Unknown. Final rule; stay of certain provisions

65,935 words·~300 min read·/register/2007/05/11/07-2323

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2007-05-11.xml --- 72 91 Friday, May 11, 2007 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Commodity Credit Corporation See Farm Service Agency See Foreign Agricultural Service See Forest Service See Natural Resources Conservation Service See Rural Housing Service See Rural Utilities Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 26772 E7-9119 Animal Animal and Plant Health Inspection Service RULES Plant-related quarantine, foreign:

Cut flowers from countries with chrysanthemum white rust, 26711 E7-9151 Army Army Department See Engineers Corps NOTICES Defense Base Closure and Realignment Act: Surplus properties; list; correction, 26867 C7-2262 Environmental statements; record of decision: Ft. Bliss, TX and NM; land use; correction, 26867 C7-2263 Blind Blind or Severely Disabled, Committee for Purchase From People Who Are See Committee for Purchase From People Who Are Blind or Severely Disabled Centers Centers for Medicare & Medicaid Services RULES Medicare:

Long-term care hospitals; prospective payment system (2008 RY); annual payment rate updates and policy changes, 26870-27029 07-2206 PROPOSED RULES Medicare: Home health prospective payment system; refinement and rate update (2008 CY); correction, 26867 C7-2167 NOTICES Agency information collection activities; proposals, submissions, and approvals, 26819 E7-9079 Coast Guard Coast Guard NOTICES Meetings: Houston/Galveston Navigation Safety Advisory Committee, 26822 E7-9060 Towing Safety Advisory Committee, 26822-26823 E7-9061 Commerce Commerce Department See Industry and Security Bureau See International Trade Administration See Minority Business Development Agency See National Institute of Standards and Technology See National Oceanic and Atmospheric Administration Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, E7-9115 26779-26780 E7-9116 Commodity Commodity Credit Corporation NOTICES Grants and cooperative agreements; availability, etc.:

Agricultural commodities; emergency and temporary storage, 26772-26774 E7-9121 Defense Defense Department See Army Department See Engineers Corps See Navy Department NOTICES Arms sales notification; transmittal letter, etc., 26789-26799 07-2330 07-2331 Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 26799 07-2254 Meetings: Science Advisory Board, 26799-26800 07-2329 Meetings; Sunshine Act, 26800 07-2361 Disability Disability Employment Policy Office NOTICES Grants and cooperative agreements; availability, etc.:

Transition and Employment for Youth with Disabilities National Technical Assistance Center, 26836-26846 E7-9117 Drug Drug Enforcement Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 26833-26835 E7-9139 E7-9140 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 26801-26803 07-2354 Grants and cooperative agreements; availability, etc.: William D. Ford Direct Loan Program, 26803-26808 07-2360 Meetings:

National Board for Education Sciences, 26808 E7-9142 Employment Employment and Training Administration NOTICES Adjustment assistance; applications, determinations, etc.: Air System Components, Inc., 26846 E7-9100 Alan White Co., E7-9103 26846-26847 E7-9105 E7-9106 Bayer Clothing Group Inc., E7-9101 E7-9109 26848 E7-9110 Medtronic Vascular, 26848 E7-9108 Primary Staffing Services, Inc., 26848-26849 E7-9104 Rayolite, 26849 E7-9111 Sony Technology Center-Pittsburgh, 26849 E7-9107 Walter Kidde Portable Equipment, Inc., 26849-26850 E7-9102 Energy Energy Department NOTICES Electricity export and import authorizations, permits, etc.:

DC Energy, LLC, 26809 E7-9083 Meetings: Environmental Management Site-Specific Advisory Board— Idaho National Laboratory, 26809-26810 E7-9084 *Applications, hearings, determinations, etc.:* Otay Mesa Energy Center, LLC, 26808 E7-9082 Engineers Engineers Corps NOTICES Environmental statements; availability, etc.: Baltimore City, MD; Patapsco River dredged material containment facility, 26800-26801 07-2338 EPA Environmental Protection Agency RULES Air quality implementation plans; approval and promulgation; various States; air quality planning; designation of areas:

California, 26718-26721 E7-8673 PROPOSED RULES Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas: Kentucky, 26759-26770 E7-9130 NOTICES Agency information collection activities; proposals, submissions, and approvals, 26810-26813 E7-9112 E7-9113 E7-9144 Air pollution control: State operating permits programs— Alaska, 26813 07-2334 Environmental statements; availability, etc.: Agency comment availability, 26814 E7-9138 Agency weekly receipts, 26814-26815 E7-9136 Meetings:

Environmental Financial Advisory Board, 26815 E7-9120 Science Advisory Board, 26815-26816 E7-9099 Reports and guidance documents; availability, etc.: Alternative asbestos control method and NESHAP method for demolition of asbestos-containing buildings; comparison, 26816-26817 E7-9098 Executive Executive Office of the President See Presidential Documents Farm Farm Service Agency NOTICES Agency information collection activities; proposals, submissions, and approvals, 26774 E7-9077 FAA Federal Aviation Administration RULES Airworthiness directives:

Pacific Aerospace Ltd., 26716-26718 E7-8993 Turbomeca Arriel, 26711-26716 E7-8991 E7-8992 Federal Highway Federal Highway Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 26862-26864 E7-9064 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, E7-9063 26817 E7-9094 Permissible nonbanking activities, 26817-26818 E7-9062 E7-9095 Foreign Foreign Agricultural Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 26774-26775 07-2323 Forest Forest Service NOTICES Environmental statements; notice of intent:

National Forest System land management planning rule; potential environmental consequences, 26775-26776 E7-9078 Olympic National Forest, WA, 26776-26777 07-2333 Meetings: Resource Advisory Committees— Ravalli County, 26777 07-2332 Recreation fee areas: Mendocino National Forest, CA; overnight rental fees, 26777-26778 07-2325 GSA General Services Administration NOTICES Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 26799 07-2254 Geological Geological Survey NOTICES Meetings:

National Earthquake Prediction Evaluation Council, 26833 07-2357 Health Health and Human Services Department See Centers for Medicare & Medicaid Services See Substance Abuse and Mental Health Services Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 26818 E7-9068 Meetings: American Health Information Community, 26818-26819 07-2328 Homeland Homeland Security Department See Coast Guard See U.S. Citizenship and Immigration Services NOTICES Meetings:

Privacy impact assessments at DHS; tutorial on how to write PIAs for Department of Homeland Security; public workshop, 26821 E7-9058 Housing Housing and Urban Development Department PROPOSED RULES Mortgage and loan insurance programs: Single family mortgage insurance— Mortgaged property; mortgagor's investment standards, 27048-27051 E7-9067 NOTICES Agency information collection activities; proposals, submissions, and approvals, 26825-26827 E7-9059 07-2320 Environmental statements; availability, etc.:

Bremerton WA; Westpark master plan redevelopment project, 26827 E7-9065 Grants and cooperative agreements; availability, etc.: Discretionary programs (SuperNOFA) Supplementary information and technical corrections, 27032-27045 07-2337 Homeless assistance; excess and surplus Federal properties, 26827-26832 E7-8820 Industry Industry and Security Bureau NOTICES Export privileges, actions affecting: Mahmood, Khalid, 26780-26781 07-2322 Interior Interior Department See Geological Survey NOTICES Committees; establishment, renewal, termination, etc.:

Climate Change Science program Committee for Synthesis and Assessment Product 1.2: Past Climate Variability and Change in Arctic and at High Latitudes, 26832 07-2326 Climate Change Science program Committee for Synthesis and Assessment Product 4.2: Thresholds of Climate Change, 26832 07-2327 Meetings: Natural Resource Damage Assessment and Restoration Advisory Committee; canceled, 26832-26833 E7-9118 International International Trade Administration NOTICES Antidumping: Brake rotors from— China, 26781-26782 E7-9132 Freshwater crawfish tail meat from— China, 26782-26783 07-2340 Justice Justice Department See Drug Enforcement Administration See Justice Programs Office Justice Justice Programs Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 26835-26836 E7-9146 Labor Labor Department See Disability Employment Policy Office See Employment and Training Administration Minority Minority Business Development Agency NOTICES Grants and cooperative agreements; availability, etc.:

Native American Business Enterprise Center Program, 26783-26787 E7-9096 NASA National Aeronautics and Space Administration NOTICES Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 26799 07-2254 National Institute National Institute of Standards and Technology NOTICES Meetings: Malcolm Baldridge National Quality Award Judges Panel, 26787-26788 E7-9145 Malcolm Baldrige National Quality Award Board of Overseers, 26788 E7-9143 NOAA National Oceanic and Atmospheric Administration RULES Endangered and threatened species:

Puget Sound steelhead; final listing determinations, 26722-26735 E7-9089 Fishery conservation and management: Atlantic highly migratory species— Atlantic billfish; tournament management measures, 26735-26741 E7-9097 PROPOSED RULES Fishery conservation and management: Northeastern United States fisheries— Yellowtail flounder, 26770-26771 E7-9092 Western Pacific fisheries— Hawaii-based charter fishery for pelagic fishes; control date, 26771 E7-9090 NOTICES Environmental statements; availability, etc.:

Beaufort and Chukchi Seas, AK; seismic surveys, 26788 E7-9093 National Science National Science Foundation NOTICES Meetings: Social, Behavioral, and Economic Sciences Advisory Committee, 26850 E7-9091 NRCS Natural Resources Conservation Service NOTICES Environmental statements; availability, etc.: Florence Flood Retarding Structure Supplemental Watershed Plan, AZ, 26778 E7-9147 Navy Navy Department NOTICES Meetings: Naval Academy Board of Visitors, 26801 E7-9085 Nuclear Nuclear Regulatory Commission NOTICES Plants and materials; physical protection:

Unescorted access to research and test reactors; fingerprinting and criminal history check requirements; correction, 26850-26852 E7-9122 *Applications, hearings, determinations, etc.:* Entergy Nuclear Operations, Inc., 26850 E7-9123 Peace Peace Corps NOTICES Agency information collection activities; proposals, submissions, and approvals, 26852 07-2324 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Meetings: Hazardous materials transportation; loading and unloading incident risk reduction; public workshop, 26864 E7-9066 Presidential Presidential Documents EXECUTIVE ORDERS Committees; establishment, renewal, termination, etc.:

Iraq Transition Assistance Office; establishment (EO 13431), 26709-26710 07-2367 Rural Rural Housing Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 26778-26779 E7-9128 RUS Rural Utilities Service PROPOSED RULES Rural broadband access loans and loan guarantees; deployment modifications, 26742-26759 E7-9021 SEC Securities and Exchange Commission NOTICES Meetings; Sunshine Act, 26852-26853 E7-9181 Self-regulatory organizations; proposed rule changes:

American Stock Exchange LLC, 26853-26854 E7-9076 International Securities Exchange, LLC, 26854-26856 E7-9070 National Association of Securities Dealers, Inc., 26856-26858 E7-9069 National Futures Association, 26858-26861 E7-9071 Options Clearing Corp., 26861-26862 E7-9086 Substance Substance Abuse and Mental Health Services Administration NOTICES Federal agency urine drug testing; certified laboratories meeting minimum standards; list, 26819-26821 E7-9087 Surface Surface Transportation Board NOTICES Railroad operation, acquisition, construction, etc.:

New York & Greenwood Lake Railway, 26865 E7-9114 Rail services abandonment: Central Railroad Co. of Indianapolis, 26865 E7-9002 Thrift Thrift Supervision Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 26865-26866 E7-9133 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Pipeline and Hazardous Materials Safety Administration See Surface Transportation Board NOTICES Aviation proceedings:

Agreements filed; weekly receipts, 26862 E7-9081 Certificates of public convenience and necessity and foreign air carrier permits; weekly applications, 26862 E7-9080 Treasury Treasury Department See Thrift Supervision Office See United States Mint MISSING FOR: U.S. Citizenship and Immigration Services U.S. Citizenship and Immigration Services NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-9124 26823-26825 E7-9125 E7-9126 E7-9127 U.S.

Mint United States Mint NOTICES American eagle platinum proof and uncirculated coins; price increase, 26866 E7-9135 Separate Parts In This Issue Part II Health and Human Services Department, Centers for Medicare & Medicaid Services, 26870-27029 07-2206 Part III Housing and Urban Development Department, 27032-27045 07-2337 Part IV Housing and Urban Development Department, 27048-27051 E7-9067 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 72 91 Friday, May 11, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 319 [Docket No. 03-016-4] RIN 0579-AC18 Cut Flowers From Countries With Chrysanthemum White Rust AGENCY:

Animal and Plant Health Inspection Service, USDA. ACTION: Final rule; stay of certain provisions. SUMMARY: We recently published a final rule amending the cut flowers regulations to establish specific requirements for the importation of cut flowers that are hosts of chrysanthemum white rust

(CWR)from countries where the disease is known to occur. The final rule had an effective date of May 3, 2007. In order to allow affected exporters of cut flowers and the national plant protection organizations of countries where CWR is known to occur additional time to make necessary preparations to comply with certain new inspection and certification procedures that will be required as a result of the final rule, we are staying a portion of the amended regulations for 30 days from the effective date of our final rule. DATES: Effective May 11, 2007, 7 CFR 319.74-2(d)(3) is stayed until June 2, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Tony Roman, Import Specialist, Commodity Import Analysis and Operation, PPQ, APHIS, 4700 River Road Unit 133, Riverdale, MD 20737-1231;

(301)734-8758. SUPPLEMENTARY INFORMATION: Background The regulations in 7 CFR part 319 prohibit or restrict the importation of plants, plant parts, and related materials to prevent the introduction of plant pests into the United States. The regulations in “Subpart—Nursery Stock, Plants, Roots, Bulbs, Seeds, and Other Plant Products,” §§ 319.37 through 319.37-14 (referred to below as the nursery stock regulations) restrict, among other things, the importation of living plants, plant parts, and seeds for propagation. Conditions governing the importation of cut flowers into the United States are contained in “Subpart-Cut Flowers” (§§ 319.74-1 through 319.74-4, referred to below as the cut flowers regulations). On April 3, 2007, we published in the **Federal Register** (72 FR 15805-15812, Docket No. 03-016-3) a final rule amending the cut flowers regulations to establish specific requirements for the importation of cut flowers that are hosts of chrysanthemum white rust

(CWR)from countries where the disease is known to occur. We also amended the nursery stock regulations to update lists of countries where CWR is known to occur. The final rule had an effective date of May 3, 2007. We recently received communications from industry representatives and the Government of Colombia expressing concern that the May 3, 2007, effective date of the final rule did not allow adequate time for those entities to prepare to comply with the new inspection and certification procedures that will be required under § 319.74-2(d)(3) of the cut flowers regulations as a result of the final rule. A delay in the implementation of those new requirements was requested. After considering those requests, we have elected to allow an additional 30 days for those entities to prepare to comply with those new requirements. To provide that additional time, we are staying § 319.74-2(d)(3) until June 2, 2007. We explained in the proposed rule that preceded our April 3, 2007, final rule, as well as in the final rule itself, that we have been administratively regulating cut flowers from countries where CWR is known to occur since 1974, and that those measures have been effective in preventing the introduction of CWR on cut flowers from those countries. During the time that § 319.74-2(d)(3) is stayed, we will continue to apply our existing administrative restrictions on cut flowers from countries where CWR is known to occur. Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. Done in Washington, DC, this 3rd day of May 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-9151 Filed 5-10-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-23809; Directorate Identifier 2005-NE-52-AD; Amendment 39-15048; AD 2007-10-07] RIN 2120-AA64 Airworthiness Directives; Turbomeca Arriel 2B Series Turboshaft Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: We are superseding an existing airworthiness directive

(AD)by adopting a new AD for the products listed above. This AD results from mandatory continuing airworthiness information

(MCAI)issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: The deterioration of the splines on the HP/LP pump assembly drive shaft may eventually interrupt fuel supply and cause uncommanded in-flight engine shutdown. The result may be an emergency autorotation landing or, at worst, an accident. Two cases of in-flight shutdown resulting from splines deterioration have been reported for the ARRIUS 2B1 engine, which has the same HP/LP pump drive design as the ARRIEL 2. These cases prompted us to require the inspection at 500 hours and each time the HMU is removed/installed. This AD modifies the content of the previous DGAC France AD F-2005-188 (EASA Approval Number 2005-6408) in adding a one time inspection within 30 operating hours from effective date of this AD as well as HMU re-installation according to a maintenance task modified to avoid this kind of wrong assembly. This has been set up following one case of improper clipping of the coupling shaft onto the drive gear shaft, which resulted in an uncommanded in-flight engine shutdown (on a twin engine rotorcraft). This precaution measure has been taken only on engines powering single engine rotorcraft. This AD requires actions that are intended to address the unsafe condition described in the MCAI. DATES: This AD becomes effective May 29, 2007. The Director of the Federal Register approved the incorporation by reference of Turbomeca Mandatory Service Bulletin No. 292 73 2812, Update No. 4, dated January 2, 2007, listed in the AD, as of May 29, 2007. We must receive comments on this AD by June 11, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *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. • *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Christopher Spinney, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; e-mail: *Christopher.spinney@faa.gov* ; telephone

(781)238-7175; fax

(HMUs)that have accumulated 450 or more hours time-since-new

(TSN)or time-since-overhaul

(TSO)on the effective date of this AD; • For HMUs that have fewer than 450 hours TSN or TSO on the effective date of this AD, visual inspection after accumulating 450 hours TSN or TSO, but before accumulating 500 hours TSN or TSO; • Repetitive inspections every time you remove or install the HMU. Differences Between the AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements take precedence over the actions copied from the MCAI. FAA's Determination of the Effective Date An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because the compliance time required to correct the unsafe condition does not allow opportunity for prior public comment. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days. Comments Invited This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2005-23809; Directorate Identifier 2005-NE-52-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because 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 we receive about this AD. 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 determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this AD: 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. Will 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 AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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 removing Amendment 39-14795 (71 FR 61634, October 19, 2006) and by adding the following new AD: **2007-10-07 Turbomeca:** Amendment 39-15048.; Docket No. FAA-2005-23809; Directorate Identifier 2005-NE-52-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective May 29, 2007. Affected ADs

(b)This AD supersedes AD 2006-21-10. Applicability

(c)This AD applies to Turbomeca Arriel 2B, 2B1, and 2B1A turboshaft engines. These engines are installed on, but not limited to, Eurocopter AS350B3 and EC130B4 helicopters. Reason

(d)European Aviation Safety Agency

(EASA)AD No. 2007-0044, dated April 27, 2007, states: The deterioration of the splines on the HP/LP pump assembly drive shaft may eventually interrupt fuel supply and cause uncommanded in-flight engine shutdown. The result may be an emergency autorotation landing or, at worst, an accident. Two cases of in-flight shutdown resulting from splines deterioration have been reported for the ARRIUS 2B1 engine, which has the same HP/LP pump drive design as the ARRIEL 2. These cases prompted us to require the inspection at 500 hours and each time the HMU is removed/installed. This AD modifies the content of the previous DGAC France AD F-2005-188 (EASA Approval Number 2005-6408) in adding a one time inspection within 30 operating hours from effective date of this AD as well as HMU re-installation according to a maintenance task modified to avoid this kind of wrong assembly. This has been set up following a one case of improper clipping of the coupling shaft onto the drive gear shaft, which resulted in an uncommanded in-flight engine shutdown (on a twin engine rotorcraft). This precaution measure has been taken only on engines powering single engine rotorcraft. Actions and Compliance

(e)Unless already done, do the following actions.

(f)Perform an initial visual inspection of the splines of the coupling assembly and the high pressure

(HP)pump drive gear shaft for wear. Use 2.A. through 2.C.(2) of the Instructions to be Incorporated of Turbomeca Mandatory Service Bulletin

(MSB)No. 292 73 2812, Update No. 4, dated January 2, 2007, as follows:

(1)Inspect within 30 hours-in-service from the effective date of this AD for engines that were previously inspected using Update 2 of MSB 292 73 2812.

(2)For engines that were not previously inspected using Update 2 of MSB 292 73 2812, inspect as follows:

(i)Inspect within 50 hours-in-service after the effective date of this AD for hydraulic mechanical units

(HMUs)that have accumulated 450 or more hours time-since-new

(TSN)or time-since-overhaul

(TSO)on the effective date of this AD. Replace the HMU if worn beyond limits.

(ii)Inspect after accumulating 450 hours TSN or TSO, but before accumulating 500 hours TSN or TSO for HMUs that have fewer than 450 hours TSN or TSO on the effective date of this AD. Replace the HMU if worn beyond limits. Repetitive Visual Inspections

(g)Thereafter, perform a visual inspection of the splines of the coupling shaft assembly and the HP pump drive gear shaft for wear every time you remove the HMU. Use 2.A. through 2.C.(2) of the Instructions to be Incorporated of Turbomeca MSB No. 292 73 2812, Update No. 4, dated January 2, 2007. Replace the HMU and coupling shaft assembly if worn beyond limits. FAA AD Differences

(h)None. Other FAA AD Provisions

(i)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Engine Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(2)*Airworthy Product:* For any requirement in this AD, to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(j)Refer to European Aviation Safety Agency AD 2007-0044, dated February 27, 2007, for related information.

(k)Contact Christopher Spinney, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; e-mail: *Christopher.spinney@faa.gov* ; telephone

(781)238-7175; fax

(781)238-7199, for more information about this AD. Material Incorporated by Reference

(l)You must use Turbomeca Mandatory Service Bulletin No. 292 73 2812, Update No. 4, dated January 2, 2007, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Turbomeca, 40220 Tarnos—France; Tel

(33)05 59 74 40 00; Telex 570 042; Fax

(33)05 59 74 45 15.

(3)You may review copies at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call

(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Burlington, Massachusetts, on May 4, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-8991 Filed 5-10-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28009; Directorate Identifier 2007-NE-16-AD; Amendment 39-15047; AD 2007-10-06] RIN 2120-AA64 Airworthiness Directives; Turbomeca Arriel 2B1 Turboshaft Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: We are adopting a new airworthiness directive

(AD)for the products listed above. This AD results from mandatory continuing airworthiness information

(MCAI)issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: Two cases of flameout have been reported on Arriel 2B1 engines: One when lowering collective pitch on ground at landing and one when switching from Flight Position to idle Position on ground. Both flameout events are explained as follows: In case of stepper motor loss of steps to a value below the “level 1 failure” detection threshold, the fuel flow of the anti-flameout limit can be reduced. The reduction can be sufficient to cause an engine flameout when decreasing rapidly the demand for power (it can therefore also happen in-flight). This condition may lead to an uncommanded in-flight shutdown. On a single-engine helicopter, the result may be an emergency autorotation landing or, at worst, an accident. To prevent this, software version 5.02 (TU 144C) increases the anti-flameout limit in the event of small stepper motor loss of steps (below the “level 1 failure” detection threshold). This AD requires actions that are intended to address the unsafe condition described in the MCAI. DATES: This AD becomes effective May 29, 2007. The Director of the Federal Register approved the incorporation by reference of Turbomeca Mandatory Service Bulletin

(MSB)No. 292 73 2144, dated January 5, 2007, listed in the AD as of May 29, 2007. We must receive comments on this AD by June 11, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(781)238-7175; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD 2007-0085, dated April 2, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: Two cases of flameout have been reported on Arriel 2B1 engines: One when lowering collective pitch on ground at landing and one when switching from Flight Position to idle Position on ground. Both flameout events are explained as follows: In case of stepper motor loss of steps to a value below the “level 1 failure” detection threshold, the fuel flow of the anti-flameout limit can be reduced. The reduction can be sufficient to cause an engine flameout when decreasing rapidly the demand for power (it can therefore also happen in-flight). This condition may lead to an uncommanded in-flight shutdown. On a single-engine helicopter, the result may be an emergency autorotation landing or, at worst, an accident. To prevent this, software version 5.02 (TU 144C) increases the anti-flameout limit in the event of small stepper motor loss of steps (below the “level 1 failure” detection threshold). You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Turbomeca has issued Mandatory Service Bulletin No. 292 73 2144, dated January 5, 2005. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all the information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. This AD requires downloading DECU software version 5.02 as soon as practicable, but no later than August 31, 2007. Differences Between the AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements take precedence over the actions copied from the MCAI. FAA's Determination of the Effective Date An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule. The compliance time needed to correct the unsafe condition requires action as soon as practicable after the effective date of this AD, but no later than August 31, 2007. This short compliance time does not afford the opportunity for prior public comment. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days. Comments Invited This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28009; Directorate Identifier 2007-NE-16-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because 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 we receive about this AD. 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 determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this AD: 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. Will 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 AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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 AD: **2007-10-06 Turbomeca:** Amendment 39-15047; Docket No. FAA-2007-28009; Directorate Identifier 2007-NE-16-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective May 29, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Turbomeca Arriel 2B1 turboshaft engines. These engines are installed on, but not limited to, Eurocopter AS 350 B3 and EC 130 B4 single-engine helicopters. Reason

(d)European Aviation Safety Agency

(EASA)AD No. 2007-0085, dated April 2, 2007, states: Two cases of flameout have been reported on Arriel 2B1 engines: one when lowering collective pitch on ground at landing and one when switching from Flight Position to idle Position on ground. Both flameout events are explained as follows: In case of stepper motor loss of steps to a value below the “level 1 failure” detection threshold, the fuel flow of the anti-flameout limit can be reduced. The reduction can be sufficient to cause an engine flameout when decreasing rapidly the demand for power (it can therefore also happen in-flight). This condition may lead to an uncommanded in-flight shutdown. On a single-engine helicopter, the result may be an emergency autorotation landing or, at worst, an accident. To prevent this, software version 5.02 (TU 144C) increases the anti-flameout limit in the event of small stepper motor loss of steps (below the “level 1 failure” detection threshold). Actions and Compliance

(e)Unless already done, do the following actions.

(1)As soon as practicable, but no later than August 31, 2007, modify the digital electronic control unit

(DECU)by downloading the TU144C software version 5.02, using the Instructions to be Incorporated of Turbomeca Mandatory Service Bulletin

(MSB)No. 292 73 2144, dated January 5, 2007.

(2)Send Turbomeca the DECU replacement compliance certificate, as specified in paragraph 2D(1)(a)3 of Turbomeca MSB No. 292 73 2144, dated January 5, 2007. FAA AD Differences

(f)None. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Engine Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to European Aviation Safety Agency AD 2007-0085, dated April 2, 2007, for related information.

(i)Contact Christopher Spinney, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; e-mail: *Christopher.spinney@faa.gov* ; telephone

(781)238-7175; fax

(781)238-7199, for more information about this AD. Material Incorporated by Reference

(j)You must use Turbomeca Mandatory Service Bulletin No. 292 73 2144, dated January 5, 2007, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Turbomeca, 40220 Tarnos—France; Tel

(33)05 59 74 40 00; Telex 570 042; Fax

(33)05 59 74 45 15.

(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Burlington, Massachusetts, on May 4, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-8992 Filed 5-10-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27859; Directorate Identifier 2007-CE-033-AD; Amendment 39-15049; AD 2007-10-08] RIN 2120-AA64 Airworthiness Directives; Pacific Aerospace Limited Model 750XL Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule; request for comments. SUMMARY: We are adopting a new airworthiness directive

(AD)for the products listed above. This AD results from mandatory continuing airworthiness information

(MCAI)issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: * * *failure of the Autopilot System Computer resulting in the possibility of an out of trim condition, which may lead to loss of aircraft control * * * This AD requires actions that are intended to address the unsafe condition described in the MCAI. DATES: This AD becomes effective June 15, 2007. On June 15, 2007 the Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD. We must receive comments on this AD by June 11, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *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. • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Karl Schletzbaum, Aerospace Engineer, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. The streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion The Civil Aviation Authority of New Zealand, which is the aviation authority for New Zealand, has issued DCA/750XL/12A, drafted: March 27, 2007, effective date: March 29, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: * * *failure of the Autopilot System Computer resulting in the possibility of an out of trim condition, which may lead to loss of aircraft control * * * The MCAI requires disconnection of the autopilot, inspection of the pitch servo, and modification of the autopilot pitch trim circuit. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Pacific Aerospace Limited has issued Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Currently within the United States there are no known Pacific Aerospace Limited Model 750XL airplanes with an S-Tec X55 autopilot system installed. There are no products of this type currently registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these products are placed on the U.S. Register in the future. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the AD. Comments Invited Since there are currently no domestic operators of this product, notice and opportunity for public comment before issuing this AD are unnecessary. This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-27859; Directorate Identifier 2007-CE-033-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because 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 we receive about this AD. 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 determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

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

(3)Will 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 AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends14 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 AD: **2007-10-08 Pacific Aerospace Limited:** Amendment 39-15049; Docket No. FAA-2007-27859; Directorate Identifier 2007-CE-033-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective June 15, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Model 750XL airplanes, serial numbers 125, 126, and 127, certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 22: Autopilot. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: * * * failure of the Autopilot System Computer resulting in the possibility of an out of trim condition, which may lead to loss of aircraft control* * * Actions and Compliance

(f)Unless already done, do the following actions before further flight.

(1)Modify the autopilot pitch trim circuit with additional protective features following Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007.

(2)Inspect the Pitch Servo to confirm part number (P/N) 108-15-P1 is installed following Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007.

(i)If Pitch Servo P/N 108-15-P1 is installed, no further action is necessary.

(ii)If Pitch Servo P/N 108-15-P1 is not installed, replace the Pitch Servo with P/N 108-15-P1 following Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows:

(1)The MCAI requires an interim action of disconnecting the autopilot following Pacific Aerospace Limited Alert Service Bulletin PACSB/XL/001, dated February 16, 2007. Since there are no products of this type currently registered in the United States, and Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007, supersedes Pacific Aerospace Limited Alert Service Bulletin PACSB/XL/001, dated February 16, 2007, we are not requiring disconnection of the autopilot. Instead we require the autopilot comply with the terminating actions in Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007.

(2)The MCAI allows modification of the pitch trim circuit within 150 hours time-in-service. Since there are no products of this type currently registered in the United States, we are requiring modification of the pitch trim circuit before a domestic airworthiness certificate can be issued. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Small Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Karl Schletzbaum, Aerospace Engineer, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ), the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to MCAI Civil Aviation Authority of New Zealand AD DCA/750XL/12A, drafted: March 27, 2007, effective date: March 29, 2007; and Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007, for related information. Material Incorporated by Reference

(i)You must use Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/025, dated March 5, 2007, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Pacific Aerospace Limited, Hamilton Airport, Private Bag HN3027, Hamilton, New Zealand; telephone:

(64)7-843-6144; fax:

(64)7-843-6134.

(3)You may review copies at the FAA, Central Region, Office of the Regional Counsel, 901 Locust, Room 506, Kansas City, Missouri 64106; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . Issued in Kansas City, Missouri on May 4, 2007. Charles L. Smalley, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-8993 Filed 5-10-07; 8:45 am] BILLING CODE 4910-13-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R09-OAR-2007-0101; FRL-8308-4] Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes: California AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is granting a request submitted by the State to redesignate the South Coast from nonattainment to attainment for the CO National Ambient Air Quality Standards (NAAQS). EPA is also approving a state implementation plan

(SIP)revision for the South Coast nonattainment area in California as meeting the Clean Air Act

(CAA)requirements for maintenance plans for carbon monoxide (CO). EPA is finding adequate and approving motor vehicle emission budgets, which are included in the maintenance plan. Finally, EPA is approving the California motor vehicle inspection and maintenance (I/M) program as meeting the low enhanced I/M requirements for CO in the South Coast. DATES: *Effective Date:* This rule is effective on June 11, 2007. ADDRESSES: Copies of the documents relevant to this action are available for public inspection during normal business hours at EPA Region 9's Air Planning Office (AIR-2), 75 Hawthorne Street, San Francisco, CA 94105-3901. Due to increased security, we suggest that you call at least 24 hours prior to visiting the Regional Office so that we can make arrangements to have someone meet you. Electronic Availability This document and our proposed rule, which was published on February 14, 2007, are also available at *www.regulations.gov* for docket number EPA-R09-OAR-2007-0101. FOR FURTHER INFORMATION CONTACT: David Jesson, U.S. EPA Region 9, 415-972-3961, *david.jesson@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document, the terms “we,” “us,” and “our” mean U.S. EPA. Table of Contents I. Proposed Action II. Public Comments III. Final Action IV. Statutory and Executive Order Reviews I. Proposed Action On February 14, 2007 (72 FR 6986), we proposed to approve the 2005 Carbon Monoxide Redesignation Request and Carbon Monoxide Maintenance Plan for the South Coast Air Basin (Maintenance Plan) as meeting the requirements of CAA sections 107(d)(3)(E) and 175A. We also proposed to approve and find adequate the motor vehicle emissions budgets (MVEBs) submitted with the Maintenance Plan. We proposed to approve the request by the State of California to redesignate the area to attainment for CO under the provisions of CAA section 107(d)(3)(E). Section 107(d)(3)(E) authorizes the EPA Administrator to redesignate areas to attainment if the area has attained the NAAQS due to permanent and enforceable emission reductions, and the approved SIP for the area meets all of the applicable requirements of CAA section 110 (basic requirements applicable to SIPs generally), Part D (special SIP requirements applicable to nonattainment areas), and 175A (SIP requirements for maintenance areas). As part of our proposed determination that California has met applicable Part D provisions, we proposed to adapt to CO nonattainment areas the provisions of our Clean Data Policy, which was initially established for ozone (see discussion at 72 FR 6989). Under the Clean Data Policy, certain CAA Part D requirements—including the requirements for developing attainment demonstrations, reasonable further progress

(RFP)plans, reasonably available control measures

(RACM)and contingency measures—no longer apply because the area has already attained the NAAQS. Finally, because our interim approval of California's I/M program for CO in the South Coast expired on August 7, 1998, California submitted a demonstration that the I/M program meets the low-enhanced requirements applicable to the South Coast CO nonattainment area (see discussion in section III.B.4. We proposed to approve that demonstration. II. Public Comments Our February 14, 2007 proposed rule provided a 30-day public comment period, which closed on March 16, 2007. We received no comments on our proposal during this period. III. Final Action We are taking final action to redesignate the South Coast from nonattainment to attainment for the CO National Ambient Air Quality Standards (NAAQS) under CAA section 107(d)(3)(E). We are approving the following SIP revision as meeting the Clean Air Act

(CAA)requirements for maintenance plans for carbon monoxide

(CO)under CAA section 175A: *2005 Carbon Monoxide Redesignation Request and Carbon Monoxide Maintenance Plan for the South Coast Air Basin,* adopted by the SCAQMD on March 4, 2005, and adopted and submitted by the CARB on February 24, 2006. 1 1 A letter from CARB dated August 11, 2006, contained information related to the enhanced I/M program, but we are not incorporating this letter in the approved SIP. We are approving Appendix V, page V-5-4, Table 5-2—“Carbon Monoxide Emissions (tons/day) Projected from 1993 through 2000 for the South Coast Air Basin,” in the *1997 CO Plan for the South Coast* , adopted by SCAQMD on November 15, 1996, and adopted and submitted by CARB on February 5, 1997, as meeting the requirements of CAA section 187(b)(2) relating to transportation control measures to offset emissions associated with growth in vehicle miles traveled and vehicle trips. We are finding adequate and approving under CAA section 176(c) the following motor vehicle emission budgets included in the maintenance plan: 2888 tons per day of CO for 2005, and 2137 tons per day of CO for 2010, 2015, and 2020. We are approving the State's demonstration that the California motor vehicle inspection and maintenance (I/M) program meets the low enhanced I/M requirements for CO in the South Coast under CAA section 187(a)(6). The State's I/M program submittal of January 22, 1996, remains an approved part of the SIP, following its approval on January 8, 1997 (62 FR 1150). IV. Statutory and Executive Order Reviews Under Executive Order 12866 (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. For this reason, this action is also not subject to Executive Order 13211, (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves changes to state law as meeting Federal requirements, and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 97249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state plan implementing a Federal Standard. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The 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 the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a major rule as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 10, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Carbon monoxide, Intergovernmental relations, Reporting and recordkeeping requirements. 40 CFR Part 81 Environmental protection, Air pollution control, National parks, Wilderness areas. Dated: April 24, 2007. Wayne Nastri, Regional Administrator, Region 9. 40 CFR parts 52 and 81 are amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart F—California 2. Section 52.220 is amended by adding subparagraph (c)(247)(i)(A)(6) and adding paragraph (c)(346) to read as follows: § 52.220 Identification of plan.

(c)* * *

(247)* * *

(i)* * *

(A)* * * ( *6* ) Appendix V, page V-5-4, Table 5-2—“Carbon Monoxide Emissions (tons/day) Projected from 1993 through 2000 for the South Coast Air Basin.”

(346)New and amended plans for the following AQMD were submitted on February 24, 2006, by the Governor's designee.

(i)Incorporation by reference.

(A)South Coast Air Quality Management District (SCAQMD).

(1)2005 Carbon Monoxide Redesignation Request and Maintenance Plan for the South Coast Air Basin, as adopted by SCAQMD on March 4, 2005, and by California Air Resources Board on February 24, 2006. PART 81—[AMENDED] 1. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart C—[Amended] 2. In § 81.305, the table “California—Carbon Monoxide” is amended by revising the entry for “Los Angeles-South Coast Air Basin Area” to read as follows: § 81.305 California. California—Carbon Monoxide Designated area Designation Date 1 Type Classification Date Type * * * * * * * Los Angeles-South Coast Air Basin Area 6/11/07 Attainment Los Angeles County (part)—that portion of Los Angeles County which lies south and west of a line described as follows: 1. Beginning at the Los Angeles-San Bernardino County boundary and running west along the township line common to Township 3 North and Township 2 North, San Bernardino Base and Meridian; 2. Then north along the range line common to Range 8 West and Range 9 West; 3. Then west along the township line common to Township 4 North and Township 3 North; 4. Then north along the range line common to Range 12 West and Range 13 West to the southeast corner of Section 12, Township 5 North and Range 13 West; 5. Then west along the south boundaries of Sections 12, 11, 10, 9, 8, and 7, Township 5 North and Range 13 West to the boundary of the Angeles National Forest which is collinear with the range line common to Range 13 West and Range 14 West; 6. Then north and west along the Angeles National Forest boundary to the point of intersection with the township line common to Township 7 North and Township 6 North (point is at the northwest corner of Section 4 in Township 6 North and Range 14 West); 7. Tthen west along the township line common to Township 7 North and Township 6 North; 8. Then north along the range line common to Range 15 West and Range 16 West to the southeast corner of Section 13, Township 7 North and Range 16 West; 9. Then along the south boundaries of Sections 13, 14, 15, 16, 17, and 18, Township 7 North and Range 16 West; 10. Then north along the range line common to Range 16 West and Range 17 West to the north boundary of the Angeles National Forest (collinear with the township line common to Township 8 North and Township 7 North); 11. Then west along the Angeles National Forest boundary to the point of intersection with the south boundary of the Rancho La Liebre Land Grant; 12. Then west and north along this land grant boundary to the Los Angeles-Kern County boundary. Orange County: Riverside County (part)—that portion of Riverside County which lies to the west of a line described as follows: 1. Beginning at the Riverside—San Diego County boundary and running north along the range line common to Range 4 East and Range 3 East, San Bernardino Base and Meridian; 2. Then east along the township line common to Township 8 South and Township 7 South; 3. Then north along the range line common to Range 5 East and Range 4 East; 4. Then west along the township line common to Township 6 South and Township 7 South to the southwest corner of Section 34, Township 6 South, Range 4 East; 5. Then north along the west boundaries of Sections 34, 27, 22, 15, 10, and 3, Township 6 South, Range 4 East; 6. Then west along the township line common to Township 5 South and Township 6 South; 7. Then north along the range line common to Range 4 East and Range 3 East; 8. Then west along the south boundaries of Sections 13, 14, 15, 16, 17, and 18, Township 5 South, Range 3 East; 9. Then north along the range line common to Range 2 East and Range 3 East to the Riverside-San Bernardino county line. San Bernardino County—that portion of San Bernardino County which lies south and west of a line described as follows: 1. Beginning at the San Bernardino-Riverside County boundary and running north along the range line common to Range 3 East and Range 2 East, San Bernardino Base and Meridian; 2. Then west along the township line common to Township 3 North and Township 2 North to the San Bernardino—Los Angeles County boundary. * * * * * * * 1 This date is November 15, 1990, unless otherwise noted. [FR Doc. E7-8673 Filed 5-10-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 223 [Docket No. 070123015-7086-02; I.D. 031006D] RIN 0648-AU43 Endangered and Threatened Species: Final Listing Determination for Puget Sound Steelhead AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: We, NMFS, are issuing a final determination to list the distinct population segment

(DPS)of steelhead ( *Oncorhynchus mykiss* ) in Puget Sound, Washington, as a threatened species under the Endangered Species Act (ESA). We intend to issue final protective regulations and propose critical habitat for this DPS in separate rulemakings. DATES: The effective date of this rule is June 11, 2007. ADDRESSES: NMFS, Protected Resources Division, 1201 NE Lloyd Boulevard, Suite 1100, Portland, OR 97232. FOR FURTHER INFORMATION CONTACT: Steve Stone, NMFS, Northwest Region, at

(503)231-2317; or Marta Nammack, NMFS, Office of Protected Resources, at

(301)713 1401. Reference materials regarding these determinations are available upon request or on the Internet at *http://www.nwr.noaa.gov* . SUPPLEMENTARY INFORMATION: Background Steelhead Life History Steelhead is the name commonly applied to the anadromous form of the biological species *O. mykiss* . The present distribution of steelhead extends from Kamchatka in Asia, east to Alaska, and south along the Pacific coast to the U.S.-Mexico border (Busby *et al.* , 1996; 67 FR 21586; May 1, 2002). *O. mykiss* exhibit the most complex life-history of any species of Pacific salmonid. *O. mykiss* can be anadromous (“steelhead”) or freshwater residents (“rainbow” or “redband” trout), and under some circumstances, they can yield offspring of the alternate life-history form. Anadromous *O. mykiss* can spend up to 7 years in fresh water prior to smoltification (the physiological and behavioral changes required for the transition to salt water), and then spend up to 3 years in salt water prior to migrating back to their natal streams to spawn. *O. mykiss* may spawn more than once during their life span (iteroparous), whereas the Pacific salmon species generally spawn once and die (semelparous). Within the range of West Coast steelhead, spawning migrations occur throughout the year, with seasonal peaks of activity. In a given river basin there may be one or more peaks in migration activity, and these “runs” are usually named for the season in which the peak occurs (e.g., winter, spring, summer, or fall steelhead). Steelhead can be divided into two basic reproductive ecotypes, based on the state of sexual maturity at the time of river entry and duration of spawning migration (Burgner *et al.* , 1992). The summer or “stream-maturing” type enters fresh water in a sexually immature condition between May and October, and requires several months to mature and spawn. The winter or “ocean-maturing” type enters fresh water between November and April with well-developed gonads and spawns shortly thereafter. In basins with both summer and winter steelhead runs, the summer run generally occurs where habitat is not fully utilized by the winter run, or where an ephemeral hydrologic barrier separates them, such as a seasonal velocity barrier at a waterfall. Summer steelhead usually spawn farther upstream than winter steelhead (Withler, 1966; Roelofs, 1983; Behnke, 1992). The Puget Sound steelhead DPS includes more than 50 stocks of summer- and winter-run fish, the latter being the most widespread and numerous of the two run types (Washington Department of Fish and Wildlife (WDFW), 2002). Hatchery steelhead production in Puget Sound is widespread and focused primarily on the propagation of winter-run fish derived from a stock of domesticated, mixed-origin steelhead (the Chambers Creek Hatchery stock) originally native to a small Puget Sound stream that is now extirpated from the wild. Hatchery summer-run steelhead are also produced in Puget Sound; these fish are derived from the Skamania River in the Columbia River Basin. The majority of hatchery stocks are not considered part of this DPS because they are more than moderately diverged from the local native populations (NMFS, 2005). Resident *O. mykiss* occur within the range of Puget Sound steelhead but are not part of the DPS due to marked differences in physical, physiological, ecological, and behavioral characteristics (71 FR 15666; March 29, 2006). Listing Determinations Under the ESA We exercise ESA jurisdiction over most marine and anadromous fishes, and are responsible for determining whether West Coast salmon and steelhead warrant listing as threatened or endangered species under the ESA (16 U.S.C. 1531 *et seq.* ). Section 3 of the ESA defines “species” as including “any subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature.” The term “distinct population segment” is not recognized in the scientific literature. On February 7, 1996, we and the U.S. Fish and Wildlife Service adopted a joint policy for recognizing DPSs under the ESA (DPS Policy; 61 FR 4722). As described in our proposed rule (71 FR 15666; March 29, 2006), we apply the DPS policy in delineating species of West Coast *O. mykiss* for consideration under the ESA. The policy adopts criteria for determining when a group of vertebrates constitutes a DPS: the group must be discrete from other populations and it must be significant to its taxon. A group of organisms is discrete if it is “markedly separated from other populations of the same taxon as a consequence of physical, physiological, ecological, and behavioral factors.” Significance is evaluated with respect to the taxon (species or subspecies). See 70 FR 67132 (November 4, 2005; “Proposed Evaluation of Significance under the DPS Policy”), and 71 FR 836 (January 5, 2006; “ *General Comments on the Consideration of Resident O. Mykiss: Determination of Species* ”) On June 28, 2005, we published a new policy for the consideration of hatchery-origin fish in ESA listing determinations (“Hatchery Listing Policy;” 70 FR 37204). Under the Hatchery Listing Policy, hatchery stocks are considered part of a DPS if they exhibit a level of genetic divergence relative to the local natural population(s) that is no more than what occurs within the DPS (70 FR at 37215; June 28, 2005). If a DPS as a whole warrants listing as threatened or endangered, the hatchery stocks considered part of the DPS will be included in the listing determination. The ESA requires us to determine whether any species is endangered or threatened because of any of the following five factors:

(1)The present or threatened destruction, modification or curtailment of its habitat or range;

(2)overutilization for commercial, recreational, scientific, or educational purposes;

(3)disease or predation;

(4)the inadequacy of existing regulatory mechanisms; or

(5)other natural or manmade factors affecting its continued existence (section 4(a)(1)(A)-(E)). The ESA defines an endangered species as one that is in danger of extinction throughout all or a significant portion of its range, and a threatened species as one that is likely to become endangered in the foreseeable future throughout all or a significant portion of its range. We are to make ESA listing determinations based solely on the best available scientific information after conducting a review of the status of the species and taking into account any efforts being made by states or foreign governments to protect the species. When evaluating the ESA section 4(a)(1) factors we focus on whether and to what extent a given factor represents a threat to the future survival of the species. When we consider protective efforts we assess whether and to what extent they address the identified threats and so ameliorate a species' risk of extinction. The overall steps we follow in implementing this statutory scheme are to:

(1)delineate the species under consideration;

(2)review the status of the species;

(3)consider the ESA section 4(a)(1) factors to identify threats facing the species;

(4)assess whether certain protective efforts mitigate these threats; and

(5)predict the species' future persistence. As noted above, as part of our listing determinations we must consider efforts being made to protect a species, and whether these efforts ameliorate the threats facing the species and reduce risks to its survival. Some protective efforts may be fully implemented, and empirical information may be available demonstrating their level of effectiveness in conserving the species. Other protective efforts are new, not yet implemented, or have not demonstrated effectiveness. We evaluate such efforts using the criteria outlined in the Policy for Evaluating Conservation Efforts (“PECE”; 68 FR 15100; March 28, 2003) to determine their certainty of implementation and effectiveness. Previous ESA Reviews and Findings In 1996 we reviewed the status of West Coast steelhead. As part of this review we determined that steelhead in Puget Sound did not warrant listing under the ESA (61 FR 41541; August 9, 1996). Subsequently we received and accepted a petition to re-evaluate the status of Puget Sound steelhead (70 FR 17223; April 5, 2005). We reviewed the new information and on March 29, 2006, published a proposed rule to list the Puget Sound steelhead DPS as threatened under the ESA (71 FR 15666). The DPS was proposed to include all naturally spawned anadromous winter-run and summer-run steelhead populations, in streams in the river basins of the Strait of Juan de Fuca, Puget Sound, and Hood Canal, Washington, bounded to the west by the Elwha River (inclusive) and to the north by the Nooksack River and Dakota Creek (inclusive), as well as the Green River natural and Hamma Hamma winter-run steelhead hatchery stocks. This proposal was informed by the conclusions of scientists on the Biological Review Team

(BRT)who assessed the overall viability of this DPS. Based on this assessment, the BRT concluded that Puget Sound steelhead are likely to become endangered within the foreseeable future throughout all of their range. We also concluded that, at present, protective efforts in Puget Sound do not substantially mitigate the factors threatening the DPS's future viability, nor do they ameliorate the BRT's assessment of extinction risk. Additional details pertaining to these findings and the information reviewed for this DPS can be found in the documents cited above as well as agency status reviews (Busby *et al.* , 1996; NMFS, 2005). On February 7, 2007 (72 FR 5648), we proposed to issue protective regulations for Puget Sound steelhead under section 4(d) of the ESA. For species listed as threatened, section 4(d) of the ESA requires the Secretary of Commerce (Secretary) to issue such regulations as are deemed necessary and advisable to provide for the conservation of the species. Such 4(d) protective regulations may prohibit, with respect to threatened species, some or all of the acts that section 9(a) of the ESA prohibits with respect to endangered species. Both the section 9(a) prohibitions and section 4(d) regulations apply to all individuals, organizations, and agencies subject to U.S. jurisdiction. The 4(d) regulations we proposed are contingent on a final listing decision, and any finalized 4(d) rule may prohibit the take of Puget Sound steelhead except for specified categories of activities determined to be adequately protective of these fish. Summary of Comments Received in Response to the Proposed Rule We solicited public comment on the proposed listing of Puget Sound steelhead for a total of 238 days and held one public hearing in Seattle, Washington (71 FR 15666, March 29, 2006; 71 FR 28294, May 16, 2006). We also sought technical review of the scientific information underlying the proposed listing determination from seven independent experts. In response to the proposed listing we received over 30 comments by fax, standard mail, and e-mail. The majority of comments received were from interested individuals who submitted e-mails or letters. Comments were also submitted by federal, state and tribal natural resource agencies, fishing groups, environmental organizations, conservation organizations, and individuals with expertise in Pacific salmonids. The vast majority of respondents supported listing Puget Sound steelhead under the ESA. We also received comments from four of the independent experts from whom we had requested technical review of the scientific information underlying the March 2006 proposed listing determination. Copies of the full text of comments received are available upon request (see ADDRESSES and FOR FURTHER INFORMATION CONTACT ). Below we address the comments received that pertain to the listing determination for Puget Sound *steelhead* . The issues raised and our responses are organized into six general categories:

(1)General Comments;

(2)Comments on the Consideration of Hatchery Steelhead;

(3)Comments on the Consideration of Resident *O. mykiss* ;

(4)Comments on the Assessment of Extinction Risk;

(5)Comments on the Factors Affecting the Species; and

(6)Comments on the Consideration of Protective Efforts/Mitigating Factors. General Comments and Comments on Process *Comment 1:* Most commenters supported listing Puget Sound steelhead under the ESA, and many expressed concern over the species' decline and the potential impacts of that decline on business and recreation. Some comments expressed concern over the fact that the current status review for Puget Sound steelhead was completed only 10 years after the previous review which found that a listing determination was not warranted. *Response:* The BRT status review describes the various types of new information that are available since the review by Busby *et al.* (1996). In addition, there have been considerable scientific findings and policy development regarding the role of resident and hatchery *O. mykiss* in steelhead DPSs (see 70 FR 37204, June 28, 2005; 70 FR 67131, November 4, 2005; 71 FR 834, January 5, 2006). All of these considerations have been factored into this updated status review and support our determination that Puget Sound steelhead now warrant listing as a threatened species under the ESA. We recognize that steelhead are a prized gamefish in Puget Sound and that their decline has affected businesses and recreational pursuits. We will work with all stakeholders to help ensure that recovery planning proceeds apace so that Puget Sound steelhead continue to provide the spectrum of ecological, cultural, and economic benefits that underscore their status as the state fish of Washington. *Comment 2:* Two commenters argued against listing steelhead at this time and instead recommended that we make a finding that listing is warranted but precluded or classify this DPS as a species of concern. One contended that because other ESA-listed species in Puget Sound (e.g., Chinook salmon) share habitat with this DPS, an additional listing in the region would add another layer of regulation with little resultant benefit to the species. Additionally, this commenter believed that listing steelhead would divert resources away from implementing a recovery plan for Chinook salmon. *Response:* Our decision to list Puget Sound steelhead is based on the required assessments identified in section 4 of the ESA and guided by agency policies such as the PECE (68 FR 15100; March 28, 2003). Once a species has been proposed for listing, section 4(b)(6)(A) of the ESA does not allow us to issue a warranted but precluded finding. Such a finding is only permissible at the time of a proposed rule (see section 4(b)(3)(B)), not a final rule. Species of concern are those about which we have concerns regarding status and threats, but for which insufficient information is available to indicate a need to list the species under the ESA. This is not the case for Puget Sound steelhead, as evidenced by the findings of the BRT, and our assessment of the factors contributing to the decline of steelhead and efforts being made to protect the species. We recognize that steelhead and threatened Puget Sound Chinook salmon share many streams and that actions benefitting one species would in many cases benefit the other. However, this fact did not alter our conclusions based upon our analysis of the threats facing West Coast steelhead under section 4(a)(1) of the ESA. Also, the species' overlap is not complete and there are a substantial number of independent streams, and upstream and tributary habitats in major river systems where only steelhead reside. In addition, steelhead use habitats differently and at different times than other salmonids. As noted elsewhere in this final rule, we expect that the recently adopted recovery plan for Puget Sound Chinook (Shared Strategy Development Committee, 2007) will accrue benefits to steelhead as well as expedite recovery planning for this DPS. Listing steelhead could divert some resources in the short term; however, comments and information received from WDFW, Indian tribes, and other co-managers and stakeholders have made it clear that there is a strong commitment to improving steelhead populations and their management in Puget Sound and statewide. We too are committed to helping find and provide the resources needed to help foster active recovery planning for all Puget Sound salmonids. *Comment 3:* One commenter suggested that the final rule would be more useful if it used a different format addressing the DPS's historic condition, current status with respect to viable salmonid population

(VSP)parameters (McElhany *et al.* , 2000), management action impacts (past and projected), and which management actions are needed to improve DPS viability. This commenter believed that this would provide a more accurate and informative discussion of issues that are fundamental to developing any eventual recovery plan. *Response:* Because this final rule is a listing determination and not a recovery plan, we have chosen instead to structure this rule in a manner that is consistent with the statutory framework and previous ESA listing decisions for West Coast salmonids. However, in our listing analysis we have identified current threats to the species' viability and considered the efficacy of efforts being made to protect the species. This has given us and Puget Sound stakeholders, many of whom actively participated in developing the recovery plan for Puget Sound Chinook (Shared Strategy Development Committee, 2007), a head start on recovery planning for Puget Sound steelhead. We also understand that the watershed-based resource management plans for steelhead currently under development in Puget Sound (WDFW, 2007) will incorporate VSP parameters and provide the detail required to identify management actions needed to promote recovery of steelhead. *Comment 4:* One commenter recommended that we solicit the views of the British Columbia Ministry of Environment. *Response:* We notified the British Columbia Ministry of Environment of the proposed ESA listing of Puget Sound steelhead but did not receive comments or information from them. However, one of the peer reviewers of the BRT's status review is a fisheries scientist with British Columbia's Ministry of Water, Land and Air Protection and an expert on steelhead biology. *Comment 5:* One commenter felt that the proposed listing fails to fully consider the tribes' role as managers and overlooks the significant costs on tribal resource management agencies and harvest opportunities associated with listing Puget Sound steelhead under the ESA. *Response:* We recognize that the tribes have longstanding cultural ties to steelhead and steelhead fisheries, and that a number of tribes have treaty-based co-management rights and responsibilities. And we acknowledge that steelhead are of economic importance to Indian people and embody cultural, ceremonial, and social dimensions of tribal life to the degree that the species is a significant symbol of tribal identity (NMFS, 2004). We also understand that an ESA listing of Puget Sound steelhead may impact some tribal fisheries and resource management agencies, at least in the short term. Steelhead recovery will only succeed with the active involvement of affected tribes. We will continue to recognize the tribes as vital co-managers of this important resource in the hope that steelhead runs can be restored as quickly as possible to meet treaty obligations and the needs of present and future generations. *Comment 6:* A peer reviewer and several commenters expressed concern about the lack of reliable data for this DPS. Another commenter expressed concerns about the adequacy of the peer review process as well as the lack of a co-manager review of the BRT's report. *Response:* While more data would help resolve some areas of uncertainty, we have sufficient data to assess the ESA status of Puget Sound steelhead. Moreover, as required by section 4(b)(1)(A) of the ESA, we have relied on the best scientific and commercial data available to make this listing determination. We requested and received such data from a variety of interested parties, including state and tribal co-managers. These data and other information are cited in this final rule, agency status reviews (Busby *et al.* , 1996; NMFS, 2005), our proposed rule (71 FR 15666; March 29, 2006), and in the comments received on the latter and contained in our agency files (available for public inspection; see ADDRESSES and FOR FURTHER INFORMATION CONTACT ). Several of the 13 BRT members are acknowledged experts on steelhead biology in the Pacific Northwest, some with direct experience with the species in Puget Sound. As noted elsewhere in this final rule, we sought technical review of the scientific information underlying the March 2006 proposed listing determination from seven independent experts. All of the experts were selected based on their knowledge of steelhead biology. Four of them provided us with comments that were subsequently considered by the BRT and reflected in the agency's status review (NMFS, 2005). We also received and evaluated information from state and tribal co-managers on the proposed rule and the BRT's report. *Comment 7:* Several commenters requested that NMFS re-open the public comment period after WDFW publishes an anticipated white paper pertaining to steelhead management. These commenters felt that the public should have the opportunity to review WDFW's management plan to determine what effect, if any, it may have on the extinction risks to Puget Sound steelhead and the NMFS listing of the DPS. *Response:* On August 25, 2006, we received a letter from WDFW requesting our review of a July 21, 2006, draft report titled “Oncorhynchus mykiss: Assessment of Washington State's Anadromous Populations and Programs” (WDFW, 2006a). This report--commonly referred to as the steelhead “white paper"--was also made available to the general public for comment. We provided comments to WDFW on this report, noting that overall we found it to be a very comprehensive and useful compilation of what is known about the biology and management histories of Washington's steelhead populations. However, we did not believe that the availability of this report warranted re-opening the comment period on our proposed listing because the report was essentially a synthesis of what is known (much of which we had already reviewed) about Washington steelhead. In addition, the report was primarily designed to lay the foundation for the development of improved management plans. In our proposed rule we stated that “[i]f WDFW completes its new steelhead management plan prior to the publication of the final rule we anticipate considering it in developing our final listing determination.” However, a final Puget Sound steelhead management plan has not yet been developed. *Comment 8:* One letter requested clarification of named populations in the 2005 status review ( i.e., if references to the Lake Washington winter run include steelhead in the Cedar River). *Response:* Population information on Lake Washington winter run steelhead was provided by WDFW. Lake Washington steelhead data included information on fish spawning in the Cedar River, Issaquah Creek, and Bear Creek, with the Cedar River contribution providing the majority of the escapement (number of adults that return to the spawning grounds). The BRT also reviewed fish passage information from the Lake Washington Ship Canal fish ladder, which would include fish spawning throughout the basin. The WDFW Salmonid Stock Inventory database identifies a number of tributaries, including the Cedar River, in the Lake Washington Basin where spawning steelhead have been observed. *Comment 9:* One letter requested clarification of the location of “impassible barriers” and suggested the definition include an approximate location. *Response:* In our status review (NMFS, 2005) we identified some of the major natural and manmade barriers to steelhead (e.g., Snoqualmie Falls and Elwha Dam), emphasizing the general role that longstanding barriers play in isolating the anadromous and resident life forms. During our review it was not possible to identify the specific locations of all impassable barriers, in particular natural waterfalls and velocity/stream gradient barriers. Our biologists (see ADDRESSES) or those from the tribes or state and Federal agencies can assist in determining whether a specific barrier is passable or not. *Comment 10:* One commenter noted that fish passage above Landsburg dam became possible in September 2003, not 2002 as stated in the BRT's report (NMFS, 2005). *Response:* The statement in the BRT report should have stated that “Most of the information relevant to this question is from the Cedar River, where research is ongoing on resident and anadromous fish below and above Landsburg Dam, opened to steelhead migrating upstream in 2003, after decades of isolation.” *Comment 11:* We received one correction comment, to add the South Fork Tolt River to the list of rivers under the Federal Energy Regulatory Commission agreement for instream flow management. *Response:* The statement in the proposed rule (at 71 FR 15677; March 29, 2006) should have read, “Instream flows are also provided through agreements negotiated with the Federal Energy Regulatory Commission on the Skagit, Sultan, Snoqualmie, South Fork Tolt, and Nisqually rivers.” *Comment 12:* A few commenters provided comments and information relevant to making a critical habitat designation for Puget Sound steelhead. *Response:* We will consider this information as we prepare a proposal to designate critical habitat for this DPS. Comments on the Consideration of Hatchery Steelhead *Comment 13:* Several commenters expressed strong concerns about the negative impacts of hatchery steelhead in this DPS, urging that much more aggressive steps be taken to reduce these impacts. Some commenters disagreed with the decision to include Green River natural and Hamma Hamma winter-run hatchery steelhead in the DPS. They argued that protecting hatchery steelhead under the ESA by listing them alongside wild steelhead was inappropriate, particularly because research suggests that hatchery fish have a negative impact on the productivity of wild steelhead. In contrast, one commenter recommended hatchery steelhead be included in the DPS if they are derived from a local wild stock. *Response:* On June 28, 2005, we finalized a new policy for the consideration of hatchery-origin fish in ESA listing determinations (“Hatchery Listing Policy;” 70 FR 37204). Under the Hatchery Listing Policy hatchery stocks are considered part of an evolutionarily significant unit

(ESU)if they exhibit a level of genetic divergence relative to the local natural population(s) that is no more than what occurs within the ESU (70 FR 37204; June 28, 2005, at 37215). The considerations that informed the Hatchery Listing Policy for ESUs are equally valid for steelhead DPSs. We acknowledge that hatchery fish can have a negative impact on naturally-produced fish, and in our proposed rule we noted that adverse impacts from hatchery programs may be contributing to the declines in natural steelhead productivity. However, the Hatchery Listing Policy is based in part on the recognition that important components of the evolutionary legacy of West Coast salmon and steelhead can be found in hatchery stocks, and that many hatchery stocks are derived from, and not significantly diverged from, the naturally spawning stocks. We developed a test for including hatchery stocks in an ESU based upon a consideration of “whether a particular hatchery stock reflects an ESU's 'reproductive isolation' and 'evolutionary legacy'” (70 FR 37204; June 28, 2005, at 37208). Those tests are equally applicable to determining whether hatchery stocks reflect the discreteness and significance of steelhead DPSs. As described in our proposed rule and consistent with recent final listing determinations for 16 West Coast salmon ESUs (70 FR 37160; June 28, 2005) and for 10 West Coast steelhead DPSs (71 FR 834; January 5, 2006), we believe it is appropriate to list two locally-derived hatchery steelhead populations (Green River natural and Hamma Hamma winter-run) along with naturally-produced steelhead in the Puget Sound DPS. This decision is informed by our Hatchery Listing Policy, the conclusions of the Salmon/Steelhead Hatchery Assessment Group (SSHAG; NMFS, 2005), and the deliberations of the BRT. The BRT concluded that these hatchery stocks meet the Hatchery Listing Policy's test for inclusion in the DPS. As a separate matter, the BRT also explicitly considered both the potential positive and negative effects of hatchery production on the viability of Puget Sound steelhead. The BRT felt that the Green River natural and Hamma Hamma winter-run hatchery programs have the potential to benefit natural steelhead populations in their respective rivers, but acknowledged that both programs are relatively recent and have not collected sufficient data to demonstrate any contributions with any certainty. The BRT did note that the Hamma Hamma program does appear to have successfully increased the number of natural spawners in the population (although the relative increase in natural spawners is large, the absolute increase in natural spawners is modest), but the success of the program cannot be fully evaluated until the naturally produced offspring of the hatchery-origin fish return and reproduce. *Comment 14:* Several commenters contended that past and present harvest and hatchery management have essentially eliminated the important early returning life-history component of wild steelhead populations in this DPS. They argue that, despite WDFW's intent to temporally separate the hatchery run from the wild run, data demonstrate that hatchery males overwinter, residualize (remain in fresh water), and ultimately breed with wild females. This commenter contended that we failed to adequately evaluate the association of steelhead hatchery programs with overutilization of Puget Sound steelhead. This commenter believed that any evaluation of the risks of adverse genetic and ecological impacts from hatchery programs on the distribution, productivity, and diversity of Puget Sound steelhead should be made in the context of that fundamental relationship between hatchery management and overutilization. *Response:* There is some information available on the historical return and spawn timing of Puget Sound steelhead, but it is limited to catch records and anecdotal information. The BRT was unaware of any documentation suggesting a spawning habitat preference exhibited by the early component of the winter run. The BRT was concerned about the decline (or elimination) of this early component to life history diversity, but was unable to establish the magnitude of this loss. The existence of an early run component of naturally-produced steelhead was discussed by the BRT in relation to the effects of a directed harvest of early run, mass-marked (adipose-clipped) hatchery steelhead (i.e., Chamber's Creek winter run). The BRT reviewed information on hatchery-wild interactions, specifically the potential for interbreeding between hatchery and naturally-produced fish in Washington coastal streams. This information was important in the BRT's increased concern about hatchery effects relative to the 1996 BRT Status Review (Busby *et al.* , 1996). *Comment 15:* One commenter questioned the assertion that the Chambers Creek hatchery stock is out-of-basin for all waterways in the DPS. This commenter pointed out that originally, the Chambers Creek stock was a composite of wild fish trapped from a variety of Puget Sound rivers, including the Green River. Therefore, Chambers Creek hatchery fish may not be out-of-basin for all waterways, such as the south sound rivers. The commenter requested that NMFS clarify how much composite stock or hatchery selection is necessary for a stock to change to the point of being considered out-of-basin. *Response:* The commenter is correct that the Chambers Creek hatchery stock (actually several broodstocks derived from the original Chambers Creek broodstock) is technically not an “out-of-basin” stock. Crawford

(1979)reviews the history of this stock, including the evolution of the Chambers Creek and “egg bank” steelhead program. But this does not change our conclusion that it has sufficiently diverged from the remainder of the DPS such that it should no longer be considered part of this DPS. The BRT reviewed the findings of the SSHAG (NMFS, 2005) for this broodstock and noted that the intentional and unintentional selection of life history traits was a major factor in the SSHAG evaluation. The advancement in run- and spawn-timing of the Chambers Creek winter-run steelhead (almost 2 months) and acceleration of the onset of smoltification (1 year instead of 2 years) have dramatically altered the reproductive connectivity between the hatchery-origin and naturally-spawning adults. Additionally, the sole use of hatchery-origin fish for hatchery broodstocks greatly increases the potential for hatchery domestication, and there is evidence that Chambers Creek winter-run steelhead have a poor rate of natural spawning success (NMFS, 2005). Given the paucity of information on hatchery steelhead life-history traits in the natural environment and their fitness effects on naturally-spawning populations, it is not possible to “quantify” a threshold for exclusion. This is why we convened a SSHAG to review the best available information and provide us with conclusions regarding the relationship of hatchery fish to DPS composition and viability. *Comment 16:* Several commenters raised questions about the origin of steelhead currently spawning naturally in the Lake Washington system, particularly the Cedar River and Sammamish watershed. Some of these commenters believe that steelhead currently spawning naturally in this system are derived from Chambers Creek hatchery plants and not naturally spawning fish native to this system. *Response:* Genetic analysis by Marshall *et al.*

(2006)on resident and anadromous *O. mykiss* in Lake Washington indicates that there are significant genetic differences between native Cedar River fish and Chambers Creek-derived hatchery winter steelhead. We therefore consider the naturally spawning populations in this system to be part of the Puget Sound DPS. In their review, the BRT cautioned that although WDFW's conclusion that there is little overlap in spawning between natural and hatchery stocks of winter steelhead throughout the ESU is generally supported by available evidence, for many basins it is based largely on models and assumptions regarding run timing rather than on empirical data. *Comment 17:* One commenter provided information correlating increasing hatchery smolt releases with declining adult returns, suggesting a “density barrier” to population expansion. This commenter also expressed concerns about hatchery smolts remaining in fresh water rather than migrating to the ocean (residualizing), and preying upon or spawning with natural steelhead (particularly by residual precocious males). Another commenter echoed many of these concerns related to the release of millions of hatchery fish into this DPS, and one believed that we should have given greater attention to this issue in the status review and requested that at a minimum we do so in the final listing determination. *Response:* The BRT expressed concerned about the increasing numbers and overall proportion of hatchery-origin smolts released into rivers in this DPS; however, there is not sufficient information on behavioral and resource competition, predation, or other ecological interactions to assess the “density barrier” assertion. Factors such as declining freshwater, estuarine, and marine productivity would independently or in combination with hatchery effects produce the same effect. The myriad of factors that could produce the trends observed make it very difficult to associate correlated responses with causal factors. We will continue to address issues related to artificial propagation as we proceed with ESA consultations, permitting, and recovery planning in Puget Sound. Comments on the Consideration of Resident O. mykiss *Comment 18:* Several commenters disagreed with our application of the DPS Policy criteria in separating the resident and anadromous forms of *O. mykiss* in this DPS. One commenter cited the U.S. Fish and Wildlife Service's

(FWS)listing of bull trout ( *Salvelinus confluentus* ; 64 FR 58910, November 1, 1999) as precedent for listing together the different life history forms because all are essential to the survival of the DPS. Another commenter felt resident fish should be considered in the context of protective measures for steelhead. Other commenters supported the listing of the two life forms separately, but encouraged further research to increase our understanding of the interactions between the two. These latter commenters encouraged NMFS to consider the relationship between resident and anadromous *O. mykiss* in the course of other ESA activities (e.g., recovery planning). *Response:* In our recently updated listing determinations for West Coast steelhead (71 FR 834; January 5, 2006), we responded to similar comments regarding our application of the DPS policy in delineating “species” of *O. mykiss* under the ESA. The reader is referred to these determinations (see 71 FR 834; January 5, 2006, at 836 through 841) for more detailed information and discussion of the above and other issues relating to our delineation of steelhead DPSs. NMFS did not include resident and anadromous *O. mykiss* in the same DPS because under the DPS policy, a population or group of populations is considered a DPS if it is first “discrete” from other such population units, and then only if it is “significant” to the taxon as a whole. Whether a given life form contributes to the viability of the species does not necessarily determine whether that life form is “markedly separated” from other components of the species. For example, a subspecies will often contribute significantly to the overall viability of a species but still be markedly separated from other subspecies. In its 1999 listing determination for the Coastal-Puget Sound bull trout DPS (64 FR 58910; November 1, 1999) the U.S. Department of the Interior found that the resident, migratory, anadromous, amphidromous, fluvial, and adfluvial life-history forms were not discrete because they interbreed. DOI concluded, as the commenter asserts, that reproductive exchange and genetic similarity between different life-history forms requires that they be included as parts of the same DPS, regardless of any “marked separation” in phenotypic traits. While we acknowledge that the expression of a range of life histories in bull trout and other fish species (e.g., coastal cutthroat trout) may raise similar issues to those we confronted in delineating DPSs of *O. mykiss* , there are important differences between *O. mykiss* and these other species. In addition to expressing anadromy (the life-history pattern in which fish spend a large portion of their life cycle in the ocean and return to fresh water to breed), bull trout and coastal cutthroat trout express amphidromy (migration between fresh and salt water that is for feeding and overwintering, as well as breeding). While the anadromous and resident forms of *O. mykiss* differ clearly in ocean-migratory behavior and associated biological factors, the migratory behavior and associated physical, physiological, and ecological factors are comparatively blurred among the life-history forms and stages of bull trout and coastal cutthroat trout. Accordingly, application of the DPS policy to these various species may very well produce different results due to the varying level of separation among their life-history forms. Efforts to protect resident *O. mykiss* could be considered in the context of efforts being made to protect the species, because the health of related resident *O. mykiss* populations may have a bearing on the viability of the anadromous populations. No information was presented, however, that would lead us to conclude that any protective efforts for rainbow trout are likely to change the steelhead DPS's risk of extinction. It is essential to improve our understanding of the interactions between the anadromous and resident life-history forms of *O. mykiss* . Additional scientific research could elucidate the factors affecting reproductive exchange between the two life forms, as well as their respective contributions to the viability of *O. mykiss* as a whole. These considerations may prove to be important in the context of recovery planning and assessing risks faced by the *O. mykiss* species as a whole. At present, there is insufficient information to evaluate whether, under what circumstances, and to what extent the resident form may contribute to the viability of steelhead over the long term (NMFS, 2005; Recovery Science Review Panel, 2004; Good *et al.* , 2005; Independent Scientific Advisory Board, 2005). *Comment 19:* One letter commented on the BRT's statement that rivers west of the Cascades rarely support resident rainbow trout populations unless the watersheds have been significantly modified, and resident native populations appear to be relatively rare above natural barriers. This commenter argued that rainbow trout are present in many rivers west of the Cascade Mountains in those areas where the anadromous life history form is not dominant, including the upper Skagit River tributaries and the upper Snoqualmie River. One commenter felt it might be appropriate to add a discussion of the unique adfluvial (migrating between lakes and streams) life history pattern of a portion of the Cedar River *O. mykiss* . *Response:* Rainbow trout are present in some of these western Washington systems, but they are rare above natural barriers to anadromous migration. Although there is potential for resident trout to function in a temporary manner to help maintain *O. mykiss* populations through extreme periods of low marine survival, this life history form is unlikely to maintain connections to other populations a critical role for the anadromous life history in contributing to the ESU's diversity and viability. Evidence for the level of interbreeding between resident and anadromous forms is limited and appears to vary considerably between coastal and inland *O. mykiss* populations, as well as on a basin by basin basis. It is possible that this interaction may provide a short-term demographic resiliency, although loss of the anadromous form would result in a catastrophic decline in diversity, and probably also spatial structure. Ultimately, the BRT's task was assessing the longer term risk of extinction facing Puget Sound steelhead, and to accomplish this task it focused on the primary data available: trends in abundance and productivity of anadromous fish. Although the *O. mykiss* life history appears to be extraordinarily plastic, and resident and anadromous fish both may produce the alternate life history form, the extent to which resident fish produce anadromous adults is largely unknown. In addition, the freshwater “trout niche” in Puget Sound is already occupied primarily by native coastal cutthroat trout, and the extent that resident *O. mykiss* alone can maintain self-sustaining natural populations in direct competition with cutthroat trout is unknown. The adfluvial life form in the Cedar River appears to be somewhat unique to Puget Sound, and may be related to the highly modified nature of the river basin, especially its redirection into Lake Washington from the Green River Basin and the longstanding effects of Landsburg Dam in dividing the watershed. Comments on the Assessment of Extinction Risk *Comment 20:* Most commenters supported a listing of Puget Sound steelhead as a threatened species, although one recommended endangered status due to concerns about efforts being made to protect the species. One commenter provided data for five steelhead populations that indicate the largest populations of winter-run steelhead have experienced a period of pronounced decline in abundance, recruitment, and productivity beginning around 1989 and continuing to the present. One commenter suspected that the declines are likely to be DPS-wide. This commenter expressed concern that there is no information on the productivity of summer populations within the DPS and that this lack of information supports an endangered listing. *Response:* We have reviewed the comments and new information provided by commenters and believe that Puget Sound steelhead do warrant listing as a threatened species. The BRT was presented with information received during the comment period and concluded that there was no basis for changing their conclusion that Puget Sound steelhead are likely to become endangered within the foreseeable future throughout all of their range. Nor was the BRT aware of any new or forthcoming information that would warrant a reassessment of this conclusion. Consistent with the commenter's concern about DPS-wide declines, we note that the BRT stated that “marked declines in natural run size are evident in all areas a pattern that reflects widespread reduced productivity of natural steelhead” (NMFS, 2005). *Comment 21:* A peer reviewer noted that the BRT's risk assessment was based on expert opinion due to the lack of sufficient empirical data. This reviewer noted that such data constraints limit the review and its veracity but acknowledged that the BRT's methods cannot be faulted. He noted that several times “there was the mention of negative impact of hatchery fish on wild, and that hatchery fish have apparently made no contribution to wild adult returns. I suspect this is largely speculation, albeit accurate in my view.” He also made several specific recommendations:

(1)Explaining how data were obtained and any uncertainties with the data;

(2)including an analysis from WDFW's Snow Creek studies (especially with respect to post-smolt migration pathways);

(3)including the cited report by Light

(1987)in the references;

(4)evaluating cutthroat hybridization with steelhead; and

(5)including an assessment of how climate change may affect Puget Sound steelhead. The latter recommendation was also made by another commenter, noting that the decline in steelhead abundance has coincided with a period of high hydrological variability during which fish are vulnerable to closely timed high and low flow events. *Response:* The BRT relied heavily on catch and escapement data provided by WDFW for its risk analyses; this information constitutes the best available data, but there is still considerable uncertainty in the data, particularly for some populations. The commenter is correct that our knowledge regarding the contribution of hatchery fish to natural steelhead reproduction in Puget Sound is limited. The conclusion that hatchery programs threaten the viability of Puget Sound steelhead is based on several steelhead studies in the Pacific Northwest published between 1977 and 2007, all of which show a depression in the reproductive performance of domesticated or out-of-basin hatchery steelhead spawning in the wild. The BRT concluded that efforts by hatchery managers to prevent natural spawning by Chambers Creek winter-run and Skamania summer-run hatchery fish were unlikely to be completely effective, with potentially adverse consequences. The BRT concluded that opportunities for genetic and ecological interactions between hatchery and wild steelhead in Puget Sound were substantial, with significant potential to reduce natural productivity. Moreover, the fixed March 15 threshold used by WDFW to separate spawning censuses of hatchery and wild fish confounds evaluations of those potential hatchery fish effects (i.e., spawning hatchery and wild fish may overlap later than that date), thus increasing scientific uncertainties. Until studies more clearly identify the effects of interbreeding between hatchery and wild steelhead, prudent management would reduce the opportunity for interaction between hatchery and wild fish (e.g., by eliminating “outplanting” and by using hatchery broodstocks genetically and phenotypically similar to local wild fish). Available research on Snow Creek winter-run steelhead represents one of Puget Sound's longest term, watershed-scale studies on this species. However, the BRT did not formally include Snow Creek winter-run steelhead in its analysis of DPS risk because this population exhibits some sharp differences from other steelhead on the Olympic Peninsula and Puget Sound. The BRT concluded that the Snow Creek system is not representative of the level of human development seen in many other Puget Sound streams. The watershed enters Discovery Bay, an eastern Strait of Juan de Fuca tributary, so steelhead do not have to pass through a long fjord on their way to and from their freshwater home as do other Puget Sound stocks. There is some development along Snow Creek (including one of the most extensive clear-cuts in Washington state), but the stream lacks the urban and industrial changes seen in many other areas. Additionally, Snow Creek is a relatively small lowland watershed, lacking many of the features and species interactions found in larger river basins. Based on these differences, the BRT members were reluctant to extrapolate trends in the Snow Creek steelhead population to those of southern Puget Sound, for example. The BRT examined Snow Creek steelhead abundance data to evaluate their patterns relative to other Puget Sound steelhead trends, and it appears that the recent trend in abundance of Snow Creek steelhead is similar to that observed for several Puget Sound steelhead populations, including some surrounding populations from the Strait of Juan de Fuca; Snow Creek steelhead show a recent sharp decline in adult abundance with a very recent modest upswing. The BRT discussed rainbow/steelhead and cutthroat hybridization in its review. Although specific areas with relatively high incidences of hybrid fish have been identified, it is unclear how extensive this occurrence is. Additionally, in the absence of a historical baseline, it is unclear if the hybridization observed represents a natural process or one that is influenced by anthropogenic activities such as fish introductions or habitat disturbances. This topic is in need of concerted research before an evaluation in the listing context would be meaningful. The BRT did not specifically evaluate how climate change might affect Puget Sound steelhead because such an evaluation would be highly speculative given the state of available evidence. In the proposed rule, we acknowledged that variability in ocean and freshwater conditions can have profound impacts on the productivity of salmon and steelhead populations. Natural climatic conditions have at different times exacerbated or mitigated the problems associated with degraded and altered riverine and estuarine habitats. We conclude that ocean-climate change and variability is a factor contributing considerable uncertainty to the viability of the Puget Sound steelhead DPS into the foreseeable future. *Comment 22:* One commenter presented findings indicating that populations in the Skagit and Snohomish have a low risk of extinction. This commenter contended that winter-run steelhead in the Skagit, Snohomish-Skykomish, Pilchuck, Snoqualmie, and Green rivers and Morse Creek and other Strait of Juan de Fuca streams had a relatively low risk of extinction (WDFW, 2006b). *Response:* The BRT did not find that extinction risk was high in the Skagit and Snohomish River winter-run populations; what the BRT found was that abundance had declined significantly in both since the 1996 review and that declining trends were evident in recent years. This pattern contrasted with that evidence in the previous review of steelhead in Puget Sound (Busby *et al.* , 1996), and was cause for concern among all BRT members. The other populations mentioned are small and therefore vulnerable to unpredictable events, even though their risk of imminent extinction is also probably low. The BRT based its conclusion about extinction risk for Puget Sound steelhead primarily on:

(1)The widespread declines in adult abundance (total run size), despite significant reductions in harvest in recent years (strongly implying declining productivity of naturally spawning steelhead);

(2)the threats to diversity posed by use of two hatchery stocks of steelhead inconsistent with wild stock diversity throughout the DPS;

(3)the declining diversity in the DPS, including the uncertain but weak status of summer-run fish in the DPS; and

(4)a reduction in spatial structure for steelhead in the DPS. The most striking difference in the BRT and WDFW reviews was the use of total run size by the BRT and escapement by WDFW. NMFS believes that by not including harvest, the WDFW analysis masks declines in overall productivity. The lack of a recent resurgence in abundance of Puget Sound steelhead since ocean conditions in the region have generally improved and since harvest rates have declined are key to understanding the factors that limit steelhead productivity in this DPS. *Comment 23:* One commenter questioned our analysis of abundance trends for Puget Sound steelhead, noting that it differed from recent analyses by WDFW (in particular for the Skagit River) (WDFW, 2006a; WDFW, 2006b). Several other commenters expressed concern that WDFW's computed escapement goals were too low and ignored historical records indicating that some streams supported considerably larger runs of steelhead. Two commenters believed that the historical run size of Puget Sound steelhead may have been twice that estimated by the BRT. *Response:* The BRT's risk assessment was based primarily on total run size, not escapement. The BRT believes that trends in run size are a better indicator of productivity and abundance of naturally reproducing fish; in addition, run size trends are independent of any changes in WDFW's escapement goals for Puget Sound steelhead populations. With a few exceptions, there was little information that the BRT could use to develop statistical trends in abundance. A form of population viability analysis was provided by one commenter to the BRT for five of the largest steelhead populations in Puget Sound. This was possible because relatively complete adult abundance data (in the form of expanded redd counts) and age structure were known for these populations. The BRT reviewed these analyses and concluded that they were useful in corroborating additional analyses of trends in productivity and abundance. The BRT also concluded that the utility of this approach was limited by the use of an average age structure taken from historical data to estimate recruits and by failing to account for errors in estimates of spawner abundance. Concerns regarding the use of an average age structure in evaluating recruitment relationships may be relatively minimal compared to other factors, but the BRT felt that the fact that this age structure is based on much older data than the spawner-recruit time series may impose undue bias on the analyses. Although the run size and escapement data used in the commenter's analysis for the five populations were recent (through 2001-2003, depending on the population), the age structures were not. The age structure data were obtained from scales and tags recovered in the late 1980s and early 1990s, a period not coincident with the abundance data. Failing to account for temporal variability in age structure can bias estimates of productivity by overestimating recruitment in small cohorts and underestimating recruitment in large cohorts. Furthermore, and more importantly, the errors surrounding the estimates of spawner abundance remain unknown (but are probably quite high, e.g., the proportion of redds dug by hatchery-origin steelhead). Thus, the BRT concluded that the commenter's analysis had significant limitations. In its own analysis, the BRT could not avoid all these sources of bias but tried to minimize them by basing calculations on empirical age structure distributions that varied over time, where they were available, and identifying where this was not possible. The BRT also noted that the fit of the stock-recruit data in the commenter's analysis was not evaluated quantitatively, and the BRT therefore attempted to fit these data to alternative models. In general, the fit of the data to either Ricker or Beverton-Holt stock-recruit models was very poor; for each of the five populations, a simple density-independent model such as the random-walk model with trend provided fits equally as good. Nevertheless, the fits to the random-walk model with trend were also poor. The BRT therefore used several analyses to look for emergent patterns in the abundance and productivity trends, including estimates of trend, population growth rates, and estimates of recruits per spawner. Analysis of population growth rates does not account for density dependent productivity; however, the BRT's ability to detect such factors with the available data was limited because of the scientific uncertainties and assumptions associated with the spawner-recruit relationships. Nevertheless, the conclusions drawn from the BRT's analyses were remarkably similar to those drawn from the commenter's analyses, despite limitations in the methods of both of them. Both the BRT and commenter's analyses express concern over low abundance and eroding productivity in even the largest and most robust populations in the DPS. Any effort to model future population trends should account for recurring cyclic effects (such as ocean productivity cycles caused by decadal oscillations and marine upwelling) and long-term trends (such as freshwater habitat changes). The available data do not allow us to identify and partition these types of effects, which led the BRT to employ the more conservative approach of not assuming population improvements as a result of potential future cyclic improvements in ocean productivity. Historical estimates of Puget Sound steelhead run size were based on expansions of commercial harvest (in pounds or fish) in the late 1800s and early 1900s. Given the uncertainties in estimating the catch, fishing effort, and historical average size, it is not surprising that there would be substantial differences in estimates. Nevertheless, estimates derived by the BRT and those submitted by the commenters indicate that there has been a substantial decline in the abundance of naturally-produced steelhead in the last 100 years. *Comment 24:* One commenter requested that we clarify our use of the term “viability” as it pertains to salmonids. *Response:* As described in McElhany *et al.* (2000), a viable salmonid population is an independent population of any Pacific salmonid (genus Oncorhynchus) that has a negligible risk of extinction due to threats from demographic variation (random or directional), local environmental variation, and genetic diversity changes (random or directional) over a 100-year time frame. *Comment 25:* One commenter presented findings indicating that the number of winter steelhead spawners was above the state's management goal in 67 percent of the watersheds assessed, the number of winter steelhead spawners had or were expected to increase relative to the review by Busby *et al.* (1996), or a substantial number of resident *O. mykiss* were present. In contrast, other commenters believed that state management goals for steelhead had been set too low and would suggest that Puget Sound steelhead are healthier than they really are. Two commenters addressed the spatial distribution of steelhead and one of these contended that the percentage of the historical habitat occupied by the Puget Sound steelhead DPS is consistent with other non-listed DPSs. *Response:* We have not reviewed in detail the state's management goals for winter steelhead and cannot assess whether the levels are appropriate to ensure the long-term viability of the DPS. Such a review should also consider summer steelhead and will need to occur in partnership with our state and tribal co-managers during ESA consultations and permitting reviews, and with all interested stakeholders during recovery planning. We do note that more than half of the watersheds identified as above management goals for winter steelhead have relatively small runs, each averaging 102 fish or less from 2002-2005 (WDFW, 2006b). We also note that the BRT did express concerns over reductions in escapement goals for steelhead runs in several watersheds, including the relatively large run in the Skagit River. The BRT reviewed the most recent abundance data for 2005 and the projections for 2006 (WDFW, 2006b). These data, which were not available prior to our proposed rule, indicate that winter steelhead abundance in 2005 was actually lower than the 2004 estimates in every watershed reviewed. Moreover, in all but one watershed, the 2006 projections are also lower than the 1991-1994 average abundance considered in our earlier status review (Busby *et al.* , 1996). These data do not suggest a lessening of abundance-related risk for this DPS. The evidence for a substantial number of resident fish appears to be restricted to a single watershed (Lake Washington). As noted in a previous response, there is insufficient information to evaluate whether, under what circumstances, and to what extent the resident form may contribute to the viability of steelhead over the long term. Additional scientific research is needed to more fully understand the roles and interactions of the anadromous and resident life forms. The percentage of historical habitat still occupied by Puget Sound steelhead is one of many parameters that we considered in making this final listing determination. While the data referenced by one commenter (WDFW, 2006a) suggest that this percentage is high relative to other ESA-listed DPSs, the data also indicate that watersheds with some of the highest production potential (e.g., the Skagit River and Green/Duwamish River) have potentially suffered the greatest loss in habitat. In addition, these data do not reveal the related and significant decline in the quality of remaining habitat highlighted by the BRT (NMFS, 2005) and in our proposed rule (71 FR 15666; March 29, 2006). Comments on the Factors Affecting the Species *Comment 26:* Several commenters agreed with our determination that habitat loss is a principal factor limiting the viability of the DPS. One commenter believed that we failed to focus on habitat limiting factors particular to steelhead (e.g., susceptibilities during extended freshwater rearing) and believed that degraded habitat exerts the greatest influence on steelhead survival. Other commenters believed that we provided a superficial treatment of the biological and demographic conditions of the DPS and as a result presented a poorly grounded conclusion that habitat modification and destruction is the principal limiting factor for Puget Sound steelhead. One commenter believed that some habitat restoration efforts are misguided (e.g., large woody debris placement) and actually damage the river channel. *Response:* We believe that we have accurately portrayed the role that habitat loss and modification have played in the decline of this DPS. Habitat issues were discussed at length by the BRT, and several of the 13 BRT members (including scientists from four Federal agencies) have extensive knowledge working with steelhead habitat issues in Puget Sound. We also base our assessment on more than 8 years of consultations for other ESA-listed species, namely Chinook and summer-run chum salmon, that share many habitat areas with Puget Sound steelhead. The vast majority of our ESA consultations involve evaluating actions that affect salmonid habitat. We have also been actively engaged in the development of numerous ESA habitat conservation plans affecting dozens of Puget Sound watersheds and have played a significant role in the development and recent adoption of a recovery plan for Puget Sound Chinook. We will address issues specific to steelhead as we continue working with these stakeholders and co-managers to determine what if any changes are needed to actions that modify salmonid habitat (including restoration efforts). *Comment 27:* Two commenters did not agree with our assessment regarding the overutilization of Puget Sound steelhead for commercial, recreational, scientific, or educational purposes. They believed that overutilization likely is a factor limiting the viability of this DPS and argued that even low mortality from harvest could continue to limit the viability of the DPS. One took exception to the BRT report's characterization that the Skagit River escapement goal was recently lowered to “support harvest” and was cited as one of the reasons for the proposed listing. *Response:* We did not receive new information to support a change in our conclusion that overutilization for recreational purposes was a factor that contributed to the past decline of Puget Sound steelhead populations but is not believed to be a primary factor limiting the viability of the Puget Sound steelhead DPS into the foreseeable future. We will, however, actively consult with state and tribal co-managers under the ESA and review harvest and associated hatchery strategies for this DPS to ensure that they do not jeopardize its continued existence. The BRT acknowledged that questions regarding carrying capacity were a primary impetus for co-managers to reduce the escapement goals in the Skagit River basin. The BRT's statement reflects a general concern by the BRT that the Skagit River (one of the largest producers of steelhead in Puget Sound) may be subjected to reduced escapements at a time when the basin's abundance is much reduced from the past. *Comment 28:* We received a number of comments regarding the role of tribal netting in the overutilization of steelhead in Puget Sound. These commenters felt that tribal fishing is an important aspect of overutilization of the DPS and needs either greater oversight or a complete moratorium in order to protect steelhead populations. One commenter argued that tribal fishing is not monitored enough by authorities and so take numbers are higher than what is allowed. *Response:* We have not received information that would lead us to the conclusion that tribal fisheries overutilize Puget Sound steelhead. A number of Puget Sound tribes have federally-recognized treaty rights to fish for steelhead, and in most areas their fisheries target hatchery fish. The tribes in many cases have curtailed their fisheries or refrained from fishing to conserve salmon and steelhead. We will continue working with the tribes to address harvest and other issues that affect the long-term viability of Puget Sound steelhead and treaty-based fisheries. *Comment 29:* NMFS received several comments disagreeing with the assertion that disease and predation are not factors limiting the viability of the DPS. Commenters felt that this issue deserves greater research and requested that NMFS acknowledge uncertainty about the role these factors play in the decline of the DPS. One commenter claimed that low abundances, diversity, and distribution, limited habitat, and poor productivity make the DPS more vulnerable to the effects of disease and predation. *Response:* Additional research is needed to determine if and how disease and predation, in combination with other factors, may limit the viability of Puget Sound steelhead. It is our understanding that little research on steelhead is currently being undertaken in these important areas. *Comment 30:* There was general agreement by commenters that no single factor described in Section 4(a)(1) of the ESA and NMFS' implementing regulations (50 CFR part 424) has caused the decline of Puget Sound steelhead. Many commenters felt that a primary focus for recovery of the DPS should be an improvement of hatchery practices. Others believed that habitat restoration and protection are essential to the recovery of the DPS. In particular, some commenters felt that hydropower dams, floodplain development, water withdrawals, and logging are factors in the decline of the DPS that must be addressed in recovery planning. *Response:* These and other factors have contributed to the decline of Puget Sound steelhead and will need to be addressed in recovery planning for this DPS. We believe that the recent Shared Strategy for Puget Sound (Shared Strategy Development Committee, 2007) provides an excellent foundation upon which to build and address issues and risk factors unique to Puget Sound steelhead. We are also encouraged by WDFW's progress in developing statewide and regional plans for steelhead to promote policies, strategies, and actions that will improve steelhead management in Puget Sound and elsewhere. Comments on the Consideration of Protective Efforts/Mitigating Factors *Comment 31:* Two commenters agreed with our determination in the proposed rule that existing protective efforts, including the Shared Strategy for Puget Sound (Shared Strategy Development Committee, 2007), hatchery reform efforts, and Habitat Conservation Plans, are not adequate to remedy the harmful factors that are depressing Puget Sound steelhead. Others believed that habitat protection and restoration provisions, including the Washington Forest Practices and Governor's Puget Sound Initiative, are far more substantial than those in place at the time of our initial status review (Busby *et al.* , 1996). Many expressed concern that we would inappropriately apply our PECE policy and decide that listing is not warranted. Another requested clarification of which land-use regulations across Puget Sound do not adequately address the continued threats from habitat degradation and modification and which presently unregulated activities, require regulation to protect the habitat of the DPS. *Response:* We have not received information to support changing our conclusion that current protective efforts collectively do not provide sufficient certainty of implementation and effectiveness to substantially ameliorate the level of assessed extinction risk for Puget Sound steelhead. While we acknowledge that many of the ongoing protective efforts are more substantial than those in place when we originally reviewed the status of this DPS, many efforts are relatively recent or still under development, and as yet have insufficient regulatory measures and/or resources in place to assure their implementation and effectiveness in addressing the factors for the decline of and threats facing Puget Sound steelhead. In our proposed rule we identified a number of land use activities that impact Puget Sound steelhead, including forestry, agriculture, and urban development (71 FR 15672; March 29, 2006). In addition, the local watershed chapters in the recent recovery plan for Puget Sound Chinook (Shared Strategy Development Committee, 2007) are an excellent resource for understanding the myriad land use issues (and restoration opportunities) facing salmon and steelhead in specific watersheds throughout Puget Sound. Through our ESA consultations and ongoing recovery planning forums we will continue to collaborate with tribal, Federal, state, and local entities, and the public to promote and improve efforts being made to protect Puget Sound steelhead. Final Species Determination We did not receive nor review any new information that would warrant revision of the proposed geographic boundaries delineating the Puget Sound steelhead DPS. These steelhead are markedly separated from other such population groups of *O. mykiss* as a consequence of physical, physiological, ecological, or behavioral factors (Busby *et al.* , 1996; NMFS, 2005). Therefore, we conclude that steelhead in Puget Sound satisfy the “discreteness” criterion under the joint DPS policy. We also conclude that Puget Sound steelhead represent an important component in the evolutionary legacy of the *O. mykiss* species based on their unique life-history, genetic, and ecological characteristics, as well as the unique glacial and fjord-like characteristics of the ecoregion occupied (Busby *et al.* , 1996). These traits satisfy the “significance” criterion of the joint DPS Policy. If Puget Sound steelhead DPS were lost, it would represent:

(1)the loss of unusual or unique habitats and ecosystems occupied by the species;

(2)a significant gap in the species' range; and

(3)a significant loss to the ecological, life-history, and genetic diversity of the taxon. Based on the BRT's findings, our review of comments summarized above, and our considerations under the joint DPS policy, we conclude that Puget Sound steelhead warrant delineation as a DPS under the ESA. Consistent with our proposed rule, the geographic boundaries of the Puget Sound steelhead DPS continue to include winter- and summer-run steelhead populations in the river basins of the Strait of Juan de Fuca, Puget Sound, and Hood Canal, Washington, bounded to the west by the Elwha River (inclusive) and to the north by the Nooksack River and Dakota Creek (inclusive). Final Assessment of Extinction Risk We did not receive any new information that would warrant revision of the BRT's assessment of extinction risk. As described in more detail in our proposed rule for this DPS (71 FR 15666;, March 29, 2006), the BRT assessed the risk of extinction for Puget Sound steelhead at two levels: first at the individual population level; and then at the overall DPS level. At both levels the BRT evaluated the likely contributions of resident and hatchery-origin fish to DPS viability. The BRT's DPS-level extinction risk assessment reflects professional scientific judgment guided by an analysis of the factors contributing to VSP (McElhany *et al.* , 2000), as well as by expectations about the likely interactions among the individual VSP factors. Specifically, the BRT concluded that there is:

(1)A high risk to the viability of Puget Sound steelhead due to declining productivity and abundance;

(2)a moderate risk due to reduced spatial complexity of, and connectivity among, populations; and

(3)a moderate risk due to the reduced life-history diversity of populations and the potential threats posed by artificial propagation and harvest practices in Puget Sound. As a result, an overwhelming majority of the BRT concluded that Puget Sound steelhead are likely to become endangered within the foreseeable future throughout all of their range. The BRT's conclusion was expressed in terms that correspond to the statutory definition of a threatened species in the ESA. The BRT's assessment, however, did not include an evaluation of efforts being made to protect the species, as required under section 4(b)(1)(A) of the ESA. The following sections briefly summarize the likely factors for the decline of Puget Sound steelhead, as well as the efforts being made to protect steelhead and other salmonids in the Puget Sound region. The reader is referred to our proposed rule for more detailed information and discussion concerning threats and protective efforts affecting Puget Sound steelhead (71 FR 15666; March 29, 2006). Summary of Factors Affecting the Species Section 4(a)(1) of the ESA requires that we determine whether any species is endangered or threatened because of any one or a combination of the following factors:

(1)The present or threatened destruction, modification, or curtailment of its habitat or range;

(2)overutilization for commercial, recreational, scientific, or educational purposes;

(3)disease or predation;

(4)inadequacy of existing regulatory mechanisms; or

(5)other natural or human-made factors affecting its continued existence. We have previously detailed the impacts of various factors contributing to the decline of Pacific salmon and *O. mykiss* in previous listing determinations (e.g., 62 FR 43937, August 18, 1997; 57 FR 14517, March 25, 1999) and supporting documentation (e.g., NMFS, 1997, “Factors Contributing to the Decline of Chinook Salmon An Addendum to the 1996 West Coast Steelhead Factors for Decline Report;” NMFS, 1996, “Factors for Decline A Supplement to the Notice of Determination for West Coast Steelhead Under the Endangered Species Act”). NMFS' **Federal Register** notices and technical reports conclude that all of the factors identified in section 4(a)(1) of the ESA have played a role in the decline of West Coast salmon and *O. mykiss* DPSs. The reader is referred to the above **Federal Register** notices and technical reports for a more detailed treatment of the relevant factors leading to the decline of specific DPSs. In the proposed rule, we evaluated those factors of specific relevance to steelhead in the Puget Sound area. We concluded that the principal factor for decline for Puget Sound steelhead is the present or threatened destruction, modification, or curtailment of its habitat or range. Barriers to fish passage and adverse effects on water quality and quantity resulting from dams, the loss of wetland and riparian habitats, and agricultural and urban development activities have contributed and continue to contribute to the loss and degradation of steelhead habitats in Puget Sound. We observed that previous harvest management practices likely contributed to the historical decline of Puget Sound steelhead, but concluded that the elimination of the direct harvest of wild steelhead in the mid 1990s has largely addressed this threat. We noted that predation by marine mammals (principally seals and sea lions) and birds may be of concern in some local areas experiencing dwindling steelhead run sizes. With respect to disease (e.g., infectious diseases exacerbated by some hatchery practices), we concluded that we lack specific current or historical information to determine whether it poses a significant threat to the DPS. We concluded that existing regulatory mechanisms inadequately protect steelhead habitats as evidenced by the historical and continued threat posed by the loss and degradation of nearshore, estuarine, and lowland habitats due to agricultural activities and urbanization. We concluded that ocean and climate conditions can have profound impacts on the continued existence of steelhead populations. Finally, we reiterated concerns regarding the extensive propagation of the Chambers Creek and Skamania hatchery steelhead stocks and their possible contribution to the observed declines in Puget Sound steelhead populations, while acknowledging that there is insufficient information to quantify the extent of potential adverse impacts. Efforts Being Made To Protect West Coast Steelhead Section 4(b)(1)(A) of the ESA requires the Secretary to make listing determinations solely on the basis of the best scientific and commercial data available after taking into account efforts being made to protect a species. Therefore, in making ESA listing determinations, we first assess a DPS's level of extinction risk and identify factors that have led to its decline. We then assess existing efforts being made to protect the species to determine if those measures ameliorate the risks faced by the DPS. In judging the efficacy of existing protective efforts that have not yet been implemented or demonstrated effectiveness, we rely on the PECE (68 FR 15100; March 28, 2003). The PECE articulates several criteria for evaluating the certainty of implementation and effectiveness of protective efforts to aid in determining whether a species warrants listing as threatened or endangered. In the proposed rule, we provided an extensive review of protective efforts affecting Puget Sound steelhead, ranging in scope from regional conservation strategies to local watershed initiatives (71 FR 15666; March 29, 2006). We did not receive new information to support changing our conclusion that protective efforts collectively do not provide empirical evidence or sufficient certainty of implementation and effectiveness to substantially ameliorate the level of assessed extinction risk for Puget Sound steelhead. While we acknowledge that many of the ongoing protective efforts for this DPS, especially those contained in the Shared Strategy for Puget Sound (Shared Strategy Development Committee, 2007) and proposed in the Draft Statewide Steelhead Plan and regional plans (WDFW, 2007), are likely to promote steelhead conservation, many efforts are relatively recent or still under development, and as yet have insufficient regulatory measures and/or resources in place to assure their implementation and effectiveness in addressing the factors for the decline of and threats facing Puget Sound steelhead. We will continue to encourage these and other future protective efforts, and we will continue to collaborate with tribal, Federal, state, and local entities to promote and improve efforts being made to protect the species. Final Listing Determination After reviewing the public comments received, independent expert reviewer comments, and other data available to us, we find that there is no available information that would cause us to reconsider the extinction risk assessments by the BRT (NMFS, 2005), nor substantially alter our assessments of the Section 4(a)(1) listing factors and efforts being made to protect the species. We conclude that the Puget Sound steelhead DPS is likely to become endangered within the foreseeable future throughout all of its range, and warrants listing as a threatened species under the ESA. Prohibitions and Protective Regulations ESA section 9(a)(1) take and other prohibitions (16 U.S.C. 1538(a)(1)) apply to all species of fish or wildlife listed as endangered. In the case of threatened species, ESA section 4(d) directs the Secretary to issue such regulations as are determined to be necessary and advisable for the conservation of the species. We have flexibility under section 4(d) to tailor protective regulations based on the contributions of available conservation measures. The 4(d) protective regulations may prohibit, with respect to threatened species, some or all of the acts which section 9(a) of the ESA prohibits with respect to endangered species. These 9(a) prohibitions and 4(d) regulations apply to all persons subject to U.S. jurisdiction, including individuals, corporations, and government agencies and their employees. On February 7, 2007 (72 FR 5648), we proposed to issue section 4(d) protective regulations for Puget Sound steelhead. The proposed regulations would prohibit the take of Puget Sound steelhead unless a “limit” applies for specified categories of activities determined to be adequately protective of these fish. We have received public comment on that proposal and will address those comments when we finalize the protective regulations for this DPS in a subsequent **Federal Register** notice. Identification of Those Activities That Would Constitute a Violation of Section 9 of the ESA We and the FWS published in the **Federal Register** on July 1, 1994 (59 FR 34272), a policy that the agencies shall identify, to the maximum extent practicable at the time a species is listed, those activities that would or would not constitute a violation of section 9 of the ESA. The intent of this policy is to increase public awareness of the effect of this listing on proposed and ongoing activities within the species' range. As noted above, final 4(d) protective regulations will be issued in a subsequent **Federal Register** notice, and until such regulations are final, Puget Sound steelhead will not be subject to ESA take protections. If and when we issue any final 4(d) protective regulations, we will identify to the extent known the activities that will not be considered likely to result in violation of section 9, as well as activities that will be considered likely to result in violation. Effective Date of the Final Listing Determination The final listing for Puget Sound steelhead will take effect on June 11, 2007. Critical Habitat Section 4(a)(3)(A) of the ESA requires that, to the maximum extent prudent and determinable, critical habitat be designated concurrently with the listing of a species. Section 4(b)(6)(C)(ii) provides that, where critical habitat is not determinable at the time of final listing, we may extend the period for designating critical habitat by not more than 1 additional year. In keeping with agency regulations at 50 CFR 424.12, we conclude that critical habitat is not presently determinable for the Puget Sound steelhead DPS. Specifically, we lack biological, economic, and related mapping information sufficient to determine which areas may qualify as critical habitat for this DPS and to determine the economic, national security, or other relevant impacts of designation necessary to perform required analyses of the impacts of critical habitat designation . Therefore, we are proceeding with the final listing determination now and will propose critical habitat in a separate rulemaking. Classification National Environmental Policy Act

(NEPA)ESA listing decisions are exempt from the requirement to prepare an environmental assessment or environmental impact statement under the NEPA. See NOAA Administrative Order 216-6.03(e)(1) and *Pacific Legal Foundation* v. *Andrus* , 657 F.2d 829 (6th Cir. 1981). Thus, we have determined that the final listing determination for the Puget Sound steelhead DPS described in this notice is exempt from the requirements of NEPA. Regulatory Flexibility Act, Executive Order (E.O.) 12866, and Paperwork Reduction Act As noted in the Conference Report on the 1982 amendments to the ESA, economic impacts cannot be considered when deciding on the listing of a species. Therefore, the economic analysis requirements of the Regulatory Flexibility Act are not applicable to the listing process. In addition, this rule is exempt from review under E.O. 12866. This final rule does not contain a collection-of-information requirement for the purposes of the Paperwork Reduction Act. Peer Review A joint NMFS/FWS policy requires us to solicit independent expert review from at least three qualified specialists, concurrent with the public comment period (59 FR 34270; July 1, 1994). In December 2004 the Office of Management and Budget

(OMB)issued a Final Information Quality Bulletin for Peer Review (Peer Review Bulletin) establishing minimum peer review standards, a transparent process for public disclosure, and opportunities for public input. The OMB Peer Review Bulletin, implemented under the Information Quality Act (Public Law 106 554), is intended to ensure the quality of agency information, analyses, and regulatory activities and provide for a more transparent peer review process. The BRT's status review for Puget Sound steelhead (NMFS, 2005) is the key science document underlying the decision to list Puget Sound steelhead as a threatened species. As described in our proposed rule, the BRT's status review was considered to be “influential scientific information” in the context of the OMB Peer Review Bulletin and was subjected to pre-dissemination peer review (60 FR 15666, March 29, 2006). A description of the peer review plan was posted on the Internet in December 2005 by the U.S. Department of Commerce and is available at: *http://www.osec.doc.gov/cio/oipr/ID47.htm* . The seven experts chosen for this review are knowledgeable in steelhead biology, artificial propagation, fisheries management, and local and regional habitat conditions and processes. Four of the experts provided peer review and their comments were thoroughly considered, and, as appropriate, incorporated into the BRT's assessment and this final listing determination. We believe that adherence to the OMB Peer Review Bulletin is consistent with the goals of the 1994 NMFS/FWS policy “to ensure the best biological and commercial information is being used in the decisionmaking process, as well as to ensure that reviews by recognized experts are incorporated into the review process of rulemakings” developed in accordance with the ESA. E.O. 13175 - Consultation and Coordination with Indian Tribal Governments The longstanding and distinctive relationship between the Federal and tribal governments is defined by treaties, statutes, executive orders, judicial decisions, and co-management agreements, which differentiate tribal governments from the other entities that deal with, or are affected by, the Federal government. This relationship has given rise to a special Federal trust responsibility involving the legal responsibilities and obligations of the United States toward Indian Tribes and the application of fiduciary standards of due care with respect to Indian lands, tribal trust resources, and the exercise of tribal rights. E.O. 13175 outlines the responsibilities of the Federal Government in matters affecting tribal interests. During our status review of Puget Sound steelhead we solicited information from the tribes, met with several tribal governments and associated tribal fisheries commissions, and provided the opportunity for all interested tribes to comment on the proposed listing of this DPS and discuss any concerns they may have. Several tribes submitted comments during the public comment period and these were thoroughly considered and incorporated (e.g., see comment 5, 6, 12, 23, and 26), as appropriate, into our final listing determination. We will continue to coordinate with the tribes on management and conservation actions related to this species. E.O. 13132 - Federalism E.O. 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific consultation directives for situations where a regulation will preempt state law, or impose substantial direct compliance costs on state and local governments (unless required by statute). This rule establishes the protected status of Puget Sound steelhead under the ESA. It thereby creates obligations on Federal agencies, e.g., to consult on their proposed actions that may affect Puget Sound steelhead. It does not impose requirements for, or restrictions on, state or local governments. Accordingly, E.O. 13132 does not apply to this final listing determination. In keeping with the intent of the Administration and Congress to provide continuing and meaningful dialogue on issues of mutual tribal, state and Federal interest, we provided the proposed rule to the relevant agencies in each state in which the subject species occurs, and these agencies were invited to comment. As noted in the previous section and in our response to comments (e.g., see comment 1, 2, 7, and 25), this final rule takes into account the views and comments received from state agencies. We will continue to consider any federalism impacts of regulations still under development for this DPS, such as our ongoing consideration of potential ESA protective regulations and critical habitat areas for Puget Sound steelhead. References A complete list of all references cited herein is available upon request (see ADDRESSES ), or can be obtained from the Internet at: *http://www.nwr.noaa.gov* . List of Subjects in 50 CFR Part 223 Endangered and threatened species, Exports, Imports, Transportation. Dated: May 7, 2007. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 223 is amended as follows: PART 223—THREATENED MARINE AND ANADROMOUS SPECIES 1. The authority citation for part 223 continues to read as follows: Authority: 16 U.S.C. 1531-1543; subpart B, § 223.201 also issued under 16 U.S.C. 1361 *et seq.* 2. In § 223.102, paragraph (c)(23) is added to read as follows: § 223.102 Enumeration of threatened marine and anadromous species. Species 1 Common name Scientific name Where Listed Citation(s) for Listing Determinations Citation(s) for Critical Habitat *****

(c)***

(23)Puget Sound Steelhead Oncorhynchus mykiss U.S.A., WA, Distinct Population Segment including all naturally spawned anadromous *O. mykiss* (steelhead) populations, from streams in the river basins of the Strait of Juan de Fuca, Puget Sound, and Hood Canal, Washington, bounded to the west by the Elwha River (inclusive) and to the north by the Nooksack River and Dakota Creek (inclusive), as well as the Green River natural and Hamma Hamma winter-run steelhead hatchery stocks. [ *Insert FEDERAL REGISTER page citation* ]May 11, 2007 NA * * * * * 1 Species includes taxonomic species, subspecies, distinct population segments

(DPSs)(for a policy statement, see 61 FR 4722, February 7, 1996), and evolutionarily significant units

(ESUs)(for a policy statement, see 56 FR 58612, November 20, 1991) [FR Doc. E7-9089 Filed 5-10-07; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 635 [Docket No. 070307055-7099-02; I.D. 022607F] RIN 0648-AV25 Atlantic Highly Migratory Species (HMS); U.S. Atlantic Billfish Tournament Management Measures AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: This final rule suspends mandatory circle hook requirements for participants in Atlantic billfish fishing tournaments through December 31, 2007. Circle hook requirements will be reinstated unchanged effective 12:01 a.m., January 1, 2008. The suspension is intended to increase post-release survival rates of Atlantic billfish in the long-term by providing an additional phase-in period during which Atlantic billfish tournament anglers can become more proficient and familiar with circle hooks and their ecological benefits, respectively. DATES: In this final rule, § 635.21, paragraph (e)(2)(iii), is suspended from May 11, 2007 to December 31, 2007, and is revised effective January 1, 2008. ADDRESSES: Copies of the Final Environmental Assessment/Regulatory Impact Review/Final Regulatory Flexibility Analysis (Final EA/RIR/FRFA) are available from the Highly Migratory Species Management Division website at *www.nmfs.noaa.gov/sfa/hms* or can be obtained by contacting Russell Dunn or Randy Blankinship (see FOR FURTHER INFORMATION CONTACT ). FOR FURTHER INFORMATION CONTACT: Russell Dunn or Randy Blankinship, by phone: 727-824-5399; by fax: 727-824-5398. SUPPLEMENTARY INFORMATION: The U.S. recreational fishery for Atlantic billfish is managed under the Consolidated Highly Migratory Species

(HMS)Fishery Management Plan (FMP). Implementing regulations at 50 CFR part 635 are issued under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 *et seq.* ), and the Atlantic Tunas Convention Act

(ATCA)(16 U.S.C. 971 *et seq)* . Background NMFS recently finalized a Consolidated HMS FMP (October 2, 2006; 71 FR 58058) that consolidated and replaced previous FMPs for Atlantic Billfish and Atlantic Tunas, Swordfish, and Sharks. The Consolidated HMS FMP is implemented by regulations at 50 CFR part 635. Prior to January 1, 2007, the recreational Atlantic billfish fishery was subject to regulations that required fishing permits, limited allowable gears to rod and reel only, established minimum legal size limits, specified landing form of retained billfish, mandated reporting of billfish landings, required registration of all recreational HMS fishing tournaments and reporting by tournaments that are selected for reporting, prohibited the retention of longbill spearfish, and prohibited sale of any billfish, among other measures. The final rule implementing the Consolidated HMS FMP implemented additional regulations that applied to the Atlantic recreational billfish fishery. Effective January 1, 2007, these regulations require anglers fishing from HMS permitted vessels and participating in Atlantic billfish tournaments to use only non-offset circle hooks when deploying natural baits or natural bait/artificial lure combinations. The regulations allow the use of J-hooks (the hook-type traditionally used in this fishery) with artificial lures in tournaments, and do not impose hook requirements on recreational fishermen fishing outside of Atlantic billfish tournaments. Additionally, the final rule limits U.S. landings of Atlantic blue and white marlin to 250 individual fish, combined, on an annual basis. In response to continuing public input on the Atlantic billfish tournament circle hook regulations, NMFS released a draft environmental assessment and published a proposed rule on March 15, 2007 (72 FR 12154), that included a preferred alternative to suspend Atlantic billfish tournament circle hook requirements through December 31, 2007. The EA considered three alternatives. Information regarding these alternatives was provided in the proposed rule and is not repeated here. Response to Comments The public comment period for the proposed rule was open from March 15, 2007 to March 30, 2007. During that time, NMFS held three public hearings and received comments from 111 individuals or organizations. A summary of the major comments received, along with NMFS' responses are provided below. *Comment 1:* Several commenters in favor of Alternative 1, the no action alternative (status quo), stated that the existing measure is necessary to protect Atlantic white marlin stocks and promote rebuilding. Similarly other commenters felt that maintaining the circle hook requirement would be beneficial in reducing the likelihood of listing white marlin as endangered or threatened under the Endangered Species Act. *Response:* NMFS agrees that maintaining the circle hook requirement would continue to provide post-release hooking mortality benefits; however, given the short duration of the circle hook suspension, NMFS projects that it will result in a one-time limited number of additional white marlin post-release mortalities that would not adversely affect the Atlantic wide stock in a measurable way. NMFS believes that the provision of an additional phase-in period during which anglers can become more proficient, comfortable, and accepting of circle hooks will, in the long-term, offset the short-term increase in mortalities by resulting in greater long-term compliance with circle hook regulations. The white marlin listing review, conducted under the Endangered Species Act, is currently underway. The biological review team conducting the review may consider the impacts of all fishery management measures in effect including circle hook requirements when making its recommendations. NMFS cannot predict the outcome of the review team's deliberations or the direct impact that any particular regulation may have on the outcome of such deliberations. *Comment 2:* NMFS received comment in support of Alternative 1, the no action alternative (status quo), because commenters felt there are many different ways of rigging baits with circle hooks that have been tested and proven to work. *Response:* NMFS received similar comment during and following development of the circle hook requirement from anglers stating that successful methods of rigging baits with circle hooks exist and are practiced. NMFS agrees that appropriate rigging techniques for circle hooks exist which allow anglers to successfully catch Atlantic billfish. Further, Prince et al. 2002, found no statistical difference between catch rates between circle hooks and J-hooks using both natural dead bait trolling and live bait drifting/kite fishing techniques. Additionally, several popular articles have been published in major sportfishing magazines that highlight some of these methods. However, NMFS believes that an improved long-term ecological benefit can be achieved by allowing an additional phase-in period for the reasons discussed in the response to Comment 1. *Comment 3:* The Maryland Department of Natural Resources

(MDNR)expressed support for alternative 1, the no action alternative (status quo). MDNR cited its work with the recreational fishing community and the billfish tournament directors in Maryland to educate anglers regarding the conservation benefits of circle hook use and stated that the major billfish tournaments in Maryland anticipated the circle hook requirement and prepared for it. MDNR cited success with implementation of circle hook requirements in Maryland's special catch and release fishery for striped bass in the Chesapeake Bay and stated that suspending the circle hook requirement for Atlantic billfish tournaments would send the wrong message to recreational anglers. *Response:* NMFS appreciates the conservation efforts of the MDNR. The suspension of the circle hook requirement in Atlantic billfish tournaments is a temporary measure with the purpose of providing additional time for anglers to become more familiar with techniques for rigging and fishing with circle hooks in Atlantic billfish tournaments, thus resulting in improved long-term compliance with the circle hook requirement upon reimplementation. NMFS has worked to increase awareness among anglers of the benefits of circle hooks and will continue to do so during and following the temporary suspension. *Comment 4:* NMFS received comment in support of alternative 1, the no action alternative (status quo), because of the lack of time for tournament operators to get the word to all potential participants about what gear is allowed. Alternatively, NMFS received comment in support of the preferred alternative so that tournament rules would not have to be rewritten this year as some tournaments may have published their rules using 2006 regulations. *Response:* NMFS received comment from multiple tournament operators indicating that some tournaments prepared for the circle hook requirement when it was implemented on January 1, 2007, while others were unaware or did not prepare. NMFS appreciates the concerns of tournament operators and anglers regarding the need to know what gear configurations are available for use in advance. NMFS also appreciates those constituents that were aware of and prepared for the requirement and regrets that tournament rules may need to be reprinted as a result of the temporary suspension of the regulation. NMFS also points out that tournaments in some areas of the Atlantic and Gulf of Mexico have voluntarily implemented circle hook requirements in recent years and the temporary suspension of the requirement does not prevent this. NMFS encourages anglers and tournament operators to stay informed of HMS management issues and actions by visiting *http://www.nmfs.noaa.gov/sfa/hms/* and signing up for the electronic bulletin, *Atlantic HMS News* . *Comment 5:* NMFS received comment in support of the preferred alternative, temporarily suspend the Atlantic billfish circle hook requirement, that expressed a desire for NMFS to use the suspension period to accomplish several tasks. These suggestions include: improve the circle hook definition; investigate the availability of circle hooks for the recreational billfishing tackle market; investigate the post-release hooking mortality rates of J-hook and circle hook rigged natural and natural bait/artificial lure combination baits trolled at high speed such as is used frequently when targeting blue marlin; investigate the possibility of a minimum size J-hook that could be allowed when high speed trolling for blue marlin; investigate post-release mortality of billfish when lures with double hooks are used; investigate how the circle hook requirement affects tournaments with mixed target species; investigate whether the circle hook requirement would accomplish its intended objective or not; and investigate post-release hooking mortality differences between different presentations of J-hooks with live baits. *Response:* NMFS agrees that information from studies such as some of those mentioned during public comment may be useful for refining management of the billfish fishery in the future as additional data become available. NMFS is working on a number of these issues including improving the definition of circle hooks and the potential for additional post-release mortality studies examining various gear and technique configurations. *Comment 6:* NMFS received comment in favor of the preferred alternative, temporarily suspend the Atlantic billfish circle hook requirement; however, commenters expressed a desire for modifications to the circle hook requirement upon re-implementation. Commenters indicated that these modifications are popular for use when targeting blue marlin and are less damaging to all billfish than J-hooks used with live or dead natural baits on light tackle. Some commenters making this suggestion stated that some of these modifications would help reduce the impact to anglers fishing in mixed species tournaments. Some commenters stated that these modifications would allow the continuation of North Carolina's historic and traditional method of fishing for blue marlin using heavy tackle and/or lure/bait combinations rigged with J-hooks and trolled at high speed. Suggested modifications included creating an exemption to the circle hook requirement to allow J-hook use with heavy tackle and/or lure/bait combinations trolled at high speed and creating an exemption to the circle hook requirement to allow J-hook use if the main line is less than 50 lb. test, less than 80 lb. test, leader size is less then 200 lb. test, hook is at least a certain size that cannot be be swallowed easily by a billfish (hook size suggestions were 9/0, 10/0, 11/0 and 12/0), or some combination of these criteria. *Response:* NMFS acknowledges that limited information from the few blue marlin tagged with pop-off satellite archival tags (PSATs) (9 fish) in the study by Graves et al.

(2001)shows relatively low rates of post-release mortality for blue marlin caught on J-hooks when certain gear configurations and techniques are employed. However, the sample size of this one study is limited and no information exists on the impacts of combination baits with J-hooks on white marlin and other billfish species. NMFS implemented the regulations requiring circle hooks on natural baits and natural bait/artificial lure combinations based on a number of considerations that are detailed in the Final Environmental Impact Statement

(FEIS)for the Consolidated HMS FMP. The basis for that decision included, but was not limited to: the post-release survival benefits of circle hooks for billfish and many other species identified in a number studies, comparable catch rates of billfish between circle hooks and J-hooks identified in available studies, the poor stock status of some Atlantic billfish species, the limited amount of available data on various gear configurations, and enforcement issues. NMFS will consider new information on the effects of the fishing methods mentioned above on fish condition and post-release mortality as it becomes available. NMFS acknowledges that the circle hook requirement in Atlantic billfish tournaments may have impacts on secondary fisheries including wahoo, king mackerel, dolphin, tunas, and other fisheries and has limited these impacts to the extent feasible in the creation of the circle hook requirement by applying it narrowly to only HMS permitted vessels participating in tournaments with award categories for Atlantic billfish. NMFS will consider new information on ways to limit impacts of HMS requirements on non-HMS fisheries as it becomes available. NMFS acknowledges that a traditional recreational fishery exists for blue marlin in the Atlantic and Gulf of Mexico that utilizes different fishing techniques in different locations and situations. The fishing technique of using heavy tackle and/or lure/bait combinations rigged with J-hooks and trolled at high speed is used in several locations throughout the Atlantic and Gulf of Mexico. The fishery management strategy employed to reduce post-release hooking mortality of Atlantic billfish through the circle hook requirement in Atlantic billfish tournaments is a modification of the techniques used in this fishery. NMFS received public comment during and following development of the circle hook requirement from anglers that successful methods of rigging baits with circle hooks exist and are practiced. Additionally, several articles have been published in major sportfishing magazines that highlight some of these methods. NMFS believes that through this and other fishery management strategies, the traditional recreational fishery for blue marlin and other Atlantic billfish may be improved by promoting stock rebuilding. *Comment 7:* NMFS received comment from the North Carolina Division of Marine Fisheries (NCDMF) indicating their support for the preferred alternative, temporarily suspend the Atlantic billfish circle hook requirement. NCDMF stated that the current rule may negatively impact angler's ability to catch blue marlin. Concern was expressed over the impacts of mandating circle hook use for natural baits and natural bait/combinations for all tackle sizes. NCDMF encouraged NMFS to explore the circle hook definition, conduct research on release mortality of billfish released on heavy tackle with J-hooks, research the difference in catch rates of circle and J-hooks for non-billfish species targeted in tournaments, and explore recently raised questions concerning post-release mortality of billfish caught on double hooked lures. NCDMF expressed concern that a shortage of large non-offset circle hooks to supply the billfish fishery may exist. *Response:* NMFS appreciates the comments of the NCDMF. The purpose of the temporary suspension of the circle hook requirement in Atlantic billfish tournaments is to allow additional time for anglers to become more familiar with techniques for rigging and fishing with circle hooks in Atlantic billfish tournaments, thus resulting in improved long-term compliance with the requirement upon reimplementation. As discussed in the response to Comment 6, NMFS received comment during and following development of the circle hook requirement from anglers stating that successful methods of rigging baits with circle hooks exist and are practiced. Additionally, several articles have been published in major sportfishing magazines that highlight some of these methods. Regarding the application of the circle hook requirement for all tackle sizes, NMFS developed the requirement with consideration for several different concerns which included application to the targeted fishery and the ease of enforcement, as well as other considerations identified in the response to Comment 6 and discussed in detail in the FEIS for the Consolidated HMS FMP. NMFS believes that the requirements for the use of circle hooks by permitted HMS fishermen when natural bait and natural bait/artificial lures are deployed in billfish tournaments improve its enforceability. Related to application of the requirement to all tackle sizes and researching post-release mortality for various tackle types, NMFS will consider new information on the effects of the fishing methods on fish condition and post-release hooking mortality, as it becomes available. NMFS has not received information indicating that a shortage of large non-offset circle hooks exists other than that contained in NCDMF's comment. The circle hook requirement was finalized in October 2006 and became effective January 1, 2007, providing time for circle hook manufacturers and retail stores to increase inventory. The Atlantic billfish tournament season is protracted and peaks in the late spring and summer months, thereby providing additional time for manufacturers and retailers to prepare for demand. The preferred alternative to temporarily suspend the circle hook requirement in Atlantic billfish tournaments may dampen the peak in demand for circle hooks in 2007 as anglers will not be required to use circle hooks, but may still desire to practice with them in preparation for re-implementation of the requirement on January 1, 2008. However, as mentioned, NMFS has received no information from anglers, distributors, tackle shops, tournament operators, or manufacturers that a real or potential shortage of hooks exists. *Comment 8:* NMFS received comment in favor of non-preferred alternative 3, remove Atlantic billfish tournament circle hook requirements, for various reasons including: insufficient data to implement a circle hook requirement in billfish tournaments; voluntary use of circle hooks should continue to be encouraged; fear that similar requirements will be imposed in all offshore trolling for any species to reduce billfish post-release mortality; concerns that circle hooks lodging in the corner of the jaw actually are the most painful and cause long-term damage to the fish resulting in a decreased ability of the fish to feed and increased rates of death relative to billfish caught with J-hooks. *Response:* NMFS disagrees that there is insufficient data to implement a circle hook requirement in billfish tournaments. NMFS has relied on publicly available peer-reviewed scientific papers and available recreational data sets in developing its analyses. The assumptions made to support the use of circle hooks are clearly articulated in Chapter 4 of the Consolidated HMS FMP. NMFS agrees that voluntary circle hook use in HMS fisheries outside of Atlantic billfish tournaments should be encouraged. Voluntary use of circle hooks was promoted in the years prior to implementation of the circle hook regulation on January 1, 2007; however, this voluntary promotion only achieved limited success in transitioning recreational anglers to circle hooks in the Atlantic billfish fishery. NMFS does not anticipate that continued promotion of voluntary circle hook use alone by tournament anglers would result in achieving the maximum conservation benefit possible of reduced post-release mortality of Atlantic billfish relative to the no action alternative. NMFS acknowledges that requiring circle hooks in all HMS fisheries could have impacts on secondary fisheries, including tunas, sharks, dolphin, wahoo, king mackerel, etc., and other inshore fisheries and has taken steps to minimize these impacts, as discussed under the response to comment 6. NMFS disagrees that circle hooks lodging in the corner of the jaw are more damaging to fish in the long-term and result in fish death more frequently than with J-hooks. This comment is not supported by peer reviewed scientific literature showing lower post-release mortality of white marlin when caught with circle hooks in comparison with J-hooks and showing less damaging hook location in sailfish and blue marlin when caught with circle hooks in comparison with J-hooks. *Comment 9:* NMFS received comment from lure manufacturers stating that rigging circle hooks with hard headed artificial lures and natural baits is an ineffective method of catching billfish and has resulted in substantial loss of lure sales. One manufacturer stated that the combined economic impact from Central American circle hook requirements and the domestic circle hook requirement implemented in January 2007, the requirement was large enough to cause his company to go out of business. Similarly, another lure manufacturer stated that hard headed lures with nylon skirts are designed to be trolled at high speed in conjunction with natural baits and J-hooks resulting in almost all fish being hooked in the mouth. One manufacturer expressed support for alternative 3, removal of Atlantic billfish tournament circle hook requirements, and another requested that NMFS further investigate an exemption for artificial lure/natural bait combinations rigged with J-hooks and trolled at high speed. *Response:* NMFS appreciates the comment that economic impacts may have occurred as a result of previous rulemaking to implement the circle hook requirement on January 1, 2007. As discussed in the response to Comment 6, NMFS received comment during and following development of the circle hook requirement from anglers stating that successful methods of rigging baits with circle hooks exist and are practiced. Additionally, several articles have been published in major sportfishing magazines that highlight some of these methods including methods to rig and fish with hard headed lures with nylon skirts used in combination with natural baits. NMFS acknowledges that investigating questions about certain gear and rigging types such as that mentioned above may provide additional useful information in the future and will consider these issues when identifying future research priorities. *Comment 10:* NMFS received comment that no data exists to support application of the circle hook requirement to blue marlin fishing methods that employ circle hook rigged baits trolled at high speed. These comments stated that the damage to billfish when J-hooks are used in baits trolled at high speed is less than when J-hooks are used with dead or live natural baits on light tackle. These comments also stated that no data exists to support the concept of the circle hook requirement that large baits, lures, or artificial/natural combination baits rigged with circle hooks and trolled at high speed result in an adequate hook-up rate. *Response:* As discussed in the response to Comment 6, NMFS developed the circle hook requirement in Atlantic billfish tournaments with consideration for several different concerns, including but not limited to: the post-release survival benefits of circle hooks for multiple billfish species and other species identified in a several studies, comparable catch rates of various billfishes between circle hooks and J-hooks as identified in available studies, the poor stock status of some Atlantic billfish species, and enforcement issues. Accordingly, the rule applies to natural and natural/artificial combination baits. NMFS acknowledges that limited information from the few blue marlin tagged with PSATs (9 fish) in the study by Graves et al.

(2001)shows relatively low rates of post-release mortality for blue marlin caught on J-hooks when certain gear configurations and techniques are employed. No information exists, however, on the impacts of this fishing technique on white marlin and other billfish species. With this uncertainty of impacts in particular to white marlin, the regulation was developed in a manner to provide additional protection to severely overfished Atlantic billfishes. NMFS will consider new information on the effects of the fishing methods mentioned above on fish condition and post-release hooking mortality, as it becomes available. As discussed in the response to Comment 6, NMFS received comment during and following development of the circle hook requirement from anglers that successful methods of rigging baits with circle hooks exist and are practiced. Additionally, several articles have been published in major sportfishing magazines that highlight some of these methods including methods to rig and fish with hard headed lures with nylon skirts used in combination with natural baits. *Comment 11:* NMFS received comment suggesting that fees be assessed on all HMS recreational permits and HMS registered tournaments to fund PSAT tagging for post- release mortality comparisons between circle hooks and J-hooks. *Response:* NMFS appreciates the suggestion as funding for continued post-release mortality studies in Atlantic billfish fisheries is needed. Suggestions for research funding will be considered as future research needs are assessed. *Comment 12:* NMFS received comment that the existing circle hook requirement is not compatible with mixed species tournaments and will reduce the ability of anglers to catch wahoo, dolphin, tuna, and others. *Response:* NMFS understands that the circle hook requirement in Atlantic billfish tournaments will affect anglers in HMS permitted vessels targeting species other than Atlantic billfish. Many pelagic fish species are found in the same areas as Atlantic billfish and feed on similar prey. Atlantic billfish may be caught in many areas using the same fishing methods employed for other pelagic species such as wahoo, dolphin, tuna, king mackerel, and others; therefore, circle hooks are necessary in that portion of the tournament fishery. NMFS sought to minimize the impacts on secondary species by limiting the applicability of circle hook regulations as discussed in the response to Comment 6. *Comment 13:* NMFS received comment that the existing circle hook requirement is not enforceable and relies on tournament operators as the only enforcement agent. NMFS also received public comment that the circle hook requirement would be enforceable. *Response:* The requirements for the use of circle hooks by permitted HMS fishermen when natural bait and natural bait/artificial lures are deployed in billfish tournaments can be adequately enforced by NOAA Enforcement and the United States Coast Guard. As most tournament's rules require anglers to comply with all applicable state and federal regulations, NMFS believes that an important incentive for anglers to comply with regulations is the potential to have a prize-winning fish disqualified for not deploying a circle hook when required. *Comment 14:* NMFS received comment that all fishing tournaments should be banned. *Response:* NMFS disagrees. Atlantic HMS tournaments represent an important component of a robust recreational fishery and provide substantial socio-economic benefits to many communities. Further, tournaments represent an essential mechanism for obtaining significant amounts of data on many species that are incorporated into fish population assessments and management decisions. *Comment 15:* NMFS received comment that tournaments are venues that could provide a large number of interactions with marlin and should be used to collect data to answer the post-release hooking mortality questions for blue and white marlin. *Response:* NMFS appreciates the interest in collecting post-release hooking mortality information and agrees that tournaments can provide, for some fishery management issues, a venue for collecting fisheries information via appropriately designed data collection protocols. Such situations have been and continue to be valuable for collecting billfish information such as through the Recreational Billfish Survey and other life history studies. Such activity is not affected by this rulemaking. *Comment 16:* NMFS received comment that the recreational fishing mortality level for billfish does not compare to the much larger pelagic longline mortality level thus the circle hook requirement in Atlantic billfish tournaments is directed at the wrong mortality source. *Response:* The United States is responsible for approximately 4.5 percent of reported white marlin catches in the Atlantic. As explained in Appendix C of the 2006 Consolidated HMS FMP, average annual fishing mortality levels imposed by the domestic pelagic longline fishery and the recreational tournament fishery on Atlantic white marlin are roughly comparable. Based on pelagic longline logbook data and data from the Recreational Billfish Survey, the level of billfish mortality imposed by U.S. recreational billfish tournament fishermen is estimated to be approximately 71% of levels imposed by the U.S. pelagic longline fishery. While the post-release mortality rate of Atlantic white marlin is estimated to be lower in recreational fisheries than in the pelagic longline fishery, the size of the recreational tournament fishery is large enough to generally offset the difference in mortality rates. *Comment 17:* NMFS received several comments that the preferred alternative, suspend Atlantic billfish tournament circle hook requirements through the close of 2007, is not favorable. These include: the proposed rule is not precautionary; compliance with the already established rule would be 100 percent; the proposed rule is not supported by the record; there is a lack of parity with this proposed rule as an extended phase-in period is proposed for recreational anglers, but there was no grace period for commercial fishermen when circle hooks were required; the timing of proposed rule is bad as tournaments are in May and June and anglers should be practicing with circle hooks already. *Response:* NMFS appreciates the comment that temporary suspension of the circle hook rule is not precautionary and that compliance would be 100 percent. NMFS disagrees that temporary suspension of the circle hook requirement is not supported by the record as the rule will be re-implemented January 1, 2008. NMFS agrees that maintaining the circle hook requirement would continue to provide post-release hooking mortality benefits; however, given the short duration of the circle hook suspension, NMFS projects that it will result in a one-time limited number of additional white marlin post-release mortalities that would not affect the Atlantic wide stock in a measurable way. NMFS believes that the provision of an additional phase-in period during which anglers can become more proficient, comfortable, and accepting of circle hooks will, in the long-term, offset the short-term increase in mortalities by resulting in greater long-term compliance with circle hook regulations. NMFS disagrees that there is a lack of parity between implementation of the circle hook requirement in Atlantic billfish tournaments and the circle hook requirement for the pelagic longline

(PLL)fishery because the bases for the two actions are different. The circle hook requirement in Atlantic billfish tournaments is a domestic measure intended to aid in rebuilding Atlantic billfish stocks by reducing post-release fishing mortality to the extent practicable at this time. The circle hook requirement in the Atlantic PLL fishery responds to issuance of the 2004 Biological Opinion which determined that continued operation of the pelagic longline fishery without changes in fishing gears or techniques would jeopardize the existence of leatherback sea turtles. Per the Endangered Species Act, the Agency was required to implement changes in the way the pelagic longline operated. Rapid implementation of the circle hook requirement for PLL was necessary for the fishery to continue operating. This rulemaking is intended to reduce post-release mortality of Atlantic billfish in the long-term by temporarily suspending the circle hook requirement in Atlantic billfish tournaments to allow tournaments and tournament anglers additional time to become more familiar with techniques for rigging and fishing with circle hooks. *Comment 18:* NMFS received comment that circle hook specifications should be defined and field tested. Commenters also stated that circle hook rigging workshops should be held or videos should be developed. NMFS also received comment that 3 different circle hooks were used in recent research and all 3 worked well in reducing post-release mortality even with differences in their general design. Additionally, comment was received that it is important to stay consistent with what the international community is using as a definition of circle hooks because of tackle manufacturing and to reduce confusion. *Response:* NMFS appreciates the numerous comments received about circle hook definition issues and is involved in discussions with hook manufacturers and gear experts to address many of these concerns. Further, NMFS is not aware of an internationally accepted definition of circle hooks. The Agency may consider this issue in future rulemaking, as appropriate. Changes from the Proposed Rule There are no changes from the proposed rule. Classification This final rule is published under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 *et seq.* NMFS has determined that this final rule is consistent with the national standards of the Magnuson-Stevens Act, other provisions of the Act, and other applicable laws. Pursuant to 5 U.S.C. 553(d)(1), the Assistant Administrator finds that this final action relieves a restriction and therefore may be made effective upon its filing with the Office of the Federal Register. Specifically, the final action relieves a restriction for persons fishing from HMS permitted vessels in Atlantic billfish tournaments to fish only with non-offset circle hooks when using natural or natural/ artificial combination baits. Without this action, NMFS would continue to require anglers to use non-offset circle hooks when using natural or natural/artificial combination baits in Atlantic billfish tournaments and would not afford anglers an additional time to become more proficient with methods used to rig and fish with circle hooks and these baits. NMFS expects that this action will improve expertise and familiarity with methods for rigging and fishing with circle hooks in Atlantic billfish tournaments. As a result, NMFS expects improved long-term compliance with the regulation to use circle hooks in billfish tournaments when it goes back into effect on January 1, 2008. This final rule has been determined to be not significant for purposes of Executive Order 12866. In compliance with 5 U.S.C. 604, a Final Regulatory Flexibility Analysis

(FRFA)was prepared for this rule. The FRFA analyzes the anticipated impacts of the preferred alternative and any significant alternatives to the final rule that could minimize significant economic impacts on small entities. Each of the statutory requirements of section 604 has been addressed, and a summary of the FRFA is provided below. Section 604(a)(1) requires the Agency to state the objective and need for the rule. As stated in the preamble of the proposed rule, the objective of this final rule is to increase post-release survival of Atlantic billfishes by improving long-term compliance with billfish tournament non-offset circle hook regulations. Maximizing post-release survival of Atlantic billfishes is an important facet of rebuilding overfished Atlantic billfish stocks. Section 604(a)(2) requires the Agency to summarize significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis (IRFA), a summary of the assessment of the agency of such issues, and a statement of any changes made in the rule as a result of such comments. NMFS received numerous comments on the proposed rule and draft EA during the public comment period. A summary of these comments and the Agency's responses is included in this final rule. NMFS did not receive any comments specific to the IRFA, but did receive one comment related to economic issues and concerns. Specifically, one fishing gear manufacturer stated that the combined impacts of a circle hook requirement imposed by a Central American country and the U.S. Atlantic billfish tournament circle hook requirement implemented domestically in January 2007 (cited previously) cost his company and others several hundred thousand dollars in lost revenues which was large enough to cause his company to go out of business. As such, this commenter supported a repeal of the circle hook regulations. NMFS appreciates that economic impacts may have occurred as a result of previous rulemaking to implement the circle hook requirement on January 1, 2007; however, as noted by the commenter, these impacts resulted from a combination of foreign regulations and a previous domestic rulemaking. This comment is responded to fully with other comments (see Comment 9). The preferred alternative in this final rule could have minor short-term positive impacts on the sales of fishing lures used in conjunction with natural baits by temporarily allowing anglers to utilize J-hooks. While the final rule has the effect of temporarily allowing anglers to utilize J-hooks, the circle hook suspension was not made as a result of this comment. Section 604(a)(3) of the Regulatory Flexibility Act requires the Agency to describe and provide an estimate of the number of small entities to which the rule will apply. NMFS considers all HMS permit holders to be small entities because they either had gross receipts less than $4.0 million for fish-harvesting, gross receipts less than $6.5 million for charter/party boats, or 100 or fewer employees for wholesale dealers. These are the Small Business Association size standards for defining a small versus large business entity in these industries. As of January 29, 2007, the potential universe of affected anglers included: 24,664 HMS Angling category permit holders; 4,140 HMS Charter/Headboat category permit holders, and 4,345 General category permit holders. All of the aforementioned permit holders are eligible to participate in registered Atlantic HMS tournaments. Section 604(a)(4) of the Regulatory Flexibility Act requires the Agency to describe the projected reporting, record keeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities which would be subject to the requirements of the report or record. None of the alternatives considered for this final rule would result in additional reporting, recordkeeping, and compliance requirements. Section 604(a)(5) of the Regulatory Flexibility Act requires the Agency to describe the steps taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes. NMFS believes that this final rule minimizes impacts on small entities by temporarily suspending circle hook requirements for HMS tournaments, to allow participants additional time to become proficient in the use of circle hooks and familiar with their ecological benefits. The alternative to permanently suspend the circle hook requirement would not achieve MSA rebuilding objectives for these fisheries. As described below, NMFS considered three alternatives in this final rulemaking and provides justification for selection of the preferred alternative to achieve the desired objective. The alternatives considered included: maintain existing non-offset circle hook requirements for anglers fishing from HMS permitted vessels and participating in Atlantic billfish tournaments (alternative 1, No Action); suspend non-offset circle hook requirements for anglers fishing from HMS permitted vessels and participating in Atlantic billfish tournaments through December 31, 2007 (alternative 2, preferred alternative); and, remove Atlantic billfish tournament circle hook requirements and promote voluntary use of circle hooks by tournament anglers (alternative 3). Alternative 1 is considered the no action alternative since it would maintain unchanged the Atlantic billfish circle hook regulations that were implemented on January 1, 2007. This alternative is not preferred because, in part, it is less likely to improve long-term compliance with circle hook regulations, and thus be less likely to maximize post-release survival of Atlantic billfish than the preferred alternative because it does not provide adequate time for anglers to familiarize themselves with circle hooks and increase angler's acceptance of them. Alternative 1, the No Action alternative, would have no new economic impacts beyond those that were included in previous rulemaking. Alternative 2 could result in a minor short-term increase in billfish tournament participation given the perceptions held by many anglers that J-hooks may increase the odds of landing a billfish. No additional costs for billfish tournament participants are likely because NMFS anticipates that anglers already possess J-hook related tackle, as this was the standard gear used in the fishery prior to January 1, 2007, and is still authorized for use outside of billfish tournaments. Alternative 3 was considered, but not fully analyzed in the Environmental Assessment because voluntary promotion of circle hook use in the years prior to implementation of the circle hook regulation on January 1, 2007, did not achieve a high percentage of recreational angler use of circle hooks in the Atlantic billfish fishery. As such, NMFS does not anticipate that continued promotion of voluntary circle hook use alone by tournament anglers would result in achieving the maximum conservation benefit possible of reduced post-release mortality of Atlantic billfish relative to the no action alternative. Alternative 3 could result in minor short-term increases in angler consumer surplus and/or willingness to pay, as anglers may perceive that their short-term catch rates of Atlantic billfish may increase with the use of J-hooks. However, alternative 3 would not be expected to increase either consumer surplus or willingness to pay in the long-term as it would result in an increase in post-release hooking mortality and thus be less likely to contribute to rebuilding of Atlantic billfish populations. For the reasons discussed above, this alternative was not selected as the preferred alternative. Alternative 2 may result in minor increases in printing and distribution costs to tournament operators if tournament rules need to be reprinted and redistributed. Tournaments could avoid additional printing costs if they voluntarily chose to maintain an all circle hook tournament format, which some tournaments have notified NMFS that they will do. There may be a long-term increase in angler consumer surplus resulting from rebuilding efforts through either alternatives 1 or 2, and therefore resulting in a potential increase in demand for billfish tournament participation. However, these benefits may be realized sooner under alternative 2, should it lead to increased acceptance and use of circle hooks. As such, and based on the analysis included in the EA for this rulemaking, alternative 2 was selected the preferred alternative. List of Subjects in 50 CFR Part 635 Fish, Fisheries, Fishing, Fishing vessels, Management. Dated: May 8, 2007. William T. Hogarth Assistant Administrator for Fisheries, National Marine Fisheries Service. For reasons set out in the preamble, 50 CFR part 635 is amended as follows: PART 635—ATLANTIC HIGHLY MIGRATORY SPECIES 1. The authority citation for part 635 continues to read as follows: Authority: 16 U.S.C. 971 *et seq.* ; 16 U.S.C. 1801 *et seq.* 2. In § 635.21, paragraph (e)(2)(iii) is suspended from May 11, 2007 to December 31, 2007, and is revised effective January 1, 2008, to read as follows: § 635.21 Gear operation and deployment restrictions.

(e)* * *

(2)* * *

(iii)After December 31, 2007, persons who have been issued or are required to be issued a permit under this part and who are participating in a “tournament”, as defined in § 635.2, that bestows points, prizes, or awards for Atlantic billfish must deploy only non-offset circle hooks when using natural bait or natural bait/artificial lure combinations, and may not deploy a J-hook or an offset circle hook in combination with natural bait or a natural bait/artificial lure combination. [FR Doc. E7-9097 Filed 5-10-07; 8:45 am] BILLING CODE 3510-22-S 72 91 Friday, May 11, 2007 Proposed Rules DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Part 1738 RIN 0572-AC06 Rural Broadband Access Loans and Loan Guarantees AGENCY: Rural Utilities Service, USDA. ACTION: Proposed rule. SUMMARY: The Rural Utilities Service, an agency delivering the United States Department of Agriculture's

(USDA)Rural Development Utilities Programs, hereinafter referred to as Rural Development, proposes to amend its regulation for the Rural Broadband Access Loan and Loan Guarantee Program (Broadband Loan Program). Since the Broadband Loan Program's inception, the Agency has faced and continues to face significant challenges in administering the program, including the fierce competitive nature of the broadband market, the fact that many companies proposing to offer broadband service are start-up organizations with limited resources, continually evolving technology, and economic factors such as the higher cost of serving rural communities. Because of these challenges, the Agency has been reviewing the characteristics of the Broadband Loan Program and has determined that modifications are required to accelerate the deployment of broadband service to the rural areas of the country. Therefore, this rulemaking proposes to implement changes on the following subject matter: funding in competitive markets and new eligibility requirements; new equity and market survey requirements; and new legal notice requirements to increase transparency. DATES: Comments must be submitted on or before July 10, 2007. ADDRESSES: Submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* and, in the lower “Search Regulations and Federal Actions” box, select “Rural Utilities Service” from the agency drop-down menu, then click on “Submit.” In the Docket ID column, select RUS-06-Agency-0052 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 your comment addressed to Michele Brooks, Acting Director, Program Development and Regulatory Analysis, USDA Rural Development, 1400 Independence Avenue, STOP 1522, Room 5159, Washington, DC 20250-1522. Please state that your comment refers to Docket No. RUS-06-Agency-0052. *Other Information:* Additional information about Rural Development and its programs is available on the Internet at *http://www.rurdev.usda.gov/index.html.* FOR FURTHER INFORMATION CONTACT: Jonathan Claffey, Deputy Assistant Administrator, Telecommunications Program, Rural Development, U.S. Department of Agriculture, 1400 Independence Avenue, SW., STOP 1590, Room 4056, Washington, DC 20250-1590. Telephone number

(202)720-9554, Facsimile

(202)720-0810. SUPPLEMENTARY INFORMATION: Executive Order 12866 This proposed rule has been determined to be significant for purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget (OMB). In accordance with Executive Order 12866, an Economic Impact Analysis was completed, outlining the costs and benefits of implementing this program in rural America. The complete analysis is available from Rural Development upon request. Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Rural Development has determined that this rule meets the applicable standards provided in section 3 of that Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be preempted. No retroactive effect will be given to the rule and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal procedures must be exhausted before an action against the Department or its agencies may be initiated. Regulatory Flexibility Act Certification The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) is not applicable to this proposed rule because the Agency is not required by 5 U.S.C. 553 or any other law to publish a notice of proposed rulemaking for the subject matter of this rule. Paperwork Reduction Act and E-Government Act In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended), Rural Development invites comments on this information collection for which approval from the Office of Management and Budget

(OMB)will be requested. Comments on this notice must be received by July 10, 2007. Comments are invited on:

(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of burden including the validity of the methodology and assumption used;

(c)ways to enhance the quality, utility and clarity of the information to be collected; and

(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques on other forms of information technology. Comments may be sent to Michele Brooks, Acting Director, Program Development and Regulatory Analysis, Rural Development, U.S. Department of Agriculture, 1400 Independence Ave., SW., Stop 1522, Room 5159 South Building, Washington, DC 20250-1522. *Title:* 7 CFR Part 1738, Rural Broadband Access Loans and Loan Guarantees. *OMB Control Number:* 0572-0130. Type of Request: Revision of a currently approved information collection package. *Abstract:* Rural Development is authorized by Title VI, Rural Broadband Access, of the Rural Electrification Act of 1936, as amended (RE Act), to provide loans and loan guarantees to fund the cost of construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities in States and Territories of the United States. Title VI of the RE Act requires that Rural Development make or guarantee a loan only if there is reasonable assurance that the loan, together with all outstanding loans and obligations of the borrower will be repaid in full within the time agreed. The items covered by this collection include forms and related documentation to support a loan application, including Form 532 and supporting documentation. Revisions to the information collection include:

(1)Funding in competitive markets and new eligibility requirements (revisions will affect the details of an application, but not the difficulty of preparation or quantity of information provided; accordingly, the paperwork burden associated with these changes is not expected to be appreciably more or less than under the existing rule);

(2)new equity requirements (revisions will affect the details of an application, but not the difficulty of preparation or quantity of information provided; accordingly, the paperwork burden associated with these changes is not expected to be appreciably more or less than under the existing rule);

(3)new market survey requirements (the associated paperwork burden will be reduced by a small amount for some applicants as the requirement will be eliminated in certain instances); and

(4)new legal notice requirements to increase transparency (the additional information required by the proposed modification of legal notice requirement will increase the paperwork burden of each application by a small amount). *Estimate of Burden:* Public reporting for this collection of information is estimated to average 225 hours per response. *Respondents:* Businesses and not-for-profit institutions. *Estimated Number of Respondents:* 40. *Estimated Number of Responses per Respondent:* 2. *Estimated Total Annual Burden on Respondents:* 13,480 hours. Copies of this information collection can be obtained from Michele Brooks, Program Development and Regulatory Analysis, at

(202)690-1078. All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Rural Development is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. Catalog of Federal Domestic Assistance The program described by this proposed rule is listed in the Catalog of Federal Domestic Assistance Programs under No. 10.886, Rural Broadband Access Loans and Loan Guarantees. This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402. Telephone:

(202)512-1800 or at *http://www.cfda.gov.* Executive Order 12372 This proposed rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with State and local officials. See the final rule related notice entitled “Department Programs and Activities Excluded from Executive Order 12372,” (50 FR 47034). Unfunded Mandates This proposed rule contains no Federal mandates (under the regulatory provision of Title II of the Unfunded Mandate Reform Act of 1995) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandate Reform Act of 1995. National Environmental Policy Act Certification Rural Development has determined that this proposed rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ). Therefore, this action does not require an environmental impact statement or assessment. Background Contents A. Introduction B. Regulatory History C. Program Results D. Program Improvements E. Review of Rules and Processes F. Proposed Rule Changes *A. Introduction:* The Utilities Programs (the Agency) of USDA Rural Development improve the quality of life in rural America by providing investment capital for deployment of rural telecommunications infrastructure. Financial assistance is provided to rural utilities; municipalities; commercial corporations; limited liability companies; public utility districts; Indian tribes; and cooperative, nonprofit, limited-dividend, or mutual associations. In order to achieve the goal of increasing economic opportunity in rural America, USDA Rural Development finances infrastructure that enables access to a seamless, nation-wide telecommunications network. With access to the same advanced telecommunications networks as its urban counterparts, especially broadband networks designed to accommodate distance learning, telework and telemedicine, rural America will eventually see improving educational opportunities, health care, economies, safety and security, and ultimately higher employment. The Agency shares the assessment of Congress, State and local officials, industry representatives, and rural residents that broadband service is a critical component to the future of rural America. The Agency is committed to ensuring that rural America will have access to affordable, reliable, broadband services, and to provide a healthy, safe and prosperous place to live and work. *B. Regulatory History:* On May 13, 2002, the Farm Security and Rural Investment Act of 2002, Public Law 107-171 “Farm Bill” was signed into law. The Farm Bill amended the Rural Electrification Act of 1936 to include Title VI, the Rural Broadband Access Loan and Loan Guarantee Program (Broadband Loan Program), to be administered by the Agency. Title VI authorized the Agency to approve loans and loan guarantees for the costs of construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. Under the Farm Bill, the Agency was directed to promulgate regulations without public comment within 120 days from passage. Implementing the program required a different lending approach for the Agency than it employed in its earlier telephone program because of the unregulated, highly competitive, and technologically diverse nature of the broadband market. The current regulations were published on January 30, 2003. *C. Program Results:* Despite the challenges in implementing this new program, significant progress has been made in facilitating rural broadband deployment. As of March 15, 2007, the Agency approved 68 loans totaling $1.2 billion for broadband deployment projects headquartered in 36 states. Eight of those projects are completed in Kansas, Louisiana, Michigan, North Dakota, Nebraska, South Dakota, Texas and Washington. The remainder of the projects are in various stages of construction or planning. Through these loans, more than half a million households in more than 1,000 rural communities will receive broadband service. Approximately 40 percent of these communities had no broadband service at the time the loan was approved, and an additional 20 percent had limited access to broadband services. As mandated by Congress, the program is to be administered in a technology neutral manner. As the results show below, the Agency has achieved that mandate by financing the deployment of a wide array of technologies capable of meeting the needs of rural communities: Technology Number of loans approved * Broadband over Powerline 1 Digital Subscriber Line 15 Wireless 18 Hybrid Fiber Coax 12 Optical Fiber 27 * Applications deploying multiple technolo- gies counted in each category. In addition to the various types of technology deployments, loans have been made to a very diverse set of organizations using various business models. Nearly 90 percent of loans approved were made to private companies, 7 percent were made to cooperatives, 3 percent were made to municipalities and 1 loan was awarded to a tribal authority. *D. Program Improvements:* Since the Broadband Program's inception, many modifications have been made to improve the administration of the program. Specifically, the Agency has created a standardized loan application; a Broadband Credit Committee to evaluate risks in the program; a financial assessment model to measure loan feasibility; and new standardized loan documents to cover the unique attributes of the industry, as well as accommodate private lending from financial markets which were not traditional Agency lending partners. Moreover, the Agency now encourages applicants to work with Agency local field representatives prior to submitting applications to increase loan processing efficiency. Program outreach efforts have been well received and are in high demand today. To date, the Agency has conducted nearly two dozen awareness sessions with 1,488 attendees nation-wide. As a result of its efforts, the Agency has seen dramatic improvements in its application processing. The average processing time in 2006 was almost half of what it was in 2003. In addition, to increase program awareness and transparency, modifications have been made to the Agency's Web site to ensure that information is available to potential applicants, potential competitors, and the public. *E. Review of Rules and Processes:* While the Agency is proud of the results achieved thus far, it is also aware that improvements to the Broadband Program are necessary. Over the course of the last four years, the Broadband Program has encountered challenges in administering the program and learned from them. The challenges include the competitive nature of the broadband communications industry, the fact that many applicants are start-up organizations with limited resources to meet equity requirements, the rapid pace of technology advancement and increases in demand for bandwidth, and the need for increased transparency in providing communities and incumbent providers with information on new market entrants. Program participants and industry members have since raised concerns with the implementation of the program. The Agency's experience, coupled with input from industry representatives, state and regional associations, and other interested parties, has prompted the Agency to propose amendments to its regulations to address these challenges and other critical issues affecting the deployment of broadband service in rural America. The Agency is, however, still committed to Title VI's direction to give priority to eligible rural communities where broadband service is not available. Further, the Agency is seeking comment on the proposals, which as noted above, will be the first formal opportunity for public comment on the rules associated with the Broadband Program. Specifically, this proposed rule will address:

(1)Funding in competitive markets and new eligibility requirements;

(2)New equity and market survey requirements; and

(3)New legal notice requirements to increase transparency. Further, the program proposes reordering the present rules to make them more user-friendly, and rewording certain rules, without substantively changing them, to clarify their meaning. In addition, the proposed changes codify processes and procedures currently published in Agency guides ( *i.e.* , application submission procedures, competitive analysis, reporting requirements, etc.). In order to easily identify which sections have been modified, added, removed, or re-ordered, the following table summarizes the proposed changes: Broadband Loan and Loan Guarantee Program Rules—Summary of Proposed Changes Existing section Proposed new location Action taken Proposed content change *Subpart A—* 1738.1 Modified Revised 1738.1(c) to state that “RUS will not assess fees for any loan made under this part”. *General:* *§ 1738.1 General statement* Added reference to agency's web site in paragraph (b). *§ 1738.2 Definitions* 1738.2 New and modified definition and additional language at 1738.2(b) Current text designated

(a)and new

(b)added. *Modified Definitions—In most cases, definitions were modified for clarification purposes.* Acquisition. Eligible Rural Community. Financial Feasibility. Forecast Period. Interim Construction. Interim Financing. Release of Funds. *Deleted Definitions.* Broadband pilot. Mortgage. Private Loan Guarantee. RUS Telecommunications borrower. *New Definitions—The Agency has added definitions to clarify existing regulation and support proposed rule modifications.* Advance of Funds. Agency. Arm's Length Transaction. Broadband Loan. Census block. Census block group. Derivative. Eligible Entity. Equity or Net Worth. Existing Broadband Service Provider. Guaranteed Amount Debt Derivative. Guaranteed Amount Equity Derivative. Guaranteed Amount Equivalent. Guaranteed Loan Amount. Guaranteed Loan Note. Guaranteed Loan Portion. Guaranteed Loan Portion Amount. Guaranteed Loan Portion Note. Incumbent Service Provider. Indefeasible Right to Use Agreement (IRU). Loan Guarantee. Loan Guarantee Documents. Pre-Loan Expenses. Security Documents. Telecommunications Loan. Urban Area. Un-guaranteed Amount Equivalent. Un-guaranteed Loan Amount and Un-guaranteed Loan Portion Amount. *Subpart B—Loan Purposes and Basic Policies:* *§ 1738.10 General* 1738.1(a) 1738.2(a) Modified/relocated Refinancing language in

(b)was moved to 1738.22(e). Moved and modified text related to economic composite life to 1738.2(a). *§ 1738.11 Availability of broadband service* 1738.33 1738.61 Modified/relocated Legal notice language moved to 1738.33.

(a)and

(1)through

(3)included in new prioritization scheme in 1738.61. *§ 1738.12 Location of facilities* 1738.22(a) Modified Clarify eligible items for financing. *§ 1738.13 Allocation of funds* 1738.62 Modified Condensed original language by citing the RE Act as the guidance for allocating funds. *§ 1738.14 One-time priority for unfunded applications from the broadband pilot program* Deleted Deleted No longer relevant. *§ 1738.15 Priorities* 1738.61 Modified Added new language regarding prioritization of applications in the following order:

(1)Applications that include only households that have no broadband access or only one Existing Broadband Service Provider.

(2)Applications that include only areas where at least 40 percent of households have no access to Broadband service or access to only one Existing Service provider;

(3)All other applications. 1738.62 Relocated language regarding State and National reserves to 1738.62. Text is reworded to reference the Act. *§ 1738.16 Eligible entities* 1738.2 Relocated/modified Moved language regarding the types of entities eligible for loans to 1738.2(a). 1738.20 1738.21 Moved language regarding eligible entities (existing 1738.16(a) and (b)) to 1738.2(a). Added new section, 1738.21, to detail requirements to serve areas with little or no service: —Start-up operations and new entrants—40% of proposed households in a proposed service area must have access to no or only one existing broadband provider. —Incumbent Service Providers proposing to extend service beyond their existing footprint—40% of proposed households in extended service areas must have access to no or only one existing broadband provider. —Incumbent Service Providers submitting applications solely for the purpose of upgrading existing facilities within Eligible Rural Communities must offer Broadband Service with enhanced features. *§ 1738.17 Civil rights* 1738.64 Relocated/unmodified Redesignated as 1738.64 but text is unchanged. *§ 1738.18 Minimum and maximum loan amount* 1738.12 Relocated/modified Removed reference to plant costs. Moved language from 1738.30(b)(2) regarding annual publication of max/min to this section. Removed language “maximum loan amounts apply only to an applicant for a direct 4-percent broadband loan” and made a general statement that the maximum will be set in the NOFA published annually in the **Federal Register** . This allows the Agency the flexibility to set the maximum level based on current funding levels and portfolio concentration. *§ 1738.19 Facilities financed* 1738.19 Modified/clarified General reorganization to more clearly define for applicants what is and is not eligible for funding by dividing the two topics into separate sections. Old 1738.19(h) is now in 1738.19(b) and renamed ineligible areas. 1738.22 *1738.22 Items Eligible to be financed.* 1738.22(a)—new language regarding start-up and overhead costs is a further clarification that these costs are eligible for financing. Although not specified in the earlier rules, these costs were considered part of the construction costs and therefore have been routinely funding in the loan program. 1738.22(b)—new language regarding pre-loan expenses. 1738.22(c)—new language (replacing old 1738-19(b)) limiting the cost of the capital lease for the first 5 years of the loan amortization period. This language was added because the standard period for advancing all funds set in all RUS loan documents is 5 years. Any lease extending beyond that period should not have funds available at that time. 1738.22(d)—new language clarifies the definition of “necessary and incidental” that currently exists in 1738.21(c). The common practice of the agency is to interpret this clause as 50%. We have made this standard known in public workshops for several years. 1738.23 Modified/clarified 1738.23(d)—clarification that funds cannot be used to purchase or acquire the equipment of an affiliate. 1738.23(e)—modified language regarding financing of CPE equipment; applicants often sell the CPE rather than lease it to the end-user. The original intent was that this equipment would be used as collateral; however, because CPE is often physically out of the control of the applicant and because the value of end-user equipment depreciates quickly, we have determined that other arrangements offer the Agency a similar level of security, while offering the applicant more flexibility under our rules. Eliminated old 1738.19(g)—This rule specifically addressed actions the Agency would take prior to October 2004. This rule is outdated and no longer valid. *§ 1738.20 Credit support requirement* 1738.31 Modified Now called Equity Requirement and Additional cash requirement. 1738.32 Added incentive to serve areas with little or no broadband service: reduced initial equity requirement to 10% for applications filing pursuant to 1738.31(a) or (b); 20% equity requirement remains for all other applications. Added clarification on the use of letters of credit and bonds to meet equity requirements. Added language to reserve the Administrator's right to modify or waive the requirements of this section as long as those modifications do not result in a projected negative cash position in any quarter throughout the forecast period and the modifications are required to provide Broadband Service in areas that are not capable of receiving Broadband Service or can receive Broadband Service from only one Existing Broadband Service Provider. Modified cash requirement language so that cash requirements are considered at time of feasibility determination rather than for eligibility. *§ 1738.21 Interim financing* 1738.60 Relocated/modified Revised for clarification. No substantive change. *§ 1738.22 Loan security* 1738.41(b)

(c)&

(d)Modified 1738.41(b),

(c)and (d)—requirement unchanged, reworded to provide further clarity. 1738.37(e) Old 1738.22(e) language regarding TIER was moved to financial analysis section—1738.37(e). *Subpart C—Types of Loans:* *§ 1738.30 Rural broadband access loans and loan guarantees* 1738.11 Relocated/modified Modified original language in 1738(b)(1)(i)(A) to increase the populations test for a 4% loan from 2,500 to 5,000. 1738.43 Modified original language in 1738.30(b)(1)(i)(B) to be consistent with proposed rules. Language located in 1738.11b(1)(ii) now reads “is not capable of receiving broadband service or can receive service from only one existing broadband service provider. Deleting original language in 1738.30(b)(1)(ii)—This language was intended to promote service to outlying rural areas because these areas had less access to broadband service. The new proposed regulations will achieve this same goal by requiring most applicants to include a significant portion of service areas with little or no broadband service. Deleting original language in 1738.30(b)(1)(i)(C)—Our experience has demonstrated that this rule was too restrictive and prevented most applicants from qualifying for the 4% funding. The proposed regulations will require most applicants to include service to areas with little or no broadband service. These areas are likely to have lower population density and higher deployment costs. Removing the original restriction in 1738.30(b)(1)(i)(C) will better support deployment to these areas by allowing applicants access to lower cost financing. 1738.11 1738.43 Relocated/modified Current 1738.30(b)(2) has been relocated to 1738.12. Current rules specific to loan guarantees have been moved to 1738.43 *§ 1738.31 Full faith and credit* 1738.43(f) Relocated/unmodified Moved to 1738.43(f) without substantial changes. *Subpart D—Terms of Loans:* *§ 1738.40 General* 1738.40(a) Relocated/modified Current text designated as paragraph

(a)and revised to clarify for applicants. *§ 1738.41 Payments on Loans* 1738.42 Relocated/modified Added language regarding the Administrator's ability to modify requirements on a case-by-case basis for areas that are not capable of receiving or can only receive from one existing broadband provider. Broadband Loan and Loan Guarantee Program Rules—Summary of Proposed Changes Proposed new sections Subject matter Proposed content *Subpart D—Loan Application Requirements:* 1738.34 Market Survey The rules proposed in this section codify existing requirements published in Bulletin 1738-1. Modification of Market Survey Requirement: 1738.34(b) now eliminates the requirement for a market survey if an applicant is projecting less than a 15 percent penetration of the households passed, by the end of the Forecast Period. A detailed competitive analysis is still required for all applications. We are proposing this modification in response to applicants' concerns that the cost of conducting a market survey is a barrier to filing. The Agency has relied more heavily on the competitive analysis and financial and risk analysis to determine project feasibility, and will continue to do so under the new proposal. Added language reserving the Administrator's right to waive the requirements on a case-by-case basis. 1738.35 Competitive analysis The rules proposed in this section codify existing requirements published in Bulletin 1738-1. Applicants are aware of the requirements and currently comply with them. 1738.36 Business plan The rules proposed in this section codify existing requirements published in Bulletin 1738-1. Applicants are aware of the requirements and currently comply with them. 1738.37 Financial information The rules proposed in this section codify existing requirements published in Bulletin 1738-1. Applicants are aware of the requirements and currently comply with them. The proposed rule also allows cash-flow from operations to be used in determination of the cash requirement. 1738.38 System design The rules proposed in this section codify existing requirements published in Bulletin 1738-1. Applicants are aware of the requirements and currently comply with them. New language reserving the Administrator's right to waive the requirements on a case-by-case basis. 1738.39 Submission of application New section that clarifies that applicants are encouraged to submit applications through the General Field Representative in their state for review prior to final submission. Applications will still be accepted at the National Office. *Subpart F—Post Application Procedures:* 1738.50 Notification of completeness This new section codifies currently existing internal processes and is designed to help applicants understand the post-application process. We believe this demonstrates the Agency's commitment to a standardized and more transparent process. 1738.51 Determination of feasibility This new section codifies currently existing internal processes and is designed to help applicants understand the post-application process. We believe this demonstrates the Agency's commitment to a standardized and more transparent process. 1738.52 Notice to applicant of decision This new section codifies currently existing internal processes and is designed to help applicants understand the post-application process. We believe this demonstrates the Agency's commitment to a standardized and more transparent process. *Subpart G—Miscellaneous Requirements and Information:* 1738.63 Annual audit and reporting requirements Codifies standard requirements currently existing in broadband loan closing documents. Added language to 1738.63(a) to allow the Administrator to waive the requirement that an audit be performed in the year in which the loan is approved if operations of the applicant have not yet started. 1738.65 Applicable laws Codifies standard requirements existing in all broadband loan documents. *F. Proposed Rule Changes:* The following proposals seek to implement changes to the Broadband Program's regulations regarding:

(1)Funding in competitive markets and new eligibility requirements;

(2)New equity and market survey requirements; and

(3)New legal notice requirements to increase transparency. Through this Notice, the Agency seeks comments on all of these proposed changes from any and all interested parties.

(1)*Funding in competitive markets and new eligibility requirements:* The most intractable problem the Broadband Program has encountered is finding feasible loan applications which propose to serve only rural areas which do not have broadband service. The cost of building out a broadband system coupled with low rural population density in unserved areas has consistently yielded loan proposals which cannot be supported by project revenues. Consequently, in the history of the program, the Agency has certified as complete only one application to serve a rural area completely without broadband service. Uniquely, that application was for an Indian reservation with a very different competitive environment. In order for broadband loans to be feasible, it is necessary for applicants to serve low cost, more densely populated areas, as well as low density high cost areas. Although it is necessary to serve high density areas which are likely to have broadband service, the Agency proposes to place limitations on service to such areas. The Agency proposes changes in eligibility that would prohibit funding within urban areas, regardless of population, and areas where a significant share of the market is already served by incumbent providers. To accomplish this, the Agency is adding or modifying three definitions, Existing Broadband Service Provider, Eligible Rural Community, and Urban Area, which will identify communities that will be ineligible for funding by establishing that sufficient service is already being provided.

(a)*Existing Broadband Service Provider.* The Agency initially proposes the definition of an existing broadband service provider to identify existing competition. As a basis, the Agency will use the current definition of “broadband” established by the Federal Communications Commission

(FCC)to determine Incumbent Service Providers that are providing broadband service to the households in the applicant's proposed communities. To be recognized as an Existing Broadband Service Provider, the Incumbent Service Provider must provide evidence and certify to the Agency that 10 percent of the households passed by their facilities are purchasing their broadband service. Using this new definition, funding for any community where there are four or more Existing Broadband Service Provider will be prohibited. In establishing the benchmark of “10 percent of households,” the Agency sought to establish a threshold penetration of the broadband market in any particular community in order to separate broadband service providers who are actively and successfully selling their services from those who are only marginally engaged with a community. The Agency believes that the threshold should differentiate providers who only market to a limited segment of the community (e.g. to businesses, densely populated areas, apartment buildings, etc.) so that a community is not treated as having service available from a provider who does not, in fact, serve all types of customers, throughout its service territory. Nationwide, slightly more than 40 percent of households are subscribing to broadband service. This number was determined by using the FCC's report entitled “High-Speed Services for Internet Access: Status as of June 30, 2006” and comparing the number of residential Advanced Services Lines (45.9 million) with the number of households in the country. The FCC report indicates that the two major technologies providing broadband service are cable modem (59.9%) and DSL (36.0%). In most rural communities, these two types of service are offered by two providers, the incumbent local cable company and the incumbent local exchange carrier (ILEC). For example, assuming that a particular community meets the national average penetration percentage of 40.9 percent and further assuming that there are only two providers supplying these services in the same proportions as the national data reflect, the percentage of households served by these two providers would be 24.5 percent and 14.7 percent for the cable company and the ILEC, respectively. This example reflects an idealized estimate. Nonetheless, looking to the idealized case for guidance indicates that setting a threshold at 20 percent of the households in a market (roughly half of the average penetration) might well eliminate all but one provider in a market. Even a 15 percent threshold seems high, since nationwide, DSL does not yet reach that penetration. Therefore, we propose a threshold of 10 percent of the households in a market. A company offering broadband service will need to have a customer base of at least 10 percent of the households in a community in order to be considered an Existing Broadband Service Provider for the purposes of this proposed rule

(b)*Urban Area.* In addition to identifying competition, the Agency proposes limiting eligibility of those communities that qualify under the regulations as rural in population, but are located within the boundaries of an Urban Area. The Agency believes that using the pre-established definition of Urban Area will clarify exactly which communities are eligible and reduce the number of “urban-like” communities that technically qualify in population size but are not representative of rural in most other characteristics.

(c)*Eligible Rural Community.* Tying together the preceding two concepts, then, the Agency proposes that an Eligible Rural Community mean a community which contains less than four Existing Broadband Service Providers and is not located in an Urban Area. This modification recognizes that, where there are four or more existing providers, the market is sufficiently served and does not warrant an additional market entrant subsidized through Federal funding. In addition, the Agency continues to prioritize deployment of Broadband Service to households with no or limited broadband access while ensuring the financial feasibility of loans. To accomplish this, the Agency will require applications from new market entrants, start-ups or incumbent providers that are expanding their service area, to enter areas where 40 percent of households either have no or limited access to Broadband Service. This requirement addresses the need to reach unserved or underserved areas while also permitting service to more lucrative areas, which may be served by up to three Existing Service Providers, in order to attract feasible loan proposals which are supportable from project revenues. Permitting service in areas with up to three Existing Service Providers addresses the need for applicants to leverage revenues from lower-cost users (typically those in more densely populated areas within a city or town) in order to provide service to rural households in higher cost areas, while excluding areas with higher levels of competition where loan feasibility is unlikely. Lastly, the Agency's proposed rule includes loans to incumbent providers to upgrade existing facilities without requiring service to additional customers as long as the upgrades enhance existing Broadband Service. For purposes of determining whether the proposed service area has “four or more” Existing Service Providers, thereby disqualifying the area from lending consideration, the applicant will not be considered as an Existing Broadband Service Provider. Therefore, a facility upgrade loan may be made to an applicant operating in an area which has three other Existing Broadband Service Providers. The Agency believes that this approach will benefit rural residents by allowing incumbents to keep pace with the changing needs of their customers through continued advancement in technologies and services

(2)*New equity and market survey requirements:* Two requirements of the Broadband Program have significantly precluded applicants from being eligible for a Broadband loan, the equity requirement and the market survey requirement. In response, the Agency is modifying both requirements so as to provide incentives for serving markets with limited or no broadband service and to reduce the costs to applicants under certain circumstances.

(a)*§ 1738.31 Equity requirement:* Under the current rules, to be eligible for a loan, applicants must have a 20 percent (of the requested loan amount) credit support contribution and in some instances, cash equal to the first full year's operations. The concept of credit support was unique to the Agency and has been a source of confusion for many applicants. In an effort to better clarify its requirements, the Agency is proposing to replace the credit support methodology with a straight forward equity requirement, mirroring private industry. With this proposed rule modification, the Agency is also addressing our applicants' challenges in obtaining private investment capital to provide service in less lucrative, rural markets, particularly those with no broadband service or service from only one provider. A significant number of applicants, many of whom are start-ups, have noted that private financing for these areas is limited and difficult to obtain. Further, applicants assert that the current equity requirement proves too burdensome and serves as a barrier to entities seeking to serve these markets. The Agency's records generally support this assertion. Of the 106 applications returned since the Program's inception, more than half were returned for lack of credit support. Therefore, the Agency is proposing to reduce its equity requirement from 20 percent to 10 percent of the requested loan amount for applicants proposing to serve an area wherein at least 40 percent of the households have no broadband access or service from only one provider. The Agency proposes that all other applicants be required to demonstrate a minimum equity position equal to 20 percent of the requested loan amount at the time the application is submitted.

(b)*§ 1738.33 Market survey:* Currently, the Agency uses market surveys, competitive assessments and financial analyses as tools to validate subscriber projections and determine loan feasibility. Applicants have asserted that completing a market survey can prove to be onerous, unnecessary, and cost prohibitive, especially for those seeking to serve areas where no service exists. Based on our experience with the program, the Agency finds that most market surveys submitted support a 15 percent penetration rate. As a result, the Agency relies more heavily on other means, such as the detailed competitive and financial analyses, to determine feasibility for areas where 15 percent or less penetration is projected. Therefore, in communities where an applicant is proposing to serve less than 15 percent of the market, the Agency is proposing to eliminate the requirement for a market survey, but continue to require submission of competitive and financial analyses.

(3)*New legal notice requirements to increase transparency:* The Agency is also proposing to modify the Legal Notice requirement of § 1738.32 to improve information to customers, existing service providers, and applicants. This requirement of the existing rule was designed to:

(i)Identify areas with no existing Broadband Service for priority consideration,

(ii)notify communities of the potential entrant of a new service provider, and

(iii)provide incumbent service providers with an opportunity to describe their current service territory and service offerings, market share, etc. The concept of the legal notice is well intended and, the Agency believes, still necessary and useful to the Agency in making lending decisions. However, based on past experience, the current process needs to be modified. The Agency proposes further modifications to increase transparency, reach a broader range of interested parties, and provide more detailed information on the extent of broadband deployment by incumbent providers. To address concerns with timely access to legal notices, the Agency is proposing to establish a clearly defined window for posting of the notices. Specifically, the legal notice will be published on the Agency's webpage after the application has been received in the Agency's national office and will remain on the webpage for a period of 30 working days. The notice must set forth the applicant's total proposed service area, including a service area map. An applicant will also need to indicate if it is proposing voice and video services, in addition to the present requirement of its intention to provide data services. This will increase the transparency of the new application to the incumbent provider, as well as alert customers to potential new service offerings. In response to the Legal Notice, incumbent providers will have new responsibilities as well. The Legal Notice will now request any Incumbent Service Provider to submit to the Agency the following information (within 30 days of notice posting) on the number of customers:

(i)Capable of receiving Broadband Service in the applicant's proposed service area;

(ii)purchasing Broadband Service in the applicant's proposed service area (including the rates of data transmission being offered, and the cost of each level of Broadband Service); and

(iii)receiving other services that will be offered in the applicant's proposed service area and the associated rates for these other services. An incumbent will also be requested to submit a map of its service territory. It is important that the Agency receive this information, as it will be used by the Agency to determine if the incumbent will be classified as an Existing Broadband Service Provider, and ultimately whether an Eligible Rural Community is eligible for funding. If, however, an incumbent does not submit a response to the legal notice within the applicable time period, it will not be considered an Existing Broadband Service Provider for the purpose of determining applicant eligibility. Nonetheless, the incumbent will still be considered in the lending decision as a competitor. All proprietary and confidential information submitted by the incumbent will not be released under the Freedom of Information Act. List of Subjects in 7 CFR Part 1738 Broadband, Loan programs-communications, Rural areas, Telephone, Telecommunications. For reasons set out in the preamble, the Agency proposes to amend chapter XVII of title 7 of the Code of Federal Regulations by revising part 1738 to read as follows: PART 1738—RURAL BROADBAND ACCESS LOANS AND LOAN GUARANTEES Subpart —General Sec. 1738.1 General. 1738.2 Definitions. 1738.3—1738.9 [Reserved] Subpart B—Types of Loans 1738.10 General. 1738.11 Broadband Loans and Loan Guarantees. 1738.12 Minimum and maximum loan amounts. 1738.13-1738.18 [Reserved] Subpart C— Ineligible Areas, Eligible Entities and Eligible/Not Eligible Items 1738.19 Ineligible areas. 1738.20 Eligible entities. 1738.21 Service requirement for proposed projects. 1738.22 Items eligible to be financed. 1738.23 Items not eligible to be financed. 1738.24-1738.29 [Reserved] Subpart D—Loan Application Requirements 1738.30 General. 1738.31 Equity requirement. 1738.32 Additional cash requirements. 1738.33 Legal notice. 1738.34 Market survey. 1738.35 Competitive analysis. 1738.36 Business plan. 1738.37 Financial information. 1738.38 System design. 1738.39 Submission of the application. Subpart E—Terms for Loans and Loan Guarantees 1738.40 Direct 4 Percent and Cost of Money Loans. 1738.41 Loan security. 1738.42 Payments on loans. 1738.43 Loan guarantees. 1738.44-1738.49 [Reserved] Subpart F—Post-Application Procedures 1738.50 Notification of completeness. 1738.51 Determination of feasibility. 1738.52 Notice to applicant on decision. 1738.53-1738.59 [Reserved] Subpart G—Miscellaneous Requirements and Information 1738.60 Interim financing and construction. 1738.61 Priority for processing loan applications. 1738.62 Allocation of funds. 1738.63 Annual audit and reporting requirements. 1738.64 Applicable laws. 1738.65-1738.99 [Reserved] 1738.100 OMB control number. Authority: Pub. L. 107-171, 7 U.S.C. 901 *et seq.* Subpart A—General § 1738.1 General statement.

(a)This part sets forth the general policies, types of loans and loan guarantees, and program requirements under the Rural Broadband Access Loan and Loan Guarantee Program to provide funds on a technology neutral basis for the costs of construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities.

(b)Additional information regarding the Rural Broadband Access Loan and Loan Guarantee Program can be found in Bulletin 1738-1, “Rural Broadband Access Loan and Loan Guarantee Application Guide” and Bulletin 1738-2, “Rural Broadband Access Loan and Loan Guarantee Advance and Construction Procedures Guide.” These bulletins are located on the Agency's Web page: *http://www.usda.gov/rus/telecom/broadband.htm* . or you can contact Kenneth Kuchno, Director, Broadband Division at the following address for copies: Stop 1599, South Agriculture Building, Room 2868, Washington , DC 20250.(c) No fees or charges will be assessed for any loan made under this part. § 1738.2 Definitions.

(a)As used in this part: *Acquisition* means the purchase of assets that will be used to provide Broadband Service, such as by acquiring facilities, equipment, operations, licenses, or majority stock interest of one or more organizations. Stock acquisitions must be arms-length transactions. *Administrator* means the Administrator of the Rural Utilities Service (RUS), or his or her designee. *Advance of Funds* means the transfer of loan funds from the Agency to the borrower. *Affiliate* or *Affiliated Company* of any specified entity means any other entity directly or indirectly controlling of, controlled by, under direct or indirect common control with, or related to, such specified entity. For the purpose of this definition, “control” of any specified entity means the power to direct the management and policies of such specified entity, directly or indirectly, whether through the ownership of stock, by contract, or otherwise. *Agency* shall mean the Rural Utilities Service, which administers the United States Department of Agriculture's

(USDA)Rural Development Utilities Programs. *Applicant* means an eligible entity requesting approval of a loan or loan guarantee under this part. *Arms-Length Transaction* means a transaction between two related or affiliated parties that is conducted as if they were unrelated, so that there is no question of conflict of interest, or a transaction between two otherwise unrelated or unaffiliated parties. *Borrower* means any organization that has an outstanding Broadband or Telecommunications loan made or guaranteed by the Agency. *Broadband Loan* means any loan approved under Title VI of the Rural Electrification Act of 1936 (RE Act). *Broadband Service* means any technology identified by the administrator as having the capacity to transmit data to enable a subscriber to the service to originate and receive high quality voice, data, graphics and video. To qualify as broadband service, the project must offer data transmission services and may provide voice, graphics, video and other services. The Agency will publish a notice in the **Federal Register** defining the minimum rate-of-data transmission criteria to qualify as broadband service during that fiscal year's funding period. *Census block* means an area normally bounded by visible features, such as streets, streams, and railroads, and by nonvisible features, such as the boundary of an incorporated place, minor civil division, county, or other tabulation entity as described in the latest decennial census. *Census block group* means a group of census blocks within a census tract whose numbers begin with the same digit; for example, BG 3 within a census tract includes all census blocks numbered from 3000 to 3999. *Composite economic life* means the weighted (by dollar amount of each class of facility in the loan) average economic life of all classes of facilities in the loan. *Derivative* means any right, interest, instrument or security issued or traded on the credit of the Guaranteed Loan or any Guaranteed Loan Portion, including but not limited to any participation share of, or undivided ownership or other equity interest in, the Guaranteed Loan or any Guaranteed Loan Portion; any note, bond or other debt instrument or obligation which is collateralized or otherwise secured by a pledge of, or security interest in, the Guaranteed Loan or any Guaranteed Loan Portion; or any such interest in such an interest or any such instrument secured by such an instrument. *Economic life* means the estimated useful service life of an asset as determined by the Agency. *Eligible entity* means a cooperative, nonprofit or for-profit corporation, limited dividend or mutual association, limited liability company, Indian tribe, tribal organization as defined in 25 U.S.C. 450b

(b)and (c), state or local government, including any agency, subdivision, or instrumentality thereof (including consortia thereof). In addition, the entity must have sufficient authority to enter into a contract with the Agency and to carry out the purposes of the proposed loan. Individuals, partnerships of individuals, and entities that serve more than 2 percent of the telephone subscriber lines installed in the United States are not eligible entities. *Eligible Rural Community* means any area, as confirmed by the latest decennial census of the Bureau of the Census, which is not located within:

(1)The boundaries of an Urban Area;

(2)An incorporated city or town with a population of more than 20,000; or

(3)An area that has four or more Existing Broadband Service Providers (excluding the applicant). *Equity or Net Worth* means Total Assets minus Total Liabilities. For example, the sum of the balances of the following accounts of the applicant: Capital Stock or Membership Units, Additional Paid-In-Capital, Treasury Stock, Other Capital, and Retained Earnings. *Existing Broadband Service Provider* means an Incumbent Service Provider that is providing Broadband Service, and is able to provide evidence and certify to the Agency that 10 percent of the households passed by their facilities are purchasing their Broadband Service. Resellers of Broadband Service who utilize the physical facilities of other service providers to deliver their products to the subscriber will not be considered as an Existing Broadband Service Provider. *Feasibility study* means the pro forma financial analysis prepared by the Agency, based on the financial projections supplied by the applicant and found acceptable by the Agency, to determine the financial feasibility of a loan. *Financial feasibility* means the ability of an applicant to generate sufficient revenues to cover its expenses and service its debt and meet the minimum TIER requirement of 1.25 by the end of the Forecast Period. *Fiscal year* means the fiscal year of the Federal Government (October 1 to September 30). *Forecast period* means the time period used in the feasibility study to determine if an application is financially feasible. Financial feasibility of a loan application is usually based on 5-year projections. *Guaranteed-Amount Debt Derivative* means any note, bond or other debt instrument or obligation which is collateralized or otherwise secured by a pledge of, or security interest in, the Guaranteed Loan Note or any Guaranteed Loan Portion Note or any Derivative, as the case may be, which has an exclusive or preferred claim to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be. *Guaranteed-Amount Equity Derivative* means any participation share of, or undivided ownership or other equity interest in, the Guaranteed Loan or any Guaranteed Loan Portion or any Derivative, as the case may be, which has an exclusive or preferred claim to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be. *Guaranteed-Amount Equivalent* means, with respect to any Derivative which is equal in principal amount to the Guaranteed Loan or any Guaranteed Loan Portion, that amount of payment on account of such Derivative which is equal to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount, as the case may be; or with respect to any Derivative which in the aggregate are equal in principal amount to the Guaranteed Loan or any Guaranteed Loan Portion, that amount of payment on account of such derivatives which is equal to the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount, as the case may be. *Guaranteed Loan Amount* means that amount of payment on account of the Guaranteed Loan which is guaranteed under the terms of the Guarantee. *Guaranteed Loan Note* means, collectively, the note or notes executed and delivered by the Borrower to evidence the Guaranteed Loan. *Guaranteed Loan Portion* means any portion of the Guaranteed Loan. *Guaranteed Loan Portion Amount* means that amount of payment on account of any Guaranteed Loan Portion which is guaranteed under the terms of the Guarantee. *Guaranteed Loan Portion Note* means any note executed and delivered by the Borrower to evidence a Guaranteed Loan Portion. *Incumbent service provider* means an existing entity that is currently providing data, voice, video and/or graphic services in the applicant's proposed service area. *Indefeasible Right to Use Agreement*

(IRU)means the effective long-term lease of a portion of the capacity of a cable, specified in terms of a certain number of channels of a given bandwidth. *Initial loan* means the first loan made under the RE Act to a Borrower. *Interim construction* means the construction, improvement, or acquisition of facilities and equipment proposed to be funded by loan funds, which occurs after the application is deemed complete by the Agency. *Interim financing* means funding for the Interim construction. *Loan* means any loan made or guaranteed under this part by the Agency, unless otherwise noted. *Loan contract* means the loan agreement between the Agency and the borrower, including all amendments thereto. *Loan documents* mean the loan contract, note, and security instrument between the borrower and the Agency and any associated documents pertaining to a loan once the loan is approved for financing. *Loan funds* mean funds provided pursuant to a loan made or guaranteed under this part by the Agency. *Loan guarantee* means a loan made by another lender and guaranteed by the Agency. *Loan guarantee documents* mean the guarantee agreement, the loan contract between the guaranteed lender and the Borrower, the loan note guarantee, the Guaranteed Loan Note, and the Security Documents. *Pre-loan expenses* means the expenses associated with the preparation of a loan application. These expenses include costs associated with the legal notice, market survey, competitive analysis, financial analysis, environmental report, engineering design, and required legal opinions. Pre-loan expenses must be fully supported and acceptable to the Agency if they are to be considered for funding. *RE Act* means the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 *et seq.* ). *Release of funds* means the availability of loan funds to be advanced for approved purposes. *RUS* means the Rural Utilities Service, an agency of the United States Department of Agriculture, and successor to the Rural Electrification Administration. *Security Documents* mean any mortgage, security agreement, and/or financing statement, or other documents which grants to the Agency a security interest, including any amendments and supplements thereto. *Service area* means the geographical area within which the applicant proposes to make Broadband Service available with a loan provided under this part. *Telecommunications* means the transmission and reception of voice, data, sounds, signals, pictures, writings, or signs of all kinds, by wire, fiber, radio, light, or other visual or electromagnetic means. *Telecommunications loan* means any telecommunication loan made under Title II, III, IV or VI of the RE Act. *TIER* means Times Interest Earned Ratio. TIER is the ratio of an applicant's net income (after taxes) plus (adding back) interest expense, all divided by interest expense. *Total Assets* means the sum of the balances of the following accounts of the applicant: Current Assets, Non Current-Assets, and Total Plant, minus the following accounts of the applicant: Accumulated Depreciation and Accumulated Amortization. *Unguaranteed-amount equivalent* means all amounts of payment on account of any Derivative other than the respective Guaranteed-Amount Equivalent. *Unguaranteed loan amount* means all amounts of payment on account of the Guaranteed Loan other than the Guaranteed Amount. *Unguaranteed loan portion amount* means all amounts of payment on account of any Guaranteed Loan Portion other than the respective Guaranteed Loan Portion Amount. *Urban Area* means, as defined by the Bureau of the Census, all territory, population, and housing units located within an urbanized area

(UA)or an urban cluster (UC).

(b)Accounting terms not otherwise defined in this part shall have the definition ascribed to them under generally accepted accounting principles (GAAP). §§ 1738.3-1738.9 [Reserved] Subpart B—Types of Loans § 1738.10 General. Financial assistance under the Rural Broadband Access Loan and Loan Guarantee Program shall be in the form of a Direct Cost-of-Money loan, a Direct 4 Percent Loan, and/or a Loan Guarantee to provide Broadband Service in Eligible Rural Communities. § 1738.11 Broadband Loans and Loan Guarantees. Broadband Loans and Loan Guarantees shall consist of one or more of the following three types of financial assistance:

(a)*Direct Cost-of-Money,* which shall bear interest at a rate (the “Cost-of-Money Interest Rate”) equal to the cost of borrowing to the Department of Treasury for obligations of comparable maturity. The Cost-of-Money Interest Rate will be supplied by the Agency each time funds are actually advanced to the Borrower.

(b)*Direct 4 Percent,* which shall bear an interest rate of 4 percent on any advance to the Borrower.

(1)To be eligible for a direct loan bearing an interest rate of 4 percent, the applicant must propose serving an Eligible Rural Community that:

(i)Has a population of less than 5,000 inhabitants; and

(ii)Is not currently capable of receiving Broadband Service or can receive Broadband Service from only one Existing Broadband Service Provider.

(iii)Is located in a county with per capita personal income that is less than or equal to that percent of the national per capita personal income which the Agency will publish in the **Federal Register** at the beginning of each fiscal year. County per capita income is published by the Bureau of Economic Analysis, U.S. Department of Commerce, at *http://www.bea.doc.gov/bea/regional/reis/.* The Agency will use the most recent statistics published on October 1 of the fiscal year in which the application is deemed complete by the Agency.

(2)When an approved application exceeds the maximum amount of 4 percent financing that may be available to the Borrower, a direct loan made at 4 percent may be made simultaneously with a Cost-of-Money Interest Rate loan.

(3)A 4 percent loan may be made simultaneously with a Cost-of-Money Interest Rate loan or a private loan guarantee.

(c)*Loan Guarantee,* which shall bear interest at a rate, set by the guaranteed lender that must be consistent with the then applicable market rate for loans of comparable amounts and maturities. § 1738.12 Minimum and maximum loan amounts. Applications for loans or loan guarantees of less than $100,000 will not be considered. The maximum of any single type of loan or loan combination will be published in the **Federal Register** at the beginning of each fiscal year. §§ 1738.13-1738.18 [Reserved] Subpart C—Ineligible Areas, Eligible Entities and Eligible/Ineligible Items § 1738.19 Ineligible areas. The Agency will not approve the use of a broadband loan:

(a)To more than one applicant to provide Broadband Service within the same Eligible Rural Community; or

(b)To an applicant proposing to provide Broadband Service in an Eligible Rural Community where an existing Borrower is already providing Broadband Service. § 1738.20 Eligible entities. Only Eligible Entities which propose providing Broadband Services in Eligible Rural Communities shall be eligible for a Broadband Loan. § 1738.21 Service requirements for proposed projects.

(a)A project in an area not currently served by the applicant must:

(1)Be in an Eligible Rural Community.

(2)Contain at least 40 percent of households with no access to Broadband Service or access to only one Existing Broadband Service Provider. (For example, if a start-up company or new entrant submits a loan application to provide Broadband Service to 1000 households, 400 (1000 × 40%) of the households must have no broadband access or have access to only one Existing Broadband Service Provider. Likewise, if an Incumbent Service Provider submits a loan application to provide Broadband Service to 2000 households in its existing service territory and 1000 households outside of its existing territory, 400 (1000 × 40%) of the households outside its existing service territory must have no broadband access or have access to only one Existing Broadband Service Provider.)

(b)Applications submitted by Incumbent Service Providers solely for the purpose of upgrading existing facilities in Eligible Rural Communities must enhance existing service by providing or improving Broadband Service and other services related thereto.

(c)Areas that are being acquired from an Incumbent Service Provider will be considered existing service areas of the applicant. § 1738.22 Items eligible to be financed. The proceeds of any loan made under this part may be used:

(a)To fund the construction, improvement, and acquisition of all facilities, wherever located, required to provide Broadband Service to Eligible Rural Communities, including facilities required for providing other services over the same facilities that Broadband Services are being provided. Start-up and overhead costs that can be capitalized and included as part of the cost of facilities required to provide Broadband Service are eligible for financing.

(b)To fund Pre-Loan Expenses not to exceed 5 percent of the requested total Broadband Loan amount, excluding any amounts requested to refinance outstanding telecommunication loans.

(c)To finance facilities to provide Broadband Service leased under the terms of a capital lease as defined in generally accepted accounting principles. Loan funds will be limited to the cost of the capital lease for the first 5 years of the loan amortization period. (d)(1) To finance an Acquisition, provided that:

(i)The Acquisition is necessary for furnishing or improving rural Broadband Service;

(ii)The acquired Service Area, if any, is in an Eligible Rural Community; and

(iii)Funds provided for the Acquisition do not exceed 50 percent of the approved loan amount.

(2)For the purposes of the Acquisition, the applicant will be considered the Incumbent Service Provider with regard to the acquired Service Area, if any.

(e)To refinance an outstanding obligation of an applicant on another Telecommunications Loan made under the RE Act if the use of the proceeds realized will further the construction, improvement, or acquisition of facilities for the provision of Broadband Service in Eligible Rural Communities, provided that:

(1)Funds used for refinancing may not constitute more than 40 percent of the loan;

(2)The amortization period for the funds associated with the refinancing of outstanding obligations cannot exceed the remaining amortization period of the notes being refinanced. If multiple notes are being refinanced, an average remaining amortization period will be calculated based on the weighted dollar average of the notes being refinanced; and

(3)The Applicant must be current with payments on the notes to be refinanced. § 1738.23 Items not eligible to be financed. The proceeds of any loan made under this part cannot be used:

(a)To fund the costs associated with facilities covered by an Indefeasible Right of Use Agreement (IRU);

(b)To acquire less than the majority interest of the stock of a company offering, or capable of offering Broadband Services, unless otherwise approved by the Agency;

(c)To acquire the stock of an affiliate;

(d)To purchase or acquire any facilities or equipment of an affiliate of the applicant. However, the Agency may consider, on a case by case basis, such funding if the Applicant can demonstrate that the purchase or acquisition will be an arms-length transaction, and that the cost is the most economically available for the facilities or equipment in question;

(e)To finance Customer Premise Equipment

(CPE)not owned by the Applicant during its economic life and any associated inside wiring, unless:

(1)Additional collateral, acceptable to the Agency, at least equal to the purchase price of the CPE is pledged, which collateral has not been purchased with loan funds, or

(2)A revolving fund for the initial purchase of CPE to be sold is established, and as CPE is sold to the customer, at least the Borrower's cost of such equipment is deposited back from the proceeds of the sale into the revolving fund to purchase additional CPE units. For additional information on this option, refer to Bulletin 1738-1.

(f)To purchase or lease vehicles not used primarily in construction of the Broadband Service project to be financed; or

(g)To finance systems or facilities that have not been designed and constructed in accordance with the loan contract, which incorporates Bulletin1738-2. §§ 1738.24-1738.29 [Reserved] Subpart D—Loan Application Requirements § 1738.30 General. A loan application will be considered complete upon the submission of acceptable information regarding:

(a)The equity requirement;

(b)The legal notice;

(c)The market survey;

(d)The competitive analysis;

(e)The business plan;

(f)The financial information; and

(g)The system design. § 1738.31 Equity requirement.

(a)To be eligible for a loan, an applicant must have a minimum equity position in the operation proposed to be funded. For start-up companies, new entrants into an area and Incumbent Service Providers that are proposing to extend their service territory, the applicant must demonstrate a minimum equity position equal to 10 percent of the requested loan amount at the time the application is submitted. For all other applications, the applicant must demonstrate a minimum equity position equal to 20 percent of the requested loan amount at the time the application is submitted. If the applicant does not have the required equity in the operation to be funded at the time the application is submitted, the shortfall for this requirement can be satisfied as follows:

(1)With an investor's proposal to cover the shortfall of the equity requirement by infusing additional capital into the operation. The additional capital must be deposited into the applicant's operating accounts prior to loan closing. If this option is elected, evidence must be included in the application that clearly identifies the investor's commitment to the project along with its bank or financial statements that demonstrates its ability to satisfy this requirement. This evidence must be acceptable to the Agency before the application will be considered complete and ready for further processing. If an investor's proposal to satisfy this requirement is not included in the loan application, the application will be returned. The Agency reserves the right to reject investments that are on a preferred basis for any reason.

(2)With an unconditional, irrevocable letter of credit

(LOC)satisfactory to the Agency. If an LOC will be used to satisfy the equity requirement, the LOC must be secured and serviced by an entity other than the applicant applying for the loan and must remain in effect until the applicant's financial position has reached a Net Worth equal to 20 percent of Total Assets after 80 percent of loan funds have been expended. The Agency must be an unconditional payee under the LOC and the LOC must be in place prior to loan closing.

(b)For State and local governments, the equity requirement can be satisfied with general obligation bonds. If the equity requirement is satisfied with general obligation bonds, the Broadband Loan or loan guarantee cannot be subordinate to the bonds.

(c)Revenue bonds supported by the operations being funded cannot be used to satisfy the equity requirement.

(d)Based on the results of the Agency's financial analysis of the application, additional equity requirements may be included as covenants to a loan offer.

(e)The Administrator reserves the right to modify or waive the requirements of this section as long as those modifications do not result in a projected negative cash position in any quarter throughout the forecast period and the modifications are required to provide Broadband Service in areas that are not capable of receiving Broadband Service or can receive Broadband Service from only one Existing Broadband Service Provider. § 1738.32 Additional cash requirements.

(a)Once the Agency has completed its review of the loan application, the applicant will be notified if additional cash requirements are needed to support the feasibility of the loan. Additional cash infusions will be necessary when the Agency's financial analysis indicates that cash from operations and previous cash infusions cannot sustain a positive cash position throughout the forecast period.

(1)The amount of the additional cash infusions required must bring the cash balance at the end of each year of the Forecast Period to zero.

(2)For purposes of satisfying the additional cash requirement for a start-up operation or an operation that has not demonstrated positive cash flow for the two previous years prior to the date the application was submitted, only 50 percent of projected revenues for each year of the forecast period will be used in the feasibility study to determine if an operation can sustain a positive cash position.

(3)The applicant will be required to infuse additional cash into the operation to cover projected deficits for the first two years of operations at loan closing and to enter into legal arrangements with the Agency committing to additional cash infusions to ensure that the operation will sustain a positive cash position on a quarterly basis throughout the forecast period.

(4)If debt is incurred to satisfy the additional cash requirement, this debt must take a subordinate lien position to the Agency debt. The Agency will provide the applicant with options for satisfying any additional requirements.

(5)Once the applicant has agreed to a method for satisfying the additional cash requirements, this method will be incorporated into the loan documents.

(6)If a loan is offered to the applicant, the applicant will have 120 days from the date of the loan contract to have the additional cash infusions deposited into the company applying for the loan and enter into any other legal arrangements to cover proposed deficits. If these requirements are not completed within this timeframe, the loan offer will be terminated, absent a written request from the applicant, and consent thereto from the Agency.

(b)If additional requirements and covenants are required to obtain loan approval, they will be detailed in the loan documents. § 1738.33 Legal notice.

(a)All applicants, as part of submitting a completed application, must prepare a legal notice to be published on the Agency Web page stating the applicant's intent to offer Broadband Service in a particular community. In addition, if the applicant is proposing other ( *i.e.* video, voice, etc.) services, these services must also be identified in the legal notice. The legal notice will be published on the Agency's Web page after the application has been received in the Agency's national office and will remain on the Web page for a period of 30 work days. The notice must set forth the applicant's total proposed service area, including a service area map, and request any Incumbent Service Provider to submit to the Agency, within this 30 day period, the following information:

(1)The number of residential and business customers capable of receiving Broadband Service in the applicant's proposed service area;

(2)The number of residential and business customers purchasing Broadband Service in the applicant's proposed service area, the rates of data transmission being offered, and the cost of each level of Broadband Service;

(3)The number of residential and business customers receiving other services that will be offered in the applicant's proposed service area and the associated rates for these other services;

(4)A map of its service territory.

(b)The information that is submitted by the Incumbent Service Provider will be used by the Agency to determine if the Incumbent Service Provider will be classified as an Existing Broadband Service Provider. If an Incumbent Service Provider does not submit a response to the legal notice, it will not be considered an Existing Broadband Service Provider. However, all Incumbent Service Providers will be considered in the Agency lending decision.

(c)All proprietary and confidential information submitted by the incumbent in response to the legal notice will not be released under the Freedom of Information Act. § 1738.34 Market survey.

(a)Except as provided in paragraph

(b)of this section, the applicant must complete a market survey for each area where Broadband Service is proposed to be provided and include it as part of the application. The survey must not only include questions about the deployment of Broadband Services but must also address all other services that are being proposed. The survey must be conducted on each Eligible Rural Community where service is proposed. Additional information on the requirements of the market survey can be found in Bulletin 1738-1.

(b)For any service that the applicant is projecting less than a 15 percent penetration of households passed in the total proposed service territory, by the end of the Forecast Period, a market survey does not need to be completed. The proposed rates for these services must be affordable as determined by the Agency. If the rates are not affordable, the Agency will require that a market survey be completed.

(c)Generally, for a market survey to be acceptable to the Agency, it must have been completed within six months from the date the application was submitted to the Agency for processing. The Agency reserves the right to reject any market survey so long as it can demonstrate that the market survey does not support the financial projections or the business plan or that the demographics of the proposed service territory have significantly changed since the survey was completed.

(d)With respect to loans for areas that do not have the capability of receiving Broadband Service or can receive Broadband Service from only one Existing Broadband Service Provider, the Administrator reserves the right to waive or modify the requirements of this section on a case by case basis. § 1738.35 Competitive analysis. The applicant must identify all competitors, including resellers, in their proposed service territory irregardless of the competitor's market share and prepare a competitive analysis, for all types of services proposed and include it as part of the application. This analysis must include each competitor's proposed rate packages for all services offered and to the extent possible, the level of service being provided and the area that is being covered. Although a market survey is not required for areas where an applicant is projecting less than 15 percent penetration of the households passed for a specific service, a competitive analysis is required for all proposed service territories. § 1738.36 Business plan. A business plan must be included as part of the application and must address, at a minimum, the following items:

(a)The proposed use of loan funds and if any non-loan funds will be required to complete the proposed project;

(b)A detailed description of working capital requirements and the source of these funds;

(c)A description of how the equity requirements will be satisfied;

(d)A description of the services that will be offered, the rates for the proposed services and the marketing plan to sell these services;

(e)A description of any current operations including services being provided, areas being served, rate structure and penetration rates;

(f)A description of any licenses and regulatory approvals that are required for the proposed operation including the status of obtaining these items;

(g)A detailed description of the qualifications of the proposed management team for the operation including a resume of each team member detailing prior positions held for the previous 10 years from the date the application is submitted;

(h)A description of the staffing requirements to operate the proposed system; and

(i)A description of the workforce that is required to construct the system. This description must agree with the build-out schedule included in § 1738.37. § 1738.37 Financial information. The financial information that must be included in the application to support the business plan is as follows:

(a)Copies of audited financial statements (balance sheet, income statement, cash flow statement) for the three years preceding the date of the application for an existing company. If audited statements are not available, un-audited statements and tax returns for the three previous years must be submitted;

(b)Copies of audited financial statements for the parent operation for the year preceding the year the application was submitted if the applicant for the Broadband Loan is a subsidiary operation. If audited statements are not available, un-audited statements and tax returns for the previous year must be submitted;

(c)Copies of audited financial statements for any affiliated operation that is providing services to the applicant for the year preceding the year the application was submitted. If audited statements are not available, un-audited statements and tax returns for the previous year must be submitted;

(d)Customer projections for the forecast period that substantiate the projected revenues for each service that is to be provided. The projections must at a minimum be on an annual basis and must be provided for each Eligible Rural Community that will be receiving service. These projections must be clearly supported by the information contained in the market survey;

(e)Financial projections in the form of balance sheets, income statements and cash flow statements for the 5-year forecast period. These projections must be supported by detailed narrative assumptions that fully explain the methodology used to develop the projections. The financial projections submitted by the applicant and the feasibility study prepared by the Agency must demonstrate that the proposed operation will be able to meet a minimum TIER requirement equal to 1.25 by the end of the forecast period. (A projected TIER of 1.25 does not guarantee that a loan will be approved.) Based on the findings of the feasibility study, the Agency will establish a TIER maintenance requirement in the loan documents that will remain in effect throughout the amortization period; and

(f)A list of all outstanding obligations of the applicant. Copies of existing notes and loan and security agreements must be included in the application. § 1738.38 System design.

(a)The system design must fully support the delivery of Broadband Service and any other services being provided, must demonstrate that the project will be completed within 3 years from the date of the loan contract, and must include the following items:

(1)A detailed description of the proposed technology that will be used to provide the services. This description must include sufficient information for the Agency to make the determination that all households in the proposed service territory will have the capability of receiving Broadband Services. For further clarification, reference Bulletin 1738-2;

(2)Existing and proposed network diagrams that clearly demonstrate the traffic flows through the network from the interconnection points with the backbone providers to the end users;

(3)Estimated project costs detailing all facilities that are required to complete the project. These estimated costs must be broken down to indicate costs associated with each community to be served; and

(4)A construction build-out schedule of the proposed facilities by community on a quarterly basis. The build-out schedule must:

(i)Include a description of the work force that will be required to complete the proposed construction;

(ii)Include a timeline demonstrating project completion within 3 years from the date of the Loan Contract;

(iii)Include detailed information showing that all households that are proposed to be passed with facilities funded by the Agency must have the capability of receiving Broadband Service with the completion of construction of the system. For additional information on how to satisfy this requirement, please refer to Bulletin 1738-1.

(iv)Include detailed information showing that construction of the proposed facilities will start within 6 months from the date the Administrator signs the Loan Documents.

(5)A depreciation schedule for the proposed facilities;

(6)Information required by 7 CFR part 1794, an environmental report prepared in accordance therewith;

(7)Any other system requirements which shall be published annually in the **Federal Register** , which the Administrator shall determine to be necessary in addressing the rapidly changing technological needs of the Broadband Program.

(b)With respect to loans for areas that are not capable of receiving Broadband Service or can receive Broadband Service from only one Existing Broadband Service Provider, the Administrator reserves the right to waive or modify the requirements of this section on a case by case basis. § 1738.39 Submission of the application. Loan applications can be submitted directly to the Agency's National Office or can be submitted to the Agency's general field representative

(GFR)that is assigned to the area where the applicant's headquarters are located. Although the applications can be submitted directly to the National Office, it is recommended that the applicant identify and contact the appropriate GFR as early as possible when preparing a loan application. The GFR will assist the applicant with the preparation of the application and explain the regulations and requirements that govern the Broadband Program. The applicant should contact the National Office in Washington to identify the GFR that is assigned to the area where their headquarters are located or refer to the list of GFR's assigned to different parts of the country on the Agency webpage. Please refer to the following Web address to identify the GFR assigned to your proposed service territory: *http://www.usda.gov/rus/telecom/staff/gfr-state-list.htm* . All applications must contain two hard copies and an electronic copy of the entire application. Subpart E—Terms for Loans and Loan Guarantees § 1738.40 Direct 4 Percent and Cost of Money Loans.

(a)Terms and conditions of loans are set forth in a mortgage, note, and loan contract. Provisions of the mortgage and loan contract are implemented by provisions in the Agency bulletins and regulations. Samples of the mortgage, note, and loan contract can be found on the Agency Web page: *http://www.usda.gov/rus/telecom/broadband.htm* .

(b)The Agency reserves the right to establish terms and conditions, including security requirements, on a case-by-case basis. § 1738.41 Loan security.

(a)The Agency makes loans only if, in the judgment of the Administrator, the security is reasonably adequate and the loan will be repaid within the time agreed.

(b)The Agency generally requires that an applicant provide it with an exclusive first lien, in form and substance satisfactory to the Agency, on all of the applicant's property and such additional security as the Agency may require. The Agency will share its first lien position with another lender provided the Broadband Loan is adequately secured and the security arrangements are acceptable to the Agency. The Agency will consider entering into joint security arrangements with other lenders on a pari pasu, prorated basis.

(c)All collateral that is securing the loan must be free from liens or security interests other than those permitted by the Agency or the Security Documents. The applicant must own collateral that will be purchased with loan funds unless otherwise designated by the Agency.

(d)In the case of loans that include the financing of broadband facilities that do not constitute self-contained operating systems or units, the applicant shall, in addition to the mortgage and/or security lien on all of the applicant's facilities financed by the Agency, furnish adequate assurance, in the form of contractual or other arrangements, satisfactory to the Agency, that continuous and efficient broadband service will be rendered.

(e)Additional financial, investment, operational, reporting, and managerial controls will appear in the loan documents required by the Agency. § 1738.42 Payments on loans. Broadband loans must be repaid with interest within a period that, rounded to the nearest whole year, equals the expected composite economic life of the facilities to be financed, as calculated by the Agency. The expected composite economic life shall be based upon the depreciation rates for the facilities financed by the loan.

(a)The depreciation rates used shall be the rates currently in place, as long as the Agency finds them to be reasonable for the telecommunications industry.

(b)Applicants may request a repayment period that is shorter than the expected composite economic life of the facilities financed. A shorter period may be approved as long as the Administrator determines that the loan remains feasible.

(c)Interest is payable on funds advanced each month as it accrues beginning with the first billing after the advance, as defined in the note. Principal payments on each note are scheduled to begin one year after the date of the first advance. After this deferral period, interest and principal payments on all funds advanced during this one-year period shall be made in equal monthly installments. Principal payments on funds advanced one year or more after the date of the first advance will begin with the first billing after the advance. The interest and principal payments on each of these advances shall be made in equal monthly installments. On a case by case basis for areas that are not capable of receiving Broadband Service or can receive Broadband Service from only one Existing Service Provider, the Administrator reserves the right to modify the terms and conditions for the interest and principal payments. § 1738.43 Loan guarantees.

(a)*Eligible guaranteed lenders.* To be eligible for a Loan Guarantee, guaranteed lenders must be legally organized lending institutions, such as commercial banks, trust companies, mortgage banking firms, insurance companies, and any other institutional investor authorized by law to loan money, which must be subject to credit examination and supervision by a Federal or state agency, unless the Agency determines that alternative examination and supervisory mechanisms are adequate.

(b)*Requirements for the Loan Guarantee.* At the time of application, Applicants must provide, in form and substance acceptable to the Agency:

(1)Evidence of the guaranteed lender's eligibility under paragraph

(a)of this section;

(2)Evidence that the guaranteed lender is capable of adequately servicing the guaranteed loan;

(3)Evidence that the guaranteed lender is in good standing with its licensing authority and meets the loan making, loan servicing, and other requirements of the jurisdiction in which the lender makes loans;

(4)Evidence satisfactory to the Agency of its qualification under this part, along with the name of the authority that supervises it;

(5)A commitment letter from the guaranteed lender that will be providing the funding, and the terms of such funding, all of which may be conditioned on final approval of the Broadband Loan by the Agency; and

(6)A description of any and all charges and fees for the loan provided they are not greater than those normally charged other applicants for the same type of loan in the ordinary course of business. Notwithstanding, such charges and fees shall not be included within the loan guarantee.

(c)*Terms for Guarantee.* Loan Guarantees will only be given on the conditions that:

(1)The Loan Guarantee is no more than 80 percent of the principal amount, which shall exclude any and all charges and fees;

(2)The guarantee is limited to the loan repayment obligation of the Borrower and does not extend to guaranteeing that the guaranteed lender will remit to a holder, loan payments made by the Borrower;

(3)The interest rate must be fixed and must be the same or lesser for the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, and Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be;

(4)The entire loan will be secured by the same security with equal lien priority for the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, and Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be;

(5)The Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be, will neither be paid first nor given any preference or priority over the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be;

(6)Any assignment by the guaranteed lender requires the prior written approval from the Agency, which assignment shall entitle the holder to all of the guaranteed lender's rights, but which shall ultimately maintain the guaranteed lender responsible for servicing the entire loan;

(7)The Borrower, its principal officers, members of the borrower's board of directors and members of the immediate families of said officials shall not be a holder of the guaranteed lender's loan;

(8)The Agency will not guarantee any loan under this subpart that provides for a balloon payment of principal or interest at the final maturity date of the loan; or the payment of interest on interest;

(9)All loan guarantee documents between the Agency and the guaranteed lender are prepared by the Agency; and

(10)The guaranteed loan agreement between the borrower and the lender shall be subject to RUS approval.

(d)*Obligations of Guaranteed lender.* Once a loan guarantee has been approved, the Guaranteed lender will be responsible for:

(1)Fully servicing the loan;

(2)Determining that all prerequisites to each advance of loan funds by the lender under the terms of the contract of guarantee, all financing documents, and all related security documents have been fulfilled;

(3)Obtaining approval from the Agency to advance funds prior to each advance;

(4)Billing and collecting loan payments from the Borrower;

(5)Notifying the Administrator promptly of any default in the payment of principal and interest on the loan and submit a report, as soon thereafter as possible, setting forth its views as to the reasons for the default, how long it expects the borrower will be in default, and what corrective actions the borrower states it is taking to achieve a current debt service position; and

(6)Notifying the Administrator of any known violations or defaults by the borrower under the lending agreement, contract of guarantee, or related security instruments, or conditions of which the lender is aware which might lead to nonpayment, violation, or other default.

(e)*Certain Agency Rights and Remedies.* The Guarantee must provide that:

(1)Upon notice to the lender, RUS may assume loan servicing responsibilities for the loan or the Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, or require the lender to assign such responsibilities to a different entity, if the lender fails to perform its loan servicing responsibilities under the loan guarantee agreement, or if the lender becomes insolvent, makes an admission in writing of its inability to pay its debts generally as they become due, or becomes the subject of proceedings commenced under the Bankruptcy Reform Act of 1978 (11 U.S.C. 101 *et seq.* ) or any similar applicable Federal or state law, or is no longer in good standing with its licensing authority, or ceases to meet the eligibility requirements of this section. Such negligent servicing is defined as the failure to perform those services which a reasonable prudent lender would perform in servicing its own portfolio of loans that are not guaranteed, and includes not only a failure to act but also not acting in a timely manner.

(2)The Guarantee shall cease to be effective with respect to any Guaranteed Loan Amount or any Guaranteed Loan Portion Amount or any Guaranteed-Amount Equivalent to the extent that:

(i)The Guaranteed Loan Amount or the respective Guaranteed Loan Portion Amount or the respective Guaranteed-Amount Equivalent, as the case may be, is separated at any time from the Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as the case may be, in any way, directly or through the issuance of any Guaranteed-Amount Equity Derivative or any Guaranteed-Amount Debt Derivative; or

(ii)Any holder of the Guaranteed Loan Note or any Guaranteed Loan Portion Note or any Derivative, as the case may be, having a claim to payments on the Guaranteed Loan receives more than its pro-rata percentage of any payment due to such holder from payments made under the Guarantee at any time during the term of the Guaranteed Loan.

(f)The Agency shall provide additional loan guarantee policies, consistent with OMB Circular A-129, in order to achieve its mission of promoting broadband in rural areas, which shall be published annually in the **Federal Register** .

(g)Loan guarantees made under this part are supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the holder had actual knowledge at the time it became a holder. §§ 1738.44-1738.49 [Reserved] Subpart F—Post-Application Procedures § 1738.50 Notification of completeness. The Agency will conduct an initial review of the application after it is received in the National Office to determine if the application is complete and ready for further analysis.

(a)If the application is determined to be complete, the applicant will be notified by the Agency and further analysis of the application will continue.

(b)If the application is determined to be incomplete, the applicant will receive a detailed list of items requiring further explanation that will have to be fully addressed by the applicant and submitted to the Agency within a specified timeframe. If the applicant fails to submit the additional information in the specified timeframe, the application will be deemed ineligible for funding and returned to the applicant.

(c)If the application is determined to be ineligible for funding, the application will be returned and the applicant will receive a detailed list explaining the reasons the application was not accepted. § 1738.51 Determination of feasibility.

(a)Loans will only be made under this part if the applicant's financial operations, taking into account the impact of the facilities financed with the proceeds of the loan and the associated debt, are financially feasible, as determined by the Agency.

(b)If the application is determined to meet all statutory and regulatory requirements and the feasibility study demonstrates that the TIER requirement can be satisfied, the application will be submitted to the Agency's credit committees for consideration. Submission of the application to the Agency's credit committees does not guarantee that a loan will be approved. § 1738.52 Notice to applicant on decision. Once the Agency's credit committees have considered the application, the applicant will be notified of the Agency's decision concerning their request for financial assistance. §§ 1738.53-1738.59 [Reserved] Subpart G—Miscellaneous Requirements and Information § 1738.60 Interim financing and construction.

(a)Upon notification by the Agency that an applicant has submitted all the required documentation and the application is considered complete for the Agency to conduct its analysis, the applicant, at it's own risk, may enter into an interim financing agreement with a lender other than the Agency or use its own internally generated funds to start construction that is included in the loan application. The Agency's determination that an application is considered complete for analysis is not a commitment that a loan will be approved.

(b)To qualify for funding, interim construction must comply with the same requirements that apply to construction included in an approved broadband loan. For information on requirements, see 7 CFR part 1788, 7 CFR part 1794, Bulletin 1738-2, Bulletin 20-15, and Bulletin 320-15. § 1738.61 Priority for processing loan applications.

(a)In making or guaranteeing loans, priority shall be given to applications in the following order:

(1)Applications for service areas that include only households that have no broadband access or receive Broadband Service from only one Existing Broadband Service Provider.

(2)Applications for service areas that include only areas where at least 40 percent of households have no access to Broadband service or access to only one Existing Broadband Service provider;

(3)All other applications

(b)Once an application has been prioritized according to the criteria listed in paragraphs

(1)through

(3)of this section, they will be processed on a first-in, first-out basis within each priority category.

(c)As applications are processed, using the first-in, first-out process, RUS may expedite for consideration for funding applications proposing to provide service where none is available. § 1738.62 Allocation of funds. For funds made available for each fiscal year, national and State reserves shall be established in accordance with Title VI of the RE ACT. § 1738.63 Annual audit and reporting requirements.

(a)If a loan offer is accepted, the applicant will be required to submit an annual CPA audit. The first audit is required for the calendar year in which the loan is approved. The Administrator can waive the requirement that an audit be performed in the year in which the loan is approved if operations of the applicant have not yet started.

(b)If a loan offer is accepted, the applicant will be required to submit quarterly financial and progress reports utilizing the Agency's electronic reporting system. § 1738.64 Applicable laws.

(a)Applicants are required to comply with certain regulations on nondiscrimination and equal employment opportunity. See RUS Bulletin 1790-1, “Nondiscrimination Among Beneficiaries of RUS Programs” and RUS Bulletin 20-15:320-15, “Equal Employment Opportunity in Construction Financed with RUS Loans”; 7 CFR parts 15 and 15b and 45 CFR part 90.

(b)Applicants are required to comply with all Federal, state and local laws, rules, regulations, ordinances, codes and orders. §§ 1738.65-1738.99 [Reserved] § 1738.100 OMB control number. The information collection requirements in this part are approved by the Office of Management Budget

(OMB)and assigned OMB control number 0572-0130. Dated: May 4, 2007. James M. Andrew, Administrator, Rural Utilities Service. [FR Doc. E7-9021 Filed 5-10-07; 8:45 am] BILLING CODE 3410-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R04-OAR-2006-0362-200702; FRL-8312-6] Approval and Promulgation of Implementation Plans and Designations of Areas for Air Quality Planning Purposes; Kentucky: Redesignation of the Boyd County, Kentucky Portion of the Huntington-Ashland 8-Hour Ozone Nonattainment Area to Attainment for Ozone AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: On September 29, 2006, the Commonwealth of Kentucky (Kentucky), through the Kentucky Division for Air Quality (KDAQ), submitted a request to redesignate the Kentucky portion of the bi-state Huntington-Ashland 8-hour ozone nonattainment area to attainment for the 8-hour National Ambient Air Quality Standard (NAAQS); and to approve a State Implementation Plan

(SIP)revision containing a maintenance plan for the Kentucky portion of the bi-state Huntington-Ashland area. The bi-state Huntington-Ashland 8-hour ozone nonattainment area is comprised of one county in Kentucky (Boyd County) and two counties in West Virginia (Cabell and Wayne counties). In this action, EPA is proposing to approve Kentucky's 8-hour ozone redesignation request for Boyd County, which is the Kentucky portion of the bi-state Huntington-Ashland 8-hour ozone nonattainment area. Additionally, EPA is proposing to approve the 8-hour ozone maintenance plan for Boyd County, Kentucky, including the state motor vehicle emission budgets (MVEBs) for nitrogen oxides (NO X ) and volatile organic compounds (VOCs). This proposed approval of Kentucky's redesignation request is based on EPA's determination that Kentucky has demonstrated that Boyd County, Kentucky has met the criteria for redesignation to attainment specified in the Clean Air Act (CAA), including the determination that the entire (both the Kentucky and West Virginia portions) Huntington-Ashland 8-hour ozone nonattainment area has attained the 8-hour ozone standard. On May 17, 2006, the State of West Virginia submitted a redesignation request and maintenance plan for the West Virginia portion (Cabell and Wayne counties) of this 8-hour ozone area. EPA has taken action on West Virginia's redesignation request and maintenance plan through a separate action. The final rulemaking approving the West Virginia submittal was published in the **Federal Register** on September 15, 2006. In this action, EPA is also providing the status of its transportation conformity adequacy determination for the new MVEBs for 2018 that are contained in the 8-hour ozone maintenance plan for Boyd County, Kentucky. MVEBs for Cabell and Wayne counties in West Virginia are included in the West Virginia submittal. DATES: Comments must be received on or before June 11, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-OAR-2006-0362, by one of the following methods:

(a)*www.regulations.gov:* Follow the on-line instructions for submitting comments.

(b)*E-mail:* *LeSane.Heidi@epa.gov* .

(c)*Fax:* 404-562-9019.

(d)*Mail:* EPA-R04-OAR-2006-0362 Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960.

(e)*Hand Delivery or Courier:* Heidi LeSane, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays. *Instructions:* Direct your comments to Docket ID No. EPA-R04-OAR-2006-0362. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Do not submit through *www.regulations.gov* or e-mail, information that you consider to be CBI or otherwise protected. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov* , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* *Docket:* All documents in the electronic docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, i.e., 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 in *www.regulations.gov* or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays. FOR FURTHER INFORMATION CONTACT: Heidi LeSane, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is

(404)562-9074. Mrs. LeSane can also be reached via electronic mail at *LeSane.Heidi@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. What Proposed Actions Is EPA Taking? II. What Is the Background for EPA's Proposed Actions? III. What Are the Criteria for Redesignation? IV. Why Is EPA Proposing These Actions? V. What Is the Effect of EPA's Proposed Actions? VI. What Is EPA's Analysis of the Request? VII. What Are the Proposed State MVEBs for Boyd County, Kentucky? VIII. What Is the Status of EPA's Adequacy Determination for the MVEBs for Boyd County, Kentucky? IX. Proposed Action on the Redesignation Request and Maintenance Plan SIP Revision Including Proposed Approval of the 2018 MVEBs X. Statutory and Executive Order Reviews I. What Proposed Actions Is EPA Taking? EPA is proposing to take three related actions, which are summarized below and described in greater detail throughout the notice of proposed rulemaking:

(1)To redesignate Boyd County, Kentucky to attainment for the 8-hour ozone NAAQS;

(2)to approve Kentucky's 8-hour ozone maintenance plan, including the associated MVEBs; and

(3)to notify the public of the status of EPA's adequacy determination for the Boyd County MVEBs. First, EPA is proposing to determine that the bi-state Huntington-Ashland 8-hour ozone nonattainment area has attained the 8-hour ozone standard, and that the Boyd County, Kentucky portion has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. The bi-state Huntington-Ashland 8-hour ozone area is comprised of one county in Kentucky (Boyd County) and two counties in West Virginia (Cabell and Wayne counties). Today's proposal addresses only the Kentucky portion of the bi-state Huntington-Ashland 8-hour ozone area. In a separate rulemaking, EPA approved the redesignation request and maintenance plan for the West Virginia portion of this 8-hour ozone area (see 71 FR 39618). EPA is now proposing to approve a request to change the legal designation of Boyd County, Kentucky from nonattainment to attainment for the 8-hour ozone NAAQS. Second, EPA is also proposing to approve Kentucky's 8-hour ozone maintenance plan for Boyd County, Kentucky (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to help keep the Huntington-Ashland area (of which Boyd County is a part) in attainment for the 8-hour ozone NAAQS through 2018. Consistent with the CAA, the maintenance plan that EPA is proposing to approve today also includes 2018 state MVEBs for NO X and VOCs. Therefore, EPA is proposing to approve the 2018 state MVEBs that are included as part of Kentucky's maintenance plan. These MVEBs apply only to Boyd County, Kentucky. MVEBs for Cabell and Wayne counties in West Virginia are included in the West Virginia submittal. Third, EPA is announcing the status of EPA's Adequacy Process for the newly-established 2018 MVEBs for Boyd County, Kentucky. Through a separate action, MVEBs for West Virginia portion of this 8-hour ozone area were established (see 71 FR 39618). The Adequacy comment period for the Boyd County, Kentucky 2018 MVEBs began on June 21, 2006, with EPA's posting of the availability of this submittal on EPA's Adequacy Web site ( *http://www.epa.gov/otaq/stateresources/transconf/currsips.htm* ). The Adequacy comment period for these 2018 MVEBs closed on July 21, 2006. No requests for or adverse comments on this submittal were received during EPA's Adequacy comment period. Please see section VIII of this rulemaking for further explanation of this process, and for more details on the MVEBs. Today's notice of proposed rulemaking is in response to Kentucky's September 29, 2006, SIP submittal which supersedes Kentucky's June 7, 2006, submittal that included a request for parallel processing. The September 29, 2006, submittal requested redesignation of Boyd County, Kentucky as part of the bi-state Huntington-Ashland Area, and included a SIP revision addressing the specific issues summarized above, and the necessary elements for redesignation described in section 107(d)(3)(E). II. What Is the Background for EPA's Proposed Actions? Ground-level ozone is not emitted directly by sources. Rather, emissions of NO X and VOCs react in the presence of sunlight to form ground-level ozone. NO X and VOCs are referred to as precursors of ozone. The CAA establishes a process for air quality management through the NAAQS. On July 18, 1997, EPA promulgated a revised 8-hour ozone standard of 0.08 parts per million (ppm). This new standard is more stringent than the previous 1-hour ozone standard. Under EPA regulations at 40 CFR part 50, the 8-hour ozone standard is attained when the 3-year average of the annual fourth highest daily maximum 8-hour average ambient air quality ozone concentrations is less than or equal to 0.08 ppm (i.e., 0.084 ppm when rounding is considered). (See, 69 FR 23857 (April 30, 2004) for further information.) Ambient air quality monitoring data for the 3-year period must meet a data completeness requirement. The ambient air quality monitoring data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90 percent, and no single year has less than 75 percent data completeness as determined in Appendix I of part 50. Specifically, section 2.3 of 40 CFR part 50, Appendix I, “Comparisons with the Primary and Secondary Ozone Standards” states: The primary and secondary ozone ambient air quality standards are met at an ambient air quality monitoring site when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentration is less than or equal to 0.08 ppm. The number of significant figures in the level of the standard dictates the rounding convention for comparing the computed 3-year average annual fourth-highest daily maximum 8-hour average ozone concentration with the level of the standard. The third decimal place of the computed value is rounded, with values equal to or greater than 5 rounding up. Thus, a computed 3-year average ozone concentration of 0.085 ppm is the smallest value that is greater than 0.08 ppm. The CAA required EPA to designate as nonattainment any area that was violating the 8-hour ozone NAAQS based on the three most recent years of ambient air quality data. The Huntington-Ashland 8-hour ozone nonattainment area was designated using 2001-2003 ambient air quality data. The **Federal Register** document making these designations was signed on April 15, 2004, and published on April 30, 2004 (69 FR 23857). The CAA contains two sets of provisions—subpart 1 and subpart 2—that address planning and control requirements for ozone nonattainment areas. (Both are found in title I, part D.) Subpart 1 (which EPA refers to as “basic” nonattainment) contains general, less prescriptive, requirements for nonattainment areas for any pollutant—including ozone—governed by a NAAQS. Subpart 2 (which EPA refers to as “classified” nonattainment) provides more specific requirements for certain ozone nonattainment areas. Some 8-hour ozone nonattainment areas are subject only to the provisions of subpart 1. Other 8-hour ozone nonattainment areas are also subject to the provisions of subpart 2. Under EPA's Phase 1 8-hour ozone implementation rule (69 FR 23857) (Phase 1 Rule), signed on April 15, 2004 and published on April 30, 2004, an area was classified under subpart 2 based on its 8-hour ozone design value (i.e., the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations), if it had a 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of subpart 2). All other areas are covered under subpart 1, based upon their 8-hour ambient air quality design values. Various aspects of EPA's Phase 1 8-hour ozone implementation rule were challenged in court and on December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard. *South Coast Air Quality Management Dist. (SCAQMD)* v. *EPA* , 472 F.3d 882 (D.C. Cir. 2006). The D.C. Circuit Court held that certain provisions of EPA's Phase I Rule were inconsistent with the requirements of the CAA. The Court rejected EPA's reasons for implementing the 8-hour standard in nonattainment areas under subpart 1 in lieu of subpart 2 of title I, part D of the CAA. The Court also held that EPA improperly failed to retain four measures required for 1-hour nonattainment areas under the anti-backsliding provisions of EPA's regulations:

(1)Nonattainment area New Source Review

(NSR)requirements based on an area's 1-hour nonattainment classification;

(2)CAA section 185 penalty fees for 1-hour severe or extreme nonattainment areas;

(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS; and

(4)certain conformity requirements for certain types of federal actions. The D.C. Circuit Court upheld EPA's authority to revoke the 1-hour standard provided that there were adequate anti-backsliding provisions in place. This section sets forth EPA's views on the potential effect of the Court's ruling on this redesignation action. For the reasons described throughout this notice of proposed rulemaking, EPA does not believe that the D.C. Circuit Court's ruling alters any requirements relevant to the redesignation of the Kentucky portion of the Huntington-Ashland Area (Boyd County) so as to preclude redesignation, and does not prevent EPA from proposing to finalize, or finalizing, the Boyd County, Kentucky redesignation. EPA believes that the Court's decision, as it currently stands or as it may be modified based upon the petitions for rehearing that have been filed, imposes no impediment to moving forward with redesignation of the Huntington-Ashland Area to attainment, because redesignation is appropriate under the relevant redesignation provisions of the CAA and longstanding policies regarding redesignation requests. The Huntington-Ashland Area was originally designated as moderate nonattainment for the 1-hour ozone standard on November 6, 1991 (56 FR 56694). The Area was redesignated as attainment for the 1-hour ozone standard on June 29, 1995 (60 FR 33748). On April 30, 2004, EPA designated the Huntington-Ashland Area (of which Boyd County is a part) as a “basic” 8-hour ozone nonattainment area. (69 FR 23857) The D.C. Circuit Court's decision in 2006 also addressed the 8-hour ozone classification scheme. The Court rejected EPA's reasons for classifying areas under subpart 1 for the 8-hour standard, and remanded that matter to the Agency. Consequently, it is possible that the Huntington-Ashland Area could, as a result of the remand to EPA, be reclassified under subpart 2. Although any future decision by EPA to classify this area under subpart 2 might trigger additional future requirements for the area, this does not mean that redesignation cannot go forward now. EPA's position is based upon:

(1)EPA's longstanding policy of evaluating requirements in accordance with the requirements due at the time that the request is submitted; and

(2)consideration of the inequity of retroactively applying any requirements that might be applied in the future. In September 2006, when Kentucky submitted its final redesignation request, the Huntington-Ashland Area was classified under subpart 1of the CAA, and was obligated to meet only the subpart 1 requirements. Under EPA's longstanding interpretation of section 107(d)(3)(E) of the CAA, to qualify for redesignation, states requesting redesignation to attainment must meet only the relevant SIP requirements that came due prior to the submittal of a complete redesignation request. See, “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992; see also, Michael Shapiro Memorandum, “SIP Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide NAAQS On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993; and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor). See, *Sierra Club* v. *EPA* , 375 F.3d 537 (7th Cir. 2004), which upheld this interpretation. See also, 68 FR 25418, 25424, 25427 (May 12, 2003) (redesignation of St. Louis, Missouri). Moreover, it would be inequitable to retroactively apply any new SIP requirements that were not applicable at the time the request was submitted. The D.C. Circuit Court recognized the general inequity in retroactive rulemakings in *Sierra Club* v. *Whitman* , 285 F. 3d 63 (D.C. Cir. 2002), in which the D.C. Circuit Court upheld a district court's refusal to make retroactive an EPA determination of nonattainment that was past the statutory due date. Such a determination would have resulted in the imposition of additional requirements on the area. In *Sierra Club* , the D.C. Circuit Court stated, “[a]lthough EPA failed to make the nonattainment determination within the statutory time frame, Sierra Club's proposed solution only makes the situation worse. Retroactive relief would likely impose large costs on the states, which would face fines and suits for not implementing air pollution prevention plans in 1997, even though they were not on notice at the time.” *Id.* at 68. Similarly, with regard to Kentucky's redesignation request, it would be unfair to penalize Kentucky by retroactively applying to it for purposes of redesignation, additional SIP requirements under subpart 2 that were not in effect at the time it submitted its redesignation request, and that are not currently in effect, but that might be in effect as a result of the D.C. Circuit Court's remand. With respect to the requirements under the 1-hour standard ozone standard, Boyd County, Kentucky was originally designated as moderate nonattainment for the 1-hour ozone standard in November 6, 1991 (56 FR 56694). The Area was redesignated as attainment for the 1-hour ozone standard on June 29, 1995 (60 FR 33748). Therefore, Boyd County, Kentucky was designated to attainment of the 1-hour ozone standard prior to its nonattainment designation for the 8-hour ozone standard. As a result, it is considered to be a 1-hour attainment area subject to a CAA section 175A maintenance plan for the 1-hour standard. The D.C. Circuit Court's ruling does not impact redesignation requests for these types of areas for two main reasons. First, there are no conformity requirements relevant for the Huntington-Ashland redesignation request, such as a transportation conformity SIP. 1 It is EPA's longstanding policy position that it is reasonable to interpret the conformity SIP requirements as not applying for purposes of evaluating a redesignation request under section 107(d) because state conformity rules are still required after redesignation, and federal conformity rules apply where state rules have not been approved. See, 40 CFR 51.390; see also, *Wall* v. *EPA* , 265 F.3d 426 (6th Cir. 2001) (upholding EPA's interpretation). See also, 60 FR 62748 (Dec. 7, 1995) (redesignation of Tampa, Florida). 1 CAA section 176(c)(4)(E) requires states to submit revisions to their SIPs to reflect certain federal criteria and procedures for determining transportation conformity. Transportation conformity SIPs are different from the motor vehicle emissions budgets that are established in control strategy SIPs and maintenance plans. Second, with regard to the three other anti-backsliding provisions for the 1-hour standard that the D.C. Circuit Court found were not properly retained, Boyd County, Kentucky is an attainment area subject to a maintenance plan for the 1-hour standard, and the NSR, contingency measure (pursuant to section 172(c)(9) or 182(c)(9)), and fee provision requirements no longer apply to this area because it was redesignated to attainment of the 1-hour standard. As a result, the decision in *SCAQMD* should not alter any requirements that would preclude EPA from finalizing the Boyd County portion of the Huntington-Ashland area to attainment for the 8-hour ozone standard. As noted earlier, in 2005, the ambient ozone data for the Huntington-Ashland nonattainment area indicated no further violations of the 8-hour ozone standard, using data from the 3-year period of 2003-2005 (with a 2003-2005 design value of 0.079 ppm), to demonstrate attainment. As a result, on September 29, 2006, Kentucky requested redesignation of Boyd County, Kentucky to attainment for the 8-hour ozone NAAQS. The redesignation request includes three years of complete, quality-assured ambient air quality data for the ozone seasons (March 1st until October 31st) of 2003-2005, indicating that the 8-hour ozone NAAQS has been achieved for the entire Huntington-Ashland area. Under the CAA, nonattainment areas may be redesignated to attainment if sufficient, complete, quality-assured data is available for the Administrator to determine that the area has attained the standard and the area meets the other CAA redesignation requirements in section 107(d)(3)(E). III. What Are the Criteria for Redesignation? The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation providing that:

(1)The Administrator determines that the area has attained the applicable NAAQS;

(2)the Administrator has fully approved the applicable implementation plan for the area under section 110(k);

(3)the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable Federal air pollutant control regulations and other permanent and enforceable reductions;

(4)the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A; and,

(5)the state containing such area has met all requirements applicable to the area under section 110 and part D of the CAA. EPA provided guidance on redesignation in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990, on April 16, 1992 (57 FR 13498), and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents: 1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton, Director, Technical Support Division, June 18, 1990; 2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992; 3. “Contingency Measures for Ozone and Carbon Monoxide

(CO)Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992; 4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the “Calcagni Memorandum”); 5. “State Implementation Plan

(SIP)Actions Submitted in Response to Clean Air Act Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992; 6. “Technical Support Documents

(TSDs)for Redesignation of Ozone and Carbon Monoxide

(CO)Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993; 7. “ State Implementation Plan

(SIP)Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide

(CO)National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993; 8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993; 9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and 10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995. IV. Why Is EPA Proposing These Actions? On September 29, 2006, Kentucky requested redesignation of the Kentucky portion (Boyd County) of the bi-state Huntington-Ashland 8-hour ozone nonattainment area to attainment for the 8-hour ozone standard. EPA's evaluation indicates that Kentucky has demonstrated that Boyd County, Kentucky (as part of the Huntington-Ashland area) has attained the standard and has met the requirements for redesignation set forth in section 107(d)(3)(E) of the CAA. EPA is also announcing the status of its adequacy determination for the 2018 state MVEBs, which is relevant to the requested redesignation. V. What Is the Effect of EPA's Proposed Actions? EPA's proposed actions establish the basis upon which EPA may take final action on these issues being proposed for approval today. Approval of Kentucky's redesignation request would change the official designation of Boyd County, Kentucky for the 8-hour ozone NAAQS found at 40 CFR part 81. Approval of Kentucky's request would also incorporate into the Kentucky SIP, a plan for maintaining the 8-hour ozone NAAQS in the Huntington-Ashland Area through 2018. The maintenance plan includes contingency measures to remedy future violations of the 8-hour ozone NAAQS. The maintenance plan also establishes state MVEBs of 1.18 tons per day

(tpd)for VOC and 1.30 tpd for NO X for the year 2018 for Boyd County, Kentucky. Approval of Kentucky's maintenance plan would also result in approval of the state MVEBs. Additionally, EPA is announcing the status of its adequacy determination for the 2018 state MVEBs pursuant to 40 CFR 93.118(f)(1). VI. What Is EPA's Analysis of the Request? EPA is proposing to make the determination that the Boyd County portion of the Huntington-Ashland 8-hour ozone nonattainment area has attained the 8-hour ozone standard, and that all other redesignation criteria have been met for that portion of the Huntington-Ashland 8-hour ozone area. EPA has made this determination with regard to West Virginia meeting the other redesignation criteria through a separate rulemaking (see 71 FR 39618). Therefore, the entire Huntington-Ashland area has air quality monitoring data showing attainment of the 8-hour ozone NAAQS. The basis for EPA's determination for the Boyd County area is discussed in greater detail below. Criteria (1)—Boyd County Has Attained the 8-Hour Ozone NAAQS EPA is proposing to determine that the Boyd County portion of the Huntington-Ashland area has attained the 8-hour ozone NAAQS. For ozone, an area may be considered to be attaining the 8-hour ozone NAAQS if there are no violations, as determined in accordance with 40 CFR 50.10 and Appendix I of part 50, based on three complete, consecutive calendar years of quality-assured air quality monitoring data. To attain this standard, the 3-year average of the fourth-highest daily maximum 8-hour average ozone concentrations measured at each monitor within an area over each year must not exceed 0.08 ppm. Based on the rounding convention described in 40 CFR part 50, Appendix I, the standard is attained if the design value is 0.084 ppm or below. The data must be collected and quality-assured in accordance with 40 CFR part 58, and recorded in the EPA Air Quality System (AQS). The monitors generally should have remained at the same location for the duration of the monitoring period required for demonstrating attainment. EPA reviewed ozone monitoring data from ambient ozone monitoring stations in the Huntington-Ashland area for the ozone season from 2003-2005. This data has been quality assured and is recorded in AQS. The fourth high averages for 2003, 2004 and 2005, and the 3-year average of these values (i.e., design value), are summarized in the following table: Table 1.—Annual 4th Max High and Design Value for 8-Hour Ozone for Huntington-Ashland Area [Parts per million, ppm] Year Huntington (Cabell County) Ashland (Boyd County) 2003 0.080 0.088 2004 0.066 0.068 2005 0.082 0.082 Design Value 0.076 0.079 As discussed above, the design value for an area is the highest design value recorded at any monitor in the area. Therefore, the design value for the Huntington-Ashland area is 0.079 ppm, which meets the standard as described above. Additionally, preliminary air quality data from the 2006 monitoring season indicates that the Huntington-Ashland Area is continuing to attain the 8-hour ozone standard. As discussed in more detail below, KDAQ has committed to continue monitoring in this area in accordance with 40 CFR part 58. The data submitted by Kentucky provides an adequate demonstration that Boyd County (as a part of the Huntington-Ashland area) has attained the 8-hour ozone NAAQS. Criteria (2)—Kentucky Has a Fully Approved SIP Under Section 110(k) for Boyd County and Criteria (5)—Kentucky Has Met All Applicable Requirements Under Section 110 and Part D of the CAA Below is a summary of how these two criteria were met. EPA has determined that Kentucky has met all applicable SIP requirements for the Boyd County under section 110 of the CAA (general SIP requirements). EPA has also determined that the Kentucky SIP satisfies the criterion that it meets applicable SIP requirements under part D of title I of the CAA (requirements specific to subpart 1 basic 8-hour ozone nonattainment areas) in accordance with section 107(d)(3)(E)(v). In addition, EPA has determined that the SIP is fully approved with respect to all applicable requirements in accordance with section 107(d)(3)(E)(ii). In making these determinations, EPA ascertained which requirements are applicable to the area and that if applicable, they are fully approved under section 110(k). SIPs must be fully approved only with respect to applicable requirements. a. Boyd County, Kentucky Has Met All Applicable Requirements Under Section 110 and Part D of the CAA The September 4, 1992, Calcagni Memorandum (see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E). Consistent with this interpretation, to qualify for redesignation, states requesting redesignation to attainment must meet only the relevant CAA requirements that come due prior to the submittal of a complete redesignation request. See also, Michael Shapiro Memorandum (“SIP Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide NAAQS On or After November 15, 1992,” September 17, 1993), and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan). Applicable requirements of the CAA that come due subsequent to the area's submittal of a complete redesignation request remain applicable until a redesignation is approved, but are not required as a prerequisite to redesignation. See, section 175A(c) of the CAA; *Sierra Club* , 375 F.3d 537 (7th Cir. 2004); see also, 68 FR 25424, 25427 (May 12, 2003) (redesignation of St. Louis, Missouri). *General SIP requirements:* Section 110(a)(2) of title I of the CAA delineates the general requirements for a SIP, which include enforceable emissions limitations and other control measures, means, or techniques, provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality, and programs to enforce the limitations. General SIP elements and requirements are delineated in section 110(a)(2) of title I, part A of the CAA. These requirements include, but are not limited to, the following: submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration (PSD)) and provisions for the implementation of part D requirements (New Source Review

(NSR)permit programs); provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development. Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address the transport of air pollutants (NO X SIP Call, Clean Air Interstate Rule (CAIR)). EPA has also found, generally, that states have not submitted SIPs under section 110(a)(1) to meet the interstate transport requirements of section 110(a)(2)(D)(i). However, the section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classifications are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, we do not believe that the CAA's interstate transport requirements should be construed to be applicable requirements for purposes of redesignation. In addition, EPA believes that the other section 110 elements not connected with nonattainment plan submissions and not linked with an area's attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements, which are linked with a particular area's designation and classification, are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See, Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174-53176, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Loraine, Ohio, final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995). See also, the discussion on this issue in the Cincinnati, Ohio redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh, Pennsylvania redesignation (66 FR 50399, October 19, 2001). EPA believes that section 110 elements not linked to the area's nonattainment status are not applicable for purposes of redesignation. Any section 110 requirements that are linked to the part D requirements for 8-hour ozone nonattainment areas are not yet due, since, as explained below, no part D requirements for 8-hour standard became due prior to submission of the redesignation request. Therefore, as discussed above, for purposes of redesignation, they are both considered applicable requirements. Nonetheless, EPA notes that it has previously approved provisions into the Kentucky SIP addressing section 110 elements (See 47 FR 30059, July 12, 1982). EPA believes that the section 110 SIP approved for the 1-hour ozone NAAQS is also sufficient to meet the requirements under the 8-hour ozone NAAQS (as well as satisfying the issue raised by the D.C. Circuit Court in the *SCAQMD* case). *Part D requirements:* EPA has also determined that the Kentucky SIP meets applicable SIP requirements under part D of the CAA since no requirements became due prior to the submission of the area's redesignation request. Sections 172-176 of the CAA, found in subpart 1 of part D, set forth the basic nonattainment requirements applicable to all nonattainment areas. Section 182 of the CAA, found in subpart 2 of part D, establishes additional specific requirements depending on the area's nonattainment classification. Subpart 2 is not applicable to the Boyd County, Kentucky area. *Part D, subpart 1 applicable SIP requirements:* For purposes of evaluating this redesignation request, the applicable part D, subpart 1 SIP requirements for all nonattainment areas are contained in sections 172(c)(1)-(9). A thorough discussion of the requirements contained in section 172 can be found in the General Preamble for Implementation of Title I (57 FR 13498). No requirements applicable for purposes of redesignation under part D became due prior to the submission of the redesignation request, and therefore none are applicable to the area for purposes of redesignation. For example, the requirements for an attainment demonstration that meets the requirements of section 172(c)(1) are not yet applicable, nor are the requirements for Reasonably Achievable Control Technology

(RACT)and Reasonably Available Control Measures

(RACM)(section 172(c)(1)), reasonable further progress

(RFP)(section 172(c)(2)), and contingency measures (section 172(c)(9)). In addition to the fact that no part D requirements applicable for purposes of redesignation became due prior to submission of the redesignation request and therefore are not applicable, EPA believes it is reasonable to interpret the conformity and NSR requirements as not requiring approval prior to redesignation. *Section 176 Conformity Requirements:* Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (“transportation conformity”) as well as to all other Federally supported or funded projects (“general conformity”). State conformity revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that the CAA required the EPA to promulgate. EPA believes it is reasonable to interpret the conformity SIP requirements as not applying for purposes of evaluating the redesignation request under section 107(d) because state conformity rules are still required after redesignation and Federal conformity rules apply where state rules have not been approved. See, *Wall* , 265 F.3d 426 (6th Cir. 2001), upholding this interpretation. See also, 60 FR 62748 (Dec. 7, 1995, Tampa, Florida). EPA has also determined that areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the standard without a part D NSR program in effect since PSD requirements will apply after redesignation. The rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment.” Kentucky has demonstrated that the area will be able to maintain the standard without a part D NSR program in effect, and therefore, Kentucky need not have a fully approved part D NSR program prior to approval of the redesignation request. EPA most recently approved Kentucky's NSR program (including a nonattainment NSR and PSD program) in the Kentucky SIP on July 11, 2006 (71 FR 38990). Kentucky's PSD program will become effective in Boyd County, Kentucky upon redesignation to attainment. See, rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorraine, Ohio (61 FR 20458, 20469-70, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Thus, Boyd County, Kentucky has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of the CAA. b. The Area Has a Fully Approved Applicable SIP Under Section 110(k) of the CAA EPA has fully approved the applicable Kentucky SIP for Boyd County under section 110(k) of the CAA for all requirements applicable for purposes of redesignation. EPA may rely on prior SIP approvals in approving a redesignation request, see Calcagni Memorandum at p. 3; *Southwestern Pennsylvania Growth Alliance* v. *Browner* , 144 F.3d 984, 989-90 (6th Cir. 1998); *Wall* , 265 F.3d 426 (6th Cir. 2001), plus any additional measures it may approve in conjunction with a redesignation action. See, 68 FR 25426 (May 12, 2003) and citations therein. Following passage of the CAA of 1970 by the U.S. Congress, Kentucky adopted and submitted, and EPA has fully approved at various times, provisions addressing the various 1-hour ozone standard SIP elements applicable in the Boyd County, Kentucky (60 FR 33748, June 29, 1995). As indicated above, EPA believes that the section 110 elements not connected with nonattainment plan submissions and not linked to the area's nonattainment status are not applicable requirements for purposes of redesignation. EPA also believes that since the part D requirements applicable for purposes of redesignation did not become due prior to submission of the redesignation request, they also are therefore not applicable requirements for purposes of redesignation. Criteria (3)—The Air Quality Improvement in the Boyd County Portion of the Huntington-Ashland 8-hour Ozone Area Is Due to Permanent and Enforceable Reductions in Emissions Resulting From Implementation of the SIP and Applicable Federal Air Pollution Control Regulations and Other Permanent and Enforceable Reductions EPA believes that Kentucky has demonstrated that the observed air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, Federal measures, and other state-adopted measures. EPA has determined that the implementation of the following permanent and enforceable emissions controls, that occurred from 2001-2005, have reduced local NO X and VOC emissions and brought the area into attainment: 2001-2005 Emission Reduction Programs Highway Mobile Source Reductions: Federal Motor Vehicle Control Programs (FMVCP) Lower Reid Vapor Pressure Fleet Turnover of Automobiles Tier 2 Vehicle Emissions and Fuel Standards Heavy Duty Engine and Vehicle Fuel Standards Point Source Emissions Reductions: Reasonably Available Control Measures

(RACM)Maximum Available Control Technology

(MACT)Non-Highway Mobile Source Reductions: Small Spark-Ignition engines Large Spark-Ignition engines Locomotives Land based diesel engines Additional Reductions: NO X SIP Call Reductions Notably, no credit specific emission reduction is being claimed in the SIP for the NO X SIP Call reductions although this program has resulted in measurable emissions reductions. Kentucky has demonstrated that the implementation of permanent and enforceable emissions controls have reduced local VOC and NO X emissions. Most of the reductions are attributable to Federal programs such as EPA's Tier 2/Low Sulfur Gasoline program and other national clean fuel programs that began implementation in 2004. Additionally, Kentucky has indicated in its September 2006 submittal that the Huntington-Ashland area has benefited from emissions reductions that have been achieved and will continue to be achieved through the implementation of the NO X SIP Call, beginning in 2002. Kentucky has further demonstrated that year-to-year meteorological changes and trends are not the likely source of the overall, long-term improvements in ozone levels. In addition, the following non-highway mobile source reduction programs were implemented during the 2002-2004 period: Small spark-ignition engines, large-spark ignition engines, locomotives and land-base diesel engines. EPA believes that permanent and enforceable emissions reductions, in and surrounding the nonattainment area, are the cause of long-term improvements in ozone levels, and are the cause of the Huntington-Ashland Area achieving attainment of the ozone standard. Criteria (4)—The Area Has a Fully Approved Maintenance Plan Pursuant to Section 175A of the CAA In its request to redesignate the Boyd County, Kentucky area (as part of the Huntington-Ashland 8-hour ozone nonattainment area) to attainment, KDAQ submitted a SIP revision to provide for the maintenance of the 8-hour ozone NAAQS in the Boyd County, Kentucky area for at least 10 years after the effective date of redesignation to attainment. a. What is required in a maintenance plan? Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, Kentucky must submit a revised maintenance plan which demonstrates that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, with a schedule for implementation as EPA deems necessary to assure prompt correction of any future 8-hour ozone violations. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. The Calcagni Memorandum provides additional guidance on the content of a maintenance plan. The Calcagni Memorandum explains that an ozone maintenance plan should address five requirements: The attainment emissions inventory, maintenance demonstration, monitoring, verification of continued attainment, and a contingency plan. As is discussed more fully below, Kentucky's maintenance plan includes all the necessary components and is approvable as part of the redesignation request. b. Attainment Emissions Inventory In coordination with West Virginia, Kentucky selected 2004 as “the attainment year” for Boyd County (as part of the Huntington-Ashland 8-hour ozone area) for the purposes of demonstrating attainment of the 8-hour ozone NAAQS. This attainment inventory identifies the level of emissions in the area which is sufficient to attain the 8-hour ozone standard. Kentucky began development of this attainment inventory by first developing a baseline emissions inventory for the Boyd County. The year 2002 was chosen as the base year for developing a comprehensive ozone precursor emissions inventory for which projected emissions could be developed for 2004, 2005, 2008, 2011, 2014, 2017, and 2018. Non-road mobile emissions were calculated using the most recent non-road model. On-road mobile source emissions were calculated using EPA's MOBILE6.2 emission factors model. The 2004 VOC and NO X emissions (as well as the emissions for other years) for Boyd County, Kentucky were developed consistent with EPA guidance, and are summarized in the table in the following subsection. c. Maintenance Demonstration The September 29, 2006, final submittal includes a maintenance plan for the Boyd County area. This demonstration:

(i)Shows compliance and maintenance of the 8-hour ozone standard by providing information to support the demonstration that current and future emissions of VOC and NO X remain at or below attainment year 2004 emissions levels. The year 2004 was chosen as the attainment year because it is one of the most recent three years (i.e., 2003, 2004, and 2005) for which the Huntington-Ashland area has clean air quality data for the 8-hour ozone standard.

(ii)Uses 2004 as the attainment year and includes future emission inventory projections for the 2005, 2008, 2011, 2014, 2017 and 2018.

(iii)Identifies an “out year,” at least 10 years after the time necessary for EPA to review and approve the maintenance plan. Per 40 CFR part 93, a MVEB was established for the last year of the maintenance plan (2018). See section VII below.

(iv)Provides the following actual and projected emissions inventories for the Boyd County portion of the Huntington-Ashland nonattainment area. Table 2.—Boyd County VOC Emissions [Tons per day] * Source category 2004 2005 2008 2011 2014 2017 2018 Point 17.52 17.76 18.49 19.09 19.81 20.54 20.79 Area 2.97 2.97 2.97 2.97 2.97 2.97 2.97 Mobile ** 2.50 2.28 1.91 1.63 1.38 1.23 1.18 Nonroad 0.71 0.68 0.61 0.56 0.55 0.56 0.56 Total 23.70 23.69 23.98 24.25 24.71 25.30 25.50 * See further information in Section VI(4)(e) Verification of Continued Attainment. ** Calculated using MOBILE 6.2. Table 3.—Boyd County NO X Emissions [Tons per day] * Source category 2004 2005 2008 2011 2014 2017 2018 Point 16.17 16.35 16.90 17.37 17.92 18.48 18.68 Area 0.09 0.10 0.10 0.10 0.10 0.10 0.10 Mobile ** 3.79 3.60 2.98 2.36 1.79 1.41 1.30 Nonroad 1.83 1.81 1.71 1.63 1.54 1.48 1.47 Total 21.89 21.86 21.69 21.46 21.35 21.47 21.55 * See further information in Section VI(4)(e) Verification of Continued Attainment. ** Calculated using MOBILE 6.2. Although the Kentucky SIP submission provided VOC and NO X emissions for the attainment and future years for Boyd County, EPA considers emissions from the entire Huntington-Ashland area for a demonstration of maintenance. Maintenance is demonstrated if the future year NO X and VOC emission for the entire area remains at or below the level of the attainment year emissions. Both Kentucky and West Virginia chose 2004 for their “attainment year” for this area. While the VOC emissions for the Boyd County, Kentucky portion of the Huntington-Ashland area indicate a steady increase of emissions beyond the attainment year, it is important to note that this area is comprised of three counties for which emissions should be considered. EPA's review of VOC emissions for the entire area indicates that these emissions are 47.40 tpd in 2004, and 45.20 tpd in 2018, which is an overall downward trend in emissions for the area. Similarly, EPA's review of NO X emissions for the entire area also indicates an overall downward trend in emissions for the area, with a total of 59.29 tpd in 2004 and 48.55 tpd in 2018. Therefore, it is highly likely that maintenance of the 8-hour ozone standard will be maintained in the future for the Huntington-Ashland area. d. Monitoring Network There are currently two monitors measuring ozone in the Huntington-Ashland 8-hour ozone area (one in Cabell County, West Virginia and one in Boyd County, Kentucky). KDAQ has committed in the maintenance plan to continue operation of the monitor in Boyd County in compliance with 40 CFR part 58, and has addressed the requirement for monitoring. West Virginia has provided a similar commitment for the monitor in Cabell County, West Virginia. e. Verification of Continued Attainment Kentucky has the legal authority to enforce and implement the requirements of the ozone maintenance plan for the Boyd County, Kentucky area. This includes the authority to adopt, implement and enforce any subsequent emissions control contingency measures determined to be necessary to correct future ozone attainment problems. Kentucky will track the progress of the maintenance plan by performing future reviews of actual emissions for the area using the latest emissions factors, models and methodologies. For these periodic inventories Kentucky will review the assumptions made for the purpose of the maintenance demonstration concerning projected growth of activity levels. If any of these assumptions appear to have changed substantially, Kentucky will re-project emissions. Following the redesignation of the area, sources are prohibited from reducing emission controls already in place when attainment is achieved unless EPA approves a SIP revision consistent with section 110 of the CAA. Kentucky and EPA have instituted the following programs that will remain enforceable and are included as part of Kentucky's September 2006 SIP submittal, to maintain air quality which meets the NAAQS for the 8-hour ozone standard. • All new major VOC or NO X sources locating in Kentucky shall as a minimum apply control procedures that are reasonable, available, and practical; • All major modifications to existing major VOC or NO X sources are subject to RACM requirements as well as the BACT requirement of the Kentucky Division of Air Quality PSD regulations; • Federal Motor Control Standards apply in Kentucky; • Transportation Conformity Requirements; • PSD Requirements; • Federal Controls on certain nonroad engines (e.g. diesel and other Federal requirements, industrial diesel equipment, locomotives) after 2000; • Federal controls on the VOC content for Architectural and Maintenance Paints, Auto Body Shops and Consumer Products. In addition to these measures, Kentucky explains that more controls are expected to occur in the Boyd County area which are not factored into the projected future year emissions analyses. For example, a major refinery, Marathon Ashland Oil Cattlesburg is undergoing a project entitled the Refinery Modernization Project, which involves new operational and emissions limitations. The proposed Refinery Modernization Project involves installation of new equipment and upgrading of existing equipment. The following emission reductions were expected to occur from the Ashland Project by 2006: • PM 33 tons per year (decrease) • PM 10 33 tons per year (decrease) • SO 2 3,605 tons per year (decrease) • NO X 730 tons per year (decrease) • CO 4 tons per year (decrease) • VOC 64 tons per year (decrease) When these reductions are factored into future emission inventories, the totals for the emission inventories for Boyd County are expected to decrease. f. Contingency Plan The contingency plan provisions are designed to promptly correct any violation of the NAAQS that occurs after redesignation. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the contingency measures to be adopted, a schedule and procedure for adoption and implementation, and a time limit for action by the state. A state should also identify specific indicators to be used to determine when the contingency measures need to be implemented. The maintenance plan must include a requirement that a state will implement all measures with respect to control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d). This requirement is met because all SIP measures are retained for maintenance. Kentucky's submittal satisfies all the contingency plan requirements described in section 175A of the CAA. In the September 29, 2006, final submittal, Kentucky affirms that a combination of all programs instituted by Kentucky and EPA have resulted in cleaner air in the Huntington-Ashland area and the anticipated future benefits from these programs are expected to result in continued maintenance of the 8-hour ozone NAAQS in this area. Sources are prohibited from terminating emissions controls following the redesignation of Boyd County unless EPA approves a SIP revision consistent with section 110 of the CAA. The contingency plan includes tracking and triggering mechanisms to determine when contingency measures are needed and a process of developing and adopting appropriate control measures. The primary trigger is a measured violation of the 8-hour ozone NAAQS. If there is a measured violation of the 8-hour ozone NAAQS in Boyd County, Kentucky commits to develop regulations for at least one of the following control measures for submission to the EPA within nine months. All regulatory programs will be implemented within 18 months from a measured violation. Kentucky will consider one or more of the measures contained in the list of potential contingency measures below. The secondary triggers in the contingency plan are

(1)if a measured value of the fourth highest maximum is 0.087 ppm or greater at the Boyd County monitor in a single ozone season, or

(2)if periodic emission inventory updates reveal excessive or unanticipated growth greater than 10 percent in ozone precursor emissions. If either of these two triggers are met, Kentucky will evaluate existing control measures to determine if any further emission reduction measures should be implemented at that time. Potential Contingency Measures: • Implementation of a program to require additional emission reductions on stationary source; • Implementation of a program to enhance inspection of stationary sources to ensure emission control equipment is functioning properly; • Open burning restrictions during ozone season; • High-volume, low pressure spray guns and low VOC degreaser solvents; • Implementation of incentives for alternative fuels programs; • Restriction of certain roads or lanes to, or construction of such roads or lanes for use by, passenger buses or high occupancy vehicles; • Trip-reduction ordinances; • Employer-based transportation management plans including incentives; • Programs to limit or restrict vehicle use in downtown areas, or other areas of emission concentration particularly during periods of peak use; • Programs for new construction and major reconstructions of paths or tracks for use by pedestrians or by non-motorized vehicles when economically feasible and in the public interest. EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. The maintenance plan SIP revision submitted by Kentucky for Boyd County meets the requirements of section 175A of the CAA and is approvable. VII. What Are the Proposed State MVEBs for Boyd County, Kentucky? Under the CAA, states are required to submit, at various times, control strategy SIPs and maintenance plans in ozone areas. These control strategy SIPs (reasonable further progress SIPs and attainment demonstration SIPs etc.) and maintenance plans create MVEBs for criteria pollutants and/or their precursors to address pollution from cars and trucks. Per 40 CFR part 93, a MVEB is established for the last year of the maintenance plan. The MVEB is the portion of the total allowable emissions in the maintenance demonstration that is allocated to highway and transit vehicle use and emissions. See, 40 CFR 93.101. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, transportation conformity rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and revise the MVEB. Kentucky and West Virginia have elected to develop separate state MVEBs to cover their individual portions of the Huntington-Ashland 8-hour ozone area. As required, Kentucky is only establishing state MVEBs for NO X and VOC for the last year of the maintenance plan (2018). EPA is now proposing to approve these state MVEBs. The state MVEBs for Boyd County, Kentucky are defined in the table below. Table 4.—Boyd County 2018 MVEBs [Tons per day] NO X VOC 1.30 1.18 Through this rulemaking, EPA is proposing to approve the 2018 state MVEBs for NO X and VOCs for Boyd County, Kentucky because EPA has determined that the Huntington-Ashland area maintains the 8-hour ozone standard with emissions at the levels of the budgets. As mentioned above, these MVEBs will be separate state area budgets for Boyd County, Kentucky. West Virginia established MVEBs for the remainder of the Huntington-Ashland 8-hour ozone area (i.e., Cabell and Wayne counties) through the 8-hour ozone maintenance plan that was submitted with West Virginia's request for redesignation. Through a separate rulemaking, EPA found adequate and approved the MVEBs for the West Virginia portion of this 8-hour ozone area (see 71 FR 39618). Once the new state MVEBs for Boyd County, Kentucky (the subject of this rulemaking) are approved or found adequate (whichever is done first), they must be used for future transportation conformity determinations. As is discussed in greater detail below, EPA is also announcing the status of its adequacy determination for the proposed 2018 MVEBs for Boyd County, Kentucky pursuant to 40 CFR 93.118(f)(1). VIII. What Is the Status of EPA's Adequacy Determination of the MVEBs for Boyd County, Kentucky? Under section 176(c) of the CAA, new transportation projects, such as the construction of new highways, must “conform” to (i.e., be consistent with) the part of the State's air quality plan that addresses pollution from cars and trucks. “Conformity” to the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS. If a transportation plan does not “conform,” most new projects that would expand the capacity of roadways cannot go forward. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of such transportation activities to a SIP. The regional emissions analysis is one, but not the only, requirement for implementing transportation conformity. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS but have since been redesignated to attainment with a maintenance plan for that NAAQS. When reviewing submitted “control strategy” SIPs or maintenance plans containing MVEBs, EPA must affirmatively find the MVEB contained therein “adequate” for use in determining transportation conformity. Once EPA affirmatively finds the submitted MVEB is adequate for transportation conformity purposes, that MVEB can be used by state and Federal agencies in determining whether proposed transportation projects “conform” to the SIP as required by section 176(c) of the CAA. EPA's substantive criteria for determining “adequacy” of an MVEB are set out in 40 CFR 93.118(e). The process for determining “adequacy” consists of three basic steps: Public notification of a SIP submission, a public comment period, and EPA's adequacy finding. This process for determining the adequacy of submitted SIP MVEBs was initially outlined in EPA's May 14, 1999 guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” This guidance was finalized in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; transportation conformity rule amendments—Response to Court Decision and Additional Rule Change” on July 1, 2004 (69 FR 40004). EPA follows this guidance and rulemaking in making its adequacy determinations. Kentucky's maintenance plan submission contained new VOC and NO X MVEBs for Boyd County, Kentucky for the year 2018. The availability of the Kentucky SIP submission with the Boyd County MVEBs was announced for public comment on EPA's adequacy Web page on June 21, 2006 at: *http://www.epa.gov/otaq/stateresources/transconf/currsips.htm.* The EPA public comment period on adequacy of the 2018 MVEBs for the Boyd County, Kentucky closed on July 21, 2006. EPA did not receive any adverse comments regarding the MVEBs or requests for the submittal. EPA's current intentions are to make its determination of the adequacy of the 2018 MVEBs for Boyd County, Kentucky for transportation conformity purposes in the final rulemaking on the redesignation of the Boyd County, Kentucky portion of the Huntington-Ashland 8-hour ozone area. If EPA finds the 2018 MVEBs adequate and approves the 2018 MVEBs in the final rulemaking action, the new MVEBs must be used for future transportation conformity determinations. The new 2018 MVEBs, if found adequate and approved in the final rulemaking, will be effective the date of publication of EPA's final rulemaking in the **Federal Register** . For required regional emissions analysis years that involve the year 2017 or before, the applicable budget for the purposes of conducting transportation conformity will be the MVEBs for Boyd County from the Huntington-Ashland 1-hour ozone maintenance plan. For required regional emissions analysis years that involve 2018 or beyond, the applicable budgets are defined in section VII of this rulemaking. IX. Proposed Actions on the Redesignation Request and the Maintenance Plan SIP Revision Including Proposed Approval of the 2018 MVEBs Today, EPA is proposing to determine that Boyd County, Kentucky has met the criteria for redesignation from nonattainment to attainment for the 8-hour ozone NAAQS. Further, EPA is proposing to approve Kentucky's redesignation for Boyd County, Kentucky (as a part of the Huntington-Ashland 8-hour ozone area). In a separate action, EPA approved the 8-hour ozone redesignation of the West Virginia portion of this area from nonattainment to attainment. See, 71 FR 54421 (September 15, 2006). After evaluating Kentucky's SIP submittal requesting redesignation, EPA has determined that it meets the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. EPA believes that the redesignation request and monitoring data demonstrate that the Boyd County portion of the Huntington-Ashland area has attained the 8-hour ozone standard. EPA is also proposing to approve the September 29, 2006, SIP revision containing Kentucky's 8-hour ozone maintenance plan for Boyd County, Kentucky. The maintenance plan includes state MVEBs for 2018, among other requirements. EPA is proposing to approve the 2018 MVEBs for Boyd County because the maintenance plan demonstrates that expected emissions for the area in 2018, including the 2018 MVEBs plus the estimated emissions for all other source categories, will continue to maintain the 8-hour ozone standard. Further, as part of today's action, EPA is providing the status of its adequacy determination for the 2018 MVEBs for Boyd County in accordance with 40 CFR 93.118(f)(1). Within 24 months from the effective date of EPA's adequacy finding for the MVEBs, or the publication date for the final rule for this action, the transportation partners will need to demonstrate conformity to these new MVEBs pursuant to 40 CFR 93.104(e) as effectively amended by section 172(c)(2)(E) of the CAA as added by the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU), which was signed into law on August 10, 2005. X. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Redesignation of an area to attainment under section 107(d)(3)(e) of the CAA does not impose any new requirements on small entities. Redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on sources. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposed rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely affects the status of a geographical area, does not impose any new requirements on sources, or allow a state to avoid adopting or implementing other requirements and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Redesignation is an action that affects the status of a geographical area but does not impose any new requirements on sources. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. 40 CFR Part 81 Environmental protection, Air pollution control, National parks, Wilderness areas. Authority: 42 U.S.C. 7401 *et seq.* Dated: May 3, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. [FR Doc. E7-9130 Filed 5-10-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 070427094-7094-01;I.D. 042407A] RIN 0648-AV50 Magnuson-Stevens Fishery Conservation and Management Act Provisions; Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Allocation of Trips to Closed Area II Yellowtail Flounder Special Access Program AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. SUMMARY: NMFS announces that the Administrator, Northeast Region, NMFS (Regional Administrator), is proposing to allocate zero trips in the Closed Area

(CA)II Yellowtail Flounder Special Access Program

(SAP)during the 2007 fishing year

(FY)(i.e., May 1, 2007, through April 30, 2008). The Regional Administrator has determined that the available catch of Georges Bank

(GB)yellowtail flounder is insufficient to support a minimum level of fishing activity within the CA II Yellowtail Flounder SAP for FY 2007. The intent of this action is to help achieve optimum yield

(OY)in the fishery by maximizing the utility of available GB yellowtail flounder TAC throughout FY 2007. DATES: Comments must be received on or before 5 p.m., local time, May 29, 2007. ADDRESSES: You may submit comments by any of the following methods: • Written comments (paper, disk, or CD-ROM) should be sent to Patricia A. Kurkul, Regional Administrator, 1 Blackburn Drive, Gloucester, MA 01930. Mark the outside of the envelope, “Comments on CA II YT SAP.” • Comments also may be sent via facsimile

(fax)to

(978)978-9135. • E-mail: *YellowtailSAP@Noaa.gov* Include in the subject line the following “Comments on CA II YT SAP.” • Federal e-Rulemaking Portal: *http://www.regulations.gov* . FOR FURTHER INFORMATION CONTACT: Mark Grant, Fishery Management Specialist, phone:

(978)281-9218, fax:

(978)281-9135, e-mail: *Mark.Grant@noaa.gov* . SUPPLEMENTARY INFORMATION: The final rule implementing Framework Adjustment

(FW)40B (70 FR 31323; June 1, 2005), authorized the Regional Administrator to allocate the total number of trips into the CA II Yellowtail Flounder SAP based upon several criteria, including: GB yellowtail flounder total allowable catch

(TAC)level, as established through the U.S./Canada Resource Sharing Understanding; and the amount of GB yellowtail flounder caught outside of the SAP. A formula was developed in FW 40B to assist the Regional Administrator in determining the appropriate number of trips for this SAP on a yearly basis. The formula is intended to allow the SAP to be adjusted for changing stock conditions to help achieve OY for GB yellowtail flounder. FW 40B authorized the Regional Administrator to allocate zero trips to this SAP if the available GB yellowtail flounder catch (GB yellowtail flounder TAC projected catch of GB yellowtail flounder outside the SAP) is not sufficient to support 150 trips with a 15,000-lb (6,804-kg) trip limit (i.e., if the available GB yellowtail catch is less than 1,021 mt), as required. The proposed U.S./Canada GB yellowtail flounder TAC for 2007, as recommended by the Transboundary Management Guidance Committee and the Council, is 900 mt (72 FR 10967; March 12, 2007). During FY 2006, vessels fishing outside of the SAP landed over 1,500 mt of GB yellowtail flounder. Therefore, based on the proposed 900-mt U.S./Canada GB yellowtail flounder TAC, assuming similar fishing behavior in 2007, and using the criteria specified under § 648.85(b)(3)(vii) to determine the appropriate number of trips for FY 2007, the Regional Administrator has determined that there will be insufficient GB yellowtail flounder TAC to support the CA II Yellowtail Flounder SAP for FY 2007 (900 mt - 1,500 mt <1,020 mt). Therefore, a limit of zero trips is proposed for FY 2007. Classification Pursuant to section 304 (b)(1)(A) of the Magnuson-Stevens Act, I have determined that this proposed rule is consistent with the NE Multispecies FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment. This proposed rule has been determined to be not significant for the purposes of Executive Order 12866. The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration

(SBA)that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. As a result, an initial regulatory flexibility analysis is not required and none has been prepared. The SBA size standard for small commercial fishing entities is $ 4.0 million in gross receipts. Individuals that would be impacted by this proposed action include all limited access NE multispecies DAS permit holders. All commercial fishing entities affected by this proposed rule would fall under the SBA size standard for small commercial fishing entities and there would be no disproportionate impacts between small and large entities. The proposed action would affect a substantial number of small entities, as approximately 66 percent of the vessels affected by this action (i.e., 100 out of 150) had participated in the CA II Yellowtail Flounder SAP when it was open during FY 2004. However, the proposed action will not significantly reduce profit for affected vessels. The proposed allocation of zero trips into the SAP would help ensure that the GB yellowtail flounder TAC is available throughout the fishing year, minimizing the impacts of depressed prices that could otherwise be caused by temporary floods of yellowtail flounder on the market, and therefore would help avoid the premature closing of the Eastern U.S./Canada Area due to catching the available GB yellowtail flounder TAC. This would enable vessels greater opportunity to fully harvest the available GB cod and GB haddock TAC allocated to the Eastern U.S./Canada Area and to achieve the full economic benefit from the U.S./Canada Management Area by more efficiently using the small GB yellowtail flounder TAC. Analysis prepared for FW 40B indicates that flexibility for vessels to target species other than yellowtail flounder is seen as critical to maintaining the profitability of vessel operations within the U.S./Canada Management Area, including the SAP, given the costs associated with fishing far offshore. Because the proposed action would maintain access to the Eastern U.S./Canada Area throughout the fishing year, this action attempts to preserve the flexibility for vessels to operate in an efficient and cost-effective manner that would maximize the profitability of vessel operations. Since the SAP was closed to fishing for FY 2006, there would be no change in profitability to individual vessels (compared to last year) resulting from the proposed zero allocation, thus, no economic impact to affected small harvesters. This proposed rule does not contain any new, nor revised existing reporting, recordkeeping, and other compliance requirements. Authority: 16 U.S.C. 1801 *et seq.* Dated: May 7, 2007. William T. Hogarth, Assistant Administrator for Fisheries, National Marine Fisheries Service. [FR Doc. E7-9092 Filed 5-10-07; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 665 [Docket No. 070427093-7093-01; I.D. 041807A] RIN 0648-AV55 Fisheries in the Western Pacific; Western Pacific Pelagic Fisheries; Control Date AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Advance notice of proposed rulemaking; notification of control date; request for comments. SUMMARY: NMFS announces that anyone who enters the Hawaii-based pelagic charter fishery after March 16, 2007 (the “control date”), is not guaranteed future participation in the fishery if the Western Pacific Fishery Management Council (Council) recommends, and NMFS approves, a program that limits entry into the fishery, or other fishery management measures. The Council is concerned about expansion of the Hawaii-based pelagic charter fishery and the potential resultant impacts on billfish and other pelagic fishes. DATES: Comments must be submitted in writing by July 10, 2007. ADDRESSES: You may submit comments on this action, identified by 0648-AV55, by any of the following methods: • E-mail: *AV55ControlCharter@noaa.gov* . Include “AV55” in the subject line of the e-mail comment. Comments sent via e-mail, including all attachments, must not exceed a 10 megabyte file size. • Federal e-Rulemaking portal: *www.regulations.gov* . Follow the instructions for submitting comments. • Mail: William L. Robinson, Regional Administrator, NMFS Pacific Islands Region (PIR), 1601 Kapiolani Blvd., Suite 1110, Honolulu, HI 96814. FOR FURTHER INFORMATION CONTACT: Bob Harman, NMFS PIR, 808-944-2234. SUPPLEMENTARY INFORMATION: At its 137th meeting held from March 13-16, 2007, the Council adopted a control date of March 16, 2007, applicable to persons who are contemplating entering the Hawaii-based charter fishery for pelagic fishes. The purpose of the control date is to notify fishermen that after March 16, 2007, they may not be guaranteed access to the fishery if the Council recommends, and NMFS approves, establishing a limited entry program or other measures to manage the fishery. The Council has not yet recommended limiting new entry or imposing any other management measures in this fishery. Establishment of a control date responds to the Council's concern over any significant expansion of the Hawaii-based pelagic charter fishery, and its potential to impact billfish and other pelagic fishes. This concern is focused on the Kona coast of the island of Hawaii, where there is a planned expansion of the Honokohau Harbor. A larger harbor could provide more berths for charter fishing vessels, with a resulting increase in fishing effort for pelagic fishes, such as blue marlin (Makaira mazara). State of Hawaii fishery data indicate that blue marlin catch per unit effort from Kona-based pelagic charter fishing has declined significantly over the past 20 years. Similar trends are also apparent for pelagic charter fishing data from the other Hawaiian islands. Pelagic charter fishing, conducted from small vessels that primarily target billfishes and tunas and are chartered for a fee, is a notable component of tourism in Hawaii. Total generated revenues were estimated at $17 million in 1990, and $16.5 million in 1992. The industry attracted an estimated 77,000 annual participants in 1994, and employed approximately 400 captains and crew members in 1997. Because at least a portion of the catch is typically sold, pelagic charter fishing in Hawaii is classified as a commercial fishery, requiring State of Hawaii commercial marine licenses and catch reporting. The State of Hawaii issued 121 commercial marine licenses to vessels for pelagic charter fishing in 2005, and the reported catch from pelagic charter vessels in 2005 was 478,650 lb (217,112 kg). In 2006, 119 licensed fishermen submitted fishing reports that reported a total of 9,535 charter trips, or an average of 80.1 trips per vessel. The March 16, 2007, control date adopted by the Council complements a control date of June 2, 2005, established for non-longline commercial pelagic fisheries in Hawaii (70 FR 47781, August 15, 2005) in response to concerns about overfishing of bigeye tuna Pacific-wide and yellowfin tuna in the central and western Pacific. Control dates are intended to discourage speculative entry into fisheries, as new participants entering the fisheries after the control date are put on notice that they are not guaranteed future participation in the fisheries. Establishment of this control date does not commit the Council or NMFS to any particular management regime or criteria for entry into the Hawaii-based pelagic charter fishery. Fishermen are not guaranteed future participation in the fishery, regardless of their level of participation before or after the control date. The Council may choose a different control date, or it may choose a management regime that does not involve a control date. Other criteria, such as documentation of landings or sales, may be used to determine eligibility for participation in a limited access fishery. The Council or NMFS also may choose to take no further action to control entry or access to the fishery, in which case the control date may be rescinded. Classification This advance notice of proposed rulemaking has been determined to be not significant for the purposes of Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: May 7, 2007. William T. Hogarth, Assistant Administrator for Fisheries, National Marine Fisheries Service. [FR Doc. E7-9090 Filed 5-10-07; 8:45 am] BILLING CODE 3510-22-S 72 91 Friday, May 11, 2007 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request May 8, 2007. The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding

(a)whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used;

(c)ways to enhance the quality, utility and clarity of the information to be collected;

(202)395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Comments regarding these information collections are best assured of having their full effect if received within 30 days of this notification. Copies of the submission(s) may be obtained by calling

(202)720-8958. An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number. Animal and Plant Health Inspection Service *Title:* Importation of Clementines, Mandarins, and Tangerines from Chile. *OMB Control Number:* 0579-0242. *Summary of Collection:* Under the Plant Protection Act (7 U.S.C. 7701-7772), the Secretary of Agriculture is authorized to carry out operations or measures to detect, eradicate, suppress, control, prevent, or retard the spread of plant pests new to the United States or not known to be widely distributed throughout the United States. The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world, to prevent the introduction and dissemination of plant pests, including fruit flies. *Need and Use of the Information:* The Animal and Plant Health Inspection Service (APHIS) requires that some plants or plant products are accompanied by a phytosanitary inspection certificate that is completed by plant health officials in the originating or transiting country. APHIS will use the information on this certificate to determine the pest condition of the shipment at the time of inspection in the foreign country. Without the information, all shipments would need to be inspected very thoroughly, thereby requiring considerable more time, this would slow the clearance of international shipments. *Description of Respondents:* Business or other for-profit. *Number of Respondents:* 19. *Frequency of Responses:* Reporting: On occasion. *Total Burden Hours:* 147. Animal and Plant Health Inspection Service *Title:* Inspection, Licensing, and Procurement of Animals. *OMB Control Number:* 0579-0254. *Summary of Collection:* The Animal Welfare Act

(AWA)(7 U.S.C. 2131 *et seq.* ) authorizes the Secretary of Agriculture to promulgate standards and other requirements governing the humane handling, housing, care, treatment, and transportation of certain animals by dealers, research facilities, exhibitors, carriers, and intermediate handlers. The Animal and Plant Health Inspection Service (APHIS) has the responsibility to enforce the AWA and to regulate the humane care and handling of most warm-blooded animals used for research or exhibition purposes, sold as pets, or transported in commerce. APHIS will collect information using several forms. *Need and Use of the Information:* APHIS will collect health certificates, program of veterinary care, application for license and record of acquisition, disposition and transportation of animals. The information is used to ensure those dealers, exhibitors, research facilities, carriers, etc., are in compliance with the Animal Welfare Act and regulations and standards promulgated under this authority of the Act. *Description of Respondents:* Individuals or households. *Number of Respondents:* 89. *Frequency of Responses:* Recordkeeping; Reporting: On occasion. *Total Burden Hours:* 41. Ruth Brown, Departmental Information Collection Clearance Officer. [FR Doc. E7-9119 Filed 5-10-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Commodity Credit Corporation Emergency and Temporary Storage of Agricultural Commodities AGENCY: Commodity Credit Corporation, USDA. ACTION: Notice. SUMMARY: The Commodity Credit Corporation

(CCC)is taking actions to ensure adequate availability of commercial warehouse storage space for the 2007 crops and for producers seeking warehouse-stored marketing assistance loans for eligible commodities. CCC is announcing authorization, under certain conditions, of emergency and temporary storage for the 2007 crops of wheat, corn, sorghum and feed grains, and temporary storage for the 2007 crops of soybeans, rice and other commodities deemed storable by CCC. The authorizations include agricultural commodities stored by warehouse operators licensed under the U.S. Warehouse Act

(USWA)and those warehouse operators who store commodities pledged as collateral for Commodity Credit Corporation

(CCC)marketing assistance loans and issue warehouse receipts for such commodities in emergency or temporary storage. EFFECTIVE DATE: May 11, 2007. FOR FURTHER INFORMATION CONTACT: Roger Hinkle, Warehouse and Inventory Division, Farm Service Agency, United States Department of Agriculture, 1400 Independence Avenue, SW., STOP 0553, Washington, DC 20250-0553, telephone

(202)720-7433, FAX

(202)690-3123, e-mail: *Roger.Hinkle@wdc.usda.gov* . Persons with disabilities who require alternative means for communication for regulatory information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at

(202)720-2600 (voice and TDD). SUPPLEMENTARY INFORMATION: Background To be eligible for a Marketing Assistance Loan under the loan provisions of 7 CFR part 1421, an eligible commodity must be stored in approved storage, which is either on-farm storage or an approved warehouse that meets the CCC standards for approval of warehouses. Further, in accordance with the CCC Charter Act (15 U.S.C. 714 *et seq.* ), CCC enters into storage agreements with commercial warehouse operators to provide for the storage of commodities owned by CCC or pledged as security to CCC for marketing assistance loans. To ease the demands made on approved warehouse space for the 2007 crops, CCC will accept as collateral for marketing assistance loans the emergency and temporary storage of wheat, corn, sorghum and feed grains and temporary storage of soybeans, rice and other commodities deemed storable by CCC for which warehouse receipts are issued by a warehouse operator that is storing such commodity in emergency or temporary storage if the warehouse has executed a storage agreement with CCC and if the warehouse is either: 1. A federally-licensed warehouse under the USWA and is in compliance with the provisions of its USWA license; or 2. For all other warehouses, the warehouse operator is in compliance with State laws allowing emergency or temporary storage of such commodities. USWA Emergency Storage Requirements Emergency storage is limited to wheat, corn, sorghum and feed grains unless otherwise allowed by the USWA. The warehouse operator may use such space from the time of initial licensing until March 31, 2008. Emergency storage space must be operated in conjunction with a USWA-licensed warehouse. In addition, warehouse operators requesting emergency storage space under the USWA must: 1. Receive USWA's authorization for the use of emergency storage space; 2. Meet all USWA security, net worth, bonding, and insurance requirements as required for conventional storage space; 3. Provide written justification that a need for emergency storage exists in the local area including the exact location, kind of commodity and quantity requested; 4. Meet USWA's requirement that emergency storage space be accessible for examination purposes; 5. Receive USWA authorization for the emergency storage space prior to using such space; 6. Maintain a separate inventory record of all commodities stored in emergency storage space, as well as accounting for such commodities in their Daily Position Record (DPR); 7. Agree that all emergency storage space will be deleted from the license no later than March 31, 2008; 8. Agree to move all commodities stored in emergency storage space into licensed space by that date; 9. Notify USWA in writing when commodities are moved into licensed space; and 10. If the warehouse chooses to continue using the emergency storage space for company-owned commodities after that date, the warehouse operator shall: • Remove that quantity of the commodity from the warehouse's official records, • Not use the commodity to cover the storage or warehouse receipted obligations of the warehouse, and • Agree that the quantity will not be included in any warehouse examination conducted by CCC. USWA Temporary Storage Requirements The warehouse operator may use such space from the time of initial licensing until March 31, 2008, for soybeans, rice and other commodities deemed storable by CCC and until July 1, 2008, for wheat, corn, sorghum and feed grains. Temporary storage structures must be operated in conjunction with a USWA-licensed warehouse. In addition: 1. Asphalt, concrete, or other approved base material must be used; 2. Rigid self-supporting sidewalls must be used; 3. Aeration must be provided; 4. Acceptable covering, as determined by CCC, must be provided; 5. Receive USWA's authorization for the use of temporary storage; 6. Meet all USWA security, net worth, bonding, and insurance requirements as required for conventional storage space; 7. Warehouse operators must maintain a separate record of all commodities stored in temporary storage space and must account for such commodities in their DPR; 8. Agree to move all commodities stored in temporary storage space into licensed space by its respective final date; 9. Notify USWA in writing when commodities are moved into licensed space; and 10. If the warehouse chooses to continue using the temporary storage space for company-owned commodities after that date, the warehouse operator shall: • Remove that quantity of the commodity from the warehouse's official records, • Not use the commodity to cover the storage or warehouse receipted obligations of the warehouse, and • Agree that the quantity will not be included in any warehouse examination conducted by CCC. Application for Emergency and Temporary Storage USWA licensees should direct questions regarding the use of emergency or temporary storage to Terry Chapman, Chief, Licensing Branch, Warehouse License and Examination Division, at: Kansas City Commodity Office, Mail Stop 9148, P.O. Box 419205 Kansas City, MO 64141-6205, telephone: 816-926-6474; facsimile: 816-926-1774. E-mail: *terry.chapman@kcc.usda.gov* . All other warehouse operators should direct questions regarding the use of emergency or temporary storage to the Chief of the Storage Contract Branch, Bulk Commodities Division, Kansas City Commodity Office—MAIL STOP 8748, PO Box 419205, Kansas City, Missouri 64141-6205, Telephone:

(816)926-6446—Facsimile:

(816)926-1426 or

(816)823-1804; E-mail: *bcdscd@kcc.usda.gov* . Warehouse Operator's Liability The authorization and licensing of emergency and temporary storage space does not relieve warehouse operators of their obligations under the USWA. Warehouse operators are responsible for the quantity and quality of commodities stored in emergency and temporary storage space to the same extent as their liability for licensed storage space. All commodities stored in emergency and temporary storage space are considered a part of the warehouse operator's commingled inventory. Warehouse Security CCC strongly recommends that warehouse operators review their warehouse security plans and conduct a prudent risk assessment in connection with their application for emergency and temporary storage space. Warehouse operators may want to pay particular attention to threats that may not have been considered significant in the past and consider restricting access to facilities to authorized personnel only. Signed in Washington, DC, on April 26, 2007. Teresa C. Lasseter, Executive Vice President, Commodity Credit Corporation. [FR Doc. E7-9121 Filed 5-10-07; 8:45 am] BILLING CODE 3410-05-P DEPARTMENT OF AGRICULTURE Farm Service Agency Information Collection: Measurement Service Requests AGENCY: Farm Service Agency, USDA. ACTION: Notice; Request for comments. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, the Farm Service Agency

(FSA)is seeking comments from all interested individuals and organizations on a new information collection associated with the Measurement Service Requests. DATES: Comments on this notice must be received on or before July 10, 2007 to be assured consideration. ADDRESSES: The comments should be addressed to Sandy Bryant, Common Provisions Branch Chief, USDA, FSA, Farm Programs, Production Emergencies and Compliance Division, 1400 Independence Avenue, SW., STOP 0517, Washington, DC 20250-0523. The comments also may be submitted by e-mail to: *Joe.Lewis@wdc.usda.gov* . The comments should be also sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 FOR FURTHER INFORMATION CONTACT: Joe Lewis, USDA, Farm Service Agency, Production Emergencies and Compliance Division,

(202)720-0795 and *Eloise.Taylor@wdc.usda.gov* . Comments should include the OMB number and title of the information collection. SUPPLEMENTARY INFORMATION: Description of Information Collection *Title:* Management Service Requests (FSA-409). *OMB Control Number:* 0560-NEW. *Type of Request:* New Information Collection. *Abstract:* The producers may request measurement services from the FSA using form FSA-409, Measurement Service Records. The measurement service requests, though not required for program participation, are customarily provided by the County Office. The request may include staking, and referencing and measurement after planting, and bin or quantity measurements in accordance with 7 CFR part 718. Information determined by the FSA during a farm visit for measurement services is reported on the FSA-409. Mandatory fees are assessed by the County Office to recover costs associated with a farm visit to perform these services. *Estimate of Annual Burden:* Public reporting burden for this collection of information is estimated to average .50 hours per response. *Respondents:* Producers. *Estimated Number of Respondents:* 135,000. *Estimated Number of Responses per Respondent:* 1.0. *Estimated Total Annual Burden on Respondents:* 20,250 hours. *Comments are invited on:*

(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used;

(c)ways to enhance the quality, utility and clarity of the information to be collected;

(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. All comments received in response to this notice, including names and addresses when provided, will be a matter of public record. Comments will be summarized and included in the submission for Office of Management and Budget approval. Signed in Washington, DC on May 2, 2007. Teresa C. Lasseter, Administrator, Farm Service Agency. [FR Doc. E7-9077 Filed 5-10-07; 8:45 am] BILLING CODE 3410-05-P DEPARTMENT OF AGRICULTURE Foreign Agricultural Service Notice of a Request for a Revision of a Currently Approved Information Collection AGENCY: Foreign Agricultural Service, USDA. ACTION: Notice and request for comments. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Department's intention to request a revision for a currently approved information collection in support of the Export Sales Reporting program. DATES: Comments should be submitted no later than July 10, 2007. *Additional Information and Comments:* Contact Peter W. Burr, Export Sales Reporting, Branch Chief, Stop 1021, U.S. Department of Agriculture, 1400 Independence Avenue, SW., Washington, DC 20250-1021, telephone;

(202)720-9209, e-mal: *esr@fas.usda.gov.* SUPPLEMENTARY INFORMATION: *Title:* Export Sales Reporting Program. *OMB Number:* 0551-0007. *Expiration Date of Approval:* October 31, 2007. *Type of Request:* Revision of a currently approved information collection. *Abstract:* Section 602 of the Agricultural Trade Act of 1978, as amended, requires the reporting of information pertaining to contracts for export sale of certain specified agricultural commodities and other commodities that may be designated by the Secretary. In accordance with Sec. 602, individual weekly reports submitted shall remain confidential and shall be compiled and published in compilation form each week following the week of reporting. Any person who knowingly fails to report shall be fined not more than $25,000 or imprisoned for not more than 1 year, or both. Regulations at 7 CFR part 20 implement the reporting requirements, and prescribe a system for reporting information pertaining to contracts for export sales. USDA's export sales reporting system was created after the large unexpected purchase of U.S. wheat and corn by the Soviet Union in 1972. To make sure that all parties involved in the production and export of U.S. grain have access to up-to-date export information, the U.S. Congress mandated as export sales reporting requirements in 1973. Prior to the establishment of the Export Sales Reporting System, it was impossible for the public to obtain information on export sales activity until the actual shipments had taken place. This frequently resulted in considerable delay in the availability of information. Under the export sales reporting system, U.S. exporters are required to report all large sales of certain designated commodities by 3 p.m. (eastern time) on the next business days after the sale is made. The designated commodities for these daily reports are wheat (by class), barley, corn, grain sorghum, oats, soybeans, soybean cake and meal, and soybean oil. Large sales for all reportable commodities except soybean oil are defined as 100,000 metric tons or more of one commodity in one day to a single destination or 200,000 tons or more of one commodity during the weekly reporting period. Large sales for soybean oil are 200,000 tons and 40,000 tons, respectively. Weekly reports are also required, regardless of the size of the sales transaction, for all of these commodities, as well as wheat products, rye, flaxseed, linseed oil, sunflowerseed oil, cotton (by staple length), cottonseed, cottonseed cake and meal, cottonseed oil, rice (by class), cattle hides and skins (cattle, calf, and kip), and beef. The reporting week for the export sales reporting system is Friday-Thursday. The Secretary of Agriculture has the authority to add other commodities to this list. U.S. exporters provide information on the quantity of their sales transactions, the type and class of commodity, the marketing year of shipment, and the destination. They also report any changes in previously reported information, such as cancellations and changes in destinations. The estimated total annual burden of 31,190 hours in the OMB inventory for the currently approved information collection will be increased by 11,757 hours to 42,947 hours. The estimated increase is based on the growth in U.S. exports of reported commodities during this period. *Estimate of Burden:* The average burden, including the time for reviewing instructions, gathering data needed, completing forms, and record keeping is estimated to be 30 minutes. *Respondents:* All reports of wheat and wheat flour, feed grains, oil seeds, cotton, rice, cattle hides and skins, beef, and any products thereof, and other commodities that the Secretary may designate as produced in the United States. *Estimated number of respondents:* 340 for forms FAS 97, 98, 99, and 100. *Requests for Comments:* Send comments regarding

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of the burden of the proposed collection of information;

(c)ways to enhance the quality, utility and clarity of the information to be collected; and

(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Copies of the current information collection may be obtained from Tamoria Thompson-Hall, FAS Information Collection Coordinator, at

(202)690-1690 or e-mail at *Tamoria.Thompson@usda.gov* . Comments may be sent to Peter W. Burr, Office of Trade Programs/Import and Trade Support Programs Division/Export Sales Reporting, FAS, 1400 Independence Avenue, Stop 1021, SW., Washington, DC 20250-1021 or *esr@fas.usda.gov* , or to the Desk Office for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503. Comments can also be hand delivered to Export Sales Reporting, U.S. Department of Agriculture, Room 456, 1250 Maryland Avenue, Washington, DC 20024. Persons with disabilities who require an alternative means of communication of information (Braille, large print, audiotape, etc.) should contact USDA's Target Center at

(202)720-2600 (voice and TDD). All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record. *Government Paperwork Elimination Act:* FAS is committed to compliance with the Government Paperwork Elimination Act, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. Signed at Washington, DC, on April 26, 2007. Michael W. Yost, Administrator, Foreign Agricultural Service. [FR Doc. 07-2323 Filed 5-10-07; 8:45 am]

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