineration equipment that is detached from other facility structures and is capable of burning animal waste and refuse. We would require the incineration site to include an area sufficient for solid waste holding. Incineration could also take place at a local site away from the facility premises. Furthermore, we would require all incineration activities to be carried out under the direct oversight of APHIS representatives, even if conducted off-site. We would require the facility to have the capability to control surface drainage and effluent into, within, and from the facility in a manner that prevents the spread of disease into, within, or from the facility. If the facility was approved to handle more than one lot of horses at the same time, the drainage system would have to be adequate to ensure that there would be no cross-contamination between lot-holding areas. The July 2002 proposed rule would have required that each lot-holding area have a separate drainage system to prevent cross-contamination. We have modified this requirement in this reproposal for reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas.” We believe this changed requirement would provide protection against transmission of communicable diseases of horses without placing an undue burden on facility operators. Security Proposed § 93.308(c)(3)(iv) would require that the facility and premises be kept locked and secure at all times to ensure the integrity of quarantine operations. We would also require the facility and premises to have signs indicating that the facility is a quarantine area and no visitors are allowed. The facility and premises would also have to be guarded at all times by one or more representatives of a bonded security company or, alternatively, would have to have an electronic security system that would indicate the entry of unauthorized persons into the facility. We would require that such an electronic security system be coordinated either through or with the local police so that the quarantine facility is monitored whenever APHIS representatives are not at the facility. We would also require that such an electronic security system be of the “silent type” and must be triggered to ring at the monitoring site and not at the facility. The electronic security system would have to be approved by Underwriter's Laboratories. We would also require that the operator provide written instructions to the monitoring agency stating that the police and a representative of APHIS designated by APHIS must be notified by the monitoring agency if the alarm is triggered. The operator would be required to submit a copy of those instructions to the Administrator. The operator of the facility would be required to notify the designated APHIS representative whenever a breach of security occurs or is suspected of having occurred. Further, in the event that disease is diagnosed in quarantined horses, the Administrator could require the operator to have the facility guarded by a bonded security company in a manner that the Administrator deems necessary to ensure the biological security of the facility. In response to the July 2002 proposed rule, one commenter stated that the requirement that a representative of a security company be present at the facility at all times would not ensure the safety of the horses inside the barns, and that the requirement should be eliminated for that reason. The purpose of having a representative of a bonded security company (or, alternatively, an electronic security system) is not only to ensure the safety of the horses but also to ensure that no unauthorized persons enter the facility. Preventing unauthorized persons from accessing the facility is essential to providing quarantine security. We would require that the operator of the facility furnish a telephone number or numbers to APHIS at which the operator or his or her agent can be reached at all times while horses are in quarantine. We would also provide that APHIS may place APHIS seals on any or all entrances and exits of the facility when determined necessary by APHIS and take all necessary steps to ensure that such seals are broken only in the presence of an APHIS representative. In the event that someone other than an APHIS representative breaks such seals, we would consider the act a breach in security, and APHIS representatives would make an immediate accounting of all horses in the facility. If we determine that a breach in security has occurred, we may extend the quarantine period for horses as long as necessary to ensure that the horses are free of communicable diseases. These proposed security requirements are unchanged from our July 2002 proposal. Operating Procedures APHIS Oversight Proposed requirements regarding APHIS oversight would be contained in § 93.308(c)(4)(i). The quarantine of horses at the facility would be subject to oversight by APHIS representatives, who could include one or more veterinarians and other professional, technical, and support personnel who are employed by APHIS and authorized to perform the services required by the regulations and the compliance agreement. Unlike temporary facilities, which are inspected on a regular basis by an APHIS veterinarian, a permanent facility would have at least one APHIS representative overseeing the care of all horses in quarantine during normal working hours. Depending on the size of the facility and the number of horses present, additional APHIS veterinarians and animal health technicians could be necessary to ensure adequate oversight of the horses in quarantine. The deployment of APHIS representatives to oversee and provide other professional, technical, and support services at a quarantine facility would be determined by the Administrator. If, for any reason, the operator fails to properly care for, feed, or handle the quarantined horses as required under the regulations, or fails to maintain and operate the facility as required under the regulations, APHIS representatives would furnish such services or make arrangements for the sale or disposal of quarantined horses at the quarantine facility owner's expense. Personnel Proposed requirements concerning personnel would be contained in § 93.308(c)(4)(ii). We would require the operator of the facility to provide adequate personnel to maintain the facility and care for the horses in quarantine, including attendants to care for and feed the horses, and other personnel to maintain, operate, and administer the facility. We would also require that the operator provide APHIS with a list of employees and other personnel assigned to work at the facility. The list would have to include the names, current residential addresses, and employee identification numbers of employees and other personnel. We would require that, when the operator wishes to grant access to the facility to persons who have not previously had access to it, the operator update the list prior to such persons having access to the quarantine facility. These requirements are necessary to ensure that APHIS has knowledge of, and can identify, all persons working at the facility. In conjunction with the above requirements, we would require the operator to provide APHIS with signed statements from each employee and any other personnel hired by the operator and working at the facility in which the person agrees to comply with proposed § 93.308(c) of the regulations, other applicable provisions of 9 CFR part 93, all terms of the compliance agreement, and any related instructions from APHIS representatives pertaining to quarantine operations, including contact with animals both inside and outside the facility. Authorized Access Proposed requirements regarding access would be contained in § 93.308(c)(4)(iii). We are proposing to grant access to the quarantine facility premises as well as inside the quarantine facility only to APHIS representatives and authorized employees and other personnel of the operator assigned to work at the facility. All other persons would be prohibited from the premises unless specifically granted access by the overseeing APHIS representative. Any visitors granted access would be required to be accompanied at all times by an APHIS representative while on the premises or in the quarantine area of the facility. Sanitary Requirements Under proposed § 93.308(c)(4)(iv), all facility employees and other personnel, as well as any other person granted access to the quarantine area, would have to: • Shower when entering and leaving the quarantine area; • Shower when leaving the necropsy area if a necropsy is in the process of being performed or has just been completed, or if any portion of the examined animal remains exposed; • Wear clean protective work clothing and footwear upon entering the quarantine area; • Wear disposable gloves when handling sick horses, and then wash hands after removing gloves; and • Change protective clothing, footwear, and gloves when they become soiled or contaminated. The July 2002 proposed rule would have required that persons granted access to quarantine areas in a facility shower before entering a lot-holding area if previously exposed from access to another lot-holding area. It would also have required that persons granted access to the quarantine area not have contact with any horses in the facility other than the lot or lots of horses to which the person would be assigned or granted access. For reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas,” we are not including these requirements in this reproposal. The July 2002 proposed rule would also have required that no person granted access to the quarantine area have contact with any horses outside the quarantine facility for at least 7 days after the last contact with the horses in quarantine. One commenter suggested retaining the requirement only for visitors to the quarantine area and shortening the length of time from 7 to 5 days to make the requirement consistent with that of the Foreign Animal Diagnostic Disease Laboratory operated by APHIS. This commenter further stated that the APHIS representative at the facility, authorized employees, other personnel of the operator assigned to work at the facility, and veterinary practitioners who enter the facility to provide emergency care should be exempt from this requirement altogether provided the other sanitary requirements in the proposed rule, such as showering when entering and exiting the quarantine area and changing clothes when entering and exiting the quarantine area, are met. Two commenters stated that such a requirement should be unnecessary for any visitors if the other sanitary requirements are met. We agree with the latter commenters that restrictions on contact with horses outside the quarantine facility should not be necessary for any visitors to a permanent facility, provided that all visitors fulfill the sanitary requirements of this proposed rule. We are, therefore, not including in this reproposal any restrictions on contact with horses outside the quarantine facility for visitors to the quarantine facility. We would require that the operator provide clean, protective clothing to persons granted access to the quarantine area. The July 2002 proposed rule would have required that the operator provide clean, protective clothing to be worn when persons provided access to the quarantine area move from one lot of horses to another lot of horses. For the reasons discussed earlier in this document under the heading “Changes In Our Approach With Respect to Lot-Holding Areas,” we have revised this proposed requirement to refer to the quarantine area rather than to lot-holding areas. The operator or the operator's designated representative would also be responsible for the handling, washing, and disposal of soiled and contaminated clothing worn within the quarantine facility in a manner approved by the overseeing APHIS representative as adequate to preclude transmission of any animal disease agent from the facility. Work clothing worn into the quarantine area would be required to be washed at the end of each workday. Used footwear would either be left in the clothes changing area or cleaned with hot water (148 °F minimum) and detergent and disinfected as directed by an APHIS representative. The July 2002 proposed rule would have required that work clothing worn into each lot-holding area be collected and kept in a bag until the clothing is washed at the end of each workday. For reasons discussed earlier in this document under the heading “Changes in Our Approach With Respect to Lot-Holding Areas,” we have revised this proposed requirement to refer to the quarantine area rather than to lot-holding areas. We would require that all equipment (including tractors) be cleaned and disinfected prior to being used in a quarantine area of the facility with a disinfectant authorized in 9 CFR part 71 or otherwise approved by the Administrator. The equipment would have to remain dedicated to the facility for the entire quarantine period in order to prevent the spread of disease agents outside the facility. Any equipment used with quarantined horses (e.g., halters, floats, feed and water buckets) would have to remain dedicated to that particular lot of quarantined horses for the duration of the quarantine period or be cleaned and disinfected before coming in contact with horses from another lot to ensure that no cross contamination occurs. Prior to its use on another lot of horses or its removal from the quarantine premises, any equipment would have to be cleaned and disinfected to the satisfaction of an APHIS representative. The proposed regulations would also require that any vehicle, before entering or leaving the quarantine area of the facility, be cleaned and disinfected under the oversight of an APHIS representative within a time period authorized by the APHIS representative and with a disinfectant authorized in 9 CFR part 71 of the regulations or otherwise approved by the Administrator. We would also require that, if the facility has a single loading dock instead of two as described earlier in this document, the loading dock would have to be cleaned and disinfected after each use under the oversight of an APHIS representative within a time period authorized by the APHIS representative and with a disinfectant authorized in 9 CFR part 71 of the regulations or otherwise approved by the Administrator. Further, we would require the area of the facility in which a lot of horses has been held to be thoroughly cleaned and disinfected, with a disinfectant authorized in 9 CFR part 71, under the oversight of an APHIS representative upon release of the horses before a new lot of horses is placed in that area of the facility. This requirement is necessary to ensure that horses entering quarantine are not exposed to disease agents present in the previous lot of horses. Handling of the Horses in Quarantine Under the proposed regulations, horses that are quarantined in private facilities would have to undergo the appropriate quarantine specified in § 93.308(a) and would be subject to any other applicable regulations in title 9 of the Code of Federal Regulations. For the purposes of quarantine operations, private facilities would operate no differently than Federal horse quarantine facilities. Each lot of horses to be quarantined would have to be placed in the facility on an “all-in, all-out” basis. Under this requirement, no horse could be taken out of the lot while it is in quarantine, except for diagnostic purposes or as provided in § 93.308(a)(4), and no horse could be added to the lot while the lot is in quarantine. The regulations would require that the facility provide sufficient feed and bedding that is free of vermin and that is not spoiled for the horses in quarantine. Feed and bedding would have to originate from an area that is not listed in 9 CFR part 72 as an area quarantined for splenetic or tick fever. We would prohibit the breeding of horses and the collection of germplasm from horses during the quarantine period. The July 2002 proposed rule would have prohibited the breeding of horses or the collection of germplasm from horses during the quarantine period unless necessary for a required import testing procedure. Because there are currently no import testing procedures that require the breeding of horses or the collection of germplasm from horses, we have removed that exception from this reproposal. We propose to require that horses in quarantine be subjected to such tests and procedures as directed by the overseeing APHIS representative to determine whether they are free from communicable diseases of horses. We would require that any death or suspected illness of horses in quarantine be reported immediately to the overseeing APHIS representative so that appropriate measures may be taken to ensure the health of the other horses in quarantine. The affected horses would have to be disposed of as the Administrator may direct or, depending on the nature of the disease, would have to be cared for as directed by the overseeing APHIS representative. The regulations would provide that quarantined horses requiring specialized medical attention or additional post-mortem testing may be transported off the quarantine site, if authorized by the overseeing APHIS representative. In such situations, a second quarantine site would have to be established to house the horses at the facility of destination (e.g., veterinary teaching hospital), and the overseeing APHIS representative could extend the quarantine period for that horse and for its lot until the results of any outstanding tests or postmortem results are received. Further, if we determine that a horse is infected with or exposed to a communicable disease of horses, we would require that arrangements for the final disposition of the infected or exposed horse be accomplished within 10 days of the date that the importer is notified by the overseeing APHIS representative that the horse has been refused entry into the United States. We would require the horses to be disposed of under the direct oversight of APHIS representatives. We would require the operator to have a preapproved contingency plan for the disposal of all horses housed in the facility prior to issuance of an import permit. This requirement is essential to ensure that diseased horses can be disposed of without posing a risk of disseminating diseases outside the quarantine facility. In the July 2002 proposed rule, we would have allowed horses in quarantine to be vaccinated. One commenter recommended that we prohibit vaccinations entirely in permanent, privately owned horse quarantine facilities. Vaccinations performed on horses while they are in quarantine can alter the immune system of the horses and therefore affect diagnostic serology, potentially producing inaccurate results in response to the diagnostic tests administered in quarantine. We agree and have therefore added a new paragraph § 93.308(c)(4)(v)(I) in this reproposal specifically prohibiting vaccination of horses in these facilities. Records Under proposed § 93.308(c)(4)(vi), it would be the facility operator's responsibility to maintain current daily records to record the entry and exit of all persons entering and leaving the quarantine facility. We would require the operator or the operator's designated representative to hold the daily records, along with any records kept by APHIS and deposited with the operator, for at least 2 years following the date of release of the horses from quarantine and to make such records available to APHIS representatives upon request. Environmental Requirements Under proposed § 93.308(c)(5), if APHIS determines that a privately operated quarantine facility does not meet all applicable local, State, and Federal environmental regulations, APHIS reserves the right to deny or suspend approval of the facility until appropriate remedial measures have been applied. This requirement is necessary to ensure that APHIS-approved facilities meet all applicable waste disposal and other environmental quality standards. Variances Under proposed § 93.308(c)(6), the Administrator may grant variances to the requirements relating to location, construction, and other design features of the physical facility, as well as to sanitation, security, operating procedures, recordkeeping, and other provisions of the regulations, but only if the Administrator determines that the variance causes no detrimental impact to the overall biological security of the quarantine operation. The operator of a permanent facility would have to submit a request for a variance from the requirements for the construction of a facility to the Administrator in writing prior to approval of the facility; for a variance from the requirements for the operation of a facility, the operator would have to submit a request to the Administrator in writing at least 30 days in advance of the arrival of horses to the facility. Any variance would also have to be expressly provided for in the compliance agreement. In conjunction with these changes, we would also make editorial changes to § 93.310 to update the regulations and make them easier to understand. We believe that these proposed regulations would ensure that permanent facilities could operate without posing a risk of foreign animal disease introduction and allow U.S. horse importers another option for quarantining imported horses. We welcome public comment on the proposed regulations. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget. In accordance with 5 U.S.C. 603, we have performed an initial regulatory flexibility analysis, which is set out below, regarding the potential economic costs and benefits of this rule and its potential economic effects on small entities. Based on the information we have, there is no basis to conclude that this rule will result in any significant economic effect on a substantial number of small entities. However, we do not currently have all of the data necessary for a comprehensive analysis of the effects of this proposed rule on small entities. Therefore, we are inviting comments on potential effects. This proposed rule would allow the establishment and operation, under APHIS oversight, of permanent, privately owned quarantine facilities for horses imported into the United States. Currently, the regulations set standards only for temporary, privately owned quarantine facilities for horses. Such temporary facilities are used to quarantine horses imported for a particular event or purpose. APHIS has also authorized the operation of one permanent, privately owned and operated animal quarantine facility in Los Angeles County, CA. Under the Animal Health Protection Act, specifically 7 U.S.C. 8303, the Secretary is authorized to promulgate regulations requiring that any animal imported or entered into the United States be raised or handled under post-importation quarantine conditions by or under the supervision of the Secretary for the purpose of determining whether the animal is or may be affected by any pest or disease of livestock. The horse industry in the United States contributes $39 billion annually to the U.S. gross domestic product via direct spending, and it supports 1.4 million full-time equivalent jobs. The horse industry pays approximately $1.9 billion in taxes annually to all levels of government. Approximately 1.96 million people own the estimated 9.2 million horses in the United States. Trade in live horses between the United States and other countries has increased considerably, both recently and over the past decade. Even though the United States is a net exporter of live horses, imports of live horses have increased dramatically. Specifically, from 2001 to 2003, U.S. imports of live horses increased by 54 percent in number (from 27,236 horses to 41,960 horses). During the 3-year period 2001-2003, the number of U.S. live horse imports averaged 39,434 annually, 134 percent more than the annual average for the 1991-1993 3-year period. In 2003, the value of U.S. live horse imports was $259.3 million. The increased demand for importing horses in the United States has resulted in an increased demand for import quarantine services. As can be seen from the data above, horses play an important role in the international trade of the United States. Effects on Small Entities We have identified two types of entities that could be affected by implementation of this rule: The existing permanent, privately owned quarantine facility and horse importers or farmers. Quarantine Facilities According to Small Business Administration

(SBA)criteria, a horse quarantine facility is considered a small entity if it has annual revenues of $6 million or less. The existing permanent, privately owned quarantine facility that operates in Los Angeles County, CA, is believed to be a small entity. If this proposed rule is implemented, the operators of that quarantine facility may need to upgrade its facilities to be in compliance with the proposed requirements. If and when the facility is approved for operation under the proposed regulations, the cost of any needed renovations to the facility, as well as the costs associated with being in compliance with the proposed regulations, would likely be passed on to importers of horses who elect to use the facility to quarantine imported horses. Such a cost pass-through to the facility's users is likely to occur, at least in the short run, given the increased demand for quarantine services in the United States, the small number of Federal horse quarantine facilities currently in operation, and the fact that there are no other permanent, privately owned quarantine facilities operating at this time. Over the long term, the impact of the rule on the facility is less certain, given the possibility of additional—and potentially competing—quarantine facilities opening in the future. That only one or two additional quarantine facilities are expected to open in the next several years suggests that this action would not have a significant effect on the facility, even in the long run. Nevertheless, at this time, we are unable to determine the effect that implementation of this rule would have on the facility's business volume and revenue. In response to the July 2002 proposed rule, one commenter objected to the proposed standards for permanent, privately owned horse quarantine facilities on the grounds that they would impose significant additional costs on the existing quarantine facility. The commenter cited decreasing demand for imported horses as grounds for fear that these significant additional costs could eventually result in a reduction of the total quarantine space available for imported horses, since the existing permanent, privately owned horse quarantine facility would likely exit the market and prospective owners of permanent horse quarantine facilities would be discouraged by the regulations from entering it. As noted earlier in this document, the demand for import quarantine facilities for horses has risen in recent years, and in some cases the demand for quarantine services for horses has exceeded the space available at existing facilities. Most of the comments we received cited this increased demand and the resulting shortage of quarantine services as the reason for supporting our proposed standards for permanent, privately owned horse quarantine facilities. However, we cannot allow horses to be quarantined in privately owned facilities that are not constructed and operated in such a manner as to mitigate the risk of transmission of foreign animal diseases into the domestic horse population. We have determined that the standards set out in the proposed rule would ensure that permanent, privately owned horse quarantine facilities are constructed and operated properly. In response to this comment, however, this reproposal provides additional time for the existing permanent, privately owned horse quarantine facility to comply with any requirements that may be established by a final rule. This deadline would be 1 year after the final rule takes effect. We have also made changes to substantive provisions in this reproposal that we expect would reduce the compliance costs associated with this rulemaking. We continue to lack data of the kind that could be used in an economic analysis to assess the proposed rule's potential impact on the existing permanent, privately owned horse quarantine facility. We are inviting comments on such impacts, particularly estimates of compliance costs and impacts on revenue. This will allow us to better assess this proposal's potential impact. Importers of Horses and Horse Farms According to SBA criteria, a farm that keeps horses for breeding and has annual revenues of $750,000 or less is considered a small entity. According to the most recent Census of Agriculture data, average per-farm revenue for all U.S. equine farms in 2002 was $7,158, an indication that these farms are by and large small entities. The establishment of standards for the approval of permanent, privately owned quarantine facilities for horses has the potential to make the import process easier and more timely while at the same time protecting against the introduction of communicable diseases of horses, a clear benefit for importers if the demand for, and worth of, live horse imports continues to increase. However, as discussed above, importers may be subject to higher fees and charges from the current quarantine facility or from new facilities that may open in the future. Additional quarantine facilities could be expected to benefit brokers, and they may also have positive economic effects for horse owners who purchase horses, since increased competition from foreign imports may serve to depress domestic prices. However, any decline in domestic horse prices stemming from increased imports would have an adverse impact on domestic sellers. Given the available data, it is not possible for us to predict the proposed rule's economic impact. Nevertheless, any increase in horse imports, which the rule would facilitate, should yield net benefits. This is because trade of a commodity generally increases social welfare. To the extent that consumer choice is broadened and the increased supply of the imported commodity leads to a price decline, gains in consumer surplus will outweigh losses in domestic producer surplus. 2 Although the rule's impact on domestic producers is uncertain, it is expected to provide benefits to consumers (domestic importers, brokers) that would exceed any potential losses to domestic producers. The net welfare effect for the United States of increased horse imports will be positive. 2 Consumer surplus is the difference between the amount a consumer is willing to pay for a good and the amount actually paid. Producer surplus is the amount a seller is paid for the good minus the seller's cost. The additional number of horses that might be imported into the United States as a result of this proposed rule is not known. However, because the proposed rule is expected to result in the opening of only one or two additional quarantine facilities in the next several years, the expected benefits are likely to be small. Alternatives Considered This proposed rule would establish standards for the approval of permanent, privately owned quarantine facilities for horses. Alternatives to the proposed rule would be to either leave the regulations unchanged, or to require a different set of standards than is proposed. Leaving the regulations unchanged would be unsatisfactory, because it would perpetuate the current situation, *i.e.* , one which does not fully address the potential disease risks, and one which does not facilitate the importation of horses. APHIS considers the proposed set of standards to be the minimum necessary to accomplish the rule's objectives. In this regard, we have made changes to substantive provisions in this reproposal that we expect would reduce the compliance costs associated with this rulemaking. This reproposal also provides additional time for the existing permanent, privately owned horse quarantine facility to comply with any requirements that may be established by a final rule. The deadline would be 1 year after the final rule takes effect. Nevertheless, we invite public comment on the proposed rule, including any comments on the expected impacts for small entities and on how the proposed rule could be modified to reduce expected costs or burdens for small entities consistent with its objectives. Any comment suggesting changes to the proposed standards should be supported by an explanation of why the changes should be considered. This proposed rule contains information collection requirements, which have been submitted for approval to the Office of Management and Budget (see “Paperwork Reduction Act” below). Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted:

(1)All State and local laws and regulations that are inconsistent with this rule will be preempted;

(2)no retroactive effect will be given to this rule; and

(3)administrative proceedings will not be required before parties may file suit in court challenging this rule. Paperwork Reduction Act In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comment refers to Docket No. APHIS-2006-0013. Please send a copy of your comment to:

(1)Docket No. APHIS-2006-0013, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and

(2)Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule. Because recent demand for quarantine services for horses exceeds the space available at existing facilities, we are proposing to allow the establishment of permanent, privately owned horse quarantine facilities if they meet requirements proposed in this document. Accomplishing this will necessitate the use of several information collection activities, including an application for facility approval, a compliance agreement explaining the conditions under which the facility must be operated, and a certification that the facility meets all applicable environmental regulations. We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:

(1)Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;

(2)Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

(3)Enhance the quality, utility, and clarity of the information to be collected; and

(4)Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; *e.g.* , permitting electronic submission of responses). *Estimate of burden:* Public reporting burden for this collection of information is estimated to average 0.78571 hours per response. *Respondents:* Owners of approved permanent, privately owned horse quarantine facilities and applicants for approval. *Estimated annual number of respondents:* 3. *Estimated annual number of responses per respondent:* 4.666. *Estimated annual number of responses:* 14. *Estimated total annual burden on respondents:* 11 hours. Copies of this information collection can be obtained from: Mrs. Celeste Sickles, APHIS's Information Collection Coordinator, at

(301)734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS's Information Collection Coordinator, at

(301)734-7477. List of Subjects in 9 CFR Part 93 Animal diseases, Imports, Livestock, Poultry and poultry products, Quarantine, Reporting and recordkeeping requirements. Accordingly, we propose to amend 9 CFR part 93 as follows: PART 93—IMPORTATION OF CERTAIN ANIMALS, BIRDS, AND POULTRY, AND CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS OF CONVEYANCE AND SHIPPING CONTAINERS 1. The authority citation for part 93 would continue to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 2-3. Section 93.300 would be amended by revising the definition for *operator* and by adding, in alphabetical order, new definitions of *lot, lot-holding area, nonquarantine area, permanent, privately owned quarantine facility, quarantine area,* and *temporary, privately owned quarantine facility* to read as follows: § 93.300 Definitions. *Lot.* A group of horses that, while held on a premises or conveyance, have had opportunity for physical contact with other horses in the group or with their excrement or discharges at any time during their shipment to the United States. *Lot-holding area.* That area in a permanent, privately owned quarantine facility in which a single lot of horses is held at one time. *Nonquarantine area.* That area in a permanent, privately owned quarantine facility that includes offices, storage areas, and other areas outside the quarantine area, and that is off limits to horses, samples taken from horses, and any other objects or substances that have been in the quarantine area during quarantine of horses. *Operator.* A person other than the Federal Government who owns or manages and has responsibility for the services provided by a temporary, privately owned quarantine facility or a permanent, privately owned quarantine facility. *Permanent, privately owned quarantine facility.* A facility that offers quarantine services for horses to the general public on a continuing basis and that is owned and operated by an entity other than the Federal Government (also permanent facility). *Quarantine area.* That area in a permanent, privately owned quarantine facility that comprises all of the lot-holding areas in the facility and any other areas in the facility that horses have access to, including loading docks for receiving and releasing horses, and any areas used to conduct examinations of horses and take samples and where samples are processed or examined. *Temporary, privately owned quarantine facility.* A facility that offers quarantine services for horses imported for a special event and that is owned and operated by an entity other than the Federal Government (also temporary facility). 4. Section 93.303 would be amended as follows: a. By revising the heading of paragraph

(e)to read as set forth below. b. In paragraph (e), by removing the words “provided by the importer” and by adding the words “privately owned” before the word “quarantine”. § 93.303 Ports designated for the importation of horses.

(e)*Ports for horses to be quarantined at privately owned quarantine facilities.* * * * § 93.304 [Amended] 5. In § 93.304, paragraph (a)(1)(i), the first sentence would be amended by removing the words “quarantine facility provided by the importer” and adding the words “privately owned quarantine facility” in their place. 6. In § 93.304, paragraph (a)(2), the words “of the regulations, horses intended for quarantine at a quarantine facility provided by the importer,” would be removed, and the words “or horses intended for quarantine at a privately owned quarantine facility” would be added in their place. 7. In § 93.308, in paragraph (a), footnote 14 would be redesignated as footnote 13, paragraph

(b)would be revised and a new footnote 14 would be added, and paragraph (c), including footnote 15, would be revised to read as follows: § 93.308 Quarantine requirements.

(b)*Temporary, privately owned quarantine facilities.* Horses presented for entry into the United States as provided in § 93.303(e) may be quarantined in temporary, privately owned quarantine facilities that meet the requirements of paragraphs (b)(1) and

(2)of this section and that have been approved by the Administrator for a specific importation.

(1)*Approval.* Requests for approval and plans for proposed temporary facilities must be submitted no less than 15 days before the proposed date of entry of horses into the facility to APHIS, Veterinary Services, National Center for Import and Export, 4700 River Road Unit 39, Riverdale, MD 20737-1231. Before facility approval can be granted, a veterinary medical officer of APHIS must inspect the facility to determine whether it complies with the standards set forth in this section: *Provided, however,* that approval of any temporary facility and use of such facility will be contingent upon a determination made by the Administrator that adequate personnel are available to provide required services at the facility. Approval of any facility may be refused and approval of any quarantine facility may be withdrawn at any time by the Administrator, upon his or her determination that any requirements of this section are not being met. Before such action is taken, the operator of the facility will be informed of the reasons for the proposed action by the Administrator and afforded an opportunity to present his or her views. If there is a conflict as to any material fact, a hearing will be held to resolve the conflict. The cost of the facility and all maintenance and operational costs of the facility will be borne by the operator.

(2)*Standards and handling procedures.* The facility must be maintained and operated in accordance with the following standards:

(i)*Inspection.* Inspection and quarantine services must be arranged by the operator or his or her agent with the APHIS Veterinarian in Charge for the State in which the approved facility is located 14 no less than 7 days before the proposed date of entry of the horses into the quarantine facility. 14 The name and address of the Veterinarian in Charge in any State is available from APHIS, Veterinary Services, National Center for Import and Export, 4700 River Road Unit 39, Riverdale, MD 20737-1231.

(ii)*Physical plant requirements.*

(A)The facility must be located and constructed to prevent horses from having physical contact with animals outside the facility.

(B)The facility must be constructed only with materials that can withstand repeated cleaning and disinfection. Disinfectants authorized in 9 CFR part 71 must be used. All walls, floors, and ceilings must be constructed of solid material that is impervious to moisture. Doors, windows, and other openings of the facility must be provided with double screens that will prevent insects from entering the facility.

(iii)*Sanitation and security.*

(A)The operator must arrange for a supply of water adequate to clean and disinfect the facility.

(B)All feed and bedding must originate from an area not under quarantine because of splenetic or tick fever (see part 72 of this chapter) and must be stored within the facility.

(C)Upon the death of any horse, the operator must arrange for the disposal of the horse's carcass by incineration. Disposal of all other waste removed from the facility during the time the horses are in quarantine or from horses that are refused entry into the United States must be either by incineration or in a public sewer system that meets all applicable environmental quality control standards. Following completion of the quarantine period and the release of the horses into the United States, all waste may be removed from the quarantine facility without further restriction.

(D)The facility must be maintained and operated in accordance with any additional requirements the Administrator deems appropriate to prevent the dissemination of any communicable disease.

(E)The facility must comply with all applicable local, State, and Federal requirements for environmental quality.

(iv)*Personnel.*

(A)Access to the facility will be granted only to persons working at the facility or to persons specifically granted such access by an APHIS representative.

(B)The operator must provide attendants for the care and feeding of horses while in the quarantine facility.

(C)Persons working in the quarantine facility may not come in contact with any horses outside the quarantine facility during the quarantine period for any horses in the facility.

(v)*Handling of horses in quarantine.* Horses offered for importation into the United States that are quarantined in an approved temporary facility must be handled in accordance with paragraph

(a)of this section while in quarantine.

(c)*Permanent, privately owned quarantine facilities.* Horses presented for entry into the United States as provided in § 93.303(e) may be quarantined in permanent, privately owned quarantine facilities approved by the Administrator as meeting the requirements of paragraphs (c)(1) through (c)(6) of this section.

(1)*APHIS approval.*

(i)*Approval procedures.* Persons seeking APHIS approval of a permanent, privately owned quarantine facility must write to the Administrator, c/o National Center for Import and Export, Veterinary Services, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231. The application letter must include the full name and mailing address of the applicant; the location and street address of the facility for which approval is sought; blueprints of the facility; a description of the financial resources available for construction, operation, and maintenance of the facility; the anticipated source or origin of horses to be quarantined, as well as the expected size and frequency of shipments; a contingency plan for horses needing emergency veterinary care; and a contingency plan for the disposal of all the horses capable of being housed in the facility.

(A)If APHIS determines that an application is complete and merits further consideration, the person applying for facility approval must enter into a service agreement with APHIS wherein the applicant agrees to pay the cost of all APHIS services associated with APHIS' evaluation of the application and facility. APHIS charges for the evaluation of the application and facility at hourly rates listed in § 130.30 of this chapter. This service agreement applies only to fees accrued during the application process. If the facility is approved by APHIS, facility owners must enter into a compliance agreement in accordance with paragraph (c)(2) of this section.

(B)Requests for approval must be submitted to APHIS at least 120 days prior to the date of application for local building permits. Requests for approval will be evaluated on a first-come, first-served basis.

(ii)*Criteria for approval.* Before a facility may operate as a permanent, privately owned quarantine facility for horses, it must be approved by APHIS. To be approved:

(A)The facility must meet all of the requirements of this section;

(B)The facility must meet any additional requirements that may be imposed by the Administrator in each specific case, as specified in the compliance agreement required under paragraph (c)(2) of this section, to ensure that the quarantine of horses in the facility will be adequate to determine their health status, as well as to prevent the transmission of diseases into, within, and from the facility; and

(C)The Administrator must determine that sufficient personnel, including one or more APHIS veterinarians and other professional, technical, and support personnel, are available to serve as APHIS representatives at the facility and provide continuous oversight over import quarantine operations and other technical services to ensure the biological security of the facility, if approved. This determination will be based on the expected size and frequency of shipments to the facility, as described in the application for approval of a permanent facility, as well as any other pertinent information in the application. APHIS will assign personnel to facilities requesting approval in the order that the facilities are approved. The Administrator has sole discretion on the number of APHIS personnel to be assigned to the facility.

(iii)*Maintaining approval.* To maintain APHIS approval, the operator must continue to comply with all the requirements of paragraph

(c)of this section and the terms of the compliance agreement executed in accordance with paragraph (c)(2) of this section.

(iv)*Denial or withdrawal of approval.* Approval for a proposed privately owned quarantine facility may be denied or approval for a facility already in operation may be withdrawn at any time by the Administrator for any of the reasons provided in paragraph (c)(1)(iv)(C) of this section.

(A)Before facility approval is denied or withdrawn, the operator of the facility will be informed of the reasons for the proposed action by the Administrator and afforded an opportunity to present his or her views. If there is a conflict as to any material fact, APHIS will afford the operator, upon request, the opportunity for a hearing with respect to the merits or validity of such action.

(B)The Administrator may withdraw approval of an existing facility prior to a final determination in the hearing if the Administrator determines that such action is necessary to protect animal health or the public health, interest, or safety. Such withdrawal will be effective upon oral or written notification, whichever is earlier, to the operator of the facility. In the event of oral notification, APHIS will promptly give written confirmation to the operator of the facility. This withdrawal will continue in effect pending the completion of the hearing and any judicial review, unless otherwise ordered by the Administrator. In addition to withdrawal of approval for the reasons provided in paragraph (c)(1)(iv)(C) of this section, the Administrator will also automatically withdraw approval when the operator of any approved facility notifies the APHIS Veterinarian in Charge for the State in which the facility is located, in writing, that the facility is no longer in operation. 15 15 The name and address of the Veterinarian in Charge in any State is available from APHIS, Veterinary Services, National Center for Import and Export, 4700 River Road Unit 39, Riverdale, MD 20737-1231.

(C)The Administrator may deny or withdraw approval of a permanent privately owned quarantine facility if: ( *1* ) Any requirement of this section or the compliance agreement is not complied with; or ( *2* ) The operator fails to remit any charges for APHIS services rendered; or ( *3* ) The operator or a person responsibly connected with the business of the quarantine facility acts as a paid agent (broker) for the importation or subsequent sale of horses; or ( *4* ) The operator or a person responsibly connected with the business of the quarantine facility is or has been found by a court of competent jurisdiction to have violated any law or regulation pertaining to the importation or quarantine of any animal; or ( *5* ) The operator or a person responsibly connected with the business of the quarantine facility is or has been convicted of any crime involving fraud, bribery, or extortion or any other crime involving a lack of integrity needed for the conduct of operations affecting the importation of animals; or ( *6* ) The approved quarantine facility has not been in use to quarantine horses for a period of at least 1 year.

(D)For the purposes of this section, a person is deemed to be responsibly connected with the business of the quarantine facility if such person has an ownership, mortgage, or lease interest in the facility's physical plant, or if such person is a partner, officer, director, holder, or owner of 10 percent or more of its voting stock, or is an employee in a managerial or executive capacity.

(v)*Approval for existing facilities.* Any permanent, privately owned quarantine facility operating under APHIS authorization at the time these regulations become effective must be approved by APHIS to continue quarantine operations by [ *Insert date 1 year after effective date of final rule* ] or else must cease horse quarantine operations.

(2)*Compliance agreement.*

(i)All permanent, privately owned quarantine facilities for horses must operate in accordance with a compliance agreement executed by the operator or his or her agent and the Administrator, and that must be renewed on an annual basis.

(ii)The compliance agreement must provide that:

(A)The facility must meet all applicable requirements of this section;

(B)The facility's quarantine operations are subject to the oversight of APHIS representatives;

(C)The operator agrees to be responsible for the cost of the facility; all costs associated with its maintenance and operation; all costs associated with the hiring of employees and other personnel to attend to the horses as well as to maintain and operate the facility; all costs associated with the care of quarantined horses, such as feed, bedding, medicines, inspections, testing, laboratory procedures, and necropsy examinations; and all APHIS charges for the services of APHIS representatives in accordance with this section and part 130 of this chapter; and

(D)The operator agrees to bar from the facility any employee or other personnel at the facility who fails to comply with paragraph

(c)of this section or other provisions of this part, any terms of the compliance agreement, or related instructions from APHIS representatives;

(3)*Physical plant requirements.* The facility must meet the following requirements as determined by an APHIS inspection prior to admitting horses into the facility:

(i)*Location.* The quarantine facility must be located in proximity to a port authorized under § 93.303(e). The site and the specific routes for the movement of horses from the port to the site must be approved by the Administrator based on consideration of whether the site or routes would put the horses in a position that could result in the transmission of communicable diseases to domestic horses.

(ii)*Construction.* The facility must be of sound construction, in good repair, and properly designed to prevent the escape of quarantined horses. It must have adequate capacity to receive and house shipments of horses as lots on an “all-in, all-out” basis, whereby separate lots of horses can be received and housed without contact with any other lots being quarantined at the facility. The facility must include the following:

(A)*Perimeter fencing.* The facility must be surrounded by a security fence of sufficient height and design to prevent the entry of unauthorized people and animals from outside the facility and to prevent the escape of the horses in quarantine.

(B)*Entrances and exits.* All entryways into the nonquarantine area of the facility must be equipped with a secure and lockable door. While horses are in quarantine, all access to the quarantine area for horses must be from within the building, and each such entryway to the quarantine area must be equipped with a series of solid self-closing double doors. Emergency exits to the outside are permitted in the quarantine area. Such emergency exits must be constructed so as to permit their being opened from the inside of the facility only.

(C)*Windows and other openings.* The facility must be constructed so that any windows or other openings in the quarantine area are double-screened with screening of sufficient gauge and mesh to prevent the entry or exit of insects and other vectors of diseases of horses and to provide ventilation sufficient to ensure the comfort and safety of all horses in the facility. The interior and exterior screens must be separated by at least 3 inches (7.62 cm). All screening of windows or other openings must be easily removable for cleaning, but must otherwise remain locked and secure at all times in a manner satisfactory to APHIS representatives in order to ensure the biological security of the facility.

(D)*Lighting.* The entire facility, including its stalls and hallways, must have adequate lighting.

(E)*Loading docks.* The facility must have separate docks for animal receiving and releasing and for general receiving and pickup, unless a single dock used for both purposes is cleaned and disinfected after each use in accordance with paragraph (c)(4)(iv)(F) of this section.

(F)*Surfaces.* The facility must be constructed so that the floor surfaces with which horses have contact are nonslip and wear-resistant. All floor surfaces with which the horses, their excrement, or discharges have contact must provide for adequate drainage. All floor and wall surfaces with which the horses, their excrement, or discharges have contact must be impervious to moisture and be able to withstand frequent cleaning and disinfection without deterioration. Ceilings and wall surfaces with which the horses, their excrement, or discharges do not have contact must be able to withstand cleaning and disinfection between shipments of horses. All floor and wall surfaces must be free of sharp edges that could cause injury to horses.

(G)*Horse stalls.* The stalls in which horses are kept must be large enough to allow each animal to make normal postural and social adjustments with adequate freedom of movement.

(H)*Aisleways.* The aisleways through which horses are moved to and from stalls must be wide enough to provide for safe movement of horses, including allowing horses to turn around in the aisleway, prevent horses in facing stalls from coming into contact with horses in the aisleway, and to adequately ventilate the stalls.

(I)*Means of isolation.* Physical barriers must separate different lots of horses in the facility so that horses in one lot cannot have physical contact with horses in another lot or with their excrement or discharges. Stalls must be available that are capable of isolating any horses exhibiting signs of illness.

(J)*Showers.* A shower must be located at each entrance to the quarantine area. If the facility has a necropsy area, a shower must be located at the entrance to the necropsy area. A clothes-storage and clothes-changing area must be provided with each shower area. There must also be one or more receptacles near each shower so that clothing that has been worn into the quarantine area can be deposited in a receptacle prior to entering the shower.

(K)*APHIS space.* The facility must have adequate space for APHIS representatives to conduct examinations and testing of the horses in quarantine, prepare and package samples for mailing, and store the necessary equipment and supplies for duplicate samples. The space provided to conduct examinations and testing must include a refrigerator-freezer in which to store samples. The examination space must include equipment to provide for the safe inspection of horses. The facility must also include a secure, lockable office for APHIS use with enough room for a desk, chair, and filing cabinet.

(L)*Necropsy area.* The facility must either include an area for conducting necropsies onsite or must have designated an alternate facility at which a suitable necropsy area is available. If the facility has a necropsy area, it must be of sufficient size to perform necropsies on horses and be equipped with adequate lighting, hot and cold running water, a drain, a cabinet for storing instruments, a refrigerator-freezer for storing specimens, and an autoclave to sterilize veterinary equipment. If the facility does not have such an area, it must specify an alternate facility at which a suitable necropsy area is available, a route from the quarantine facility to the alternate facility's necropsy area, and the safeguards that will be in place to ensure that communicable diseases of horses are not spread during transit. This alternate facility and transport methodology must be approved by the Administrator under the procedures for requesting variances outlined in paragraph (c)(6) of this section.

(M)*Storage* . The facility must have sufficient storage space for equipment and supplies used in quarantine operations. Storage space must include separate, secure storage for pesticides and for medical and other biological supplies, as well as a separate vermin-proof storage area for feed and bedding, if feed and bedding are stored at the facility. If the facility has multiple lot-holding areas, then separate storage space for any reusable supplies and equipment that are not disinfected after each use in accordance with part 71 of this chapter must be provided for each lot-holding area.

(N)*Additional space needs.* The facility must have an area for washing and drying clothes, linens, and towels and an area for cleaning and disinfecting equipment used in the facility. The facility must also include a work area for the repair of equipment.

(O)*Restrooms.* The facility must have permanent restrooms in both the quarantine and nonquarantine areas of the facility.

(P)*Ventilation and climate control.* The facility must be constructed with an air handling system capable of controlling and maintaining the ambient temperature, air quality, humidity, and odor at levels that are not injurious or harmful to the health of horses in quarantine. Air supplied to the quarantine area must not be recirculated or reused for other ventilation needs. Air handling systems for lot-holding areas must be separate from air handling systems for other operational and administrative areas of the facility. In addition, if the facility is equipped to handle more than one lot of horses at a time, the air handling system must be adequate to ensure that there is no cross-contamination of air between the separate lot-holding areas.

(Q)*Fire protection.* The facility, including the lot holding areas, must have a fire alarm voice communication system.

(R)*Communication system.* The facility must have a communication system between the nonquarantine and quarantine areas of the facility.

(iii)*Sanitation* . To ensure that proper animal health and biological security measures are observed, the facility must have the following:

(A)Equipment and supplies necessary to maintain the facility in clean and sanitary condition, including pest control equipment and supplies and cleaning and disinfecting equipment with adequate capacity to disinfect the facility and equipment.

(B)Any reusable equipment and supplies that are not disinfected after each use in accordance with part 71 of this chapter maintained separately for each lot of horses.

(C)Equipment and supplies used in the quarantine area maintained separately from equipment and supplies used in the nonquarantine area.

(D)A supply of potable water adequate to meet all watering and cleaning needs, with water faucets for hoses located throughout the facility. An emergency supply of water for horses in quarantine must also be maintained.

(E)A stock of disinfectant authorized in part 71 of this chapter or otherwise approved by the Administrator that is sufficient to disinfect the entire facility.

(F)The capability to dispose of wastes, including manure, urine, and used bedding, by means of burial, incineration, or public sewer. Other waste material must be handled in such a manner that minimizes spoilage and the attraction of pests and must be disposed of by incineration, public sewer, or other preapproved manner that prevents the spread of disease. Disposal of wastes must be carried out under the oversight of APHIS representatives.

(G)The capability to dispose of horse carcasses in a manner approved by the Administrator and under conditions that minimize the risk of disease spread from carcasses.

(H)For incineration to be carried out at the facility, the facility must have incineration equipment that is detached from other facility structures and is capable of burning animal waste and refuse. The incineration site must also include an area sufficient for solid waste holding. Incineration may also take place at a local site away from the facility premises. All incineration activities, whether onsite or offsite, must be carried out under the direct oversight of APHIS representatives.

(I)The capability to control surface drainage and effluent into, within, and from the facility in a manner that prevents the spread of disease into, within, or from the facility. If the facility is approved to handle more than one lot of horses at the same time, the drainage system must be adequate to ensure that there is no cross-contamination between lot-holding areas.

(iv)*Security.* Facilities must provide the following security measures:

(A)The facility and premises must be kept locked and secure at all times while horses are in quarantine.

(B)The facility and premises must have signs indicating that the facility is a quarantine area and no visitors are allowed.

(C)The facility and premises must be guarded at all times by one or more representatives of a bonded security company or, alternatively, the facility must have an electronic security system that indicates the entry of unauthorized persons into the facility. Electronic security systems must be coordinated through or with the local police so that monitoring of the quarantine facility is maintained whenever APHIS representatives are not at the facility. The electronic security system must be of the “silent type” and must be triggered to ring at the monitoring site and not at the facility. The electronic security system must be approved by Underwriter's Laboratories. The operator must provide written instructions to the monitoring agency stating that the police and a representative of APHIS designated by APHIS must be notified by the monitoring agency if the alarm is triggered. The operator must also submit a copy of those instructions to the Administrator. The operator must notify the designated APHIS representative whenever a breach of security occurs or is suspected of having occurred. In the event that disease is diagnosed in quarantined horses, the Administrator may require the operator to have the facility guarded by a bonded security company in a manner that the Administrator deems necessary to ensure the biological security of the facility.

(D)The operator must furnish a telephone number or numbers to APHIS at which the operator or his or her agent can be reached at all times.

(E)APHIS is authorized to place APHIS seals on any or all entrances and exits of the facility when determined necessary by APHIS and to take all necessary steps to ensure that such seals are broken only in the presence of an APHIS representative. If someone other than an APHIS representative breaks such seals, APHIS will consider the act a breach in security and APHIS representatives will make an immediate accounting of all horses in the facility. If a breach in security occurs, APHIS may extend the quarantine period as long as necessary to determine that the horses are free of communicable diseases.

(4)*Operating procedures.* The following procedures must be observed at the facility at all times:

(i)*APHIS oversight.*

(A)The quarantine of horses at a privately owned quarantine facility is subject to the oversight of APHIS representatives authorized to perform the services required by this section and by the compliance agreement.

(B)If, for any reason, the operator fails to properly care for, feed, or handle the quarantined horses as required in this paragraph (c), or fails to maintain and operate the facility as provided in this paragraph (c), APHIS representatives will furnish such services or make arrangements for the sale or disposal of quarantined horses at the quarantine facility owner's expense.

(ii)*Personnel.*

(A)The operator must provide adequate personnel to maintain the facility and care for the horses in quarantine, including attendants to care for and feed horses, and other personnel as needed to maintain, operate, and administer the facility.

(B)The operator must provide APHIS with an up-to-date list of all personnel who have access to the facility. The list must include the names, current residential addresses, and employee identification numbers of each person. When the operator wishes to grant access to the facility to persons who have not previously had access to it, the operator must update the list prior to such persons having access to the quarantine facility.

(C)The operator must provide APHIS with signed statements from each employee and any other personnel hired by the operator and working at the facility in which the person agrees to comply with paragraph

(c)of this section and applicable provisions of this part, all terms of the compliance agreement, and any related instructions from APHIS representatives pertaining to quarantine operations, including contact with animals both inside and outside the facility.

(iii)*Authorized access.* Access to the facility premises as well as inside the quarantine area will be granted only to APHIS representatives, authorized employees, and other personnel of the operator assigned to work at the facility. All other persons are prohibited from the premises unless specifically granted access by an APHIS representative. Any visitors granted access must be accompanied at all times by an APHIS representative while on the premises or in the quarantine area of the facility.

(iv)*Sanitary requirements.*

(A)All persons granted access to the quarantine area must: ( *1* ) Shower when entering and leaving the quarantine area; ( *2* ) Shower when leaving the necropsy area if a necropsy is in the process of being performed or has just been completed, or if all or portions of the examined animal remain exposed; ( *3* ) Wear clean protective work clothing and footwear upon entering the quarantine area; ( *4* ) Wear disposable gloves when handling sick horses and then wash hands after removing gloves; and ( *5* ) Change protective clothing, footwear, and gloves when they become soiled or contaminated.

(B)The operator is responsible for providing a sufficient supply of clothing and footwear to ensure that all persons provided access to the quarantine area at the facility have clean, protective clothing and footwear when they enter the quarantine area.

(C)The operator is responsible for the handling, washing, and disposal of soiled and contaminated clothing worn within the quarantine facility in a manner approved by APHIS as adequate to preclude transmission of any animal disease agent from the facility. At the end of each workday, work clothing worn into the quarantine area must be collected and kept in a bag until the clothing is washed. Used footwear must either be left in the clothes changing area or cleaned with hot water (148 °F minimum) and detergent and disinfected as directed by an APHIS representative.

(D)All equipment (including tractors) must be cleaned and disinfected prior to being used in the quarantine area of the facility with a disinfectant authorized in part 71 of this chapter or otherwise approved by the Administrator. The equipment must remain dedicated to the facility for the entire quarantine period. Any equipment used with quarantined horses (e.g., halters, floats, feed and water buckets) must remain dedicated to that particular lot of quarantined horses for the duration of the quarantine period or be cleaned and disinfected before coming in contact with horses from another lot. Prior to its removal from the quarantine premises, any equipment must be cleaned and disinfected to the satisfaction of an APHIS representative.

(E)Any vehicle, before entering or leaving the quarantine area of the facility, must be cleaned and disinfected under the oversight of an APHIS representative within a time period authorized by the APHIS representative and with a disinfectant authorized in part 71 of this chapter or otherwise approved by the Administrator.

(F)If the facility has a single loading dock, the loading dock must be cleaned and disinfected after each use under the oversight of an APHIS representative within a time period authorized by the APHIS representative and with a disinfectant authorized in part 71 of this chapter or otherwise approved by the Administrator.

(G)That area of the facility in which a lot of horses has been held or has had access to must be thoroughly cleaned and disinfected, with a disinfectant authorized in part 71 of this chapter or otherwise approved by the Administrator, under the oversight of an APHIS representative upon release of the horses before a new lot of horses is placed in that area of the facility.

(v)*Handling of the horses in quarantine.*

(A)All horses must be handled in accordance with paragraph

(a)of this section.

(B)Each lot of horses to be quarantined must be placed in the facility on an “all-in, all-out” basis. No horse may be taken out of the lot while it is in quarantine, except for diagnostic purposes or as provided in paragraph (a)(4) of this section, and no horse may be added to the lot while the lot is in quarantine.

(C)The facility must provide sufficient feed and bedding for the horses in quarantine, and it must be free of vermin and not spoiled. Feed and bedding must originate from an area that is not listed in part 72 of this chapter as an area quarantined for splenetic or tick fever.

(D)Breeding of horses or collection of germplasm from horses is prohibited during the quarantine period.

(E)Horses in quarantine will be subjected to such tests and procedures as directed by an APHIS representative to determine whether they are free from communicable diseases of horses.

(F)Any death or suspected illness of horses in quarantine must be reported immediately to APHIS. The affected horses must be disposed of as the Administrator may direct or, depending on the nature of the disease, must be cared for as directed by APHIS to prevent the spread of disease.

(G)Quarantined horses requiring specialized medical attention or additional postmortem testing may be transported off the quarantine site, if authorized by APHIS. A second quarantine site must be established to house the horses at the facility of destination ( *e.g.* , veterinary teaching hospital). In such cases, APHIS may extend the quarantine period for that horse and for its lot until the results of any outstanding tests or postmortem results are received.

(H)Should a horse be determined to be infected with or exposed to a communicable disease of horses, arrangements for the final disposition of the infected or exposed horse must be accomplished within 10 days of the date that the importer is notified by the overseeing APHIS representative that the horse has been refused entry into the United States. Subsequent disposition of the horse must occur under the direct oversight of APHIS representatives. The operator must have a preapproved contingency plan for the disposal of all horses housed in the facility prior to issuance of the import permit.

(I)Vaccination of horses in quarantine is prohibited.

(vi)*Records.*

(A)The facility operator must maintain a current daily record to record the entry and exit of all persons entering and leaving the quarantine facility.

(B)The operator must maintain the daily record, along with any records kept by APHIS and deposited with the operator, for at least 2 years following the date of release of the horses from quarantine and must make such records available to APHIS representatives upon request.

(5)*Environmental quality.* If APHIS determines that a privately operated quarantine facility does not meet applicable local, State, or Federal environmental regulations, APHIS may deny or suspend approval of the facility until appropriate remedial measures have been applied.

(6)*Variances.* The Administrator may grant variances to existing requirements relating to location, construction, and other design features of the physical facility, as well as to sanitation, security, operating procedures, recordkeeping, and other provisions of paragraph

(c)of this section, but only if the Administrator determines that the variance causes no detrimental impact to the overall biological security of the quarantine operations. The operator must submit a request for a variance from the requirements for the construction of the facility in paragraph (c)(3) of this section to the Administrator in writing prior to the construction of the facility. The operator must submit a request for a variance from the operational requirements in paragraph (c)(4) of this section to the Administrator in writing at least 30 days in advance of the arrival of horses to the facility. Any variance must also be expressly provided for in the compliance agreement. 8. In § 93.309, the section heading would be revised to read as follows: § 93.309 Horse quarantine facilities; payment information. 9. Section 93.310 would be revised to read as follows: § 93.310 Quarantine stations, visiting restricted; sales prohibited. Visitors are not permitted in the quarantine enclosure during any time that horses are in quarantine unless an APHIS representative specifically grants access under such conditions and restrictions as may be imposed by APHIS. An importer (or his or her agent or accredited veterinarian) may be admitted to the lot-holding area(s) containing his or her quarantined horses at such intervals as may be deemed necessary, and under such conditions and restrictions as may be imposed, by an APHIS representative. On the last day of the quarantine period, owners, officers or registry societies, and others having official business or whose services may be necessary in the removal of the horses may be admitted upon written permission from an APHIS representative. No exhibition or sale shall be allowed within the quarantine grounds. Done in Washington, DC, this 1st day of December 2006. Bruce Knight, Under Secretary for Marketing and Regulatory Programs. [FR Doc. E6-21032 Filed 12-12-06; 8:45 am] BILLING CODE 3410-34-P NUCLEAR REGULATORY COMMISSION 10 CFR Part 20 Public Meeting on Consideration of Rulemaking To Reduce the Likelihood of Funding Shortfalls for Decommissioning Under the License Termination Rule AGENCY: Nuclear Regulatory Commission. ACTION: Notice of meeting. SUMMARY: The Nuclear Regulatory Commission

(NRC)is working on a proposed rule to reduce the likelihood that a licensee will have insufficient funds to decommission its facility in accordance with 10 CFR part 20, Subpart E, Radiological Criteria for License Termination. In the past, these funding shortfalls resulted in “legacy sites,” which are sites that are in decommissioning but whose operators do not have enough funds to complete the work and terminate the license in accordance with NRC regulations. All of the legacy sites have been materials facilities, primarily those that processed uranium and thorium, with undetected subsurface contamination from operations arising as a significant problem during decommissioning. A risk-informed approach addressing subsurface contamination at operating facilities would affect materials licensees and operators of nuclear power reactors. The purpose of the meeting is to give stakeholders an opportunity to discuss their views and interact with other interested parties on the regulatory issues summarized in the Supplementary Information section of this document. To aid in the rulemaking process, NRC is holding a public meeting with a “roundtable” format (defined further in the body of this notice) to solicit input. The meeting is open to the public. The NRC is asking those planning to attend the meeting to pre-register by contacting Jayne McCausland as noted under the For Further Information section of this document. Individuals unable to attend the meeting will be able to listen by teleconference. DATES: The meeting will be held on January 10, 2007, from 9 a.m. to 4 p.m. Registration is from 8:30 a.m. to 9 a.m.; however, all persons planning to attend the meeting are encouraged to pre-register in order to facilitate check-in on the day of the meeting. ADDRESSES: Residence Inn Bethesda Downtown, 7335 Wisconsin Avenue, Bethesda, Maryland, 20814. Telephone

(301)718-0200. FOR FURTHER INFORMATION CONTACT: Kevin O'Sullivan, telephone

(301)415-8112, e-mail *kro2@nrc.gov* , of the Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Questions on the meeting format, including participation in the roundtable, should be directed to the meeting facilitator, Lance Rakovan. Mr. Rakovan can be reached at

(301)415-2589 or *ljr2@nrc.gov* . To pre-register to attend the meeting in person or to participate via teleconference, or if a participant has special needs, please contact Jayne McCausland, telephone

(301)415-6219, fax

(301)415-5369, or e-mail *jmm2@nrc.gov.* SUPPLEMENTARY INFORMATION: Current NRC regulations in 10 CFR part 20, Subpart F, Surveys and Monitoring, require licensees to conduct surveys, as reasonable under the circumstances, to evaluate

(1)the magnitude and extent of radiation levels;

(2)concentrations or quantities of radioactive material; and

(3)the potential radiological hazards. NRC regulations in 10 CFR 20, Subpart L, Records, contain related record-keeping requirements. There have been past occurrences among materials licensees, and recent occurrences at nuclear power reactors, of inadvertent and undetected release of radioactive material into the underlying soils and groundwater. Such undetected subsurface contamination from operations may significantly expand the scope of decommissioning when the facility is shut down, to the extent that the licensee has insufficient funds to terminate the license in accordance with NRC regulations. Amendments to NRC regulations are under consideration that will affect both facility operations and financial assurance for decommissioning requirements. One proposed change would require each NRC licensee to conduct operations, to the extent practicable, so as to minimize the presence of contamination in the subsurface environment. A second would require certain licensees, based on their capability for causing long-lasting subsurface contamination, to check for the presence of such contamination. NRC experience with legacy sites demonstrates that soil or groundwater contamination, if not addressed during the operating life of the facility, can increase decommissioning costs to levels much higher than initially funded and may contribute to off-site radionuclide migration, causing additional expense and delay in returning the site to other productive uses. Another regulatory amendment under consideration is to eliminate the escrow account as an approved financial assurance mechanism due to its ineffectiveness in bankruptcy actions. Two other financial assurance mechanisms that pose similar financial risk during bankruptcy are the unsecured Parent Company Guarantee and unsecured Self-Guarantee. Reliance on these financial assurance mechanisms may increase the likelihood of future legacy sites. The January 10, 2007, public meeting is being held to discuss these and related issues using a “roundtable” format. Participants at the roundtable will be the invited stakeholders representing the broad spectrum of interests who may be affected by this rulemaking. The roundtable format is being used for this meeting to promote a dialogue among the representatives at the table on the issues of concern. Opportunities will be provided for comments and questions from the audience. The meeting notice and a meeting agenda will be posted on the NRC Web site at: *http://www.nrc.gov/public-involve/public-meetings/index.cfm.* Dated at Rockville, Maryland, this 6th day of December 2006. For the Nuclear Regulatory Commission. Dennis Rathbun, Director, Division of Intergovernmental Liaison and Rulemaking, Office of Federal and State Materials and Environmental Management Programs. [FR Doc. E6-21154 Filed 12-12-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION 10 CFR Part 54 [Docket Nos. PRM-54-02 and PRM-54-03] Andrew J. Spano and Joseph C. Scarpelli; Denials of Petition for Rulemaking AGENCY: Nuclear Regulatory Commission. ACTION: Petitions for rulemaking; denial. SUMMARY: The Nuclear Regulatory Commission

(NRC)is denying two nearly identical petitions for rulemaking submitted by Andrew J. Spano, County Executive, Westchester County, New York (PRM-54-02), and Mayor Joseph Scarpelli of Brick Township, New Jersey (PRM-54-03). The petitioners requested that the NRC amend its regulations to provide that the agency renew a license only if the plant operator demonstrates that the plant meets all criteria and requirements that would apply if it were proposing the plant de novo for initial construction. The petitioners assert that amendments are necessary because they believe the process and criteria established in the Commission's license renewal regulations are seriously flawed and should consider critical plant-specific factors as demographics, siting, emergency evacuation, and site security. The NRC is denying the petitions because the petitioners raise issues that the Commission has already considered at length in developing the license renewal rule. These issues are managed by the on-going regulatory process or under other regulations; or are issues beyond the Commission's regulatory authority. The petitioners did not present new information that would contradict positions taken by the Commission when the license renewal rule was established or demonstrate that sufficient reason exists to modify the current regulations. ADDRESSES: Publicly available documents related to these petitions, including the petitions, public comments received, and the NRC's letters of denial to the petitioners, may be viewed electronically on public computers in the NRC's Public Document Room (PDR), O-1 F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland. The PDR reproduction contractor will copy documents for a fee. Selected documents, including comments, may be viewed and downloaded electronically via the NRC rulemaking Web site at *http://ruleforum.llnl.gov* . Publicly available documents created or received at the NRC after November 1, 1999, are also available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html* . From this site, the public can gain entry into the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR reference staff at

(800)387-4209,

(301)415-4737 or by e-mail to *pdr@nrc.gov* . FOR FURTHER INFORMATION CONTACT: Lee Banic, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone

(301)415-2771, e-mail *mjb@nrc.gov* . SUPPLEMENTARY INFORMATION: I. Background The NRC received two separate, but nearly identical, petitions for rulemaking in 2005 requesting that part 54, Requirements for renewal of operating licenses for nuclear power plants be amended. Mr. Andrew J. Spano, the County Executive of Westchester County, New York, filed the first petition on May 10, 2005, which was assigned Docket No. PRM-54-02. The NRC published a notice of receipt of the petition and request for public comment in the **Federal Register** on June 15, 2005 (70 FR 34700). Mayor Joseph C. Scarpelli of Brick Township, New Jersey, filed the second petition on July 20, 2005, which was assigned Docket Number PRM-54-03. 1 The NRC published a notice of receipt of the petition and request for public comment in the **Federal Register** on September 14, 2005 (70 FR 54310). Because of the similarities to PRM-54-02, Mayor Scarpelli also requested that his petition be joined with Mr. Spano's. The NRC agrees that the issues raised in these petitions and some of the public comments are nearly identical, and thus it is appropriate to evaluate the petitions together. 1 Attorney Michelle R. Donato actually filed PRM-54-03 on behalf of Mayor Scarpelli, the New Jersey Environmental Federation (NJEF), and the New Jersey Sierra Club (NJSC). Although Ms. Donato's letter indicates that she is presenting three “formal” petitions to the NRC, the submissions from NJEF and NJSC state that they are submitted “in support of” or joining Mayor Scarpelli's petition. They do not appear to request petitioner status. Thus, any reference in this document to the PRM-54-03 petitioner is limited to Mayor Scarpelli. PRM-54-02 (Mr. Andrew J. Spano) Westchester County is a political subdivision and municipality of the State of New York, and is located immediately north of New York City. It is 450 square miles in size. It has a southern border with New York City (Bronx County) and a northern border with Putnam County. It is flanked on the west side by the Hudson River and on the east side by Long Island Sound and Fairfield County, Connecticut. The total population of Westchester County, as measured in the 2000 Census, is 923,459. The 2000 population is over 100,000 more than it was as measured in the 1960 Census. Westchester County is the host county for the Indian Point Energy Facility (Indian Point or IP), located in the Village of Buchanan, Town of Cortlandt. There are two nuclear power units at Indian Point: IP2 and IP3. These are currently operated by single purpose entities controlled by the Entergy Corporation (Entergy). IP2 & IP3's operating licenses are scheduled to expire in 2013 and 2015, respectively, and Mr. Spano believes that in accordance with industry trends, Entergy could apply for license extensions for up to an additional twenty years, provided certain operating, environmental, and safety conditions are met. Mr. Spano stated that because of the presence of Indian Point, Westchester County has long had an interest and concern with the environmental, emergency, and public safety issues with respect to Indian Point. Mr. Spano further stated that after living with nuclear power plants for the past three decades, several events have changed the local community's perspective on the continued presence of the Indian Point facility: Three Mile Island-2, the Browns Ferry fire, utility bankruptcies, the Chernobyl accident, delays at Yucca Mountain, Davis-Besse reactor head problems, and the events of September 11, 2001. He believes that as a result of these events, orders for the construction of reactor facilities have ceased and the public has become justifiably concerned about nuclear power plant safety. Mr. Spano stated that these concerns are particularly sensitive at Indian Point, because of its proximity to major population centers, periodic leaks of radioactive material, difficult (if not impossible) evacuation issues, and its proximity to the events which occurred at the World Trade Center. PRM-54-03 (Mayor Joseph C. Scarpelli) Brick Township, New Jersey is situated in the northern part of Ocean County, directly on the border of Monmouth County, and is located approximately 18 miles north of Oyster Creek Nuclear Generating Station (Oyster Creek or OCNGS). Mayor Scarpelli stated that Ocean County is located on the Jersey Shore, approximately 50 miles south of New York City and 50 miles east of Philadelphia, Pennsylvania. Ocean County encompasses nearly 640 square miles. Mayor Scarpelli stated that Ocean County's location on the Atlantic Ocean makes it one of the premier tourist destinations in the United States. Oyster Creek, which is located in Lacey Township, became operational in 1969. In 1970, one year after Oyster Creek began producing electricity, Ocean County, New Jersey had 208,470 residents. Mayor Scarpelli also stated that according to the 2000 Census, Ocean County today has 510,916 residents, a growth of over 245 percent. Mayor Scarpelli also stated that Brick Township has experienced great growth over the past four decades, and that Brick Township is presently home to over 77,000 residents as compared to the 35,057 residents it claimed in 1970. Mayor Scarpelli stated that there have been numerous incidents that have occurred since Oyster Creek began operating that have raised concerns about the safety and security of nuclear power, particularly in densely populated areas, including the near catastrophe at Three Mile Island, the realized catastrophe at Chernobyl, the controversy about Yucca Mountain, and the terrorist attacks of September 11, 2001. Mayor Scarpelli is particularly concerned that the evacuation of the communities surrounding Oyster Creek requires extensive review and consideration because of the growing concern of traffic congestion in Ocean County due to an aging infrastructure that has not kept up with the population growth. The Petitions Both petitions present nearly identical issues and requests for rulemaking. Both petitioners believe that the license renewal process and criteria currently established in part 54 are “seriously flawed.” They argue that the process for license renewal appears to be based on the theory that if the plant was originally safe to be licensed at the site, it would also be satisfactory to renew the license, barring any significant issues involving passive structures, systems, and components. The petitioners further suggest that many key factors affecting nuclear plant licensing evolve over time, in that the population grows; local, State, and Federal regulations evolve; public awareness increases; technology improves; and plant economic values change. As a result, roads and infrastructure required for a successful evacuation may not improve along with population density, inspection methods may not be adopted or may be used inappropriately, and regulations may alter the plant design after commercial operation. According to the petitioners, the license renewal process under 10 CFR part 54 inappropriately excludes these factors. Mr. Spano also suggested that, before the concept of license renewal for nuclear power plants was established, it was generally assumed that plants would exist as operating facilities for the rest of their design life and then would enter a decommissioning phase. He stated that this assumption is supported by the fact that the collection of decommissioning funds from ratepayers initiated in the 1970s was based on a 40-year life of the facility. Both petitions set forth a list of “key renewal issues,” that are stated as questions the petitioners believe are necessary to confront during the license renewal process. Mr Spano lists five such “key renewal issues:”

(1)Could a new plant, designed and built to current standards, be licensed on the same site today? For example, given the population growth in Westchester County, it is uncertain if Indian Point would be licensed today. The population in the areas near Indian Point has outpaced the capacity of the road infrastructure to support it, making effective evacuation in an emergency unlikely.

(2)Have the local societal and infrastructure factors that influenced the original plant licensing changed in a manner that would make the plant less apt to be licensed today? For example, three of four counties surrounding Indian Point have not submitted certified letters in support of the emergency evacuation plan. That would not be a consideration under the current licensing process. However, the inability of local governments to support the safety of the evacuation plan should, at the very least, give serious pause before the licenses of the plants are renewed.

(3)Can the plant be modified to assure public health and safety in a post-9/11 era? For example, Indian Point cannot be made sufficiently safe according to James Lee Witt, former head of FEMA.

(4)Have local/State regulations changed that would affect the plant's continued operation? For example, Indian Point must convert from once-through cooling to a closed-cycle design using cooling towers.

(5)The original design basis of older nuclear power plants did not include extended onsite storage of spent nuclear fuel (SNF). At Indian Point for example, the current SNF storage plan includes one or more Independent Spent Fuel Storage Installations onsite, which increases the overall risk to the local community. Mayor Scarpelli identifies six similarly phrased “key renewal issues:”

(1)Could a new plant, designed and built to current standards, be licensed on the same site today? With the growth of Ocean County, which continues today, it is not certain that a nuclear plant would be permitted there today.

(2)The design of Oyster Creek's reactor has been prohibited for nearly four decades. Does that reactor conform to today's standards? Would Oyster Creek receive a license today with that reactor?

(3)In light of the terrorist attacks of September 11, 2001, would Oyster Creek's storage system, which is located close to Route 9, be acceptable today?

(4)Is the evacuation plan realistic in today's Ocean County? Would the tremendous growth of Ocean County over the past four decades, and the failure of Ocean County's infrastructure to keep pace with this growth, inhibit Oyster Creek's likelihood of receiving an operating license?

(5)Would a license be permitted in light of the public opposition to the plant? To date, 21 municipalities in Ocean County, as well as Congressmen Smith, Saxton and Pallone, New Jersey Department of Environmental Protection Commissioner Bradley, and the Ocean County Board of Chosen Freeholders, have expressed either their concern for a thorough review and/or their opposition to the re-licensing.

(6)In recent weeks, two studies released by the National Academy of Sciences have raised serious concerns about nuclear plant security and the health effects of low-level radiation upon people who reside near nuclear plants. Should these two scientific studies and other relevant scientific data regarding human health and anti-terrorism be taken into account when considering Oyster Creek's license renewal application? II. The Proposed Amendments The petitioners requested that the NRC amend its regulations to provide that it will issue a renewed license only if the plant operator demonstrates that the plant meets all criteria and requirements that would apply if it were proposing the plant de novo for an initial construction permit and operating license. The petitioners therefore requested that the NRC amend § 54.29 to provide that the Commission will issue a renewed license only if it finds that, upon a de novo review, the plant would be entitled to an initial operating license in accordance with all criteria applicable to initial operating licenses, as set out in the Commission's regulations, including 10 CFR parts 2, 19, 20, 21, 26, 30, 40, 50, 51, 54, 55, 73, 100, and the appendices to these regulations. The petitioners also requested that the NRC make corresponding amendments to §§ 54.4, 54.19, 54.21, and 54.23, and rescind § 54.30. The petitioners stated that the criteria to be examined as part of a renewal application should include factors such as demographics, siting, emergency evacuation, and site security. The petitioners believe that in undertaking this analysis the NRC should focus on the critical plant-specific factors and conditions that have the greatest potential to affect public safety. III. Public Comments Received on the Petitions The NRC received 21 comment letters on PRM-54-02. Fifteen letters support the granting of the petition and six support denying the petition. On PRM-54-03, the NRC received four letters. One letter supports granting the petition and three letters support denial. Letters in Support of Granting the Petitions Eleven letters of support came from individuals and five came from public interest groups or individuals affiliated with public interest groups. The public interest groups are Riverkeeper, Nuclear Free Vermont, Critical Mass Energy and Environment Program (CMEP), which is part of Public Citizen, Public Citizen, and the Nuclear Information and Resource Service. Most of the letters are short statements of support and echo the petitioners concerns about emergency planning, evacuation, population density, and infrastructure. Other letters, mainly from organizations, comment more extensively and raise additional issues for consideration in renewing licenses. These issues include requiring an intergrated plant assessment of both moving and non-moving parts; basing the regulations on the best scientific and technical knowledge and data available; the use of seismic hazard analyses; public participation; designs of older plants; site-specific reviews, and waste management. Several commenters stated that they are concerned that the current relicensing regulations are not in the best interest of the public and its health and safety. They state that nuclear plants should meet the highest standards. They define these standards as those that are based on the most current experience and knowledge. One commenter focused in detail on the changes he thinks should be made to the NRC's license renewal regulations: requiring a moving parts assessment; addressing storage of spent nuclear fuel, the changes in population density and traffic patterns in the supplemental environmental impact study, and evaluating the feasibility of the current emergency evacuation for communities surrounding operating plants. Another commenter stated that license extension is not a right. The commenter believes that site-specific analysis is necessary and improved knowledge must be applied. The NRC should not “lower the bar for currently operating plants, and they should be required to meet or exceed the very same standards a new operator would.” Letters in Support of Denying the Petitions Of the nine letters supporting denial, seven letters came from industry organizations and two from individuals. The industry organizations are Entergy, Exelon, the Nuclear Energy Institute

(NEI)(who sent 2 letters, 1 for each petition), Southern California Edison, Tennessee Valley Authority, and Strategic Teaming and Resource Sharing, a group of six utilities. Those letters mainly argue that the proposed amendments are misguided and contrary to sound regulatory and public policy. Specifically, these commenters argue that the petitioners misconstrue the 1991 license renewal rule; the petitioners propose regulating factors that are beyond NRC's jurisdiction and not appropriate for rulemaking; the proposed rulemaking would duplicate the regulation of matters that are subject of ongoing regulatory oversight; and that the petitions lack bases upon which the Commission should conclude that its earlier determinations were incorrect or inappropriate. NEI, commenting on behalf of the nuclear industry, states that the petitions should be denied because the regulatory framework of the existing NRC license renewal process is appropriately focused and adequately protects public health and safety. NEI also states that the petitions fail to provide a valid basis for expanding license renewal reviews to duplicate the Commission's initial plant licensing review on certain topics. One letter from an individual opposes Mayor Scarpelli's proposal and specific issues. He states that his concerns with the Mayor's proposal are that they would result in the inevitable closing of nuclear power plants in New Jersey and nationwide, and in the resulting rise in energy costs to consumers. The commenter states that the Mayor has ample opportunity to voice his concerns through the current renewal process. The commenter also states that because Oyster Creek appears to be the mayor's primary focus, amending NRC regulations would be “a horrendously overinclusive remedy to a local problem.” Finally, the commenter cites both local and statewide public support for the renewal of Oyster Creek's license. IV. Discussion The NRC has reviewed the petitions and the public comments and appreciates the concerns raised. However, the NRC is denying both petitions under § 2.803. The reasons for the denials are described in more detail in the discussion that follows. Briefly, the petitions raise issues that the Commission already considered at length in developing the license renewal rule (December 13, 1991; 56 FR 64943). These issues are managed by the on-going regulatory process or under other regulations; or are issues beyond the Commission's regulatory authority. The petitioners did not present any new information that would contradict positions taken by the Commission when the license renewal rule was established or demonstrate that sufficient reason exists to modify the current regulations. Summary of the License Renewal Process Under the Atomic Energy Act of 1954, as amended (AEA), the NRC issues licenses for commercial power reactors to operate for up to 40 years and allows these licenses to be renewed for another 20 years upon application by the licensee. The 40-year license term was selected on the basis of economic and antitrust considerations, not technical limitations (56 FR 64960-64962; December 13, 1991). The Commission has explained its regulatory philosophy in license renewal at length in the final rule issued December 13, 1991 (56 FR 64943), as well as revisions to the final rule issued May 8, 1995 (60 FR 22461). That philosophy is that the issues material to the renewal of a nuclear power plant operating license are to be confined to those issues that the Commission determines are uniquely relevant to protecting the public health and safety and preserving common defense and security during the period of extended operation. This basic philosophy led the Commission to the formulation of two principles of license renewal as described in the 1995 document: 1. The current regulatory process is adequate to ensure that the licensing bases of all currently operating plants provide and maintain an acceptable level of safety, except for possibly the detrimental effects of aging on certain structures, systems, and components and possibly a few other issues related to safety only during extended operation. Issues relevant to current plant operations are addressed by the regulatory process and will be carried forward into the extended period of operation. Examples of current issues include emergency planning and nuclear plant security. These issues are managed by current regulatory processes and will continue to be managed by them during the period of extended operation. Additional reviews for license renewal are not necessary. 2. Each plant-specific licensing basis must be maintained during the renewal term in the same manner and to the same extent as during the original licensing term. The Commission has decided to limit the scope of the license renewal process because other issues would, by definition, be relevant to the safety and security of current plant operation. Given the Commission's responsibility to oversee the safety and security of operating reactors, issues that are relevant to both current plant operation and operation during the extended period must be addressed as they arise within the present license term rather than at the time of renewal. In some cases, safety or security might be endangered if resolution of a safety or security matter were postponed until the final renewal decision. Thus, duplicating the Commission's responsibilities in both oversight of current plant operations as well as license renewal would not only be unnecessary, but would waste Commission resources. NRC Evaluation of Issues Raised in the Petitions and Comments The Commission has analyzed and addressed the substance of these issues on numerous occasions in the past. Neither the petitions nor the comments raise new issues, nor provide any tangible reason why the careful formulation of the scope of license renewal should be addressed once again. Other procedural mechanisms are available to the public to raise concerns related to the current operations or the renewal of a license for nuclear power plants. An interested party could, for instance, file a request under § 2.206, requesting that the NRC take action to institute a proceeding, under § 2.202 to modify, suspend or revoke a license, or for any other action as may be proper. Furthermore, any interested person may report a safety or security concern, or allegation to the NRC at anytime. The Commission's regulations also provide for numerous opportunities for interested parties to become involved in licensing actions and rulemaking proceedings. The NRC has reviewed each of the petitioners' requests and provides the following analysis: 1. The petitioners request that the NRC amend its regulations to provide that a renewed license will be issued only if the plant operator demonstrates that the plant meets all criteria and requirements that would be applicable if the plant was being proposed de novo for initial construction. In particular, § 54.29 should be amended to provide that a renewed license may be issued if the Commission finds that, upon a de novo review, the plant would be entitled to an initial operating license in accordance with all criteria applicable to initial operating licenses, as set out in the Commission's regulations, including 10 CFR parts 2, 19, 20, 21, 26, 30, 40, 50, 51, 54, 55, 73, 100 and the appendices to these regulations. *NRC Review:* The Commission explicitly considered and rejected the possibility that an application for license renewal would be treated as if it were an initial application for an operating license when it issued the license renewal rule on December 13, 1991; 56 FR 64943. In the statement of considerations

(SOC)to that document, the Commission explained: It is not necessary for the Commission to review each renewal application against standards and criteria that apply to newer plants or future plants in order to ensure that operation during the period of extended operation is not inimical to the public health and safety. Since initial licensing, each operating plant has continually been inspected and reviewed as a result of new information gained from operating experience. Ongoing regulatory processes provide reasonable assurance that, as new issues and concerns arise, measures needed to ensure that operation is not inimical to the public health and safety and common defense and security are “backfitted” onto the plants. (December 13, 1991; 56 FR 64945) The Commission revised the license renewal rule in 1995, in part to eliminate any ambiguity as to the scope of license renewal. The Commission emphasized that it “continues to believe that aging management of certain important systems, structures, and components during this period of extended operation should be the focus of a renewal proceeding and that issues concerning operation during the currently authorized term of operation should be addressed as part of the current license rather than deferred until a renewal review.” (May 8, 1995; 60 FR 22481) However, out of concern for the possibility that the rule “could be erroneously interpreted as requiring a general demonstration of compliance with the [Continuing Licensing Basis] as a prerequisite for issuing a renewed license,” the Commission amended § 54.29 (Standards for issuance of a renewed license) to clarify the specific findings required for renewing a license, and by adding § 54.30 (Matters not subject to a renewal review), which specified that the licensee's responsibilities for addressing safety matters under its current licensing basis is not within the scope of license renewal. Seeking to revisit this determination, the petitioners suggest that the Commission reverse its course, and set forth a new standard for issuance of a renewed license that would be essentially the same as what the Commission rejected in formulating the license renewal rule. Though the Commission appreciates the petitioners' concerns regarding the facilities in their communities, the petitioners offer no new information that would support inclusion of those issues in the license renewal process and that was not previously considered. 2. The petitioners request that corresponding amendments be made to 10 CFR 54.4, 54.19, 54.21, and 54.23, and that 10 CFR 54.30 be rescinded. *NRC Review:* The NRC rejects the request that the corresponding amendments be made because it disagrees with the petitioners' contention that the license renewal rule should be amended. 3. The petitioners request that the criteria to be examined as part of a renewal application should include factors such as emergency planning, demographics, siting, site security, and spent fuel storage. *NRC Review:* *Emergency Planning:* The petitioners request that the Commission consider emergency planning as part of the license renewal process. They both expressed deep concerns that, in light of the change in demographics, local infrastructures and governments would be unable to support large-scale evacuations. Both petitioners suggested that, if either facility were proposed for initial licensing today, that the licenses would be rejected for these reasons. Thus, the petitioners conclude that it is unreasonable to relicense facilities that would clearly be ineligible for initial licensing. The Commission has already considered evacuation in formulating the license renewal rule and determined that emergency preparedness need not be reviewed again for license renewal (December 13, 1991; 56 FR 64966). Current requirements, including periodic update requirements provide reasonable assurance that an adequate level of emergency preparedness exists at any operating reactor. The Commission explained that “[t]hrough its standards and required exercises, the Commission ensures that existing plans are adequate throughout the life of any plant even in the face of changing demographics and other site-related factors. Thus, these drills, performance criteria, and independent evaluations provide a process to ensure continued adequacy of emergency preparedness in light of changes in site characteristics that may occur during the term of the existing operating license, such as transportation systems and demographics.” This determination is also incorporated in the Commission's regulations at § 50.47(a), describing emergency planning requirements, in which a new finding on emergency planning considerations is specifically not required for license renewal. The Commission reaffirmed its determination on emergency planning in its May 8, 1995 (60 FR 22468) amendment of the license renewal rule. The regulations in §§ 50.47, 50.54(q), and 50.54(s) through (u), and appendix E to part 50, establish requirements and performance for emergency preparedness. These requirements apply to all nuclear power plant licensees and require the specified levels of protection from each licensee regardless of plant design, construction, or license date. The requirements of § 50.47 and appendix E to part 50 are independent of the renewal of the operating license, and continue to apply during the license renewal term. The NRC's regulatory oversight program

(ROP)monitors the continued adequacy of a licensee's EP program. In addition, licensees must review the facility's EP program periodically, including working with State and local governments, and have biennial exercises with offsite authorities. In addition, the Commission recently reasserted its position on emergency preparedness in the relicensing of the Millstone Nuclear Power Station. In that case, the Commission stated, “[T]he primary reason we excluded emergency-planning issues from license renewal proceedings was to limit the scope of those proceedings to ‘age-related degradation unique to license renewal.’ Emergency planning is, by its very nature, neither germane to age-related degradation nor unique to the period covered by the Millstone license renewal application.” Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI-05-24, 62 NRC 551, 560-561 (2005). If the Commission were to consider emergency planning during the license renewal review, it is not evident that the petitioners' assertions as to the licensability of either site have any factual basis. The petitioners ask rhetorically whether the local societal and infrastructure factors that influenced the original plant licensing changed in a manner that would make the plant less apt to be licensed today. As examples of these factors, the petitioners cited changes in the demographics since the facilities were initially licensed, and deficiencies in the local infrastructure. Yet these broad, conclusory statements without a factual or technical basis are insufficient to support a petition for rulemaking under the Commission's regulations. A petition for rulemaking, as set forth at § 2.802(c)(3), must contain “relevant technical, scientific or other data involved which is reasonably available to the petitioner.” Neither petitioner has presented this type of information. Setting the sufficiency of the petition aside, it is not evident that demographics and siting would necessarily preclude the issuance of an initial operating license at either site. The Commission has addressed these issues, however, in other rulemakings. The final rule on reactor site criteria for nuclear power plants, 10 CFR part 100 (December 11, 1996; 61 FR 65157) addressed examining demographics and siting, both for future reactor facilities and license renewal. Regarding new facilities, the rule states: The Commission is not establishing specific numerical criteria for evaluation of population density in siting future reactor facilities because the acceptability of a specific site from the standpoint of population density must be considered in the overall context of safety and environmental considerations. The Commission's intent is to assure that a site that has significant safety, environmental or economic advantages is not rejected solely because it has a higher population density than other available sites. Population density is but one factor that must be balanced against the other advantages and disadvantages of a particular site in determining the site's acceptability. Thus, it must be recognized that sites with higher population density, so long as they are located away from very densely populated centers, can be approved by the Commission if they present advantages in terms of other considerations applicable to the evaluation of proposed sites. (61 FR 65162) Regarding future population growth, the 1996 final rule explains: Population growth in the site vicinity will be periodically factored into the emergency plan for the site, but since higher population density sites are not unacceptable, per se, the Commission does not intend to consider license conditions or restrictions upon an operating reactor solely upon the basis that the population density around it may reach or exceed levels that were not expected at the time of site approval. Finally the Commission wishes to emphasize that population considerations as well as other siting requirements apply only for the initial siting for new plants and will not be used in evaluating applications for the renewal of existing nuclear power plant licenses. (61 FR 65163) *Security:* Like emergency planning issues, security matters are covered by current review and update requirements. The Commission has rules, regulations and orders that are in place concerning physical protection (security) programs, specifically, parts 26 and 73, orders, and an on-going regulatory process that addresses the petitioners' concerns. The Commission specifically addressed physical security considerations in the license renewal process in its 1991 final rule. There, it stated that: “Licensees must establish and maintain a system for the physical protection of plants and materials, in accordance with 10 CFR part 73, to protect the plant from acts of radiological sabotage and prevent the theft of special nuclear material.” “Application for a renewed license will not affect the standards for physical protection required by the NRC. The level of protection will be maintained during the renewal term in the same manner as during the original license term, since these requirements remain in effect during the renewal term by the language of § 54.35. The requirements of 10 CFR part 73 will continue to be reviewed and changed to incorporate new information, as necessary. The NRC will continue to ensure compliance of all licensees, whether operating under an original license or a renewed one, through ongoing inspections and reviews. Therefore, the Commission concludes that a review of the adequacy of existing security plans is not necessary as part of the license renewal review process.” (56 FR 64967) The Commission has regulations governing security and neither petition provides new information to justify including physical security considerations into the license renewal process. The NRC has reviewed and updated security requirements and continues to do so. The Commission has recently restated its position on the relevance of security issues in license renewal and explained that “security issues at nuclear power reactors, while vital, are simply not among the age-related questions at stake in a license renewal proceeding.” Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI-04-36, 60 NRC 631, 638 (2004). After the terrorist attacks of September 11, 2001, U.S. commercial nuclear facilities escalated to the highest level of security. Since then, the NRC has issued more than 35 Advisories, Orders, and Regulatory Issue Summaries to further strengthen security at U.S. power reactors. In April 2003, the NRC required by order that power reactors revise their physical security plans, guard training and qualification plans, and contingency plans. Furthermore, the Commission will soon issue a final rule revising the Design Basis Threat

(DBT)regulations in 10 CFR 73.1 (See proposed rule, 70 FR 67380; November 7, 2005), and will soon publish a proposed rule for comment amending most of its security regulations for power reactors. (See Proposed Rulemaking—Power Reactor Security Requirements, SECY-06-0126). The previously cited Commission decisions and agency activities support denial of this section of the petition because security issues are monitored through an on-going regulatory process. *Storage of SNF.* The petitioners also contend that the Commission should consider the impact of the long-term storage of SNF, either in pools or at independent spent fuel storage installations (ISFSIs) during license renewal. *NRC Review:* In addition to being excluded by definition from the scope of license renewal under part 54, the Commission has also specifically decided to preclude the storage of spent fuel from license renewal in § 51.95(c)(2) of the Commission's regulations, which states that “The supplemental EIS prepared at the license renewal stage need not discuss * * * any aspect of the storage of spent fuel for the facility within the scope of the generic determination in § 51.23(a) and in accordance with § 51.23(b).” Section 51.23 contains the Commission's “Waste Confidence Rule,” in which the Commission had made a generic finding that “spent fuel generated in any reactor can be stored safely and without significant environmental impacts for at least 30 years beyond the licensed life for operation (which may include the term of a revised or renewed license) of that reactor at its spent fuel storage basin or at either onsite or offsite ISFSIs.” The rule therefore does not require analysis of these impacts as part of the environmental report, environmental assessment, or environmental impact statement. The Commission's reasoning for this finding has been documented in great detail and periodically reconsidered since the rule was first issued in 1984. See final rule, Waste Confidence Decision, (49 FR 34658; August 31, 1984); “Waste Confidence Decision Review,” (September 18, 1990; 55 FR 38474); “Waste Confidence Decision Review; Status,” (December 6, 1999; 64 FR 68005); and “State of Nevada; Denial of Petition for Rulemaking,” (PRM-51-08) (August 17, 2005; 70 FR 48329). Additionally, the NRC notes that the licensing and regulatory oversight of ISFSIs are dealt with under part 72, and that the Commission has specifically determined on several occasions that these issues are therefore outside the scope of license renewal for power reactors. See Nuclear Management Company, LLC. (Palisades Nuclear Plant), CLI-06-17, 63 NRC 727, 733-734 (2006); and Duke Energy Corp. (Oconee Nuclear Station, Units 1, 2, and 3), CLI-99-11, 49 NRC 328, 344 n.4 (1999). 4. *Changes to State and Local Law Affecting Continued Operation:* Both petitions requested that changes to State and local regulations should be considered during the license renewal process. Mr. Spano stated a concern that “Indian Point must convert from once-through cooling to a closed-cycle design using cooling towers.” *NRC Review:* Licensees must comply with applicable local and State regulations. However, nuclear power plant safety is the exclusive province of the Federal Government and cannot be regulated by the States. Under the AEA, the NRC has exclusive authority over the health and safety regulations of nuclear power plants and AEA materials. A State law that directly or indirectly sets nuclear power plant safety standards would thus be facially invalid. However, a State law that regulates the generation, sale, or transmission of nuclear energy produced by a NRC-licensed nuclear power facility would not be pre-empted by the AEA. Thus, to the extent that a nuclear power plant licensee was subject to a State law not pre-empted by the AEA, that licensee would have a continuing obligation to comply with that law. NRC consideration of the applicable State or local laws at the license renewal stage is therefore not necessary or appropriate during license renewal. Regarding the conversion to closed cycle design, the NRC believes that Mr. Spano is incorrect in two respects. First, the regulation to which he refers is a Federal, not a local or state regulation: Environmental Protection Agency

(EPA)regulation on impingement entrainment (40 CFR Part 122; National Pollutant Discharge Elimination System—Final Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities; 69 FR 41575; July 9, 2004). Second, the regulation has performance standards that can be met in various ways, one of which is closed-cycle cooling. Thus, it would be incorrect to suggest that EPA's regulations require conversion to a closed-cycle design. 5. The petitioners contend that factors such as an increase in public awareness, technology improvements, and changes in plant economic values are inappropriately excluded from the part 54 license renewal process. *NRC Review:* Evolving factors such as public awareness, technology improvements, and plant economic values are beyond the purview of the Commission's regulatory authority. The NRC notes that the regulatory process considers new scientific and technical knowledge since plants were initially licensed and imposes new requirements on licensees as justified. The NRC engages in a large number of regulatory activities that, when considered together, constitute a regulatory process that provides ongoing assurance that the licensing basis of nuclear power plants provides an acceptable level of safety. This process includes research, inspections, audits, investigations, evaluations of operating experience, and regulatory actions to resolve identified issues. These activities include consideration of new scientific or technical information. The NRC's activities may result in changes to the licensing basis for nuclear power plants through issuance of new or revised regulations, and the issuance of orders or confirmatory action letters. Operating experience, research, or the results of new analyses are also issued by the NRC through documents such as bulletins, generic letters, regulatory information summaries, and information notices. In this way, the NRC's consideration of new information provides ongoing assurance that the licensing basis for the design and operation of all nuclear power plants provide an acceptable level of safety. This process continues for plants that receive a renewed license. In addition, the economic viability of nuclear power is not within the regulatory jurisdiction of the NRC. However, NRC regulations require adequate funds to ensure the decommissioning of commercial facilities (e.g., commercial power reactors and ISFSIs) and for the safe management of SNF. A consideration of costs and benefits of a proposed action and its alternatives are normally part of the NRC's review according to NEPA; however, these factors have been excluded from consideration in the NEPA review for license renewal (see 10 CFR 51.45(c), 51.53(c)(2), and 51.95(c)(2)). 6. PRM-54-03 states that the NRC should revise part 54 to require consideration of a “worst-case scenario” in connection with license renewal, to the same extent that these issues must be considered at the initial construction/licensing stage. *NRC Review:* All of the requirements regarding design basis accidents analyzed for the original operating license continue to apply for the period of extended operation. There is no relaxation of the requirements applicable for the first 40 years for a licensee applying for license renewal. Analyses that rely on the original licensing term ( *i.e.* , 40 years) that meet the criteria contained in § 54.3(a) must be evaluated for license renewal and demonstrated acceptable in accordance with § 54.21(c). In the environmental context, the NRC's current regulations address accidents for license renewal. Subpart A to appendix B of part 51, Table B-1, “Summary of Findings on NEPA Issues for License Renewal of Nuclear Power Plants,” under “Postulated Accidents,” states that the NRC has concluded that the environmental impacts of design basis accidents are of small significance for all plants. For severe accident impacts, Table B-1 states that NRC has determined that “The probability weighted consequences of atmospheric releases, fallout onto open bodies of water, releases to groundwater, and societal and economic impacts from severe accidents are small for all plants.” However, according to § 51.53(c)(3)(ii)(L) alternatives to mitigate severe accidents must be considered for all plants that have not considered these alternatives. Public Comments Integrated Plant Assessment A commenter states that NRC must include an assessment of moving parts for relicensing. The commenter also states that all license renewal applicants should be required to submit an integrated plant assessment that includes both moving and non-moving parts before being relicensed. *NRC Review:* The Commission explicitly considered whether to include active structures and components within the scope of a license renewal review when it amended the license renewal rule in 1995. The Commission concluded that structures and components associated only with active functions can be generically excluded from a license renewal aging management review. Functional degradation resulting from the effects of aging on active functions is more readily determinable, and existing programs and requirements are expected to directly detect the effects of aging. Considerable experience has demonstrated the effectiveness of these programs, including the performance-based requirements of the maintenance rule contained in 10 CFR 50.65. For example, many licensee programs that ensure compliance with technical specifications are based on surveillance activities that monitor performance of structures and components that perform active functions. As a result of the continued applicability of existing programs and regulatory requirements, the Commission determined that active functions of structures and components will be reasonably assured during the period of extended operation. Performance and condition monitoring for structures and components typically involve functional verification, either directly or indirectly. Direct verification is practical for active functions such as pump flow, valve stroke time, or relay actuation where the parameter of concern (required function), including any design margins, can be directly measured or observed. For passive functions, the relationship between the measurable parameters and the required function is less directly verified. Passive functions, such as pressure boundary and structural integrity are generally verified indirectly, by confirmation of physical dimensions or component physical condition (e.g., piping structural integrity can be predicted based on measured wall thickness and condition of structural supports). It should be noted that although the parts of structures and components that only perform active functions do not require an aging management review, structures and components that perform both passive and active functions do require an aging management review for their intended passive functions only. For example, the casings of safety related pumps and valves perform a passive pressure boundary function and require aging management, but the internals of those pumps and valves, which have an active function, do not. Therefore, the effects of aging on active structures and components are being managed by existing programs and any aging effects will continue to be managed by these programs for the period of extended operation. The commenter did not provide any information to justify revising the scope of the license renewal rule. Use of Current Scientific and Technical Knowledge One commenter states that regulations must be based on best scientific and technical knowledge and data available, instead of allowing currently operating plants to be grandfathered into compliance based on scientific data from the 1970s that is proven to be outdated. *NRC Review:* The NRC believes that the regulations are based on the best scientific and technical knowledge and data available. The regulatory process does consider new scientific and technical knowledge and data available since plants were initially licensed, and imposes new requirements on licensees as justified. All of the Commission's regulations undergo a lengthy and detailed rulemaking process required by the Administrative Procedure Act. During that process, the staff conducts a detailed technical review based in part on its years of experience, and input from the scientific community, public comment on the rulemaking, and industry. For further details, see the previous discussion under comment 6, concerning technology improvements. This commenter also suggests that the license renewal process simply “grandfathers” older plants into compliance with the current regulations. Contrary to the commenter's assertion, the NRC does not “grandfather” plants as part of the license renewal. As explained previously, the review conducted within the scope of renewing an operating license does not relieve a licensee from compliance with its current licensing basis, which mandates compliance with the Commission's current regulations. If changes in technology or scientific knowledge occur resulting in new NRC requirements, each licensee must evaluate the new requirements and comply based on the design and licensing basis of their plant. Seismic Hazard Analyses One commenter states that updated seismic hazards analyses are not required of licensees, despite the issuance of new regulations that acknowledge the change in scientific knowledge on the differing effects of earthquakes on plant structures. The commenter further states that new seismic regulations (December 11, 1996; 61 FR 65157) only apply to new nuclear power plants. *NRC Review:* The December 1996 regulation (part 100) provides basic siting criteria for decisions about future sites and future nuclear power plants. The SOCs of the 1996 final rule stated that to replace the existing regulation with an entirely new regulation would not be acceptable because the provisions of the existing regulations form part of the licensing bases for many of the operating nuclear power plants and others that are in various stages of obtaining operating licenses. Therefore, the Commission concluded that these provisions should remain in effect for currently operating facilities. To ensure the continued safety of currently operating nuclear power plants, the NRC required industry to re-examine their seismic designs as part of the Individual Plant Examination of External Events (IPEEE) program. The results of the IPEEE studies are summarized in NUREG-1742, “Perspectives Gained from the Individual Plant Examination of External Events (IPEEE) Program.” Based on the evaluations of the IPEEE program, the NRC staff determined that seismic designs of operating nuclear power plants still provide an adequate level of protection. Since the IPEEE program, the NRC staff has continued to assess the most recent models for estimating seismic ground motion from earthquakes as well as recent models for earthquake sources in seismic regions such as New Madrid, MO, and Charleston, SC. To evaluate the impact of the most recent seismic studies, cited previously, on currently operating nuclear power plants, the NRC has initiated a generic issue resolution process (Generic Issue 199, “Implications of Updated Probabilistic Seismic Hazard Estimates in Central and Eastern United States,” ML051600272). Public Participation A commenter voiced the concern that the current treatment of license renewal “unfairly excluded and denies the public and its experts from critical analysis of the risks and benefits of 20 additional years of operational wear and tear on safety-related equipment and from critical analysis of the risks * * * as well as extending and enlarging the adverse environmental impacts from nuclear waste generation * * * and the vulnerability of onsite nuclear waste storage systems to domestic security threats.” *NRC Review:* The NRC rulemaking process appropriately includes the public. The public has many opportunities to comment, such as public meetings and hearings under part 54. For special cases concerning security and safeguards (such as rulemaking, orders, and generic communications), procedures are implemented to appropriately ensure the safeguarding of nuclear material and information. In these cases, only persons with a need to know and with the proper security clearance are authorized access to subject proceedings. The public also had ample opportunity to comment under the various part 54 rulemakings, which evaluated prolonged waste storage. Public participation is an important part of the license renewal process. Members of the public have several opportunities to question how aging will be managed during the period of extended operation. Information provided by the licensee is made available to the public in various ways. The license renewal application and subsequent correspondence regarding the application are available to the public from the NRC's PDR or from ADAMS, which can be accessed through the NRC's Web site ( *http://www.nrc.gov* ). Shortly after the NRC receives a renewal application, a public meeting is held near the nuclear power plant to give the public information about the license renewal process and provide opportunities for public involvement. Additional public meetings are held by the NRC during the review of the renewal application. As part of the environmental review of each license renewal application a separate public meeting is held near the nuclear power plant seeking renewal to identify environmental issues specific to the plant for the license renewal action. The result is an NRC recommendation on whether the environmental impacts are so great that they preclude license renewal. This recommendation is presented in a draft plant-specific supplement to the GEIS which is published for comment and discussed at another public meeting. After consideration of comments on the draft, NRC prepares and publishes a final plant-specific supplement to the GEIS. NRC evaluations, findings, and recommendations are published when completed. All public meetings are posted on NRC's Web site. Key meetings are announced in press releases and in the **Federal Register** . Concerns may be litigated in an adjudicatory hearing if any party that would be adversely affected requests a hearing as is indicated in the notice of opportunity for hearing for each individual license renewal application. The opportunity for hearing is also announced in a press release which is initially posted on the NRC's home page on the Web. In establishing the current hearing process under part 2, the Commission adopted many changes and undertook additional activities intended to enhance public participation. For example, the final rule extends from 30 to 60 days the time between issuing a **Federal Register** notice for a reactor licensing proceeding and the time for submitting a request for hearing and a petition to intervene. The Commission adopted a mandatory disclosure provision in part 2 that provides for early and comprehensive disclosure of information by all parties, thus avoiding the substantial resources and delay that often is associated with discovery. The Commission also created a prominently displayed button on its Web site titled “Hearing Opportunities,” where the public can find notices of intent to file applications, notices of docketing of applications, and notices of opportunity to request a hearing and petition to intervene in major licensing and regulatory actions. Designs of Older Plants One commenter on PRM-54-03 was concerned about the designs of older plants, asking whether GE Mark I and II could be approved today and given license extensions. NRC Response: The NRC emphasizes that it would be incorrect to conclude that any currently operating facility regulated by the NRC, including OCNGS, is less safe than a newly constructed plant. The NRC's continuous regulatory oversight process often requires licensees to correct design deficiencies that could impact continued safe operation. Since OCNGS began operation in December 1969, the licensee has replaced and overhauled many pieces of equipment. The licensee has also installed new, modern systems to replace or supplement original systems that are obsolete or no longer considered adequate. The NRC requires plant operators to continuously test and monitor the condition of safety equipment and to maintain equipment in top condition. If a licensee applies for license renewal, the NRC reviews both the relevant safety and environmental issues associated with the application. Specifically, the licensee must provide the NRC with an evaluation of the technical aspects of plant aging. The licensee must also describe the aging management programs and activities that will be relied on to manage aging. In addition, to support plant operation for an additional 20 years, the licensee must prepare an evaluation of the potential impact on the environment. The NRC reviews the application and makes a determination concerning the protection of public health and safety and the protection of the environment. The NRC documents its reviews in a safety evaluation report and supplemental environmental impact statement, and performs verification inspections at the licensee's facilities. If NRC approves a renewed license, the licensee must continue to comply with all existing regulations and commitments associated with the current operating license as well as those additional activities required as a result of license renewal. Licensee activities continue to be subject to NRC oversight in the period of extended operation. Site-Specific Reviews One commenter states that site-specific environmental analysis is necessary. *NRC Review:* The NRC performs plant-specific reviews of the environmental impacts of license renewal in accordance with the National Environmental Policy Act

(NEPA)and the requirements of part 51. Certain issues are evaluated generically for all plants, rather than separately in each plant's renewal application. The generic evaluation, NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants” (GEIS), assesses the scope and impact of environmental effects that would be associated with license renewal at any nuclear power plant site such as endangered species, impacts of cooling water systems on fish and shellfish, and ground water quality. A plant-specific supplement to the generic environmental impact statement is required for each application for license renewal. The GEIS was developed to establish an effective licensing process. It contains the results of a systematic evaluation of the environmental consequences of renewing an operating license and operating a nuclear power facility for an additional 20 years. Those environmental issues that could be resolved generically were analyzed in detail and were resolved in the GEIS. Those issues that are unique because of a site-specific attribute, a particular site setting or unique facility interface with the environment, or variability from site to site, are deferred and are resolved at the time that an applicant seeks license renewal. In the license renewal process, these issues are addressed by the site-specific supplement to the generic environmental impact statement (SEIS). The GEIS is used to avoid duplication and allow the staff to focus specifically on those issues that are important for a particular plant ( *i.e.* , issues that are not generic). This is an appropriate and effective use of the concept of tiering that was issued by the President's Council on Environmental Quality

(CEQ)in its 1978 regulations that implemented the requirements of NEPA. Tiering is the process of addressing a general program (such as a nuclear power plant license renewal) in a generic (or programmatic) environmental impact statement (EIS), and then analyzing a detailed element of the program (such as a site-specific action related to the general program) as a supplement to the generic EIS. The CEQ has stated that its intent in formalizing the tiering concept was to encourage agencies “to eliminate repetitive discussions and to focus on the actual issues ripe for decisions at each level of environmental review.” In addition, the environmental review of each license renewal application affords several opportunities for public input as described previously. Nuclear Waste Management One commenter asserted that the license renewal process disallows public adjudicatory involvement in the extension of nuclear waste generation at reactor sites seeking license renewal without a scientifically approved and demonstrated nuclear waste management program because of reliance on the Waste Confidence Decision of 1990. The commenter stated: “[t]he license extension process needs to be broadened in its scope and not hide behind an increasing dubious Nuclear Waste Confidence Decision by providing for the public intervention process to independently analyze and challenge inadequate site-specific onsite “spent” fuel storage systems including storage ponds and dry cask storage systems.” Another commenter added his concerns about requiring the most up-to-date science to spent fuel pools and dry cask storage and questions the updating of regulations regarding seismic criteria for ISFSIs. Another commenter cited an April 2005 report to Congress by the National Academy of Sciences entitled “Safety and Security of Commercial Spent Nuclear Fuel Storage.” The commenter stated that the NRC should amend the regulations on the basis of that report to require that security of spent fuel pools and dry cask storage be comprehensively assessed during the relicensing process. *NRC Review:* As explained in the denial of PRM-51-08 (August 17, 2005; 70 FR 48329), the Commission stated in its 1999 Waste Confidence Decision Status Report that it would consider undertaking a comprehensive reevaluation of the Waste Confidence findings if either of two criteria were met:

(1)When the impending repository development and regulatory activities run their course; or

(2)If significant and pertinent unexpected events occur, raising substantial doubt about the continuing validity of the Waste Confidence findings (December 6, 1991; 64 FR 68007). Because activities involving the high-level waste repository have not run their course, a petitioner would have to demonstrate that “significant and pertinent unexpected events” have occurred that have raised “substantial doubt about the continuing validity of the Waste Confidence findings” for the Commission to reevaluate its conclusions. Neither PRM-54-02 or PRM-54-03 has provided any demonstration warranting reopening of this decision. Finally, delays of the waste depository at Yucca Mountain are not relevant to these petitions because waste is governed by separate NRC regulations and outside the scope of part 54, and the Waste Confidence Decision determined that spent fuel can be safely stored onsite for 100 years. The petitioners have not shown that waste would be better regulated under part 54. For spent fuel issues, see previous discussion. With respect to the comment regarding the National Academy of Sciences Report, the NRC notes that this is a classified report on spent fuel transportation security that was delivered to the House and Senate Committees on Appropriations in July 2004, and that an unclassified summary was published in March 2005. The NRC sent a report to Congress on March 14, 2005, describing the specific actions the NRC took to respond to the Academy's recommendations. The Academy's study is one of many instruments that supplements NRC's understanding of the safety of the interim storage of spent fuel. Reasons for Denial The NRC is denying the petitions for rulemaking (PRM-54-02 and PRM-54-03) because they raise issues that the Commission already considered at length in developing the license renewal rule (December 13, 1991; 56 FR 64943), that are managed by the ongoing regulatory process or under other regulations, or that are beyond the Commission's regulatory authority. The petitioners did not present any new information that would contradict positions taken by the Commission when the regulation was established or demonstrate that sufficient reason exists to modify the current regulations. Dated at Rockville, Maryland, this 2nd day of December 2006. For the Nuclear Regulatory Commission. Luis A. Reyes, Executive Director of Operations. [FR Doc. E6-21151 Filed 12-12-06; 8:45 am] BILLING CODE 7590-01-P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Chapter III RIN 3064-AC98 Large-Bank Deposit Insurance Determination Modernization Proposal AGENCY: Federal Deposit Insurance Corporation (“FDIC”). ACTION: Advance notice of proposed rulemaking (“ANPR”). SUMMARY: The FDIC is seeking comment on whether and how the largest insured depository institutions should be required to modify their deposit account systems to speed depositor access to funds in the event of a failure. Today, insured institutions do not track the insured status of their depositors yet the FDIC must make deposit insurance coverage determinations in the event of failure. The current process might result in unacceptable delays if used for an FDIC-insured institution with a large volume of deposit accounts. Such delays would have an impact on depositors' ability to access their funds and are likely to result in a resolution (of the failed institution) significantly more costly to the Deposit Insurance Fund. As currently contemplated, the options discussed in the ANPR would apply only to the 152 insured depository institutions with more than 250,000 deposit accounts and more than $2 billion in domestic deposits, as well as seven additional institutions with total assets over $20 billion, less than 250,000 deposit accounts and at least $2 billion in domestic deposits. In December 2005 the FDIC issued a prior advance notice of proposed rulemaking on this subject (“2005 ANPR”). 1 This ANPR is a follow-up to that issuance. The FDIC is seeking comment on all aspects of the ANPR. 1 “Large-Bank Deposit Insurance Determination Modernization Proposal, Advance Notice of Proposed Rulemaking,” 70 FR 73652, December 13, 2005. DATES: Comments must be submitted on or before March 13, 2007. ADDRESSES: You may submit comments by any of the following methods: • Agency Web site: *http://www.FDIC.gov/regulations/laws/federal/propose.html.* Follow the instructions for submitting comments. • E-mail: *comments@FDIC.gov.* • Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. • Hand Delivered/Courier: The guard station at the rear of the 550 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m. • Public Inspection: Comments may be inspected and photocopied in the FDIC Public Information Center, Room E-1002, 3501 North Fairfax Drive, Arlington, Virginia, between 9 a.m. and 5 p.m. on business days. • Internet Posting: Comments received will be posted without change to *http://www.FDIC.gov/regulations/laws/federal/propose.html* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: James Marino, Project Manager, Division of Resolutions and Receiverships,

(202)898-7151 or *jmarino@fdic.gov* , Joseph A. DiNuzzo, Counsel, Legal Division,

(202)898-7349 or *jdinuzzo@fdic.gov* or Catherine Ribnick, Counsel, Legal Division,

(202)898-3728 or *cribnick@fdic.gov.* SUPPLEMENTARY INFORMATION: I. Background When handling a depository institution failure the FDIC is required to structure the least costly of all possible resolution transactions, except in the event of systemic risk. 2 In addition, the FDIC is required to pay insured deposits “as soon as possible” after an institution fails 3 and places a high priority on providing access to insured deposits promptly. 4 In view of the significant industry consolidation in recent years, the FDIC is exploring new methods to modernize the process to determine the insurance status of each depositor in the event of a depository institution failure. The FDIC's current procedures to determine deposit insurance coverage may result in unacceptable delays if used for an FDIC-insured institution with a large volume of deposit accounts. In developing a new system to determine insurance coverage in a large-bank failure, the FDIC's goals are to minimize disruption to depositors and communities and to minimize costs to the Deposit Insurance Fund. 2 Section 13(c)(4)(A)(ii) of the Federal Deposit Insurance Act (“FDI Act”) 12 U.S.C. 1823(c)(4)(A)(ii) and section 13(c)(4)(G)(i) of the FDI Act, 12 U.S.C. 1823(c)(4)(G)(i). 3 Section 11(f)(1) of the FDI, 12 U.S.C. 1821(f)(1). 4 Doing so enables the FDIC to:

(1)Maintain public confidence in the banking industry and the FDIC;

(2)provide the best possible service to insured depositors by minimizing uncertainty about their status and avoiding costly disruptions, such as returned checks, that may limit their ability to meet financial obligations;

(3)mitigate the spillover effects of a failure, such as risks to the payments system, problems stemming from depositor illiquidity and a substantial reduction in credit availability; and

(4)retain, where feasible, the franchise value of the failed institution (and thus minimize the FDIC's resolution costs). The ANPR's focus is on FDIC-insured institutions with complex deposit systems. These include those institutions with the largest volume of deposit accounts, currently expected to include 152 insured institutions with over 250,000 deposit accounts and total domestic deposits of at least $2 billion, as well as seven additional institutions with total assets over $20 billion, with less than 250,000 deposit accounts and total domestic deposits of at least $2 billion (“Covered Institutions”). One of the assumptions underlying this ANPR is that no institution would be required to submit detailed customer deposit data to the FDIC unless the institution was in danger of failing. Insurance Coverage and Insurance Coverage Determination Procedures The basic FDIC insurance limit is $100,000 per depositor, per insured institution. 5 Deposits maintained by a person or entity in different ownership rights and capacities at one institution are separately insured up to the insurance limit. All types of deposits (for example, checking accounts, savings accounts, certificates of deposit, interest checks and cashier's checks) held by a depositor in the same ownership category at an institution are added together before the FDIC applies the insurance limit for that category. The FDIC generally relies upon the deposit account records of a failed institution in making deposit insurance determination. 5 The coverage for Individual Retirement Accounts and other specific types of retirement accounts was recently increased to $250,000. 71 FR 14629, March 23, 2006. The FDIC's rules and regulations for deposit insurance coverage described the categories of ownership rights and capacities eligible for separate insurance coverage. FDIC refers to these as “ownership categories.” There is a description of the primary ownership categories in Appendix A. To achieve accurate deposit insurance determinations, the FDIC uses a specialized system to analyze depositor data and apply insurance rules. As part of its normal practice, the FDIC obtains depositor data only at the time an insured institution is in danger of failing. These data are received in the weeks or months prior to failure, and the FDIC uses them to determine the insurance status of their depositors and to estimate the total amount of insured funds in the institution. The current FDIC deposit insurance determination process has several steps. Each step varies in time and complexity, depending on the institution's characteristics (primarily the number of deposit accounts and type of deposit account system). The following is a summary of the usual steps involved in the insurance coverage determination process where deposits are passed to an acquiring institution: • *Closing out the day's business.* In the event of failure, it is the FDIC's practice to close out the insured institution's daily business prior to obtaining the account balances upon which the insurance determination is based. Generally, this process is completed according to the bank's existing procedures. All of the day's check processing and deposit transactions are completed, and end-of-day account balances are determined. This process can require varying lengths of time, across Covered Institutions. For larger institutions this process can run into the early morning hours. • *Obtain deposit data.* A data file is obtained from the institution or its servicer. Obtaining usable data from the institution or its servicer frequently is a time-consuming process. The FDIC will provide the institution or its servicer with a standard data request. The standard data request requires the institution to provide approximately 45 data fields for each deposit account along with electronic copies of trial balances and deposit application reconciliations. FDIC technical staff works with the insured institution until the standard data set requirements are met and the files provided the FDIC can be processed properly. Generally, the FDIC has at least 30 days advance warning to plan and prepare for a failure. Data are requested in advance to test delivery capabilities, prove the balancing and reconciliation processes and make certain that all required data fields have been included. • *Process deposit data.* Data are received and validated (including reconciliation to supporting subsidiary systems). Using its Receivership Liability System (“RLS”), the FDIC determines which accounts are fully insured, which are definitely uninsured and which are possibly uninsured (pending the collection of further information). The RLS automatically groups accounts based on the ownership category and the name(s), address, and tax identification number for each account. This process is part of the insurance determination performed on the depositor data received from a failed institution. • *FDIC holds/debits based on insurance determination results.* Funds deemed insured are passed in full to the acquiring institution. Accounts definitely uninsured are debited for the uninsured amount and a receivership certificate (“RC”) is issued for the debited amount. 6 Holds are placed on accounts deemed potentially uninsured for amounts over the insurance limit, and the account owner is contacted. If additional information is required from the depositor, a meeting is scheduled. These meetings afford the opportunity to collect information necessary to finalize the insurance determination on the possibly uninsured depositors. The typical institution resolved by the FDIC does not have the capability to post a large volume of holds electronically by batch. However, this is an essential requirement for an effective depositor claims process for larger institutions. 6 The receivership certificate entitles the depositor to a pro rata distribution of the receivership proceeds with respect to their claim. Least-Cost Resolution Requirements As noted above, when handling a depository institution failure the FDIC is required by statute to structure the least costly of all possible resolution transactions, except in the event of systemic risk. Even with systemic-risk failures, the FDIC must conserve costs. Since the introduction of the systemic risk exception in 1991, no exceptions to the least-cost requirement have been made. The FDIC's least-cost requirement was intended to reduce resolution cost and instill a greater degree of market discipline by requiring losses to be borne by uninsured depositors and non-deposit creditors. When an insured institution fails the FDIC may pay insured depositors up to the insurance limit (a “pay-off”) or the FDIC may sell the failed institution to another FDIC-insured institution (a “purchase and assumption transaction”). Another option is to establish a bridge bank or a conservatorship and transfer deposits to that institution. 7 Preservation of the deposit franchise of a failed institution is an important facet of minimizing resolution costs. 7 A bridge bank is a national bank chartered for the purpose of temporarily carrying on the banking operations of a failed institution until a permanent solution can be crafted. See 12 U.S.C. 1821(n). The FDIC's bridge bank authority applies only to the failure of a bank. In the event of the failure of an insured savings association the FDIC could seek a federal thrift charter that would be operated as a conservatorship. As with a bridge bank, the new thrift institution would be a temporary mechanism to facilitate a permanent resolution structure. Complexities Caused by Industry Consolidation Historically, most insured institution closures occur on a Friday. In almost all cases, the FDIC has made funds available to the majority of insured depositors by the next business day, usually the Monday following a Friday closing. All of the insured institution failures of the past ten years have been of modest size, the largest being Superior Bank, FSB with total deposits at the time of closure of about $2 billion and roughly 90,000 deposit accounts. Industry consolidation raises practical concerns about the FDIC's current business model for handling institution failures. In most instances, larger institutions are considerably more complex, have more deposit accounts, are more geographically dispersed and have more diverse systems and data-integration issues than small institutions. This is especially true of large institutions that have recently engaged in merger activity. Implications of industry consolidation over the past ten years can be seen in Table 1. If such trends continue, deposits will become even more concentrated in the foreseeable future. Table 1.—Top Ten Institutions, by Number of Deposit Accounts [In millions] Rank 1996 2001 2006 1 11.3 33.7 50.6 2 10.4 12.3 30.4 3 5.0 11.6 22.7 4 4.1 10.1 18.7 5 4.0 9.1 17.7 6 3.8 8.3 13.9 7 3.7 8.0 9.0 8 3.7 6.5 8.8 9 3.6 6.2 6.2 10 3.2 5.6 5.9 Total 52.7 111.5 183.9 The single most important facet determining the complexity of the claims process for depositors of a failed institution is the number of deposit accounts. Other factors are important as well, including the volume of daily transactions, the amount of uninsured funds, the number of separate computer systems or “platforms” on which deposit accounts are maintained, the speed at which the institution's deposit operations must be resumed following failure and the potential spillover implications of the failure. The FDIC's analysis of these factors as applied to larger banks indicates that the industry can be divided into two segments as shown in Table 2. Table 2.—Industry Segmentation Segment Definition Number % of Total Total domestic deposits (Billions) % of Total Covered Total number of deposit accounts over 250,000 and total domestic deposits over $2 billion or total assets over $20 billion regardless of the number of deposit accounts and total domestic deposits over $2 billion 159 1.8 $4,445 69.1 Non-Covered All insured institutions not covered 8,619 98.2 1,992 30.9 Total 8,778 100.0 6,437 100.0 Note: Data are as of June 30, 2006. Large institutions typically have more accounts, more complex deposit systems and require a rapid resumption of deposit operations in the event of failure to protect the institution's franchise value. With Covered Institutions the speed of the claims process could be greatly enhanced by the FDIC obtaining a timely data download and by improving the institution's capability to automatically post holds or debit uninsured funds. Covered Institutions are more likely to fail due to liquidity reasons prior to becoming critically undercapitalized under prompt corrective action. 8 Most likely, this will be a more rapid and less orderly event. Institutions more susceptible to a liquidity insolvency pose greater problems for the FDIC. Such institutions have a less predictable failure date. The failure could occur on any day of the week, and pre-failure access to the institution may be limited because liquidity insolvency oftentimes is difficult to anticipate, and because liquidity insolvency can occur in a very compressed period of time. 8 12 U.S.C. 1831o. Covered Institutions present unique challenges in the event of failure. For the smaller, less-complex Covered Institutions these challenges may be only modest; for the larger, more complex members of the group they are more severe. As noted, the FDIC is concerned about both the size and complexity of the deposit operations of Covered Institutions and the necessary speed of the claims process to make funds available quickly to depositors and maximize the institution's franchise (or re-sale) value. II. The 2005 ANPR The 2005 ANPR 9 requested comment on three options for enhancing the speed at which depositors of the larger, more complex insured institutions would receive access to their funds in the event of failure. 10 All of the options entailed modifications to the deposit account systems of Covered Institutions to facilitate the insurance determination process. Option 1 was to require the institution to install on its deposit system a capability that, in the event of failure, would place a temporary hold on a portion of the balances of large deposit accounts. The percentage hold amount would be determined by the FDIC at the time of failure, depending mainly on estimated losses to uninsured depositors. 11 Such provisional holds would be placed immediately prior to the day the institution reopens for business (generally expected to be the next business day) as a bridge bank (discussed above). The institution also would need to be able to automatically remove these holds and replace them with the results of the deposit insurance determination when they become available. The insurance determination would be facilitated by certain depositor data (such as the depositor's name, address, and tax identification number) maintained by the institution in a standard format. The data would include a unique identifier for each depositor and the insurance ownership category of each account. 9 70 FR 73652 (Dec. 13, 2005). 10 In the 2005 ANPR Covered Institutions were defined to include all insured institutions with total number of deposit accounts over 250,000 and total domestic deposits over $2 billion. A full description of the three options is provided in the 2005 ANPR. 11 Uninsured depositors are entitled to a pro rata distribution of the receivership proceeds with respect to their claim. The FDIC—at its discretion—may immediately distribute receivership proceeds in the form of advance dividends at the time the bridge bank is opened. Advance dividends are based on the expected recovery to uninsured depositors. Option 2 was similar to Option 1 except that the standard data set would have included only information that institutions currently possessed. The option would not have required institutions to create a unique identifier for each depositor or to classify each account by ownership category. Option 3 was to require the largest ten or twenty insured institutions (in terms of the number of deposit accounts) to know the insurance status of their depositors and to be able to deduct expected losses to uninsured depositors in the event of failure. Comments on the 2005 ANPR The FDIC received 28 comments on the 2005 ANPR. 12 Six were from trade organizations, fourteen from large institutions, four from community banks and four from others. Most commenters expressed an appreciation of the objectives set forth in the 2005 ANPR. The letter submitted jointly by American Bankers Association, America's Community Bankers and The Financial Services Roundtable “recognize[d] that the Federal deposit insurance system's viability depends on the principle that no financial institution is either too big or too small to fail. The development of prudent systems to prepare for and respond to the failure of any size institution is an important component of the Corporation's receivership functions.” 13 Nevertheless, the majority of commenters generally opposed implementation of any of the options offered in the 2005 ANPR. Eighteen of the twenty-eight comment letters (sixty-four percent) indicated opposition to the 2005 ANPR, citing high costs and regulatory burden. The aforementioned joint comment letter from three trade associations “urge[d] the Corporation to reconsider its program to implement the 2005 ANPR.” 14 A complete summary of the comments received on the 2005 ANPR is provided in Appendix B. 12 The 2005 ANPR comment letters are available at: *http://www.fdic.gov/regulations/laws/federal/2005/05comlargebank.html.* 13 Comment letter provided by American Bankers Association, America's Community Bankers and The Financial Services Roundtable dated March 13, 2006 in response to the 2005 ANPR, page 3. 14 American Bankers Association, America's Community Bankers and The Financial Services Roundtable, page 4. III. The Revised ANPR Process Overview Under the process discussed in the ANPR, in the event of failure a Covered Institution would complete its nightly processing cycle according to the institution's normal practices. After completion of this nightly processing cycle provisional holds would be placed on large deposit accounts through the institution's deposit systems as specified by the FDIC. The placement of provisional holds will allow the opening of a bridge bank the day following failure, yet guard against the loss of uninsured deposit funds subject to loss. A standard set of data files reconciled to the institution's supporting subsidiary systems will then be provided to the FDIC, to be used as the basis for making deposit insurance determinations. The results of the insurance determination will be returned to the bridge bank, likely within several days. At this point the provisional holds will be removed en masse to be replaced with the results of the deposit insurance determination. The FDIC requests comment on all aspects of this contemplated approach, including cost/benefit issues and alternative approaches that would allow the FDIC to accomplish its objectives of affording a timely deposit insurance determination and a prompt release of funds to depositors. Continuation of Business Operations For the purposes of implementing the possible requirements explained in the ANPR, Covered Institutions should assume that their deposit operations would continue post failure in a bridge bank or a federally chartered mutual association. In the event of failure the bank would complete the nightly deposit processing cycle according to the institution's normal practices. For insurance determination purposes, the FDIC would use the deposit account balance generated at the end of the nightly processing cycle. This is the account balance against which provisional holds would be calculated. Tiered Approach Based on the comments received on the 2005 ANPR and additional analysis, the FDIC has refined its thinking in terms of how to approach the issues discussed in the 2005 ANPR. The FDIC is putting forward for comment an approach under which each insured depository institution would fall into one of three categories: Tier 1 Covered Institutions, Tier 2 Covered Institutions and Non-Covered Institutions. Tier 1 Institutions would include the largest, most complex institutions among those having at least 250,000 deposit accounts and more than $2 billion in domestic deposits. Tier 2 Institutions would include institutions of lesser complexity among those having at least 250,000 deposit accounts and more than $2 billion in domestic deposits, and those with at least $20 billion in domestic assets and $2 billion in domestic deposits not falling under the definition of a Tier 1 Institution. Non-Covered Institutions would be any insured depository institution not meeting the definition of a Tier 1 or 2 Covered Institution. Non-Covered Institutions would be exempt from the requirements discussed in the ANPR. 15 15 As part of its claims-process modernization effort, the FDIC is streamlining the business processes it uses to facilitate a deposit insurance determination. This involves replacing the current Receivership Liability System (noted above) with a new system incorporating more advanced technologies to enhance automation. These changes will improve the FDIC's ability to process efficiently a large number of accounts and provide timely customer support to uninsured depositors. Enhancements to the FDIC's claims system would be facilitated by a closer interaction with a Covered Institution's deposit systems. Compared to the 2005 ANPR, the definition of a Covered Institution has been expanded to include insured institutions with at least $20 billion in domestic assets and $2 billion in domestic deposits, regardless of the number of accounts. While some such institutions may have far fewer than 250,000 deposit accounts, the FDIC is concerned that—for such institutions—a Friday closure date cannot be expected, a bridge institution will need to be established quickly and that a high percentage of deposit accounts may involve uninsured funds. The FDIC is interested in comments on the challenges presented by such institutions in the event of failure compared to other institutions with a comparable number of deposit accounts. Should the definition of Covered Institutions be expanded to include institutions with fewer than 250,000 deposit accounts? Requirements for Different Tiers/Explanation of Requirements As explained more fully below, under the approach being put forward for comment, a Tier 1 Covered Institution would be required to have in place systems that could:

(1)Provide a unique depositor identification (“ID”) for each depositor;

(2)implement automated provisional holds against deposit accounts;

(3)supply a standard data framework (where the form and content of this data structure will be developed in cooperation with insured institutions);

(4)remove provisional holds;

(5)supply an agreed upon standardized data structure to compute a trial balance; and

(6)post holds and debits in batch mode resulting from the deposit insurance determination results. A Tier 2 Covered Institution would be subject to the same requirements as a Tier 1 Covered Institution except it would not have to provide a unique depositor ID for each depositor. 16 Each of these requirements is described below, along with specific questions on which the FDIC requests comment. 16 Each institution in Tiers 1 and 2 would be required to provide the FDIC with the names of the individuals responsible for the deposit data file(s), provisional holds, communications, customer service and the removal the provisions holds and implementation of the results of the deposit insurance determination.

(a)Unique Depositor ID Tier 1 Covered Institutions would be required to uniquely identify each depositor. The FDIC requests comments on all aspects of this possible requirement. In particular: • To what extent can Covered Institutions uniquely identify depositors using current systems and procedures? • What would be the best method(s) to use for depositor identification? Should the FDIC specify the format to be used for depositor identification, or should this be left to the Covered Institution to determine? • How expensive would it be for Covered Institutions to supply a unique identifier for each depositor? Is this something that Covered Institutions are considering for internal business purposes? If not, how do Covered Institutions determine common ownership for relationship management, cross-selling, risk management or other purposes? How long would it take to implement a unique depositor identification process? To what extent is the answer to that question a function of running deposit accounts on more than one platform? • How reliable would the data be in identifying each depositor? To what extent are Covered Institutions able to identify account owners (as opposed to trustees, managers, beneficiaries, etc.) from source files being supplied to the FDIC for insurance determination purposes? Does this differ by types of accounts; for example, checking accounts versus (brokered) CDs? • Could Covered Institutions uniquely identify depositors within a single legacy data system? Is there an accompanying Customer Information File (“CIF”) available for each legacy data system? Could the Covered Institutions provide instructions or rules to assist the FDIC to integrate depositor records across these legacy data sources?

(b)Provisional Holds Against Deposit Accounts Under the suggested approach, Tier 1 and 2 Covered Institutions would be required to have in place an automated process for implementing a one-time FDIC provisional hold immediately following the completion of the nightly deposit processing cycle following a failure. The contemplated provisional hold algorithm contains variables that would be supplied by the FDIC only on the day of failure. Provisional holds would be applied to individual accounts (commonly owned deposits are not aggregated). Provisional holds would vary by individual account balance and type. Under one approach:

(1)Deposit accounts with balances below $X dollars would not be subject to a provisional hold;

(2)deposit accounts with balances between $X and $100,000 would be subject to a provisional hold of Y percent; and

(3)deposit accounts with balances above $100,000 would be subject to a provisional hold of Z percent. The FDIC would supply the values X, Y and Z to the institution on the day of failure. Those values could differ depending on whether the account is a demand deposit/NOW account, money market deposit/savings account or time deposit. X could be set at a higher level for DDA systems than for time deposit systems, for example. The values X, Y and Z also could differ depending on whether the institution categorizes the account as consumer or business. For these purposes, the account category would be the one normally used by the institution, rather than a definition more consistent with FDIC insurance rules. FDIC research indicates the likely value of X would fall between $30,000 and $80,000. Based on account-size distributions provided by a sample of insured institutions, this potential threshold range is expected to exclude over 90 percent of deposit accounts from the provisional hold process at most institutions. Given the historical loss experience for large institutions and their general liability structure, the FDIC expects that the values of Y and Z would be less than 15 percent. The FDIC requests comments on all aspects of these possible requirements concerning provisional holds on deposits. In particular: • What more would Covered Institutions need to know to design and implement such a system? • What would be the overall cost to a Covered Institution for developing the capability to automatically post provisional holds? • The deposit systems of many Covered Institutions use software purchased from a small group of vendors. To what extent would vendor-based software changes help mitigate the overall implementation costs of this program? • Some Covered Institutions use a servicer to process deposit accounts, and some Covered Institutions share the same deposit servicer. To what extent would implementation changes made by the servicer mitigate the costs of this program? • A provisional hold could potentially trigger complications in the back office of the bridge bank due to an increase in returned items. This might be mitigated if a large percentage of a depositor's checking account balance is made available immediately. If, for example, fifteen percent holds were placed on transaction accounts with balances over $50,000, how significant would the impact be for the back office of the bridge bank? Would overdraft facilities already in place with depositors mitigate this potential impact? If the impact is expected to be significant, how could it be mitigated? Would there be any potential complications in the back office of the bridge bank due to holds placed on MMDA, savings accounts or time deposits? If so, what types of complications, and how could they be mitigated? • The FDIC may set Y and Z to the same percentage. If the FDIC required institutions to be prepared for only one ratio rather than two, would that reduce the system development costs, the reliability of the algorithm or the speed of running the algorithm? If so, by how much? If only one ratio were used, the FDIC might choose to apply the ratio to the entire balance of accounts with over $X dollars, or it might apply the ratio to only the portion of the balance that exceeds $X. The FDIC does not anticipate requiring institutions to be prepared for both options. Would this choice influence the system development costs, the reliability of the algorithm or the speed of running the algorithm? If so, which choice would be better, and to what degree would it be better? • The FDIC may choose to set the same X, Y and Z for all deposit systems (as opposed to different thresholds or ratios for transaction account systems, MMDA/Savings systems and time deposit systems). If the FDIC required institutions to be prepared for only one set of thresholds and ratios, would that reduce the system development costs, the reliability of the algorithm or the speed of running the algorithm? If so, by how much? • The FDIC may choose to set the same X, Y and Z for all account categories. If the FDIC required institutions to be prepared for only one set of thresholds and ratios, would that reduce the system development costs, the reliability of the algorithm or the speed of running the algorithm? If so, by how much? • Where do individual retirement accounts (“IRAs”) reside? Are they clearly coded or otherwise identified on bank records in a way that would allow their ready identification? Are all IRAs generally found in time deposit systems, in other systems, or are they distributed across multiple systems? • Since the FDIC would want to continue operating the institution on the business day after failure, the provisional hold process must be completed quickly. The time thresholds may be challenging especially if the institution does not fail on a Friday. Are there ways to structure the provisional hold requirements that would make it easier for institutions to meet the associated timing requirements? For example, would it be helpful if the FDIC agreed that $X would never fall below a predetermined amount (say $30,000 or $40,000)? • How long would you expect such a program to run? • What problems would occur if holds were placed during the first day (that is, before the evening check-clearing process) rather than before opening for business on the first day?

(c)The Generation of a Standard Data Structure Reconciled to the Supporting Subsidiary Systems A fundamental aspect of this ANPR is the development of a standard data framework which does not place an onerous burden on Covered Institutions, while ensuring that the FDIC is provided with an optimum set of data structures within that framework that enable a timely and accurate insurance determination process. The FDIC seeks industry input into the development of this standard data framework. Industry participation will be important in assuring that the FDIC specifies standards that are adequate for making deposit insurance determinations without being unduly burdensome to Covered Institutions. Consequently, the FDIC seeks comment on all aspects pertinent to the development of this standard. Appendix C provides representative standard data elements. • What would be the overall cost to a Covered Institution to develop a capability to produce a standard data structure complete with associated linked data sources for information such as account ownership or other maintained information relationships required to define a deposit account, as well as provide a data structure to facilitate the generation of a trial balance and reconciliations of accounts? Could a Covered Institution develop and deploy this standard in 18 months? Does the Covered Institution have a standard deposit account data framework that they would recommend the FDIC adopt as a standard to support this deposit account definition process? • The deposit systems supporting many Covered Institutions use software purchased from a small group of vendors and servicers. Could a vendor or servicer develop the standard data structure and the necessary processing logic to pull the data into the specified standard format for multiple institutions or does your institution have unique details that would prevent this from occurring? • To meet the proposed standard data structure requirement, institutions may have to link records from the CIF with the deposit systems or provide a key for linking elements so data from the CIF could be linked to individual account owner records. This would be more complex than a standard data structure that only included items from the deposit systems, but it would enable the FDIC to make timely insurance determinations. Once the systems had been developed and tested, how much longer would it take for an institution to prepare a standard data structure that included CIF and deposit system items, compared to one that included only deposit system items? • The FDIC would require transmitted deposit balances to reconcile to the actual trial balance, both principal and interest dollar amounts and the deposit record counts. How does reconciliation affect timeliness? Can the process be developed in advance and automated? • The standard data set should not contain records for foreign deposits or international banking facility (“IBF”) accounts, since they are not defined as deposits for insurance purposes. Do foreign deposits reside on separate deposit systems? Would your institution have any problems creating a data set that excludes foreign deposits not payable in the U.S.? If so, how might these problems be mitigated? Would your institution have problems placing a blanket freeze on all foreign deposits and IBF accounts so that the funds could not be drawn on the bridge bank? • Deposits held by the institution's subsidiaries and affiliates should be included in the standard data set. For deposit insurance purposes all deposits owned by the same FDIC charter, whether an affiliate or subsidiary, should be included in the data call if the account is held at the institution. Would your institution have any problems complying with the standard data structure described above that includes the full balance of deposits held by subsidiaries and affiliates? If so, how might these problems be mitigated? • Would Covered Institutions have difficulty supplying complete and reliable data for any of the items listed in Appendix C? If so, which ones? Do problems arise because the data are incomplete (available for some accounts but not others) or for other reasons? • One of the items envisioned in the standard data structure is a flag for bank-owned accounts (the institution's payroll accounts, for example), but not accounts owned by others and managed by the institution (trust accounts, for example). These accounts are not deposits and thus should be excluded from the deposit insurance determination process. How costly would it be for institutions to provide a reliable flag for these accounts or remove them from the standard data set prior to transferring it to the FDIC? If no flag were available, the FDIC might place provisional holds on these accounts. Would such an action cause problems in the back office? If so, how serious a problem might it cause? • In the event of failure, depositor data may be transmitted to the FDIC or its designee. One method for data transfer of the deposit file(s) is via secure FTP, requiring financial institutions or their servicers to use VPN to communicate with the FDIC over the Internet. What are the relative costs and benefits of using a secure FTP? Are there more effective, less costly ways of transmitting data to the FDIC? • The transmission method may depend on the number of accounts in the transmission data sets. For some Covered Institutions the FDIC may have to deploy hardware to the failed institution. How would Covered Institution suggest this process be handled and which location would be optimum to support FDIC requirements?

(d)Posting the Insurance Determination Results and Removal of Provisional Holds The FDIC would forward insurance results to be incorporated into the institution's deposit systems as soon as possible, perhaps as quickly as the day following the receipt of the standard data set. The results would dictate debits and holds to be placed by batch in an automated fashion on deposit accounts. The processing stream would be as follows: FDIC would notify Operations/IT that results are available. This notification would trigger a process whereby all provisional holds are removed en masse. After provisional holds have been removed, the bridge bank would run replacement transactions. Depending on the depositor's insurance status, the replacements could include:

(1)No replacement (that is, just release the provisional hold);

(2)a debit of the account by the amount specified by the FDIC;

(3)a debit and credit of the account (that is, debit the uninsured balance and credit an advance dividend); and

(4)placement of a FDIC hold that might not be the same amount as the provisional hold. In a few cases, new FDIC debits or holds may be placed on accounts that did not have a provisional hold. Both the removal of provisional holds and the placement of new FDIC transactions would have to be accomplished in the same nightly processing schedule and the institution would have to be open for business as usual on the next business day. As to this proposed procedure, the FDIC requests responses to these specific questions: • What would be the overall cost to a Covered Institution for developing the capability to remove provisional holds and automatically process account debits and holds based on the insurance determination results? • Would the en masse removal of provisional holds, coupled with the placement of FDIC debits, credits and holds during the same processing schedule, raise operational issues? If so, what types of issues, and how might they be mitigated? Would the system development costs or operational risk be reduced if this process were only scheduled on a weekend? • The FDIC is contemplating providing institutions with an ASCII/EBCDIC text file with debit, credit and hold transactions based on the insurance determination. Could the data contained in such a file be readily reformatted so that the transactions can be processed on the institution's deposit systems? Is there a format other than ASCII/EBCDIC that is easier and less costly for institutions? If so, what is it? Would it be helpful for the FDIC to provide institutions a sample data set (for testing) during the implementation period? • In some cases, all accounts with debits would also have credits. The FDIC anticipates that this would simplify the reconciliation process and the settlement process between the insurance fund and the bridge bank, since the debits relate to uninsured balances and the credits relate to advance dividends. This policy would, however, increase the number of required transactions. Is the larger number of transactions problematic? If so, what are the problems and how might they be mitigated? • One possible way to reduce the number of transactions in a given processing schedule would be to segment the process; for example, release provisional holds and replace them for only one system (or for selected accounts) per night until they are all completed. The FDIC anticipates that the costs associated with segmenting this process in some way would exceed the associated benefits. Do you believe this would be the case? If not, what benefits and costs would accrue for a segmented process and how should it be segmented? Debiting time deposits may be operationally more difficult than transaction or savings accounts. It might not be possible to debit a certificate of deposit (“CD”) to reflect a loss resulting from the insurance determination results. Debiting a CD may require that the existing CD be closed and new one opened with the lesser dollar amount. • What are the operational difficulties of requiring a cancellation of a large number of CDs? What is the best way to automate this process? Are there ways to build upon processes that are already in place for rolling over or paying out CDs? If so, how? The FDIC expects that, in the event of a large institution failure, its new claims system will create a file that contains the data needed by institutions to cancel an uninsured CD and replace it with a smaller CD. What information should be included in that file? What format should it take? Would it be helpful for the FDIC to provide institutions a sample data set (for testing) during the implementation period? IV—Implementation and Testing Requirements The FDIC is considering an approach under which an insured institution meeting the definitional requirements of a given tier for the two quarters prior to the effective date of the requirements discussed in the ANPR would have eighteen months to fully implement the respective requirements. The FDIC asks specific comment on whether more time would be needed to implement Tier 1 requirements. For example, should the implementation period be fifteen months for Tier 2 Covered Institutions and eighteen months for Tier 1 Covered Institutions? Also, under the contemplated approach, regarding a merger of two or more Non-Covered Institutions resulting in Covered Institution status, the requirements of the new tier would have to be fully implemented within, for example, eighteen months following the completion of the merger. Would this be a reasonable way to handle the situation? Under the contemplated approach, the FDIC would conduct an initial test at each Covered Institution sometime after the initial implementation period ends. 17 Once the initial test is completed successfully, the FDIC anticipates that it would conduct additional tests infrequently at healthy institutions that do not make major changes to their deposit systems—perhaps only once every three-to-six years. More frequent testing may be necessary for institutions that move to Tier 1 from Tier 2, make major acquisitions, experience financial distress (even if the distress is unlikely to result in failure) or undertake major system conversions. 17 In addition to testing, the FDIC might require that information contact points be validated (and updated as needed) every three-to-six months. To reduce the frequency of FDIC testing and ensure ongoing compliance, the FDIC might consider requiring that Covered Institutions conduct tests in-house on a regular basis (perhaps every year) and provide the FDIC with evidence that the test was conducted and a summary of the test results. If the FDIC chose to do this, what type of protocols should be set? Should the FDIC prepare a standard report format for the summarized test results? Would it be less costly for institutions to submit test results to the FDIC regularly to reduce the FDIC testing frequency (say from every three years to every five-to-six years)? Which testing option would result in a more reliable process? Why? In addition, the FDIC would have to test certain other requirements inside the institution, including but not limited to the ability to remove provisional holds en masse and place new holds and debits using a data set that meets the FDIC standards. The testing of processes involving transmittal of data to or from the FDIC would use dummy or scrambled data. To protect financial privacy, the FDIC's testing process would not require that Covered Institutions transmit any sensitive customer data outside of the institution's premises. Therefore, all testing involving sensitive customer data would be conducted on the institution's premises. The FDIC does not intend to remove sensitive data from the institution's premises under the proposed testing process. These items include, but might not be limited to the completeness and reliability of the standard data structure, the format requirements of the standard data structure and the accuracy and effectiveness of the provisional holds. V—New Deposit Accounts Covered Institutions currently are not required to know the insurance status of depositors or inform them of this status when a new account is opened. The FDIC is interested in comments on whether Covered Institutions should be encouraged or required to know the insurance status of each new deposit account and/or notify customers of this status when a new account is opened. Knowing the identity of each depositor is an important aspect of a deposit insurance determination. If Tier 1 Covered Institutions are not required to have a unique ID for each depositor, should the FDIC require a unique depositor ID to be assigned by Covered Institutions when a new account is opened? The insurance category of each account is necessary for the insurance determination process, but is not a requirement proposed in this ANPR. Should the FDIC require that Covered Institutions determine the insurance category of each new deposit account? VI. Request for Comments The FDIC realizes that the requirements discussed in the ANPR could not be implemented without some regulatory and financial burden on the industry. The FDIC is seeking to minimize these costs while at the same time ensuring it can effectively carry out its mandates to make insured funds available quickly to depositors and provide a least-cost resolution for Covered Institutions. The FDIC would like comment on the potential industry costs and feasibility of implementing the options in the ANPR. The FDIC also is interested in comments on whether there are other ways to accomplish its goals that might be more effective or less costly or burdensome. In other words, what approach or combination of approaches (which may include new alternatives) most effectively meets this cost/benefit tradeoff? The FDIC seeks comments on all aspects of the ANPR. Between 2004 and 2006 the FDIC met with six would-be Covered Institutions and four software vendors/servicers for Covered Institutions. These meetings took place at various stages in the development process. The FDIC found these meetings to be extremely helpful and is requesting additional meetings with interested parties. FDIC staff is willing to travel to facilitate the meeting or structure a teleconference. Any such meetings will be documented in the FDIC's public files to note the institution's general views on the ANPR or answers to questions that have been posed. In past meetings, the institutions and software vendors/servicers discussed proprietary information. Such confidential information would not be made public. The record of the meeting could be prepared by the institution or the FDIC. Any institution or organization wishing to discuss this proposal in more detail or influence the way in which it is implemented should contact James Marino, Project Manager, Division of Resolutions and Receiverships,

(202)898-7151 or *jmarino@fdic.gov.* During 2006 the FDIC met with several major software vendors/servicers to discuss an earlier version of the proposal outlined in this ANPR. These meetings provided useful insights into the operations of different deposit software and resulted in changes to the proposal. A previous version of the FDIC's proposal included a “freeze” on time deposits rather than the use of provisional holds against these accounts. The discussions with the software vendors resulted in an elimination of the “freeze” in favor of using provisional holds against all accounts. Further, an earlier version of the FDIC's proposal included three tiers for Covered Institutions rather than two. The third tier—to be comprised of the least complex of the Covered Institutions—did not include a unique depositor ID or provisional hold requirement. The original purpose of the three-tiered approach was to reduce industry implementation costs. The software vendors indicated a less varied set of requirements would be easier and less costly to implement, hence the movement to a suggested two-tiered approach. Appendix A—Primary FDIC Deposit Insurance Categories Insurance category Description 1. Single Ownership Funds owned by a natural person including those held by an agent or custodian, sole proprietorship accounts and accounts that fail to qualify in any other category below. Coverage extends to $100,000 per depositor. 2. Joint Ownership Accounts jointly owned as joint tenants with the right of survivorship, as tenants in common or as tenants by the entirety. Coverage extends to $100,000 per co-owner. • The account title generally must be in the form of a joint account (“Jane Smith & John Smith”). • Each of the co-owners must sign the account signature card. (This requirement has exceptions, including certificates of deposit.) • The withdrawal rights of the co-owners must be equal. 3. Revocable Trust Accounts whereby the owner evidences an intention that upon his or her death the funds shall belong to one or more qualifying beneficiaries. For each owner, coverage extends to $100,000 per beneficiary. • The title of the account must include “POD” (payable-on-death) or “trust” or some similar term. • The beneficiaries must be specifically named in the account records. (This requirement applies to informal “POD” accounts but does not apply to formal ‘living trust’ accounts.) • The beneficiaries must be the owner's spouse, children, grandchildren, parents or siblings. 4. Irrevocable Trust Accounts established pursuant to an irrevocable trust agreement. Coverage extends to $100,000 per beneficiary. • The account records must indicate that the funds are held by the trustee pursuant to a fiduciary relationship. • The account must be supported by a valid irrevocable trust agreement. • Under the trust agreement, the grantor of the trust must retain no interest in the trust funds. • For “per beneficiary” coverage, the interest of the beneficiary must be “non-contingent.” 5. Self-Directed Retirement Individual retirement accounts under 26 U.S.C. 408(a), eligible deferred compensation plans under 26 U.S.C. 457, self-directed individual account plans under 29 U.S.C. 1002 and self-directed Keogh plans under 26 U.S.C. 401(d). Coverage extends to $250,000 per owner or participant. • The account records must indicate that the account is a retirement account. • The account must be an actual retirement account under the cited sections of the Tax Code. 6. Corporation, Partnership or Unincorporated Association Accounts of a corporation, partnership or unincorporated association. Coverage extends to $100,000 per entity. • The account records must indicate that the entity is the owner of the funds or that the nominal accountholder is merely an agent or custodian (with the entity's ownership interest reflected by the custodian's records). • The entity must be engaged in an “independent activity.” • The entity must not be a sole proprietorship (which is treated as a single ownership account). 7. Employee Benefit Plan Deposits of an employee benefit plan as defined at 29 U.S.C. 1002, including any plan described at 26 U.S.C. 401(d). Coverage extends to $100,000 per participant. • The account records must indicate that the funds are held by the plan administrator pursuant to a fiduciary relationship. • The account must be supported by a valid employee benefit plan agreement. • For “per participant” coverage the interests of the participants must be ascertainable and non-contingent. 8. Public Unit Funds of “public units” or “political subdivisions” thereof. Coverage extends to $100,000 for interest bearing deposits and $100,000 for non interest bearing deposits for each official custodian of the public unit or subdivision. • For separate coverage for the non interest bearing deposits, the insured financial institution must be located in the same state as the public unit. • The account records must indicate that the funds are held by the custodian in a custodial capacity. • For “per custodian” coverage, the custodian must be a separate “official custodian.” • For “per subdivision” coverage, the governmental entity must be a separate “political subdivision.” Appendix B—Comment Summary The FDIC received 28 comment letters in response to the 2005 ANPR. While most of the comment letters touched on multiple points, they generally focused on a common theme. The various themes of the letters are summarized in Table 3. Sixty-four percent of the comment letters indicated opposition due to the view that implementation costs of the options outweighed any potential benefits, high potential costs and regulatory burdens, or the options simply are not needed. In other words, these commenters expressed the general belief that the FDIC failed in the 2005 ANPR to make a compelling case in favor of any of the options in light of their perceptions of the costs. Table 3.—2005 ANPR Comment Summary General comment Number Percentage Costs Outweigh Benefits 10 35.7 Opposed Due to Costs/Burdens 5 17.9 Options Are Not Needed 3 10.7 Do Not Include Our Institution as Covered 2 7.1 Supportive of at Least One Option, but in Some Cases Expressed Concern Over Costs 5 17.9 Too-Big-To-Fail and/or Market Discipline 2 7.1 Options Raise Significant Privacy Issues 1 3.6 Total 28 100.0 The 2005 ANPR noted that the FDIC was considering expanding the definition ofa Covered Institution to include any institution with at least $20 billion in total assets, regardless of the total number of deposit accounts. Two institutions falling into this category commented that the definition of a Covered Institution should not be changed from the original definition of at least 250,000 deposit accounts and $2 billion in domestic deposits. Some commenters were expressly supportive of one or more of the options, but in some cases indicated concern over costs. In particular, the letter from Dollar Bank stated it “understands and supports the need for the FDIC to have a rapid and effective process for determining insurance coverage. Not only does this benefit the FDIC directly, but effective performance by the FDIC also benefits the entire banking system by assuring the public of the reliability of federal insurance of deposits. The FDIC asked in this Proposal for suggestions on alternative approaches that might achieve approximately the same benefits for the FDIC at lower costs for banks. Because Dollar sees no reasonable alternative, it supports the general thrust of the Proposal.” 18 18 Comment letter provided by Dollar Bank dated March 13, 2006 in response to the 2005 ANPR, page 1. Two other commenters indicated support because the 2005 ANPR options were viewed as addressing the concept of too-big-to-fail (“TBTF”) and enhancing market discipline. Gary H. Stern, President of the Federal Reserve Bank of Minneapolis made the following five points. 19 19 Comment letter provided by the Federal Reserve Bank of Minneapolis in response to the 2005 ANPR, pages 1-5. • “To ensure effective use of society's resources, the FDIC must reform current insurance determination procedures which hinder its ability to carry out the least-cost resolution of a large bank. • The FDIC's Board of Directors should focus on net benefits when evaluating the comments received on the 2005 ANPR and choosing which option to implement. 20 20 This quote provides further elaboration on this point. “As already noted, creating the conditions for imposition of least cost resolution of a large bank is the first and most important benefit of the options. This outcome, in turn, should increase market discipline/reduce moral hazard. More market discipline and less moral hazard means a higher standard of living, as resources flow to their best uses. This benefit is difficult to quantify but the limited evidence available suggests that it is potentially large.” • The features of Option 2 are necessary but may not prove sufficient to correct weaknesses in the insurance determination process. • The FDIC should give serious consideration to implementing Options 1 and 3. • The reformed insurance determination regime should apply to all large banks for which the current regime could prevent a least cost resolution; the same insurance determination scheme need not apply to all covered institutions.” One comment letter focused almost entirely on financial privacy issues. Numerous other commenters indicated financial privacy concerns as well, particularly as they may arise from any testing program implemented as part of the proposal. The 2005 ANPR noted that “the FDIC solicits suggestions on alternative means of meeting the objective of conducting a timely insurance determination on Covered insured institutions.” 21 No alternative suggestions were received. 21 70 FR 73659, December 13, 2005. Since such a large portion of the comment letters raised concerns about costs versus benefits, this topic will be discussed in the next section. This will be followed by a discussion of other issues raised in the comment letters. Commenters' Views on Costs Versus Benefits *General arguments.* Many commenters—including all responses from the trade organizations—argued that any option presented in the 2005 ANPR would impose high or significant costs on Covered Institutions. These costs would come in the form of dollar expenditures and the utilization of scarce technological resources. Some responders indicated this was the wrong time for a new technological initiative since “under both Basel II and Basel I-A as proposed, banks will be required to develop new and costly information technologies.” 22 22 Comment provided by The Financial Services Roundtable dated March 10, 2006 in response to the 2005 ANPR, page 3. Many commenters also argued that the likelihood of a Covered-Institution failure was remote. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FIDICA”) and the Federal Deposit Insurance Reform Act of 2005 (“FDIRA”) were cited as containing provisions reducing the likelihood of large-institution failures. It was noted that the FDIC is undergoing the longest period in its history without a failure. Furthermore, responders pointed out that the most recent failures were of institutions not proposed to be covered by the regulation. It also was argued that the FDIC likely will have ample warning of a large-institution failure, thereby allowing for adequate preparation time. Several commenters recommended applying the 2005 ANPR options only in the event the Covered Institution reaches problem status. This suggestion is discussed in more detail below. *Failure preparation time.* The joint trade association letter noted “failures that have occurred in the last few years were among financial institutions that would not be covered by this 2005 ANPR. Regulators frequently had knowledge of the problems undermining these institutions and had time to prepare for closure. Sudden failures were more likely to have been caused by fraud or other criminal activity. It is highly unlikely that such a series of similar events could cause a failure of covered financial institutions because of their size, capital strength and diversity of lines of business. Constructing, maintaining and periodically testing the programs proposed under this 2005 ANPR solely because of the remote chance of sudden failure resembles an expensive solution in search of a very low probability problem.” 23 23 American Bankers Association, America's Community Bankers and The Financial Services Roundtable, page 3. The 2005 ANPR noted that Covered Institutions are more likely to be closed due to liquidity reasons, thus are prone to fail on any day of the week. Covered Institutions generally would be handled through a bridge bank structure, and to preserve franchise value the failed institution must open the day following failure. The provisional hold functionality included in Options 1 and 2 allows for a next-day opening of the bridge institution. The nightly processing cycle of Covered Institutions does not end until the early morning hours, often extending until 4 a.m. and, in some cases, until 7:30 a.m. Once the nightly processing schedule is complete a failed institution must generate deposit data to be used by the FDIC to make the deposit insurance determination. The 2005 ANPR options recognize that, even under the best of circumstances, it would be impossible for the FDIC to complete the steps necessary for a deposit insurance determination and have the results posted in time for the opening of the bridge bank the business day following failure. 24 Therefore, it is the FDIC's view that one or more of the 2005 ANPR options appear necessary for a successful bridge bank opening, regardless of the advance warning or preparation time allotted. 24 These steps include:

(1)Generating the depositor data file,

(2)transmitting the data file to the FDIC,

(3)processing the depositor data to produce the deposit insurance determination results and

(4)transmitting and posting these results on the institution's deposit systems. *Differentiation between options.* While the majority of commenters opposed the FDIC moving forward, many clearly differentiated between the three options listed in the 2005 ANPR. The Clearing House stated, “we believe that Option 3 is so extraordinarily burdensome as to be unfeasible and that the burden of Option 1 is clearly excessive. Although Option 2 is less onerous and a possible solution to the FDIC's concerns, we believe that further study and dialogue between the Covered institutions and the FDIC are necessary to refine this option.” 25 26 25 Comment provided by The Clearing House dated March 29, 2006 in response to the 2005 ANPR, page 2. 26 This quotation is not intended to suggest the trade organization supports Option 2, rather to illustrate the clear differences among the three options. The commenter further noted “we are concerned that even Option 2 does not create a reasonable [cost/benefit] balance.” Option 1 differs from Option 2 in that it would require the institution to supply a unique depositor ID and the insurance category of each account. Several commenters noted that—of the two—the insurance category requirement was significantly more burdensome. Wachovia Corporation noted that it “currently uses a unique customer identifier for each of [its] general bank customers. However, this identifier may not be available in all instances. An example of this is brokered CDs, in which the insurance is passed through to individuals who are the ultimate customers. We also do not have a unique way to identify insurance categories. Identifying and developing systemic ways to assess categories may be arduous and costly. Again, the development of this logic by multiple banks would be redundant and would shift responsibility to the bank that the bank should not have to bear.” 27 27 Comment provided by Wachovia Corporation dated March 10, 2006 in response to the 2005 ANPR, page 3. Capital One Financial Corporation noted that “we estimate the cost of complying with the FDIC's Option 1 as over $220,000. Most of that cost is attributable to the additional requirements of Option 1 as compared with Option 2—in particular, the requirement to identify the insurance ownership category of each deposit account.” 28 28 Comment provided by Capital One Financial Corporation dated March 13, 2006 in response to the 2005 ANPR, page 2. *Estimated costs.* No trade organization provided specific cost estimates on the 2005 ANPR options, other than to say the costs would be “high” or “very substantial.” Four of the 14 large-institution responders—Wachovia Corporation, Capital One Financial Corporation, First Tennessee and Dollar Bank—provided cost estimates for one or more of the options. These estimates generally were characterized as being “rough” and frequently contained caveats. The estimates provided are listed in Table 4, which also shows the assessable deposit base of the institution (indicating institution size) and the impact of a 1-basis point annual FDIC assessment (indicating a basis for relative cost comparison). The paucity of data provided on Option 3 reflects the view among most commenters that it is unfeasible. Wachovia Corporation indicated, for example, that Option 3 was “wholly unacceptable,” 29 which appears to be the reason why no cost estimate was provided for this option. First Tennessee was the only responder providing an estimate for Option 3 indicating it was roughly five times higher that that for Option 2. 29 Wachovia Corporation, page 3. Table 4.—Cost Estimates of 2005 ANPR Options Responder Comment Estimated implementation cost Assessable deposits ($ millions) 1-Basis point annual FDIC assessment ($ millions) Estimated Cost as a % of 1 BP assessment Wachovia Corporation Option 2, for demand deposit, time deposit and securities systems only “$2 mm or more” 307,000 30.7 7 Capital One Financial Corporation Option 1 “over $220,000” 44,000 4.4 5 First Tennessee Option 2 “exceed $1,000,000” 23,000 2.3 44 First Tennessee Option 3 “mid seven figures” 23,000 2.3 200 Dollar Bank Cost of Option 2, “negligible” additional cost for Option 1 “approximately $60,000” 4,500 0.45 13 For Options 1 and 2 the cost estimates provided in the table are fairly modest when matched against other potential deposit insurance costs. Compared to a 1-basis point annual FDIC assessment, the estimated implementation costs of Options 1 or 2 ranged from 5 to 44 percent. The FDIC expects that implementation costs will vary across institutions. The deposit systems at Covered Institutions are different. In particular, some institutions rely primarily on proprietary systems while others use software or servicing provided by an outside vendor. The 2005 ANPR noted that many Covered Institutions use deposit software supplied by a common vendor or have their deposits serviced by a common servicer. The 2005 ANPR suggested this structure may help mitigate the implementation costs of the options. No deposit software vendor or servicer responded to the 2005 ANPR, nor did any commenter address the potential cost savings associated with the common use of software providers or servicers. The FDIC believes this common usage would mitigate implementation costs. *Too big to fail and market discipline.* Several commenters raised the issue of TBTF, effectively expressing the concern that uninsured depositors of a large institution could be made whole in the event of failure, regardless of expected losses in the failed institution. Mr. Stern's letter noted that “[i]n the face of insufficient technology to segregate deposits or information to determine the insurance status of deposits, therefore, the FDIC would likely prefer to provide depositors with access to deposits even if they might be uninsured. This preference, even if understandable, undercuts least cost resolution and puts pressure on policymakers to invoke the systemic risk exception of [FDICIA]. Invoking the systemic risk exception due to limitations in the resolution process (as opposed to preventing a true systemic crisis) could contribute to substantial resource misallocation in the economy over time.” 30 Mr. Stern noted that these costs are difficult to quantify, although they could be substantial. 30 Federal Reserve Bank of Minneapolis, pages 2-3. FDIC's Views on the Cost/Benefit Tradeoff Any option will impose industry costs, but benefits also will accrue. The FDIC must balance these costs and benefits. *Summary of costs.* In its 2005 visitations to the four large deposit software vendors/servicers, two of the organizations indicated the cost of the provisional hold functionality was fairly modest. The 2005 ANPR specifically requested comment on the costs of implementing the three options. The limited data summarized above suggests fairly modest implementation costs for an Option 2 approach and, for some institutions, Option 1 as well. The consensus of comments was that Option 3 would be prohibitively expensive. While no commenters mentioned the potential cost savings that may arise from the use of common software vendors or servicers, they could be significant. The available data on costs currently is limited, although more information should result from this request for comments as well as other research conducted by the FDIC. Many responders noted the low likelihood of a Covered-Institution failure. Historical evidence indicates this to be the case. The FDIC also agrees that the reforms implemented in FIRREA, FDICIA and FDIRA serve to reduce the probability of a Covered-institution failure. However, even if the likelihood of a failures among Covered Institutions is perceived to be low, it is not zero. The FDIC should have in place a credible plan for resolving the failure of an institution of any size with the least possible costs. The ability to determine the insurance status of depositors in a failed institution in a timely manner is a critical element for ensuring a least-costly resolution. *Meeting the FDIC's legal mandates* . FDICIA was one of the most important pieces of legislation affecting the FDIC's failure resolution process. Its least-cost requirement effectively requires uninsured depositors to be exposed to losses. Also, FDICIA's legislative history and the nature of the systemic risk exception provide a clear message that uninsured depositors of large institutions are to be treated on par with those of any size. Meeting these mandates is an important benefit of the rules being proposed. *Enhancement of market discipline* . The FDIC's legal mandates have direct implications for TBTF and market discipline. If financial markets perceive uninsured depositors in large institutions will be made whole in the event of failure, deposits will be directed toward these larger depository institutions. The result would be the misallocation of economic resources. Many market observers believe there are substantial benefits of improved market discipline that accrue even without serious industry distress or bank failures. The FDIC agrees with Mr. Stern's assessment that this resource misallocation could be significant. Effective market discipline also limits the size of troubled institutions and results in a more rapid course toward failure. Both serve to mitigate overall resolution losses. Lower resolution losses benefit insured institutions through lower insurance assessments. *Equity in the treatment of depositors of insured institutions* . In the absence of one or more of the options outlined in the 2005 ANPR, the FDIC is concerned that the resolution of a Covered Institution could be accomplished only through a significant departure from its normal claims procedures. This departure could involve leaving the bank closed until an insurance determination is made or the use of shortcuts to speed the opening of the bridge institution. The use of shortcuts or other mechanisms to facilitate depositor access to funds will imply disparate treatment among depositors within the failed institution and certainly different treatment relative to the closure of a non-Covered Institution. The FDIC places a high priority on the consistent implementation of its claims policies and procedures regardless of the size or complexity of the institution. *Preservation of franchise value in the event of failure* . The sale of the franchise of a failed institution can provide significant value to mitigate failure costs and is a necessary ingredient to a least-cost resolution. Superior Bank, FSB, the largest failure over the past 10 years, generated a franchise premium of $52 million, or 17 percent of current estimated FDIC losses in the failure. An ineffective claims process—especially one deviating significantly from the FDIC's normal policies and procedures—risks reducing or destroying an important asset of the receivership. Preservation of franchise value in the event of failure of a Covered Institution will be an important benefit of the proposed options. *Suggested course of action* . The strong industry opposition and high costs of Option 3 make it unlikely to be the most cost-effective option. In addition, the less costly options appear to meet the primary objective of the FDIC. Although the 2005 ANPR generated only limited data on the costs of Options 1 and 2, these costs are almost certainly low enough to merit moving forward—particularly given the substantial benefit to the FDIC in being able to meet its statutory mandate for least-cost resolutions and the uniform application of insurance limits, plus additional benefits associated with enhanced market discipline. Implementation costs may vary among Covered Institutions depending on conditions such as the number of deposit systems, the age of these systems and their architecture, and whether deposit operations are processed in-house or through a servicer. To some degree, the factors affecting costs also indicate a facet of operational risk which may influence failure potential. Implementation of Options Upon Reaching Problem Status Several commenters suggested delaying the implementation of any options until a Covered Institution reaches “problem bank status.” 31 For supervisory purposes problem bank status refers to any insured depository institution with a composite CAMELS rating of “4” or “5”. None of the Covered Institutions currently are designated as problem institutions. The adoption of this exception likely would imply that no Covered Institutions would have to immediately comply with the new FDIC requirements. 31 See, for example, the American Bankers Association, America's Community Bankers and The Financial Services Roundtable letter, page 3. Several commenters also provided insights into the potential time needed to implement the proposed rules. The Clearing House, for example, noted that “material information system changes take significant time. Our member banks have discussed the ANPR with their technical staffs and have determined that any of the requested changes could be made, but only over a significant period of time. Without more specific direction, they cannot put a specific timeframe on the project, but to make any substantial changes over multiple systems, and then fully test them, is likely to take more than a year.” 32 Additional time would be needed for the FDIC to test the system changes. 32 The Clearing House, page 3. The FDIC is concerned that a Covered Institution could fail prior to reaching problem status (with a CAMELS rating of “3”, for example), or relatively shortly after attaining problem status. If the one-year implementation time estimate is generally accurate, the FDIC risks not meeting its objectives should a Covered Institution fail more quickly than one year after being designated a problem institution. Further, a period of financial or operational stress is not the opportune time to make the proposed system enhancements. Cost Reimbursement Several responders to the 2005 ANPR suggested that the FDIC cover implementation costs, either through a direct payment or an assessment rebate. As shown in Table 4, the estimated costs of implementing Options 1 or 2 are fairly modest, ranging from 5 to 44 percent of a 1-basis point annual FDIC assessment. Implementation costs may be viewed as part of the overall cost of deposit insurance; therefore, not subject to reimbursement. Extending Program to All Insured Institutions Two commenters proposed extending the options to all insured institutions, and one commenter suggested the FDIC may apply the options to large institutions now but include small institutions at some future point. The 2005 ANPR specifically limited the scope of the options to the 145 insured institutions with at least 250,000 deposit accounts and more than $2 billion in domestic deposits. The 2005 ANPR noted that the FDIC was considering expanding the definition of a Covered Institution but only in a way that would include a handful of other institutions (for example, those with at least $20 billion in total assets, regardless of the number of accounts). The 2005 ANPR never suggested or mentioned in any way the possibility of extending coverage to all insured institutions. As noted in the 2005 ANPR, the “FDIC is seeking to minimize [implementation] costs while at the same time ensuring that it can effectively carry out its mandates to make insured funds available quickly to depositors and provide a least-cost resolution for Covered institutions.” 33 The FDIC's deposit insurance determination modernization initiative is directed at improving the process at the very largest institutions. The FDIC has never considered extending the options beyond the largest, most complex institutions. There simply is no business reason for doing so. 33 70 FR 73654, December 13, 2005. Financial Privacy One comment letter focused primarily on financial privacy, but other letters mentioned the issue as well, especially in the context of any testing program. As noted in the 2005 ANPR, “[a]s part of its normal practice, the FDIC obtains depositor data only at the time an insured institution is in danger of failing. These data are received in the weeks or months prior to failure, and are obtained for the sole purpose of determining the insurance status of individual depositors and estimating the total amount of insured funds in the institution. The receipt of such depositor data is necessary for the FDIC to carry out its insurance function. The options provided in this [2005] ANPR do not alter the FDIC policy regarding the receipt of depositor information in preparation for the resolution of a failing insured institution. The FDIC is aware of the potential privacy issues surrounding the holding of depositor information and has in place strict safeguards to protect these data.” 34 The 2005 ANPR also states “it is possible to conduct an effective testing process while on-site, without the need for sensitive depositor data to leave the institution's premises.” 35 34 70 FR 73653, December 13, 2005. 35 70 FR 73658, December 13, 2005. The 2005 ANPR options would not change the treatment of depositor data in the event an institution is in danger of failing, nor have such changes been proposed. The FDIC still believes an effective testing program can be structured whereby sensitive depositor data never leaves the institution's premises. These testing safeguards eliminate privacy concerns. Appendix C—Data Elements Included in the Standard Data Set The Standard Data Request contains data structures which will be used by the FDIC to determine insurance categorization. This data structure may be divided into multiple Record Types/Formats. It is the FDIC's intent to work with the industry to define a standard data structure. If data or information are not maintained or do not apply, a null value in the appropriate field should be indicated. XML may be the most beneficial format. XML has become a widely adopted standard for data interchange by enabling a common messaging format for the exchange of information between systems. XML will enable all the information listed below to be consolidated into one file and presented in plain text with hierarchical relationships providing a single source/file containing the required information. Following is a list of the data fields that are to be included in the proposed data structure along with explanations of the data being requested. The fields are listed in the order they should appear in the file. Representative Deposit Data Elements The Deposit data elements provide information specific to deposit account balances and account data. The sequencing of these elements, their physical data structures and the mode or method of data transmission will be developed in cooperation with the Covered Institutions. Note: Fields 13-26 relate to the Account Name and Address information. Some systems provide for separate fields for Account Title/Name, Address, City, State, Zip, and Country, all of which are parsed out. Others systems may simply provide multiple lines for Name, Address, City, State, Zip, with no distinction. Please populate fields that best fit the system's data, either fields 13-20 or fields 21-26. Field name FDIC field description Questions/comments for the industry 1 DP_Acct_Numb Account Number: The unique number assigned by the institution to this account Is there a case where this number is not unique within your institution? Are account numbers unique across different deposit systems? If they are not unique, will the combination of branch and account number provide a unique number? 2 DP_Sub_Acct_Numb Sub-Account Number: Account number field that further identifies the account. May be used to identify separate deposits tied to this account where there are different processing parameters, i.e. interest rates, maturity dates, but all owners are the same (like CD certificate numbers). 3 DP_Tax_ID Tax ID: Provide the tax identification number(s) maintained on the account. For consumer accounts, typically, this would be the primary account holder's social security number (SSN). For business accounts it would be the federal tax identification number (TIN). 4 DP_Tax_Code Tax ID Code: This field should identify the type of the tax identification number. Generally deposit systems have flags or indicators set to indicate whether the number is an SSN or TIN. • S = Social Security Number. • T = Federal Tax Identification Number. • O = Other. Is the data field available in your deposit system? 5 DP_Branch Branch Number: This field should identify the branch or office associated with the account. Usually referred to as branch number but may represent a specialty department or division or office. 6 DP_Cost_Center Cost Center or G / L Code: Identifier used for organization reporting or ownership of the account. Ties to general ledger accounts. If cost center is not carried in the deposit record, leave blank. 7 DP_Prod_Type Product Type: This field is used to identify the product type from a customer perspective. Your financial institution may identify this field by another name, but will indicate account product: • CON = Personal or consumer accounts; this can be a SGL, JNT, REV, IRR, IRA. • BUS = Business. • NPR = Non-profit accounts. • GOV = Accounts held by government entities (city, state, political subdivisions). • FIN = Accounts held by other financial institutions. • INT = Internal accounts (bank control accounts) or bank owned accounts. • BRK= Brokered accounts. Can your deposit accounts be categorized into these product types? How accurate would the designation be? What data elements in your deposit system would enable you to determine the product type? Is this available for all deposit products? 8 DP_Owner_Ind Customer Owner Indicator: This field is used to identify the type of ownership at the account level. Your financial institution may call these indicators by another name, but the field should indicate: • S = Single. • J = Joint Account. • P = Partnership account. • C = Corporation. • B = Brokered Deposits. • T = Trust. • O = Other. How accurately can you determine the ownership status of an account? Are these data readily available on your deposit system(s)? 9 DP_Prod_Cat Product Category: This is a broad classification of products and accounts. It is sometimes referred to as “application type” or “system type”. Examples of values in the field are: • DDA = Non-Interest Bearing Checking accounts. • NOW = Interest Bearing Checking accounts. • MMA = Money Market Accounts. • SAV = Savings accounts and Money Market Savings accounts. This includes any interest bearing accounts with regulated withdrawal requirements. • CDS = Time Deposit accounts and Certificate of Deposit accounts. Include any accounts with specified maturity dates that may or may not be renewable. • REP = Repurchase agreements—Include any accounts supported by an agreement to repurchase the deposit at a specified date and interest rate, and is secured by designated securities owned by the institution. • IRA = Individual Retirement Account (IRA). • RIRA = Roth IRA. • KEO = Keogh. Can your deposit accounts be categorized into these product categories? How accurate would the categorization be? What data elements in your deposit system would enable you to determine the product category? Is this available for all deposit products? 10 DP_Stat_Code Status Code: Include only the following status or condition of the account. Field values are: • O = Open. • C = Closed. • D = Dormant. • I = Inactive. 11 DP_Short_Name Short Name or SORT Name: Generally the field used to create an alpha list of accounts or to sort names. If a similar field does not exist, create a “Short Name” by concatenating data using the account title field. Personal accounts should have all letters or last name if possible or first 5 letters of last name and first 2 letters of first name for all names on account. Business accounts should have business name with leading words such as “the” dropped so the name can be properly placed in an alphabetized account listing. 12 DP_Acct_Title_1 Account Title Line 1: Two lines (Fields 13 & 14) are provided to enter account styling or titling of the account. These data will be used to identify the owners of the account. Please indicate the best way to obtain account title, name and address based on the characteristics of your deposit system(s). 13 DP_Acct_Title_2 Account Title Line 2: Additional Account Title line. 14 DP_Address_Line_1 Address Line 1: Two lines (Fields 15 & 16) are provided to enter the street, PO Box, suite number, etc * * * of the address. 15 DP_Address_Line_2 Address Line 2: Additional address line. 16 DP_City City: Enter the city associated with the mailing address. 17 DP_State State: Enter the state abbreviation associated with the mailing address. 18 DP_ZIP ZIP: This field allows for the ZIP+ 4 Code associated with the mailing address. If “4 Code” is not available provide 5-digit ZIP Code and leave “4 Code” blank. 19 DP_Country Country: This field should identify the country associated with the mailing address. Provide the name of the country or the standard country code. 20 DP_NA_Line_1 Name or Address Line 1: Six lines (Fields 21—26) are provided to enter the name and/or the account mailing address if your system does not distinguish particular address lines. 21 DP_NA_Line_2 Name & Address Line 2: Additional name and/or address line. 22 DP_NA_Line_3 Name & Address Line 3: Additional address line. 23 DP_NA_Line_4 Name & Address Line 4: Additional address line. 24 DP_NA_Line_5 Name & Address Line 5: Additional address line. 25 DP_NA_Line_6 Name & Address Line 6: Additional address line. 26 DP_Cur_Bal Current Balance: This amount represents the current balance in the account at the end of business on the effective date of this file. This balance should not be reduced by float or holds. For CDs and time deposits, it should reflect the principal balance plus any interest paid and available for withdrawal that is not already included in the principal (do not include accrued interest not paid). The total of all current balances in this file should reconcile to the total deposit trial balance totals or other summary reconciliation of deposits performed by the financial institution. 27 DP_Int_Rate Interest Rate: The current interest rate in effect for interest bearing accounts. 28 DP_Bas_Days Basis Days: Indicates the basis on which interest is to be paid. Valid values are: • 1 = 30/360. • 2 = 30/365. • 3 = 365/365 (actual/actual). 29 DP_Int_Type Interest Type: Indicates the type of interest to be paid. Valid values are: • S = Simple. • D = Daily Compounding. • C = Continuous Compounding. • O = Other. 30 DP_Int_Factor Interest Rate Daily Factor: This field should reflect the daily interest rate factor for generating interest. Are these data available for interest-bearing accounts? 31 DP_Acc_Int Accrued Interest: This field should reflect the amount of interest that has been earned but not yet paid to the account as of the date of the file 32 DP_Lst_Int_Pd Date Last Interest Paid: This field should indicate the date thru which interest was last paid to the account. Must be entered in MMDDYYYY format. 33 DP_Lst_Deposit Date Last Deposit: This date should reflect the last deposit transaction posted to the account. For example, a deposit that included checks and or cash. Must be entered in MMDDYYYY format. 34 DP_Open_DT Account Open Date: This date should reflect the date the account was opened. If the account had previously been closed and re-opened, this should reflect the most recent re-opened date. Must be entered in MMDDYYYY format. 35 DP_Nxt_Mat Date of Next Maturity: For CD and time deposit accounts, this is the next date the account is to mature. For non-renewing CDs that have matured and are waiting to be redeemed this date may be in the past. Must be entered in MMDDYYYY format. Representative Hold Data Elements The Hold data elements provide information related to any holds for collateral placed on an account. If an account has more than one collateral hold, additional Hold elements may be provided to help the Covered Institutions or FDIC to process holds more efficiently. Field name FDIC field description Questions/comments for the industry 1 HD_Acct_Numb Account Number The account number associated with the hold. Should be the same as the account number in Deposit Record field #1 Do we need the branch number to make this unique across all deposit accounts? 2 HD_Sub_Acct_Numb_ID Sub-Account Number: Account number field that further identifies the account. 3 HD_Hold_Amt Hold Amount: Dollar amount of the hold. 4 HD_Hold_Reason Hold Reason: Reason for the hold. Valid values are: • LN = Loan collateral hold. • OT = Other—any hold not a collateral hold. 5 HD_Hold_Desc Hold Description: Description of the hold available on the system. 6 HD_Hold_Days Hold Days: The number of days the hold was/is intended. May be used instead of an expiration date. Please specify a preference between field #6 and field #8. 7 HD_Hold_Start_Dt Hold Start Date: The date the hold was initiated. Must be entered in MMDDYYYY format. 8 HD_Hold_Exp_Dt Hold Expiration Date: The date the hold is to expire. Must be entered in MMDDYYYY format. May be used instead of number of hold days. Customer Record Held in Central Information File (“CIF”) or Central Information System (“CIS”) The Customer Record provides information related to each customer of the financial institution. Customers may have more than one deposit account, or may be partial owners of more than one deposit account. Each of the customer's accounts are associated with a customer record. If there are multiple owners of an account, multiple customer records (CIF/CIS) will be associated to the deposit account and will be associated in the deposit record (pointed to or linked by a linking file). If a linking file is required to link customer records to deposit records, please provide the program along with instructions on how to link. Field name FDIC field description Questions/comments for the industry 1 CS_Cust_Numb Customer Number: The number assigned to the customer in the Customer Information System 2 DP_Acct_Numb Account Number: The unique account number assigned by the institution 3 CS_Tax_ID Customer Tax ID Number: Provide the Tax ID number on record for the customer Do you store customer tax ID number in your customer records? If so, is there a possibility that the customer and account level tax ID numbers are different? 4 CS_Tax _Code Customer Tax ID Code: This field should identify the type of the Tax ID number of the customer. Valid values are: • S = Social Security Number. • T = Federal Tax Identification Number. • O = Other. 5 CS_Rel_Code Relationship Code: This code indicates how the customer is related to the account. Valid values are: • P = Primary Owner. • S = Secondary Owner. • B = Beneficiary. • T = Trustee. • O = Other. • U = Unknown. The CIF account is for one person or entity. That person may have more than one deposit account that is tied to the CIF number. The relationship code is given for the person or entity relating to each account the CIF is tied to. Are these data available within your customer records? 6 CS_Bene_Code Beneficiary Type Code: If the customer is considered a beneficiary, enter the type of account associated with this customer. This includes beneficiaries on retirement accounts, trust accounts, minor accounts, and payable-on-death accounts. Valid values are: • I = IRA. • T = Trust—irrevocable. • R = Trust—revocable. • M = Uniform Gift to Minor. • P = Payable on death. • O = Other. Are these data available within your customer records? 7 CS_Name Customer Name: The name of the customer. Provide in the Mapping document the typical format the bank practices for business customers and personal/individual customers, *i.e.* —Last Name first, First Name last. 8 CS_Last_Name Customer Last Name: The last name of the individual/ personal customer. 9 CS_First_Name Customer First Name: The first name of the individual/ personal customer. 10 CS_Middle_Name Customer Middle Name: The middle name of the individual/ personal customer. 11 CS_Suffix Customer Suffix: The suffix of the individual/ personal customer— *i.e.* Jr., Sr., III, etc. 12 CS_Comp_Name Customer Company Name: The company name of the business customer How are business customers reflected in your customer records? Are there multiple name/address fields? 13 CS_Address_1 Address Line 1: Two lines (Fields 13 & 14) are provided to enter the street, PO Box, suite number, etc. of the address. 14 CS_Address_2 Address Line 2: Additional address field. 15 CS_City City: Enter the city associated with the mailing address of the customer. 16 CS_State State: Enter the state abbreviation associated with the mailing address of the customer. 17 CS_ZIP ZIP: This field allows for the ZIP+ 4 Code associated with the mailing address of the customer. 18 CS_Country Country: This field should identify the country associated with the mailing address. Provide the name of the country or the standard country code. 19 CS_Birth_Dt Customer Birth Date: The birth date on record for the customer. Must be entered in MMDDYYYY format. 20 CS_Telephone Customer Telephone Number: The telephone number on record for the customer. 21 CS_Email Customer Email Address: The e-mail address on record for the customer. By order of the Board of Directors. Dated at Washington, DC, this 5th day of December, 2006. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. E6-21143 Filed 12-12-06; 8:45 am] BILLING CODE 6714-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-23871; Directorate Identifier 2006-NE-01-AD] RIN 2120-AA64 Airworthiness Directives; General Electric Company

(GE)CF6-80C2 Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for GE CF6-80C2 series turbofan engines. This proposed AD would require replacing certain installed part number (P/N) and serial number

(SN)cast titanium weld-repaired forward engine mount platforms and cast titanium forward mount yokes, with a forged titanium or a non-welded cast titanium part. This proposed AD results from the discovery of cracks, in a weld-repaired area on a forward engine mount platform and a forward engine mount yoke, found during a fluorescent penetrant inspection (FPI). These parts were weld-repaired during manufacture. We are proposing this AD to prevent cracks in the forward engine mount platform and forward engine mount yoke that could result in possible separation of the engine from the airplane. DATES: We must receive any comments on this proposed AD by January 12, 2007. ADDRESSES: Use one of the following addresses to comment on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Fax:*

(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may examine the comments on this proposed AD in the AD docket on the Internet at *http://dms.dot.gov* . FOR FURTHER INFORMATION CONTACT: James Lawrence, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7176; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send us any written relevant data, views, or arguments regarding this proposal. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2006-23871; Directorate Identifier 2006-NE-01-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of the DOT Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78) or you may visit *http://dms.dot.gov* . Examining the AD Docket You may examine the docket that contains the proposal, any comments received, and any final disposition in person at the DOT Docket Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone

(800)647-5227) is located on the plaza level of the Department of Transportation Nassif Building at the street address stated in ADDRESSES. Comments will be available in the AD docket shortly after the Docket Management Facility receives them. Discussion During an FPI inspection of the forward engine mount platform and forward engine mount yoke, an air carrier found crack indications in the forward engine mount platform and yoke, and reported the findings to GE. An audit of GE's manufacturing records revealed 25 cast titanium forward engine mount platforms, including the one found cracked, and 59 cast titanium forward engine mount yokes, had been weld-repaired at manufacture in either the pylon thrust pin hole or in the pylon attach bolt-hole region. Therefore, 25 cast titanium forward engine mount platforms and 59 cast titanium forward engine mount yokes would be affected by this proposed AD. Although the weld repairs were an approved GE practice at the time, it has since been determined that the welding results in cracking in critical areas of the forward engine mount platforms and yokes. This condition, if not corrected, could result in possible separation of the engine from the airplane. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other products of this same type design. We are proposing this AD, which would require replacing certain installed P/N and SN cast titanium weld-repaired forward engine mount platforms and cast titanium forward mount yokes with a forged titanium or a non-welded cast titanium part. Costs of Compliance There are 25 engines in service that contain the substandard forward engine mount platforms and 59 engines in service that contain the substandard forward engine mount yokes. We estimate that this proposed AD would affect 84 CF6-80C2 engines installed on airplanes of U.S. registry. We estimate that it would take 34 work-hours per engine to replace the weld-repaired cast titanium forward engine mount platforms and the weld-repaired cast titanium forward engine mount yokes. The average labor rate is $80 per work-hour. Required forward engine mount parts would cost about $12,168 per engine. Required forward engine mount yoke parts would cost about $39,560 per engine. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $2,866,720. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Under the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new airworthiness directive: **General Electric Company:** Docket No. FAA-2006-23871; Directorate Identifier 2006-NE-01-AD. Comments Due Date

(a)The Federal Aviation Administration

(FAA)must receive comments on this airworthiness directive

(AD)action by January 12, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to the following General Electric Company

(GE)turbofan engines with cast titanium assembly engine mount platforms part numbers (P/Ns) 1292M13G06, 1301M28G08, 1459M70G07, and 1846M24G04 and cast titanium assembly engine mount yokes P/Ns 9383M43G14 and 9383M43G16 installed. CF6-80C2A1 CF6-80C2A8 CF6-80C2B4 CF6-80C2B4F CF6-80C2A2 CF6-80C2A5F CF6-80C2B6 CF6-80C2B5F CF6-80C2A3 CF6-80C2B1 CF6-80C2B1F CF6-80C2B6F CF6-80C2A5 CF6-80C2B2 CF6-80C2B2F CF6-80C2B6FA These engines are installed on, but not limited to, Boeing 747, Boeing 767, and Airbus A300-600 airplanes. Unsafe Condition

(d)This AD results from the discovery of cracks in a forward engine mount platform and a forward engine mount yoke found during fluorescent penetrant inspection (FPI). We are issuing this AD to prevent cracks in the forward engine mount platform and forward engine mount yoke that could result in possible separation of the engine from the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. P/N and SN Weld-Repaired Forward Engine Mount Platforms and Forward Engine Mount Yokes Requiring Replacement

(f)Table 1 of this AD lists the P/Ns and serial numbers

(SNs)of the weld-repaired forward engine mount platforms that have a weld repair in a non-redundant area of the mount and must be replaced. Table 1.—Weld-Repaired Forward Engine Mount Platforms Requiring Replacement That Have a Weld Repair in a Non-Redundant Area of the Mount. P/Ns SNs 1292M13G06 or 1846M24G04 WACHH228 WACHH254 WACHH285 WACHH290 WACHH292 WACHH295 WACHH299 WACHH384 WACHH427 WACHH440 WACHH604 1301M28G08 WACAR292 WACAR354

(g)Table 2 of this AD lists the P/Ns and SNs of the weld-repaired forward engine mount platforms that have a weld repair in a redundant area of the mount. Because it is impossible to detect whether the mount is operating on the redundant feature, each of these mounts must be replaced. The compliance time for mounts in this category can be longer than for the mounts listed in Table 1 of this AD. Table 2.—Weld-Repaired Forward Engine Mount Platforms Requiring Replacement That Have a Weld Repair in a Redundant Area of the Mount P/Ns SNs 1292M13G06 or 1846M24G04 WACHH173 WACHH189 WACHH274 WACHH278 WACHH314 WACHH325 WACHH486 1301M28G08 WACAR294 WACAR304 WACAR353 WACAR372 1459M70G07 MTXT1282

(h)Table 3 of this AD lists the P/Ns and SNs of the weld-repaired forward engine mount yokes that have a weld repair in a redundant area of the yoke. Because it is impossible to detect whether the mount yoke is operating on the redundant feature, each of these mount yokes must be replaced. The compliance time for mounts in this category can be longer than for the mounts listed in Table 1 of this AD. Table 3.—Weld-Repaired Forward Engine Mount Yokes Requiring Replacement That Have a Weld Repair in a Non-Redundant Area of the Yoke P/Ns SNs 9383M43G14 WACV0388 WACV0394 WACV0405 WACV0406 WACV0477 WACV0498 WACV0529 WACV0556 WACV0579 WACV0581 WACV0582 WACV0600 WACV0605 WACV0617 WACV0625 WACV0627 WACV0633 WACV0645 WACV0683 WACV0703 WACV0733 WACV0737 WACV0759 WACV0775 WACV0791 WACV0799 WACV0875 WACV0883 WACV0885 WACV0909 WACV1097 WACV1615 WACV1713 WACV1753 WACV1797 WACV1867 WACV1987 WACV2131 WACV2159 WACV2185 WACV2343 WACV2511 WACV2695 WACV2707 WACV2881 WACV2899 9383M43G16 WACV0511 WACV0515 WACV0518 WACV0540 WACV0542 WACV0571 WACV0689 WACV0721 WACV0727 WACV0730 WACV0786 WACV0816 WACV0954

(i)GE advises that forward engine mount platform, P/Ns 1292M13G06 and 1846M24G04, are the same, except that P/N 1846M24G04 incorporates a previously approved field rework. This rework allows the thrust pin hole in the forward engine mount platform to be bored out to accept installation of an oversized thrust pin. GE cannot identify which SN goes with which P/N, but all SNs are affected. Welded Cast Titanium Forward Engine Mount Platform and Forward Engine Mount Yoke Removal

(j)If the P/N and SN of the forward engine mount platform listed in Table 1 and Table 2 and the forward engine mount yoke listed in Table 3 of this AD are not installed on the engine, no further action is necessary.

(k)If the P/N and SN of the forward engine mount platform listed in Table 1 of this AD is installed on the engine:

(1)Remove the forward engine mount platform from the engine within 500 cycles or 6 months, after the effective date of this AD, whichever occurs first.

(2)Information for removal of the forward engine mount platform from the engine can be found in the CF6-80C2 Engine Manual, 72-00-01, Disassembly.

(l)If the P/N and SN of the forward engine mount platform listed in Table 2 of this AD is installed on the engine:

(1)Remove the forward engine mount platform at the next shop visit, or within 4,800 cycles after the effective date of this AD, whichever occurs first.

(2)Information for removal of the forward engine mount yoke can be found in the CF6-80C2 Engine Manual, 72-00-01, Disassembly.

(m)If the P/N and SN of the forward engine mount yoke listed in Table 3 of this AD is installed on the engine:

(1)Remove the forward engine mount yoke at the next shop visit, or within 4,800 cycles after the effective date of this AD, whichever occurs first.

(2)Information for removal of the forward engine mount yoke can be found in the CF6-80C2 Engine Manual, 72-00-01, Disassembly.

(n)Replace the affected forward engine mount platform and or the affected forward engine mount yoke with a non-weld-repaired cast titanium forward engine mount platform and or the forward engine mount yoke or a forged titanium forward engine mount platform or a forged titanium forward engine mount yoke.

(o)Information for installing the forward engine mount platform and forward engine mount yoke can be found in the CF6-80C2 Engine Manual, 72-00-01, Assembly.

(p)Location of the forward engine mount platform and forward engine mount yoke and SN are illustrated in the following Figure 1. BILLING CODE 4910-13-P EP13DE06.002 BILLING CODE 4910-13-C

(q)After the effective date of this AD, do not install a weld-repaired, cast forward engine mount platform or a weld-repaired, cast forward engine mount yoke in any engine. Alternative Methods of Compliance

(r)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Issued in Burlington, Massachusetts, on December 7, 2006. Robert Ganley, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. 06-9674 Filed 12-12-06; 8:45 am]

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