Unknown. Interim rule and request for comments
68,483 words·~311 min read·
/register/2007/06/21/07-3056A 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-2007-06-21.xml --- 72 119 Thursday, June 21, 2007 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Forest Service Animal Animal and Plant Health Inspection Service RULES Plant-related quarantine, domestic: Pine shoot beetle, 34161-34163 E7-12025 Plant-related quarantine, foreign: Fruit from Thailand, 34163-34176 E7-12023 PROPOSED RULES Plant-related quarantine, domestic:
Citrus canker, 34180-34191 E7-12041 Army Army Department NOTICES Environmental statements; record of decision: Base realignment and closure— Fort Sam Houston, TX, 34229-34230 07-3056 Children Children and Families Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34252-34255 07-3046 07-3047 07-3048 07-3049 Organization, functions, and authority delegations: Principal Deputy Assistant Secretary et al., 34255 E7-12019 Commerce Commerce Department See Economic Development Administration See International Trade Administration See National Oceanic and Atmospheric Administration See Patent and Trademark Office Defense Defense Department See Army Department See Navy Department Drug Drug Enforcement Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34278 E7-12035 Economic Economic Development Administration NOTICES Grants and cooperative agreements; availability, etc.:
National Technical Assistance, Training, Research, and Evaluation Program, 34225-34228 E7-12003 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 34231-34235 E7-11982 E7-11983 E7-11992 E7-11993 E7-11994 E7-11995 Grants and cooperative agreements; availability, etc.: Special education and rehabilitative services— Disability and Rehabilitation Research Projects and Centers Program, 34235-34237 07-3040 Energy Energy Department See Federal Energy Regulatory Commission EPA Environmental Protection Agency PROPOSED RULES Air programs;
State authority delegations: Arizona and Nevada, 34209-34215 E7-12044 Air quality implementation plans; approval and promulgation; various States: Delaware, 34207-34209 E7-12051 NOTICES Agency information collection activities; proposals, submissions, and approvals, 34239-34240 E7-12053 Superfund; response and remedial actions, proposed settlements, etc.: PCB Treatment Inc. Site, MO, 34240-34241 E7-12048 Water pollution control: National Pollutant Discharge Elimination System— Discharges incidental to the normal operation of vessels; permits development, 34241-34249 E7-12022 Water supply:
Public water system supervision program— Michigan, 34249-34250 E7-12049 Farm Farm Credit Administration PROPOSED RULES Farm credit system: Funding and fiscal affairs, loan policies and operations, and funding operations— Capital adequacy; Basel Accord, 34191-34197 E7-11990 FAA Federal Aviation Administration PROPOSED RULES Airworthiness directives: Cirrus Design Corp., 34198-34199 E7-12006 FCC Federal Communications Commission RULES Radio services, special: Private land mobile services— 800 MHz band; improving public safety communications, 33914-33916 [ **Editorial Note:** This document was inadvertently placed under the Federal Aviation Administration in the **Federal Register** table of contents of June 20, 2007.] Federal Election Federal Election Commission NOTICES Meetings;
Sunshine Act, 34250 07-3065 Federal Energy Federal Energy Regulatory Commission NOTICES Complaints filed: Hudson Transmission Partners, LLC, 34238 E7-11946 Hydroelectric applications, 34238-34239 E7-11950 *Applications, hearings, determinations, etc.:* Dominion Cove Point LNG, LP, 34237 E7-11948 Northern Natural Gas Co., 34238 E7-11947 Federal Highway Federal Highway Administration NOTICES Federal agency actions on proposed highways; judicial review claims: Sacramento County, CA;
Hazel Avenue between State Route 50 and Madison Avenue, 34338-34339 E7-12002 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 34250 E7-12014 FTC Federal Trade Commission NOTICES Prohibited trade practices: American Petroleum Co., Inc., 34250-34252 E7-12033 Federal Transit Federal Transit Administration NOTICES Reports and guidance documents; availability, etc.: FTA-funded major capital projects; safety and security management plan, 34339-34348 E7-11970 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species:
Critical habitat designations— Mussels; Northeast Gulf of Mexico drainages; public hearings, 34215-34224 E7-11897 NOTICES Agency information collection activities; proposals, submissions, and approvals, 34270 E7-12042 Endangered and threatened species: Incidental take permits— Charlotte County, FL; Florida scrub-jay, 34271 E7-12001 Environmental statements; notice of intent: Marana, AZ; habitat conservation plan, 34271-34273 E7-12009 Food Food and Drug Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34255-34259 E7-11969 E7-11980 E7-11981 Reports and guidance documents; availability, etc.:
Electronic based testing for compatibility between donor's cell type and recipient's serum or plasma type; computer crossmatch, 34259-34260 E7-11998 Source plasma donors participating in plasmapheresis and immunization programs; informed consent recommendations, 34260 E7-11997 Veterinary Medicinal Products, International Cooperation on Harmonisation of Technical Requirements for Approval— Pharmacovigilance veterinary medicinal products; controlled list of terms, 34261-34262 E7-11996 Foreign Foreign Assets Control Office NOTICES Sanctions; blocked persons, specially designated nationals, terrorists, narcotics traffickers, and foreign terrorist organizations:
Libya; additional designations, 34353-34354 E7-11987 Terrorist-related blocked persons; additional designations, 34354-34355 E7-11988 Forest Forest Service NOTICES Environmental statements; notice of intent: Helena National Forest, MT; withdrawn, 34225 E7-12000 Health Health and Human Services Department See Children and Families Administration See Food and Drug Administration See Indian Health Service See National Institutes of Health Homeland Homeland Security Department See U.S.
Citizenship and Immigration Services Housing Housing and Urban Development Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 34269 E7-11966 Indian Indian Health Service NOTICES Health service delivery areas: Geographic composition; list, 34262-34267 07-3045 Interior Interior Department See Fish and Wildlife Service See National Park Service IRS Internal Revenue Service RULES Procedure and administration: Taxpayers who have participated in listed transactions or undisclosed reportable transactions; suspension provisions, 34176-34178 E7-12081 PROPOSED RULES Procedure and administration:
Taxpayers filing timely income tax returns to whom IRS does not provide timely notice stating additional tax liability; suspension provisions, 34199-34203 E7-12082 Taxpayers who have participated in listed transactions or undisclosed reportable transactions; suspension provisions; cross-reference, 34204-34205 E7-12085 NOTICES Agency information collection activities; proposals, submissions, and approvals, 34355-34358 E7-11973 E7-11974 E7-11975 E7-11976 E7-11977 Meetings: Taxpayer Advocacy Panels, 34358-34360 E7-11967 E7-11968 E7-11972 E7-11979 International International Trade Administration NOTICES Cheese quota; foreign government subsidies:
Quarterly update, 34228 E7-12047 International International Trade Commission NOTICES Import investigations: Steel nails from— China and United Arab Emirates, 34276-34277 E7-12007 Justice Justice Department See Drug Enforcement Administration PROPOSED RULES Production or disclosure of material or information: State or local law enforcement or prosecutive officials testimony while serving on Justice Department task forces, 34205-34207 E7-12038 NOTICES Pollution control; consent judgments:
James Campbell Co. LLC, 34277 07-3043 Soulliere, Dean R., et al., 34277-34278 07-3042 Labor Labor Department See Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34278-34279 E7-12020 Grants and cooperative agreements; availability, etc.: India, Nepal, and Pakistan; children working in carpet industry; research agreement, 34279-34299 E7-12011 National Highway National Highway Traffic Safety Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34348-34349 E7-11999 NIH National Institutes of Health NOTICES Agency information collection activities; proposals, submissions, and approvals, 34267-34268 E7-11971 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management:
Alaska; fisheries of Exclusive Economic Zone— Gulf of Alaska shallow-water species, 34179 E7-12028 NOTICES Meetings: Gulf of Mexico Fishery Management Council, 34228-34229 E7-12004 National Park National Park Service NOTICES Environmental statements; availability, etc.: Flight 93 National Memorial, PA; general management plan, 34273-34274 E7-12013 Native American human remains, funerary objects; inventory, repatriation, etc.: American Museum of Natural History, New York, NY, 34274-34275 E7-11986 Anthropological Studies Center, Archaeological Collections Facility, Sonoma State University, Rohnert Park, CA, 34275-34276 E7-11985 National Science National Science Foundation NOTICES Agency information collection activities; proposals, submissions, and approvals, 34321-34322 07-3054 Navy Navy Department NOTICES Environmental statements; availability, etc.:
Atlantic Fleet; Combined Carrier Strike Group Composite Training Unit Exercise/Joint Task Force Exercise, 34230-34231 E7-12026 Shipping container system use for spent nuclear fuel from naval aircraft carriers, 34231 E7-12032 Nuclear Nuclear Regulatory Commission NOTICES Meetings: Reactor Safeguards Advisory Committee, 34322-34323 E7-12016 Occupational Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 34299-34300 E7-12021 Grants and cooperative agreements; availability, etc.:
Susan Harwood Training Program, 34300-34319 07-3001 Nationally recognized testing laboratories, etc.: National Technical Systems, Inc., 34320-34321 E7-12024 Patent Patent and Trademark Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 34229 E7-12005 Postal Postal Regulatory Commission NOTICES Commission tours: Kansas City, MO, 34323 07-3051 SEC Securities and Exchange Commission NOTICES Self-regulatory organizations; proposed rule changes:
American Stock Exchange LLC, 34323-34325 E7-12015 NYSE Arca, Inc., 34325-34326 E7-12017 State State Department NOTICES Clean Diamond Trade Act of 2003; participating countries and entities eligible for trade in rough diamonds; list, 34326-34327 E7-12034 Culturally significant objects imported for exhibition: Deja Vu? Revealing Repetition in French Masterpieces, 34327 E7-12030 Grants and cooperative agreements; availability, etc.: Global Undergraduate Exchange Program, 34327-34333 E7-12027 Study of United States Institutes for Western Hemisphere student leaders, 34333-34338 E7-12029 Surface Surface Transportation Board NOTICES Meetings:
National Grain Car Council, 34349 E7-11962 Railroad operation, acquisition, construction, etc.: Fortress Investment Group LLC et al., 34349-34353 E7-11759 Thrift Thrift Supervision Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 34360 E7-12040 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Transit Administration See National Highway Traffic Safety Administration See Surface Transportation Board Treasury Treasury Department See Foreign Assets Control Office See Internal Revenue Service See Thrift Supervision Office MISSING FOR:
U.S. Citizenship and Immigration Services U.S. Citizenship and Immigration Services NOTICES Immigration: District Office Rapid Adjudication Pilot Program; filing procedures for Form I-485 applicants; optional participation requirement, 34268-34269 E7-11989 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. 72 119 Thursday, June 21, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No.
APHIS-2007-0067] Pine Shoot Beetle; Addition of Cumberland County, NJ, to the List of Quarantined Areas AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Interim rule and request for comments. SUMMARY: We are amending the pine shoot beetle regulations by adding Cumberland County in New Jersey to the list of quarantined areas. We are taking this action because the pine shoot beetle has been detected in the county. This action is necessary to prevent the spread of the pine shoot beetle, a pest of pine trees, into noninfested areas of the United States.
DATES: This interim rule is effective June 21, 2007. We will consider all comments that we receive on or before August 20, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0067 to submit or view public comments and to view supporting and related materials available electronically.
Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0067, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No.
APHIS-2007-0067. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Mr. Weyman Fussell, Program Manager, Pest Detection and Management Programs, PPQ, APHIS, 4700 River Road Unit 134, Riverdale, MD 20737-1231;
(301)734-5705. SUPPLEMENTARY INFORMATION: Background The regulations in 7 CFR 301.50 through 301.50-10 (referred to below as the regulations) restrict the interstate movement of certain regulated articles from quarantined areas in order to prevent the spread of pine shoot beetle
(PSB)into noninfested areas of the United States. PSB is a pest of pine trees that can cause damage in weak and dying trees, where reproduction and immature stages of PSB occur. During “shoot feeding,” young beetles tunnel into the center of pine shoots (usually of the current year's growth), causing stunted and distorted growth in host trees. PSB is also a vector of several diseases of pine trees. Factors that may result in the establishment of PSB populations far from the location of the original host tree include:
(1)Adults can fly at least 1 kilometer, and
(2)infested trees and pine products are often transported long distances. This pest damages urban ornamental trees and can cause economic losses to the timber, Christmas tree, and nursery industries. PSB hosts include all pine species. The beetle has been found in a variety of pine species ( *Pinus* spp.) in the Unites States. Scotch pine ( *P. sylvestris* ) is the preferred host of PSB. The Animal and Plant Heath Inspection Service (APHIS) has determined, based on scientific data from European countries, that fir ( *Abies* spp.), larch ( *Larix* spp.), and spruce ( *Picea* spp.) are not hosts of PSB. Surveys conducted by State and Federal inspectors have revealed that Cumberland County, NJ, is infested with PSB. Copies of the surveys may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT . The regulations in § 301.50-3 provide that the Administrator of APHIS will list as a quarantined area each State, or each portion of a State, in which PSB has been found by an inspector, in which the Administrator has reason to believe that PSB is present, or that the Administrator considers necessary to regulate because of its inseparability for quarantine enforcement purposes from localities in which PSB has been found. The regulations further provide that less than an entire State will be designated as a quarantined area only if the Administrator determines that:
(1)The State has adopted and is enforcing a quarantine and regulations that impose restrictions on the intrastate movement of the regulated articles that are equivalent to those imposed by the regulations on the interstate movement of those articles; and
(2)the designation of less than the entire State as a regulated area will otherwise be adequate to prevent the artificial interstate spread of PSB. In accordance with these criteria, we are designating Cumberland County in New Jersey as a quarantined area and are adding it to the list of quarantined areas in § 301.50-3. Emergency Action This rulemaking is necessary on an emergency basis to prevent PSB from spreading to noninfested areas of the United States. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the **Federal Register** . We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the **Federal Register** . The document will include a discussion of any comments we receive and any amendments we are making to the rule. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866. This rule amends the PSB regulations by adding Cumberland County, NJ, to the list of quarantined areas in § 301.50-3. Entities affected by this rule may include nurseries, cut Christmas tree farms, logging operations, moving companies, and others who sell, process, or move regulated articles interstate from Cumberland County, NJ. As a result of this rule, any regulated articles to be moved interstate from Cumberland County must first be inspected and/or treated in order to qualify for a certificate or limited permit authorizing such movement. This action will mitigate the spread of the pest to new areas, and consequently avoid economic damage to timber, nursery, and Christmas tree producers in areas that could become infested if no action were taken. Certain pine products will not be allowed to be shipped interstate during certain months of the year or will be required to undergo debarking before transport occurs. Enterprises such as Christmas tree farms, nurseries and greenhouses, and others in Cumberland County that wish to move regulated articles from the county may be affected by compliance requirements; however, costs associated with the issuance of certificates and limited permits are borne by the issuing agency. Using 2002 statistics provided by the National Agricultural Statistics Service, we have identified approximately 194 entities that sell, process, or move forest products in Cumberland County, NJ, and thus may be affected by this rule (table 1). Approximately 175 of these entities produce nursery or greenhouse crops. Christmas tree farms account for the remaining 19. There may be sawmills and logging operations that process pine tree products in the quarantined area, but we do not possess information about them. According to information we have previously collected, pine trees and pine tree products sold in areas such as Cumberland County largely remain within the regulated areas. In addition, nurseries and greenhouses tend to specialize in the production of deciduous landscape products rather than the production of rooted pine Christmas trees and pine nursery stock. The latter products in general constitute a small part of their production, if they are produced at all. Therefore, the rule is not likely to affect most nurseries and greenhouses. Table 1.—Christmas Tree Farms and Nurseries and Their Market Sales in Cumberland County, NJ Number of Christmas tree farms Market sales of Christmas tree farms ($1,000) Nurseries & greenhouses Market sales of nurseries & greenhouses ($1,000) 19 58 175 $67,853 Source: USDA, NASS, 2002 Census of Agriculture, New Jersey State and County Level Data. Table 2, Market Value of Agricultural Products Sold Including Direct and Organic in 2002. The Small Business Administration
(SBA)has established size standards to determine when an entity is considered small. Nursery stock growers, including Christmas tree growers, may be considered small when they have annual sales of $750,000 or less. The 2002 Agricultural Census does not report sales by entity size. However, from previously gathered information, we expect that the majority of these entities are small by the SBA size standards. Regulated articles from quarantined areas may be moved interstate if accompanied by a certificate or limited permit. A certificate for interstate movement of regulated articles from quarantined areas is issued by an inspector after it is determined that the regulated articles are not infested with PSB, and do not present a risk of spreading PSB to other areas. A limited permit is issued by an inspector for the interstate movement of regulated articles from quarantined areas when the articles are to be moved to a specified destination for processing, handling, or utilization and the movement will not result in the spread of PSB. Regulated articles must have the name of the consignor and consignee, as well as the certificate or limited permit, attached during all segments of interstate movement. A request for a certificate or a limited permit must be made at least 48 hours prior to transporting the regulated articles interstate. The cost for this service falls upon the issuing agency, and not the person/business entity requesting the certificate/limited permit. In summary, this rule adds Cumberland County, NJ, to the list of areas quarantined for PSB. We have identified approximately 175 nurseries and greenhouses and 19 cut Christmas tree farms in this county. In addition, there may be an unknown number of sawmills and logging operations in the county. As noted previously, the movement of cut Christmas pine trees and pine tree products by these establishments is generally local, rather than interstate. Thus, those farms, nurseries, and other entities are expected to be little affected by this rule. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V). Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:
(1)Preempts all State and local laws and regulations that are inconsistent with this rule;
(2)has no retroactive effect; and
(3)does not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, we are amending 7 CFR part 301 as follows: PART 301—DOMESTIC QUARANTINE NOTICES 1. The authority citation for part 301 continues to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3. Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note). 2. In § 301.50-3, paragraph (c), the entry for New Jersey is amended by adding, in alphabetical order, an entry for Cumberland County to read as follows: § 301.50-3 Quarantined areas.
(c)* * * New Jersey. *Cumberland County.* The entire county. Done in Washington, DC, this 15th day of June 2007. W. Ron DeHaven, Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-12025 Filed 6-20-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Parts 305 and 319 [Docket No. APHIS-2006-0040] RIN 0579-AC10 Importation of Fruit From Thailand AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Final rule. SUMMARY: We are amending the fruits and vegetables regulations to allow the importation into the United States of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand. As a condition of entry, these fruits must be grown in production areas that are registered with and monitored by the national plant protection organization of Thailand, treated with irradiation in Thailand, and subject to inspection. The fruits must also be accompanied by a phytosanitary certificate with an additional declaration stating that the fruit had been treated with irradiation in Thailand. In the case of litchi, the additional declaration must also state that the fruit had been inspected and found to be free of *Peronophythora litchii,* a fungal pest of litchi. Additionally, under this final rule, litchi and longan imported from Thailand may not be imported into or distributed to the State of Florida, due to the presence of litchi rust mite in Thailand. This action allows the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand into the United States while continuing to provide protection against the introduction of quarantine pests into the United States. EFFECTIVE DATE: July 23, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Alex Belano, Import Specialist, Commodity Import Analysis and Operations, PPQ, APHIS, 4700 River Road Unit 140, Riverdale, MD 20737-1231;
(301)734-8758. SUPPLEMENTARY INFORMATION: Background The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8, referred to below as the regulations) 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 that are new to or not widely distributed within the United States. On July 26, 2006, we published in the **Federal Register** (71 FR 42319-42326, Docket No. APHIS-2006-0040) a proposal 1 to amend the regulations to allow the importation into the United States of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand. As a condition of entry, we proposed to require that these fruits be grown in production areas that are registered with and monitored by the national plant protection organization
(NPPO)of Thailand and treated with irradiation in Thailand at a dose of 400 gray. The 400 gray dose is approved to treat all plant pests of the class Insecta except pupae and adults of the order Leipdoptera; we proposed to inspect for the Lepidopteran pests for which the irradiation treatment is not approved. We also proposed to require that the fruits be accompanied by a phytosanitary certificate with an additional declaration stating that the fruit had been treated with irradiation in Thailand. In the case of litchi, the additional declaration would also have had to state that the fruit had been inspected and found to be free of *Peronophythora litchii,* a fungal pest of litchi. 1 To view the proposed rule and the comments we received, go to *http://www.regulations.gov,* click on the “Advanced Search” tab, and select “Docket Search.” In the Docket ID field, enter APHIS-2006-0040, then click “Submit.” Clicking on the Docket ID link in the search results page will produce a list of all documents in the docket. We solicited comments concerning our proposal for 60 days ending September 25, 2006. We received 43 comments by that date, from producers, exporters, researchers, members of Congress, and representatives of State governments. They are discussed below by topic. Based on the comments we received, we are making one change to the regulations as they were proposed. In addition to the treatments and safeguards included in the proposed rule, this final rule prohibits the importation and distribution of litchi and longan from Thailand into the State of Florida. We are making this change based on comments regarding the risk associated with the litchi rust mite, *Aceria litchi,* which is present in Thailand and is a pest of litchi and longan. The comments on this topic are discussed in more detail below under the heading “Pests Named by Commenters That Were Not Addressed in the Risk Management Document.” General Comments Several commenters expressed general concern about the risk that importing litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand could introduce plant pests into the United States. One commenter was concerned that the importation of these fruits from Thailand could introduce harmful plant pests into Florida. Two other commenters were concerned that the same thing could happen in Hawaii, which already struggles to control invasive species. One commenter suggested that the entire State of Hawaii be designated as a natural resource preserve. We believe that the mitigations included in this final rule are sufficient to mitigate the risk associated with the importation of these fruits, and thus will prevent the introduction of invasive species into the United States. In the case of litchi and longan, this final rule adds a safeguard to the proposed rule to ensure that litchi rust mite is not introduced to Florida. The Animal and Plant Health Inspection Service (APHIS) does not have the statutory authority to designate areas as natural resource preserves. One commenter asked whether APHIS had considered preparing an environmental impact statement for the importation of the six tropical fruits from Thailand. We prepared an environmental assessment to support our proposed action; it was available for public review and comment along with the proposed rule. We received no comments specifically addressing the environmental assessment. We have prepared an environmental assessment and finding of no significant impact for this final rule; it can be accessed through *Regulations.gov* (see footnote 1). Our regulations in 9 CFR part 372 describe the procedures we use to fulfill our obligations under the National Environmental Policy Act. Section 372.5 describes the types of actions for which we would normally prepare an environmental impact statement and the types of actions for which we would normally prepare an environmental assessment. An action for which we would normally prepare an environmental assessment, as described in § 372.5(b), “may involve the agency as a whole or an entire program, but generally is related to a more discrete program component and is characterized by its limited scope (particular sites, species, or activities) and potential effect (impacting relatively few environmental values or systems). Individuals and systems that may be affected can be identified. Methodologies, strategies, and techniques employed to deal with the issues at hand are seldom new or untested. Alternative means of dealing with those issues are well established. Mitigation measures are generally available and have been successfully employed.” We believe these statements are all consistent with the proposed action and the action taken in this final rule, which allows the importation of a limited number of fruits from one country, subject to mitigation measures that have been successfully employed elsewhere. One commenter addressed our characterization in the proposed rule of pupae and adults of the order Lepidoptera as “external feeders.” This commenter stated that pupae of Lepidoptera do not feed, and that it would be more accurate to state that pupae and adults of the order Lepidoptera do not occur in fruit. We agree with this comment, and we will use this wording to discuss the issue as it arises elsewhere in this document. The comment does not affect the rule text that we proposed, and we are making no changes based on this comment in this final rule. Requiring Production Areas To Be Registered With and Monitored by the NPPO of Thailand We proposed to require that all litchi, longan, mango, mangosteen, pineapple, and rambutan imported from Thailand into the United States be grown in a production area that is registered with and monitored by the NPPO of Thailand. Six commenters stated that the proposed rule did not describe how this requirement would mitigate the risk associated with importing these fruits from Thailand into the United States. One commenter noted that the proposed rule stated that this requirement would result in fruit that had fewer pests and thus maximize the effectiveness of the irradiation treatment, but stated that we provided no supporting data on the relationship between the number of pests in a specific fruit and the ability of a specific dose of irradiation to neutralize those pests. We appreciate the opportunity to clarify our statement in the proposed rule. When we referred to reducing the number of plant pests in the fruit, our meaning was not that the requirement would reduce the number of species of plant pests found in the fruit, but rather that it would reduce the pest population found in the fruit. Based on published research, we expect the irradiation dose of 400 gray to neutralize all plant pests of the class Insecta, except pupae and adults of the order Lepidoptera, that are exposed to the dose. (Pupae and adults of the order Lepidoptera are not approved for treatment by the 400 gray dose because not enough research has been done to judge whether the dose will be effective on those insects. 2 The 400 gray dose has been determined to provide at least a Probit 9 level security based on tests performed on hundreds of thousands of individual plant pests. A treatment that achieves Probit 9 security is 99.9968 percent effective against the treated plant pests—in other words, if 1 million plant pests are subjected to the treatment, and 32 or fewer survive, the treatment is Probit 9 effective. However, if a shipment of fruit being treated is heavily infested with pests, the possibility of having some pests survive a treatment remains. Because fruit that is grown in production areas registered with and monitored by the NPPO of Thailand will be grown in accordance with best management practices, the density of pests in the production area will be reduced, which means that the pest population being treated will be smaller than it would otherwise be. Reducing the pest population in Thai fruit prior to the treatment provides an additional assurance that the 400 gray dose will neutralize the plant pests that are present in the fruit. 2 A detailed discussion of the evidence supporting this determination can be found in the proposed rule (70 FR 33857-33873, Docket No. 03-077-1, published in the **Federal Register** on June 10, 2005) and final rule (71 FR 4451-4464, Docket No. 03-077-2, published in the **Federal Register** on January 27, 2006) that added the 400 gray dose to the regulations as a treatment option. These documents can be accessed on the Internet at *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetailed&d=APHIS-2005-0052.* Three commenters requested that APHIS provide additional information regarding the best management practices that the Thai NPPO would require for registered production areas. The best management practices that would be required by the Thai NPPO for production areas growing these six tropical fruits for export would vary according to the pest population in the production area, the fruit being grown in the production area, and other factors. Rather than prescribe certain management practices for Thai producers, APHIS instead will include in the framework equivalency workplan a requirement that producers utilize appropriate pest management control measures to ensure low pest population levels (especially of fruit flies) and to comply with all horticultural standards required by the NPPO. The regulations for treatment of imported fruits and vegetables with irradiation in § 305.31(f)(1) require that the plant protection service of a country from which articles are to be imported into the United States enter into a framework equivalency workplan. Among other things, this workplan specifies the type and amount of inspection, monitoring, or other activities that will be required in connection with allowing the importation of irradiated articles into the United States. The regulations in § 305.31(f)(2) require that the foreign irradiation facility enter into a facility preclearance workplan. This workplan details the activities that APHIS and the foreign NPPO will carry out to verify the facility's compliance with the requirements of § 301.34. 3 3 We published a notice in the **Federal Register** providing background information on bilateral workplans in general on May 10, 2006 (71 FR 27221-27224, Docket No. APHIS-2005-0085). That notice may be viewed at * http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&d=APHIS-2005- 0085-0001. * Both the framework equivalency workplan and the facility preclearance workplan are bilateral workplans. APHIS will ensure that these measures are being effectively employed through inspection of the fruit when it is treated in Thailand; if the number of pests found is above a certain tolerance, we will reject the fruit for treatment, meaning that it may not be exported to the United States. We are making no changes to the proposed rule in response to these comments. Monitoring and Inspection In the proposed rule, we described the monitoring and inspection for the treatment of the six Thai fruits as follows: “The regulations in § 305.31 contain extensive requirements for performing irradiation treatment at a facility in a foreign country. These requirements include: • The operator of the irradiation facility must sign a compliance agreement with the Administrator of APHIS and the NPPO of the exporting country. • The facility must be certified by APHIS as capable of administering the treatment and separating treated and untreated articles. • Treatments must be monitored by an inspector. • A preclearance workplan must be entered into by APHIS and the NPPO of the exporting country. In the case of fruits imported from Thailand, this workplan would include provisions for inspection of articles, which APHIS would perform before or after the treatment. • The operator of the irradiation facility must enter into a trust fund agreement with APHIS to pay for the costs of monitoring and preclearance.” Several commenters expressed confusion regarding whether an officer from APHIS' Plant Protection and Quarantine
(PPQ)program would be on site in Thailand to monitor irradiation treatment and inspect the treated fruit. One of the commenters noted that PPQ personnel monitor the irradiation treatment of fruits and vegetables moved interstate from Hawaii and that the NPPO of Japan has inspectors on site to monitor the irradiation treatment of Hawaiian papayas that are intended for export to Japan. The commenter urged APHIS to include a requirement in the rule that PPQ monitor irradiation treatment of fruits in Thailand that are intended for export to the United States, rather than addressing it in the compliance agreement. One commenter stated that irradiation treatment would be effective only if properly performed. We agree with the commenters that it is necessary to have a PPQ officer on site to monitor irradiation treatment of fruits intended for export to the United States. Under § 305.31(f), irradiation treatment must be monitored by an inspector. *Inspector* is defined in § 305.1 as any individual authorized by the Administrator or the Commissioner of Customs and Border Protection, Department of Homeland Security, to enforce the regulations in 7 CFR 305. Because this work would involve oversight in a foreign country, it would be conducted exclusively by APHIS employees. We include the details of how this requirement will be fulfilled in the facility preclearance work plan under paragraph (f)(2) of § 305.31. We believe that the PPQ officer's supervision will be adequate to ensure that the irradiation treatment is properly performed, and thus effective. Because the regulations already require that an inspector monitor the irradiation treatment, we do not believe it is necessary to make any changes based on these comments. One commenter asked how APHIS would verify that the phytosanitary certification provided by the Thai NPPO is accurate. Another commenter expressed general concern that the production and treatment of these Thai fruits would not be effectively monitored by the Thai NPPO. As a signatory to the International Plant Protection Convention (IPPC), 4 the Thai NPPO is obligated to provide accurate and complete phytosanitary certification and to fulfill its responsibilities under bilateral agreements with other NPPOs. We have reviewed the Thai NPPO's procedures and are confident in its ability to provide such certification, and we are also confident that the Thai NPPO can fulfill its responsibilities under the regulations and under a framework equivalency workplan. If we became aware of inaccuracies in the phytosanitary certification, or we determine that the requirements of the regulations and the workplan are not being complied with, we will take appropriate corrective action. 4 The text of the International Plant Protection Convention can be reviewed at *http://www.ippc.int/IPP/En/default.jsp.* Several commenters also expressed the opinion that APHIS should inspect all fruit being exported from Thailand. Two commenters stated that the proposed rule indicated that APHIS inspectors will not be directly involved with supervising the required inspection program in Thailand. As stated earlier, the proposed rule indicated that all fruit that is treated and exported under these regulations will be inspected prior to export, before or after irradiation treatment. A PPQ inspector will supervise the treatment and inspection process under the bilateral workplan between APHIS and the Thai NPPO. The regulations in § 319.56-6 provide that all imported fruits and vegetables shall be inspected, and shall be subject to such disinfection at the port of first arrival as may be required by an inspector. The pre-export inspection that will be conducted by APHIS personnel as part of preclearance activities in Thailand will serve to satisfy the inspection requirement. Section 319.56-6 also provides that any shipment of fruits and vegetables may be refused entry if the shipment is so infested with plant pests that an inspector determines that it cannot be cleaned or treated. Two commenters stated that inspection levels in general should be increased. For these six fruits from Thailand, inspections will be performed at levels specified in the workplan, according to a statistical plan designed to ensure phytosanitary security. Our successful use of such plans in the past indicates that they are effective. One commenter stated that APHIS does not have enough personnel to check all shipments of fruit. If we do not have personnel available to fulfill our inspection responsibilities, as they are detailed in the workplan, we will not allow fruit to be precleared and imported from Thailand. Two commenters stated that inspection in general is not an effective mitigation. We disagree with these commenters. Inspection can be an effective mitigation for pests that are found outside of the commodity, such as pupae and adults of the order Lepidoptera, or for pathogens that cause easily visible symptoms when they infect a commodity. For other pests, treatments or other mitigation strategies are typically required, such as the 400 gray irradiation dose that we are requiring for the six fruits approved for export from Thailand to the United States. One commenter stated that because irradiation will not control pupae and adults of the order Lepidoptera, these plant pests could be introduced into the United States via shipments of treated and inspected fruit. The commenter cited as examples the introduction of adult Lepidoptera via the holding bay of a transport ship once the hatch doors are opened at the port of entry and the introduction of pupae through deposit onto soil during transportation of the fruit to importer facilities. As discussed earlier, fruit from Thailand exported to the United States under these regulations will be inspected prior to export in all cases for the presence of plant pests that are pupae or adults of the order Lepidoptera. In addition, under § 305.31(g)(2)(i), all fruits and vegetables irradiated prior to arrival in the United States must either be packed in insect-proof packaging or stored in rooms that completely preclude access by fruit flies. (A room that fruit flies cannot enter will also exclude Lepidopteran pests, since Lepidopteran pests are typically much larger than fruit flies.) These requirements are designed to prevent reinfestation after commodities are treated with irradiation and subjected to any necessary inspection. The Risk Management Document and Its Discussion in the Proposed Rule In the proposed rule, we stated the following about the risk management document that we prepared to support our proposed action: “We have not prepared a comprehensive pest risk analysis for this proposed rule, as we normally do when determining whether to allow the importation of fruits or vegetables under the regulations. When we prepare a comprehensive pest risk analysis for a commodity, one part of the analysis examines in detail the likelihood that the plant pests for which the commodity could serve as a host would be introduced into the United States via the importation of that commodity, the likelihood that those pests would become established if they were introduced, and the damage that could result from their introduction or establishment. This helps us to determine which plant pests pose a risk that makes mitigation measures beyond port-of-entry inspection necessary. However, since irradiation at the 400 gray dose is approved to neutralize all plant pests of the class Insecta, except pupae and adults of the order Lepidoptera, we did not consider it necessary to undertake a detailed analysis of the risks posed by any plant pests that fall into the category, since the risks for all these pests would be mitigated through the irradiation treatment. For the plant pests that we identified that are not approved for treatment with the 400 gray dose, we have analyzed what specific mitigations may be necessary given the risks they pose and the likelihood that these risks would be effectively mitigated by inspection.” One commenter stated that the Thai NPPO provided APHIS with full pest risk analyses for each of the six fruits we proposed to allow to be imported from Thailand into the United States. This commenter stated that these pest risk assessments were the basis for discussions between the Thai NPPO and APHIS on proper mitigations for the pests associated with each of these six fruits. The commenter was concerned that, because we did not make these pest risk assessments or the comprehensive lists of plant pests associated with each of the six fruits available for public review and comment, the public could be misled regarding how APHIS determined which pests associated with these fruits are quarantine pests and thus required mitigation. Bearing out this commenter's concern, several commenters requested that APHIS complete a full pest risk assessment for each of the six fruits addressed in the proposed rule. Many of these commenters recommended that APHIS concentrate on pathogens, as the primary pest mitigation method we proposed to use for these fruits, irradiation treatment, is not approved to neutralize pathogens. It is correct that the Thai NPPO provided APHIS with pest risk assessments and pest lists for each of the six fruits addressed in the proposed rule. However, APHIS plant scientists reviewed the documents that were submitted by the Thai NPPO and used additional sources to develop independent pest lists. The lists of pests that were judged to be quarantine pests, however, did not change during the review process prior to the publication of the proposed rule, which allowed for productive discussions between the Thai NPPO and APHIS on mitigation measures for quarantine pests associated with each of the six fruits. By listing only the pests associated with these fruits that were judged to be quarantine pests in the risk management document, however, we appear to have caused confusion. Many commenters, for example, asked whether we had considered pests that we did not list in the risk management document; in fact, we had considered them and determined that they were not quarantine pests, meaning that we did not include them in the risk management document. (These comments are discussed later in this document under the heading “Pests Named by Commenters That Were Not Addressed in the Risk Management Document.”) Therefore, in support of this final rule, we are making available on *Regulations.gov* (see footnote 1) not only the risk management document, with the updates discussed in this document, but also the pest lists we used when determining what quarantine pests are associated with each of the six fruits in question. We hope this will help to address these concerns. Three commenters addressed the statement in the risk management document that pineapples moved interstate from Hawaii are approved for irradiation treatment at a 250 gray dose. The commenters stated that the pineapple in production in Hawaii is the smooth Cayenne variety, which is not a host of the fruit flies present in Hawaii; therefore, smooth Cayenne pineapples have never been subject to quarantine treatment, including irradiation. The commenters are correct that the regulations allow smooth Cayenne pineapples to move interstate from Hawaii without treatment. However, for pineapples of varieties other than the smooth Cayenne that are moved interstate from Hawaii, the regulations in § 305.34(a) provide for the use of irradiation treatment at a dose of 150 gray. 5 Thus, the risk management document correctly referred to the existence of irradiation requirements for pineapples moved interstate from Hawaii, but did not completely describe the situation. We have amended the risk management document to clarify our discussion of this matter. 5 At the time the risk management document was written, the required dose for pineapples other than smooth Cayenne moved interstate from Hawaii was 250 gray. Since then, we published a final rule in the **Federal Register** on January 27, 2006 (Docket No. 03-077-2, 71 FR 4451-4464) that lowered the required does to 150 gray. We have updated the risk management document for this final rule to reflect this change. One commenter stated that economic factors should be considered in risk assessments. Our risk assessments evaluate the risk associated with a quarantine pest in part by considering the economic impact of its introduction. We have carefully considered the risks posed by all the quarantine pests associated with the six Thai fruits addressed in the proposal. As mentioned earlier, based on the risk posed by *A. litchi,* this final rule prohibits litchi and longan from Thailand from being imported into or distributed to Florida based on the possible economic consequences of the introduction of that pest into litchi production areas in that State. Two commenters stated that, despite the apparent effectiveness of the mitigation measures described in the risk management document, there was still some risk that quarantine pests could be introduced to the United States through the importation of Thai fruits due to failures in treatment or the execution of the treatment protocols. The commenters cited temporary faults in the irradiation equipment or procedures, human error, and intentional disregard of the treatment procedures with terroristic intent to introduce plant pests. The commenters stated that, when considering that large volumes of Thai fruit would be imported over an indefinite period of time, there was bound to be some failure in the system designed to prevent the introduction of plant pests. The commenters believed that such a risk was unacceptable and thus opposed finalizing the proposed rule. APHIS has authorized the importation of fruits from foreign localities under phytosanitary measures similar to those described in the proposed rule for many years. These measures have been proven to be effective at preventing the introduction of quarantine pests. When considering what phytosanitary measures are necessary to prevent the introduction of quarantine pests into the United States through the importation of a commodity whose importation is presently prohibited, we balance the necessity of preventing the introduction of quarantine pests with our obligation under the World Trade Organization Agreement on Sanitary and Phytosanitary Measure to take the least restrictive measures necessary to ensure phytosanitary security. We believe the measures required by this final rule fulfill both of these objectives. One commenter stated that pupae and adults of the order Lepidoptera are not likely to move in the pathway for fresh fruit exported from Thailand to the United States. We agree with this commenter. However, we believe it is necessary to inspect Thai fruits to ensure their freedom from these pests because of the potential for harm if a quarantine pest of the order Lepidoptera were to be introduced into the United States. One commenter objected to our statement that we are confident that inspection can detect pupae and adults of the order Lepidoptera, which we made in the preamble of the proposed rule. This commenter stated that APHIS did not provide support for the assertion and that, given the proposal's implications for the agricultural and environmental health of the United States, such support was necessary. Our assertion that inspection can detect pupae and adults of the order Lepidoptera is based on decades of experience inspecting imported fruit for plant pests. The commenter did not provide any specific reasons to doubt the ability of our inspectors to detect such pests. Pests Named by Commenters That Were Not Addressed in the Risk Management Document Several commenters expressed concern regarding pests that were not addressed in the risk management document. As discussed earlier, along with this final rule, we are providing the full pests lists we used when determining what quarantine pests are associated with each of the six fruits in question we proposed to import from Thailand, so that the public can see the full set of pests we considered. We will also address the specific pests about which commenters expressed concern. Several pests named by commenters are already present in the United States and thus are not considered quarantine pests. These pests are: • *Cylindrocladiella peruviana,* a fungus; • Longan witches' broom; • Pineapple bacterial wilt; • Pineapple heart rot; • Bacterial leaf spot, caused by *Erwinia mangifera;* and • Blossom malformation, caused by the fungus *Fusarium subglutinans.* Citing pineapple bacterial wilt and pineapple heart rot, two commenters asked us to develop a postentry pineapple risk management plan for pineapples imported into Hawaii from Thailand. Because both diseases are already present in Hawaii and are not under official control in that State, we do not believe it is necessary to develop a plan for action regarding the introduction of those diseases. Two genera, *Deudorix* (fruit borers) and *Greeneria* (fungi), were named by commenters as pests we did not consider. We do not consider pests that are not identified to the species level when developing risk documents. We did consider *Deudorix epijarbas* (Lepidoptera: Lycaenidae) as a quarantine pest of litchi and longan in the risk management document and in the proposed rule. Our review of the available scientific information did not identify any other species of the genus *Deudorix* or any species of the genus *Greeneria* that qualified as a quarantine pest. Commenters also mentioned ants as a class of pests that the risk management document did not address. Our review of the available scientific information did not identify any species of ants in Thailand that qualified as quarantine pests. Other pests cited by the commenters are discussed below. *Aceria litchi, A. longana, A. dimocarpi.* All three of these are mites, which the 400 gray irradiation dose is not approved to treat. *A. longana* and *A. dimocarpi* are not considered quarantine pests because they are not known to be associated with mature fruit. *A. longana* infests the leaves and inflorescences of the tree. *A. dimocarpi* is associated with young fruit, and typically causes premature fruit drop; since only mature fruit would be treated and exported from Thailand, it is unlikely that this pest would move to the United States. However, a review of the available literature confirms that *A. litchi* is considered to be associated with the fruit of litchi and longan. 6 Additionally, APHIS considers *A. litchi* to be a quarantine pest. For this reason, our regulations generally prohibit the movement of litchi and longan into Florida from areas where *A. litchi* is present. For example, litchi and longan moved interstate from Hawaii to the mainland United States that are treated with irradiation in accordance with § 305.34 may not be moved into or distributed in Florida under paragraph (b)(4)(iii) of that section. Litchi from China and India that are imported under § 319.56-2x are also not allowed to be imported into or distributed in Florida. 6 The pest lists for litchi and longan that accompany this rule provide a full list of citations supporting this determination. Because *A. litchi* is not present in Florida and because we have consistently prohibited host movement into Florida from areas where that pest is present, this final rule prohibits the importation and distribution of litchi and longan from Thailand into the State of Florida. *Citrus greening.* The citrus greening disease is spread by specific insect vectors, all of which would be neutralized by irradiation at the 400 gray dose. *Cryptophlebia carpophaga.* Synonymous with *C. ombrodelta,* which is considered a quarantine pest and was addressed in the risk management document and in the proposed rule. *Cylindrocarpon tonkinense.* Synonymous with *C. lichenicola,* which is the accepted name. A postharvest fungus. The commenter cited it as a pest of litchi from Thailand, but CABI reports it as only present in India, and as a pest of yams. *Deanolis sublimbalis* [Lepidoptera: Pyralidae], the mango seed borer. The name *Deanolis sublimbalis* is a synonym of *Deanolis albizonalis.* * D. albizonalis * is listed in the pest list for mango from Thailand. We determined that this quarantine pest would not follow the pathway of imported fruit. As *D. albizonalis* larvae feed within the mango, the damaged area softens and collapses. Common signs of damage by *D. albizonalis* are bursting at the fruit apex and longitudinal cracking of the fruit as it nears maturity. Because of the destructive and obvious nature of fruit injury, it is very unlikely that any infested fruit would be packed for export. Therefore, we determined that no mitigation beyond inspection is necessary to address the risk posed by this pest. *Homodes bracteigutta* (Walker) [Lepidoptera: Noctuidae]. This pest is on the pest list for longan from Thailand. We determined that this quarantine pest would not follow the pathway of imported fruit, because *H. bracteigutta* occurs externally to the fruit during all its life stages and thus is unlikely to remain on the fruit after processing. Therefore, we determined that no mitigation beyond inspection is necessary to address the risk posed by this pest. *Pestalotiopsis flagisetulai.* A fungus that occurs on mangosteen. We do not consider this fungus to be a quarantine pest. The pest causes rot in infected fruit during postharvest storage, meaning that infected fruit would be likely to be culled prior to shipment to the United States. If the disease were introduced into the United States, we would not expect its consequences to be significant. According to an Australian pest risk assessment, *P. flagisetulai* is a weak pathogen that only affects fruits that were bruised during harvest, causing storage rots. *Phomopsis longanae.* A pathogen causing stem-end rot on longan. This pest is reported in China, but not in Thailand. *Tessaratoma papillosa* (Drury) [Hemiptera: Pentatomidae], known as the litchi stink bug. This pest is on the pest list for litchi from Thailand. We determined that this quarantine pest would not follow the pathway of imported fruit, because *T. papillosa* is a large, active insect that attacks the fruit and is unlikely to remain with litchi after processing. Therefore, we determined that no mitigation beyond inspection is necessary to address the risk posed by this pest. *Twig pathogens.* One commenter recommended that twig and stem pathogens should be considered in the risk management document or addressed through an additional measure in the inspection process that would prohibit stem material from being shipped. The commenter did not cite any specific twig pathogens that we should have included in the risk management document. In general, our preclearance inspection is sufficient to detect disease symptoms on any twigs included with the fruit and to reject shipments in which diseased material is present. Fungi For litchi and mango from Thailand, we identified one fungus each as being a quarantine pest. For litchi, the fungus was *Peronophythora litchii* . We stated the following about *P. litchii* in the proposed rule: “This pest can cause litchi fruit to drop prematurely from their trees; fungicidal field treatments are typically applied to reduce premature fruit drop in commercial litchi production areas where *P. litchii* is present. To address the risk posed by this pest, we are proposing to require that litchi from Thailand be inspected and found to be free of *P. litchii* . We would also require that the phytosanitary certificate accompanying litchi from Thailand include an additional declaration to that effect. “We believe that most litchi fruit that are infected with *P. litchii* would be culled prior to importation into the United States; trained harvesters, packinghouse personnel, and plant quarantine inspectors can easily detect the distinctive symptoms of the disease on fruit. Litchi that are infected with *P. litchii* but are not symptomatic may not be culled, but the likelihood that *P. litchii* would then be introduced into the United States via the few fruit that may escape detection is very low, because the spores are transmitted by water. This means that for *P. litchii* to be introduced into the United States via an infected litchi fruit, the fruit would have to be incompletely consumed and discarded in a place where the pest could be transmitted to a litchi production area through moving water. Additionally, there is no record of interception of this disease on litchi imported into the United States from other countries in regions where this pathogen is present. Therefore, we believe that the requirement that litchi from Thailand be inspected for *P. litchii* , along with the additional declaration that would be required on the phytosanitary certificate accompanying the fruit, would adequately mitigate the risk posed by this pest.” For mangos, the fungus we identified as a quarantine pest was *Phomopsis mangiferae* . We stated the following about *P. mangiferae* in the proposed rule: “We believe that *Phomopsis mangiferae* is unlikely to be introduced into the United States via the importation of mangoes for consumption. The pest is specific to mangoes and is spread only via the seed of the mango. For the pest to spread, fungal spores from the seed must be dispersed at a time when susceptible tissue is available; thus, dispersal only occurs when infected seed is used in mango production. If infected fruit is consumed and the seed is discarded as waste, the infected fruit does not serve as a pathway for introduction. Discarded fruit could create a possible source of inoculum that could provide the means for introduction, but the likelihood that infected mangoes will reach these habitats is low because
(1)the host range is limited to mango;
(2)the portion of the total number of mango shipments from Thailand that is expected to be transported to mango-producing areas in California, Florida, Hawaii, or Texas is small; and
(3)the likelihood of fruit being discarded in mango orchards at an appropriate time is likewise very low. For these reasons, we are not proposing any measures beyond inspection to mitigate the risk associated with this plant pest. This decision is consistent with the recommendations contained in pest risk analyses examining the importation of mangoes from Australia, India, and Pakistan, countries where *Phomopsis mangiferae* is also present.” One commenter stated that the proposed rule did not provide any quarantine mitigation for disease pathogens. As discussed above, we identified two disease pathogens as quarantine pests, and proposed mitigations for both of them. For *P. litchii* , the mitigation proposed was inspection with an additional declaration on the phytosanitary certificate accompanying litchi imported from Thailand stating that the litchi had been inspected and found to be free of *P. litchii* . For *P. mangiferae* , the mitigation proposed was inspection. We received several comments addressing *P. litchii* specifically. As noted above, for *P. litchii* to be introduced into the United States via an infected litchi fruit, the fruit would have to be incompletely consumed and discarded in a place where the pest could be transmitted to a litchi production area through moving water. Several commenters stated that, while this would be unlikely in States where litchi is not produced, the likelihood that incompletely consumed litchi fruit would be discarded in a yard or other area with a litchi tree in a litchi production area is not insignificant. Given the significant annual rainfalls in Hawaii, some commenters stated, the skin or seed of an infected fruit could affect a growing area through direct water transmission. Additionally, backyard litchi trees would also provide a vector for transmission of the fungus to commercial litchi orchards. Another commenter stated that, as a means of determining freedom from *P. litchii* , inspection may be problematic. Visual inspection will identify advanced infections, but may not reveal recent infections, which can be asymptomatic. In addition, the commenter stated, the fungus will remain in a suspended state during transit in cool temperatures, allowing fungal growth to resume once litchi are imported. The commenter cited a risk analysis prepared by the Australian government regarding *P. litchii* that stated that the probability of distribution into Australia of *P. litchii* through fruit imported from Thailand was high: “The pathogen is likely to survive storage and transportation, even at cool dry temperatures, and is unlikely to progress to visual decay before distribution.” Several of the commenters specifically argued that the litchi imported from Thailand should be prohibited from importation or distribution into Hawaii and other litchi-producing States to prevent a possible introduction of *P. litchii* . We understand the commenters' concerns and have carefully considered them in developing this final rule. We continue to believe that the requirement that the phytosanitary certificate accompanying litchi imported from Thailand into the United States contain an additional declaration stating that the litchi had been inspected and found to be free of *P. litchii* is an adequate mitigation for the risk posed by *P. litchii* . Several considerations lead us to this conclusion. One is that our prediction in the risk management document that it is unlikely that *P. litchii* would be introduced into the United States has largely been borne out in practice in other circumstances. The regulations in § 319.56-2x presently allow the importation of litchi from two other countries in which *P. litchii* is present, China and India, when the litchi are treated in accordance with 7 CFR 305. (No treatment is available for *P. litchii* ; the treatments are applied to neutralize other plant pests that are present in those countries.) There is no special inspection requirement to mitigate the risk posed by *P. litchii* in the regulations for litchi from China and India, although all fruits entering the United States are inspected for quarantine pests. During the period 2003 through 2006, we received no shipments of litchi from India, but 550 shipments of litchi from China. There were no interceptions of *P. litchii* on these fruit, and no introductions of *P. litchii* in the United States have been reported. While the Australian risk analysis identified the probability of distribution of *P. litchii* as high, it identified the probability of entry of the fungus as moderate, which is consistent with requiring inspection and an additional declaration on the phytosanitary certificate that certifies freedom from the pest. Along with the information in the proposed rule, we believe that this information indicates that the mitigation against *P. litchii* in the proposed rule was adequate. We are making no changes to the proposed rule in response to these comments. Two commenters stated that the host range of *P. litchii* was not adequately represented in the risk management document. One stated that the CABI Abstracts indicate that in nature, the disease is confined to litchi, although in laboratory conditions, tomatoes, papayas, and loofah may also be infected. This commenter, however, also stated that *P. litchii* has also been reported on longan in China (Hoi, H.H., J.Y. Lu and L.Y. Gong. 1984. Observation on asexual reproduction by *Peronophythora litchii* . Mycologia 76:745-747) and on Christmas berry tree, a commonly occurring invasive species in Hawaii. The other commenter stated that *P. litchii* has also been found on tomato and papaya, without the other references. We typically discount reports of host status based on a species' role as a laboratory or experimental host when completing risk assessments, as there is no clear evidence that the plants would ever be infected with the disease in nature; the CABI citation confirms this. The fact that longan is not listed as a host in the CABI citation, over 20 years after the publication of the Chinese report, argues against placing restrictions on the importation of longan from Thailand based on the Chinese report. Additionally, the commenter did not provide a reference to establish Christmas berry tree as a host of *P. litchii* , and we have been unable to find such a reference. We are making no changes to the proposed rule in response to these comments. The proposed rule stated that fungicidal field treatments are typically applied to reduce premature fruit drop in commercial litchi production areas where *P. litchii* is present. One commenter stated that this disease control method may result in a higher possibility of disease introduction on fruits. The commenter stated that very few fungicides are therapeutic and kill the pathogen once infection is established. If the results of field fungicide treatments are designed to “reduce fruit drop,” then there will be potentially higher infection rates among the fruits that remain on the tree and harbor latent, non-fatal infections. Two other commenters also referred to this statement, noting that no mention is made of what pesticides would be used and whether they are legally registered for use in the United States. As the commenters noted, imported fruit that has been sprayed with pesticides not legally registered for use on those specific crops in the United States may not be imported into the United States. Another commenter noted that the proposed rule stated that we believe that most litchi fruit that are infected with *P. litchii* would be culled prior to importation into the United States; trained harvesters, packinghouse personnel, and plant quarantine inspectors can easily detect the distinctive symptoms of the disease on fruit. The commenter stated that APHIS should have more than a belief that this will happen. The commenter also stated that all fruit, not most fruit, infected with this fungus should be culled before litchi are shipped from Thailand to the United States. The commenter also questioned whether the training these workers receive is adequate to perform the task of culling infected fruit. We appreciate these commenters' concerns. We would like to take this opportunity to clarify that we are not requiring any fungicidal treatment to be applied to litchi imported from Thailand. The statement in the proposed rule and the risk management document simply described the typical response of litchi producers to *P. litchii* infection in a production area. Similarly, the culling described in the proposed rule is part of a characterization of the probability of introduction; exporters would routinely cull litchi intended for export in order to ensure that the fruit is marketable. We are not making culling a required phytosanitary measure. The mitigation we are requiring for *P. litchii* is inspection and phytosanitary certification of freedom from the disease. If a shipment of litchi was found to be infested with *P. litchii* , the Thai NPPO would not issue a phytosanitary certificate for those litchi, and they would be ineligible for export to the United States. As discussed earlier, we believe that inspection and certification for freedom from the disease is adequate to address the risk posed by *P. litchii* . The workplan agreed to by the Thai NPPO and APHIS will contain specific provisions requiring compliance with these and all other regulations that apply to the export of these fruits to the United States. Finally, harvesters and packinghouse personnel can be trained to look for symptoms of pathogens such as *P. litchii* ; this process would be included in our bilateral workplan with Thailand. One commenter stated that the fungus should not be characterized as *Peronophythora litchii* but rather as *Phytophthora litchii* . In this context, the commenter stated that over the last several years, the plant protection community has become aware of several new species of *Phytophthora* that have most likely been introduced into the United States on plant material imported from Asia. Although these introductions were probably directly associated with the importations of plant propagative materials, the commenter was very concerned given the ability of some *Phytophthora* species to hybridize with other species. Therefore, the commenter expressed concern about allowing the importation of a known host (litchi) from a known infested area with nothing more than a visual inspection. The commenter doubted that a thorough host range study has been completed for *P. litchii* . The commenter stated that the increasing number of new *Phytophthora* species moving from Asia to the Western Hemisphere needs to be curtailed and that APHIS should place a higher emphasis on phytosanitary security with regard to this genus. While some sources have reclassified *Peronophythora litchii* as *Phytophthora litchii* , there has not been a consensus judgment in that regard. As mentioned earlier, CABI continues to refer to the pest as *Peronophythora litchii* , and several other references list the fungus under that name as well. We are making no changes to the proposed rule in response to this comment. Were the fungus to be classified under *Phytophthora* rather than *Peronophythora,* we would still rely on the scientific evidence available to assess the risk it poses, and we believe the biology of *P. litchii* is sufficiently well characterized in the literature for us to do that. Two commenters specifically addressed *P. mangiferae* . Referring to our statement that the portion of the total number of mango shipments from Thailand that is expected to be transported to mango-producing areas in California, Florida, Hawaii, or Texas is small, the commenter cited U.S. census data indicating that the Asian American population of the United States is 4 percent. In Hawaii, Asian Americans make up 42 percent of the population, in Florida 2 percent, in California 12 percent, in Texas 3 percent, and Puerto Rico 0.2 percent; all told, the Asian American population represents over 12.4 million Americans. The commenter stated that these statistics clearly demonstrate that there will be demand for mangoes from Thailand. The commenter additionally stated that such demand indicates that *P. mangiferae* would be dispersed by seed in the urban or agricultural areas of Florida, Hawaii, California, Texas, and Puerto Rico. Another commenter objected to our use of conditional terms, such as our statement that mangos exhibiting symptoms of *P. mangiferae* “are likely to be detected at harvest and during packing and inspection” and our statement that, if infected mangos are imported into the United States, the number of mangoes that would be shipped to mango production areas in California, Florida, Hawaii, and Texas is expected to be small. Our assessment of *P. mangiferae* as posing a risk for which inspection is a suitable mitigation was not based on the idea that there would be no demand in the United States for mangoes imported from Thailand. Rather, our assessment was based on the means by which *P. mangiferae* must be disseminated in order for it to spread. Discarded fruit imported for consumption could create a possible source of inoculum that could provide the means for introduction, but the likelihood that infected mangoes will reach these habitats is low because
(1)the host range is limited to mango;
(2)the portion of the total number of mango shipments from Thailand that is expected to be transported to mango-producing areas, specifically, in the four named States is small; and
(3)the likelihood of fruit being discarded in mango orchards at an appropriate time is likewise very low. All these factors, combined, led us to determine that the probability of introduction of *P. mangiferae* is low. The commenter did not state any reasons for disputing our analysis of the probability of occurrence for each of the specific stages of the pathway for introduction. Regarding the second commenter's comments, those statements in the proposed rule were part of an analysis of the probability of introduction of *P. mangiferae* , not a set of mitigations that we are requiring. Our conclusion that the probability of introduction for *P. mangiferae* is low led us to propose no mitigations beyond inspection against its introduction. Labeling Three commenters stated that each fruit imported from Thailand should be required to have a label stating its country of origin and that irradiation was used as a treatment on the fruit. Two of these commenters also stated that the fruit should be required to be kept in its original containers. One of the commenters stated that, without a labeling requirement, consumers would be unable to distinguish Thai pineapples from Hawaiian pineapples, the latter of which the commenter believed to be of higher quality. Our regulations in § 305.31(g)(2)(iii) require that the packaging for all fruits and vegetables irradiated prior to arrival in the United States be labeled with treatment lot numbers, packing and treatment facility identification and location, and dates of packing and treatment. If pallets of fruits or vegetables are broken apart into smaller units prior to or during entry into the United States, each individual carton must have the required label information. Labeling requirements indicating that the fruits have been treated with irradiation do not fall under APHIS' authority, as they do not help to mitigate the pest risk associated with fruit imported from Thailand. However, the Food and Drug Administration requires in 21 CFR 179.26 that, “for irradiated foods not in package form, the required logo and phrase ‘Treated with radiation’ or ‘Treated by irradiation’ be displayed to the purchaser with either
(i)the labeling of the bulk container plainly in view or
(ii)a counter sign, card, or other appropriate device bearing the information that the product has been treated with radiation. As an alternative, each item of food may be individually labeled. In either case, the information must be prominently and conspicuously displayed to purchasers. The labeling requirement applies only to a food that has been irradiated, not to a food that merely contains an irradiated ingredient but that has not itself been irradiated.” The bilateral workplan we agree to with the Thai NPPO will contain provisions ensuring compliance with these and other requirements of both APHIS and other Federal agencies that relate to irradiation and importation of food in general. Comparable Regulations on the Interstate Movement of Hawaiian Fruits Several commenters expressed concern that we proposed to allow the importation of mangosteen from Thailand into the United States while that fruit is prohibited from moving interstate from Hawaii to the rest of the United States. The commenters stated that Hawaiian farmers have waited over 6 years for a pest risk analysis to be completed regarding the interstate movement of mangosteen from Hawaii. These commenters stated their belief that Hawaii should be given preference over foreign countries, given the infrastructure available to support interstate movement with treatment, Hawaii's status as a producer of fruit for niche markets, and Hawaii's status as a State. We process requests for movement of fruits both from Hawaii and from foreign countries as expeditiously as possible. We are developing a proposed rule that would allow the interstate movement of mangosteen, as well as other fruits, from Hawaii to the mainland United States. We also plan to implement a notice-based process for approving commodities for interstate movement from Hawaii, similar to the process recently proposed for foreign commodities. However, it is critically important that we take whatever time is necessary to develop treatment protocols that will safeguard American plant resources from pest invasion and that are acceptable to producers and shippers of fruits and vegetables moved interstate. With regard to the five fruits other than mangosteen that were included in the July 2006 proposal, we note that the regulations governing the movement of these fruits from Hawaii are substantially less restrictive than the requirements we proposed for their importation from Thailand. The commodities moved interstate from Hawaii may be irradiated at lower doses, and do not have to be grown in a registered production area. In addition, some steps necessary to allow importation of commodities from foreign countries, such as the development of a bilateral workplan, are not necessary when allowing movement of commodities within the United States, which can expedite the approval process for those commodities. One commenter asked whether Hawaii should have the option to regulate the importation of agricultural commodities into Hawaii based on the risk of introduction of agricultural pests, superseding APHIS' regulations. The commenter was concerned that APHIS might become overwhelmed and ineffective as time goes on. As noted in the proposed rule and in this final rule under the heading “Executive Order 12988,” “State and local laws and regulations regarding litchi, longan, mango, mangosteen, pineapple, and rambutan imported under this rule will be preempted while the fruit is in foreign commerce.” We are confident that we will be able to effectively enforce the requirements of this rule. Economic Issues Many of the comments we received addressed economic issues, and specifically the economic analysis included in the proposed rule. Several commenters were concerned that the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand would have adverse economic effects on domestic producers of those fruits. The comments we received focused on adverse effects on producers in the States of Florida and Hawaii. Several commenters stated that most of Florida's production of the six fruits in the proposal is moved interstate and is not consumed locally. Two commenters stated that estimates of the value of commercial production in Florida of litchi, longan, and mango are over $25 million a year. Two commenters stated that imports of tropical fruits from Mexico have had a devastating effect on domestic grower prices in Florida over the past 5 to 6 years. Other commenters stated that the majority of Hawaiian production of litchi and the vast majority of Hawaiian production of longan and rambutan is moved interstate to the U.S. mainland. One commenter stated that in 2005, 600,000 pounds of rambutan were treated for interstate movement from Hawaii, and the commenter assumed that the production for the local market exceeded that amount. Two commenters stated that Hawaii has been increasing production of the six fruits named in the proposed rule from year to year, increasing planted acreage as well. These commenters also stated that the volume of production has allowed for expansion from the traditional market segment for these fruits, ethnic grocery stores, to gourmet grocery stores; the commenters expected that eventually, production of these fruits would reach mainstream grocery stores and produce markets on the U.S. mainland. Many of these commenters also noted that the effects they cited would likely affect small entities. Two commenters specifically cited litchi as being vulnerable to foreign competition, stating that litchi from Taiwan had flooded the Hawaiian litchi market in the fall of 2006 and crowded out Hawaiian production. Another commenter asked APHIS to consider a detailed economic study on the economic impacts that the proposed changes may have on Hawaiian businesses. One commenter stated generally that APHIS should support local agriculture and oppose the practice of shipping fruits over long distances. Our discussion of the markets for which domestic tropical fruit is produced may not have been clear in the proposed rule. Specifically, our reference to production for the local market needs to be clarified. As the commenters stated, these fruits are destined primarily for specialty stores—ethnic grocery stores and gourmet grocery stores. They have not been produced in commercial quantities for widespread distribution to mainstream grocery stores. We have amended the economic analysis in this final rule to reflect this. As a signatory to the IPPC, the United States has agreed not to prescribe or adopt phytosanitary measures concerning the importation of plants, plant products, and other regulated articles unless such measures are made necessary by phytosanitary considerations and are technically justified. Protecting domestic tropical fruit producers from foreign competition does not constitute a technical justification. We believe that the mitigations in this final rule will adequately address the risk posed by the importation of these six tropical fruits from Thailand. The commenters who questioned the data we used in preparing the economic analysis in the proposed rule did not provide any citations of their own. Some of the data supplied by the commenters appear to be incorrect; for example, National Agricultural Statistics Service
(NASS)data indicate that 600,000 pounds is more rambutan than was produced for the processed and fresh market combined in 2005. Nevertheless, we have undertaken to find additional data and have updated the economic analysis where appropriate. However, the conclusions of the economic analysis have not changed. The economic analysis in the proposed rule stated that “Hawaii's production of pineapples for the fresh market has remained relatively stable over the last two decades.” Two commenters questioned this statement. One stated that fresh pineapple production in Hawaii declined by 18 percent from 2003 to 2005. Another stated that, according to NASS data, from 2001 to 2005, annual pineapple production in Hawaii fell from 323,000 to 212,000 tons, value dropped from $96 million to $79 million, and acreage fell from 20,100 to 14,000. These commenters also mentioned that Del Monte-Hawaii recently closed its Hawaiian pineapple production operation because foreign producers could provide pineapples at lower cost. With regard to the first comment, our statement in the proposed rule was that production has remained relatively stable over the last two decades; we did not focus on the short term, as the commenter did. The decline of 18 percent in Hawaiian fresh pineapple production over the years from 2003 to 2005, when compared with the 54 percent decline in the production of pineapples for the processing market over the same time period, is not large. However, we have expanded our discussion of this issue in the economic analysis below to improve clarity. The data the second commenter cited, from *http://www.nass.usda.gov/hi/fruit/pine.htm* , match the data cited in the proposed rule. Hawaii produced 323,000 tons of pineapples in 2001 for both the fresh and processed markets, rather than just the fresh market, which was the production referred to in the economic analysis in the proposed rule. The other numbers cited by the commenter also include pineapple production for both the fresh and processed market. We acknowledged in our economic analysis in the proposed rule that Hawaiian pineapple production for the processed market has declined to nearly 19 percent of what it was 20 years ago. The Del Monte decision predated the publication of the proposed rule. One commenter stated that stiff anti-dumping penalties have been imposed on shippers of Thai canned pineapple that is exported to the United States. APHIS does not play any role in investigating or enforcing compliance with international trade laws. Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document. Note: In our July 2006 proposed rule, we proposed to add the conditions governing the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand as § 319.56-2ss. In this final rule, those conditions are added as § 319.56-2uu. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. This final rule amends the fruits and vegetables regulations to allow the importation into the United States of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand. As a condition of entry, these fruits must be grown in production areas that are registered with and monitored by the national plant protection organization of Thailand, treated with irradiation in Thailand at a dose of 400 gray, and subject to inspection. The fruits must also be accompanied by a phytosanitary certificate with an additional declaration stating that the fruit had been treated with irradiation in Thailand. In the case of litchi, the additional declaration must also state that the fruit had been inspected and found to be free of *Peronophythora litchii* , a fungal pest of litchi. Additionally, under this final rule, litchi and longan imported from Thailand may not be imported into or distributed to the State of Florida, due to the presence of the litchi rust mite in Thailand. This action allows the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand into the United States while continuing to provide protection against the introduction of quarantine pests into the United States. This rule is not expected to have any significant effect on APHIS program operations since the relevant commodities are currently allowed importation into the United States from various other regions subject to different treatments. Current regulations already set out a course of action if, on inspection at the port of arrival, any actionable pest or pathogen is found and identified. The use of irradiation as a pest mitigation measure reduces the Agency's dependence on other mitigations such as methyl bromide fumigation. The final rule prohibits the distribution of litchi and longan from Thailand into Florida due to the litchi rust mite, *A. litchi* . U.S. Production and Imports Historically, the United States has not produced the fruits covered in this final rule in any quantity, with the exception of mangoes and pineapples. Mangoes were produced in some quantity in Florida, but production has not been recorded since 1997. Mangoes are still produced in southern Florida along with approximately two dozen other minor tropical fruits. However, these fruits, including litchi, longan, and mango, are primarily destined for the local fresh market, according to a report produced by the Florida Department of Agriculture and Consumer Services. 7 7 Florida Department of Agriculture and Consumer Services. *Florida Agriculture Statistical Directory 2006.* Online publication: *http://www.florida-agriculture.com/pubs/pubform/pdf/Florida_Agricultural_Statistical_Directory.pdf.* A record of the production of most of these fruits is kept by the Hawaii Field Office of the National Agricultural Statistics Service. The “Hawaii Tropical Specialty Fruits” report published by this office shows that Hawaii produces all of the fruits covered by the final rule; however, mangosteen production is included in the category “Other” to avoid disclosure of individual operations. Production and price data for the Hawaiian fruit may be found in table 1. With the exception of pineapple, production figures account for both the processing and fresh markets. Disaggregated data are not available. As evidenced in the table, production of longan, litchi, mango, and rambutan has trended upward over the past few years. This seems to indicate a growth in the specialty tropical fruit industry in Hawaii. Although Hawaii's production of pineapples for the fresh market has remained relatively stable over the last two decades, production intended for the processed market is merely 19 percent of what it was 20 years ago. More recently, production of pineapple for the fresh market has trended slightly downward. From 2000 to 2005, fresh market production declined by 13 percent. Production of pineapples for the processing market fell 54 percent over the same period. Production of longan, litchi, mango, and rambutan is a fraction of pineapple production in Hawaii and is directed to specialty markets. Table 1.—Production and Farm Prices of Tropical Fruit Produced in Hawaii, 2000-2005 1 Year Longan Production (1,000 lb) Farm price ($ per lb) Litchi Production (1,000 lb) Farm price ($ per lb) Mango Production (1,000 lb) Farm price ($ per lb) Rambutan Production (1,000 lb) Farm price ($ per lb) Pineapple 3 Production (1,000 lb) Farm price ($ per lb) 2000 24 4.02 ( 2 ) ( 2 ) 207 0.93 220 2.98 244 0.29 2001 37 3.05 ( 2 ) ( 2 ) 242 0.86 205 3.01 220 0.31 2002 46 3.20 77 2.64 377 0.92 257 3.01 234 0.31 2003 114 3.33 88 2.84 481 0.86 306 2.73 260 0.30 2004 121 3.41 102 2.42 391 0.92 278 2.60 208 0.32 2005 142 3.09 111 2.61 530 1.11 400 2.51 212 0.30 1 Mangosteen production is included in a residual category to avoid disclosure of individual operations. 2 Data not shown separately to avoid disclosure of individual operations. 3 Pineapple data includes only production destined for the fresh market. Production is not apportioned to the processing and fresh markets for the other commodities. Source: USDA, National Agricultural Statistics Service (NASS), Hawaii Field Office, “Hawaii Tropical Specialty Fruits,” August 8, 2006. Based on available data, imports of mangoes and pineapples far exceed domestic production (table 2). Furthermore, it appears that imports do not compete with domestic production. In the case of litchis, longans, mangoes, mangosteens, and rambutans, it appears that domestic production is sold mainly in specialty markets. Pineapples, on the other hand, seem more widely distributed, but their production has remained fairly consistent over the years with fluctuations in production in a consistent range despite increased imports from abroad. This information indicates very little correlation between domestic production and foreign imports. Movements of pineapple processing facilities to countries in South America have occurred due to the lower costs of production in these countries rather than increasing imports in the United States. Table 2.—U.S. Imports of Mango, Mangosteen, and Pineapple, 2000-2005 Mango Mangosteen 1 Pineapple 1,000 lb 2000 528,868 40 2 711,292 2001 541,329 226 2 715,651 2002 3 587,048 137 894,446 2003 613,816 136 1,050,855 2004 609,237 104 1,126,672 2005 3 515,058 52 1,273,401 1 Statistics include guavas and mangosteens. Source: Global Trade Atlas. 2 Includes fresh and frozen. Source: Economic Research Service
(ERS)Fruit and Tree Nut Yearbook. 3 Statistics include guavas and mangos. Source: ERS Fruit and Tree Nut Yearbook. Thailand's Production and Exports Thailand is the leading producer of pineapple in the world. Much of their production is geared toward international markets, although the majority of this is not fresh production. Over the last 5 years, only 0.27 percent of the country's fresh production has been exported, as seen in table 3. Additionally, Thailand produces a significant amount of mangoes. However, as is the case with pineapples, only a small proportion—0.82 percent—of mango production is exported for the fresh market. Table 3.—Thai Production and Exports of Mango and Pineapple, 2000-2004 Mango Production Exports Exports as percentage of production Pineapple Production Exports Exports as percentage of production (metric tons) (metric tons) 2000 1,633,479 8,755 0.54 2,248,375 4,995 0.22 2001 1,700,000 10,829 0.64 2,078,286 6,471 0.31 2002 1,700,000 8,736 0.51 1,738,833 4,561 0.26 2003 1,700,000 8,098 0.48 1,899,424 4,874 0.26 2004 1,700,000 33,097 1.95 1,997,000 5,736 0.29 Source: FAOSTAT data, 2006. Thailand also produces longans, litchis, mangosteens, and rambutans. Production data for each of these comes from Thailand's Office of Agriculture Economics (OAE). Table 4 shows that production of rambutan far exceeded that of longan and mangosteen. Farm prices, on the other hand, were much higher for longan and mangosteen. In economic terms, this result is not surprising since higher levels of supply foster lower prices. Production and price data on litchis were not available. Table 4.—Thai Production and Price of Longan, Mangosteen, and Rambutan, 2000-2004 Longan Production (metric tons) Farm price ($ per kg) Mangosteen Production (metric tons) Farm price ($ per kg) Rambutan Production (metric tons) Farm price ($ per kg) 1999 163,900 0.76 160,800 0.66 601,000 0.41 2000 417,300 0.65 168,200 0.60 618,000 0.33 2001 250,100 0.63 197,200 0.51 617,000 0.25 2002 420,300 0.28 244,900 0.44 619,000 0.15 2003 396,700 0.38 203,800 0.65 651,000 0.19 Source: OAE, 2006. According to a press release of the Thai Minister of Agriculture and Cooperatives posted on the Web site of the National Bureau of Agricultural Commodity and Food Standards in Thailand, that country is capable of producing approximately 5 million metric tons
(MT)of the fruits covered in the final rule. This production may be divided as follows: 80,000 MT of litchi (lychee), 200,000 MT of mangosteen, 500,000 MT of rambutan, 500,000 to 700,000 MT of longan, 1.8 million MT of mango, and 2 million MT of pineapple. Given the production data reported by the OAE, these production values seem reasonable. However, only a fraction of this is likely to be exported given historical export data, as well as the fact that the existing irradiation facility will not be able to accommodate these estimated volumes of fruit. Since a new facility will not be constructed until regulations are in place, it is not likely that Thailand will be able to treat and ship volumes of this magnitude in the immediate future. Final Regulatory Flexibility Analysis The Regulatory Flexibility Act requires that agencies consider the economic impact of rule changes on small businesses, organizations, and governmental jurisdictions. Section 604 of the Act requires agencies to prepare and make available to the public a final regulatory flexibility analysis
(FRFA)describing any changes made to the rule as a result of comments received and the steps the agency has taken to minimize any significant economic impacts on small entities. Section 604(a) of the Act specifies the content of a FRFA. In this section, we address these FRFA requirements. Summary of Significant Issues Raised During Comment Period The majority of the comments received concerned the potential market losses of domestic producers that would result from the implementation of this rule. As a signatory to the IPPC, the United States has agreed not to prescribe or adopt phytosanitary measures concerning the importation of plants, plant products, and other regulated articles unless such measures are made necessary by phytosanitary considerations and are technically justified. Therefore, no changes were made to the rule in response to these comments. Several comments concerned the availability of domestically produced fruit. APHIS only has data on production and farm prices for the fruit in question and was not able to obtain any information on its distribution. However, other comments pointed to the fact that domestically grown fruit is mainly distributed to ethnic grocery stores and produce markets. This would indicate that domestically produced fruit serves specialty markets rather than mainstream retail markets. As no other data were supplied to APHIS as proof of wider distribution, no changes were made to the economic analysis. A detailed discussion of comments on the economic analysis is available earlier in this document. Description and Estimated Number of Small Entities Regulated The final rule may affect domestic producers of the six tropical fruits, as well as firms that import these commodities. It is likely that the entities affected are small according to SBA guidelines. A discussion of these impacts follows. Affected U.S. tropical fruit producers are expected to be small based on 2002 Census of Agriculture data and SBA guidelines for entities in the farm category Other Noncitrus Fruit Farming (NAICS 111339). The SBA classifies producers in this farm category with total annual sales of not more than $750,000 as small entities. APHIS does not have information on the size distribution of the relevant producers, but according to 2002 Census data, there were a total of 2,128,892 farms in the United States in 2002. Of this number, approximately 97 percent had annual sales in 2002 of less than $500,000, which is well below the SBA's small entity threshold of $750,000 for commodity farms. This indicates that the majority of farms are considered small by SBA standards, and it is reasonable to assume that most of the 623 mango and 34 pineapple farms that may be affected by this rule also qualify as small. In the case of fresh fruit and vegetable wholesalers, establishments in NAICS 424480 with not more than 100 employees are considered small by SBA standards. In 2002, there were a total of 5,397 fresh fruit and vegetable wholesale trade firms in the United States. Of these firms, 4,644 firms operated for the entire year. Of those firms that were in operation the entire year, 4,436 or 95.5 percent employed fewer than 100 employees and were, therefore, considered small by SBA standards. Thus, domestic producers and importers that may be affected by the rule are predominantly small entities. Based on the data available to APHIS, it does not appear that domestic production of litchi, longan, mango, mangosteen, pineapple, and rambutan markedly competes with imports of these fruits. Domestic production is generally destined for specialty markets, such as ethnic grocery stores and local produce markets. Distribution of these fruits does not appear to be mainstream. Thus, the imports from Thailand are unlikely to substantially affect these markets. Additionally, imports from Thailand are not likely to significantly increase the overall level of imports. It is more reasonable to assume that they will at least partially substitute for imports from other countries like Mexico, depending on relative prices. Domestic import firms may benefit from more open trade with Thailand, with more import opportunities available to them because of the additional source of these tropical specialty fruits. In any case, it is not likely that the effects of importing litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand will have large repercussions for either domestic producers or importers of these tropical fruits. Executive Order 12988 This final rule allows litchi, longan, mango, mangosteen, pineapple, and rambutan to be imported into the United States from Thailand. State and local laws and regulations regarding litchi, longan, mango, mangosteen, pineapple, and rambutan imported under this rule will be preempted while the fruit is in foreign commerce. Fresh fruits are generally imported for immediate distribution and sale to the consuming public, and remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule. National Environmental Policy Act An environmental assessment and finding of no significant impact have been prepared for this final rule. The environmental assessment provides a basis for the conclusion that the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand under the conditions specified in this rule will not have a significant impact on the quality of the human environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared. The environmental assessment and finding of no significant impact were prepared in accordance with:
(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),
(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR 1500-1508),
(3)USDA regulations implementing NEPA (7 CFR 1b), and
(4)APHIS' NEPA Implementing Procedures (7 CFR 372). The environmental assessment and finding of no significant impact may be viewed on the Regulations.gov Web site. 8 Copies of the environmental assessment and finding of no significant impact are also available for public inspection at USDA, room 1141, South Building, 14th Street and Independence Avenue, SW., Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, except holidays. Persons wishing to inspect copies are requested to call ahead on
(202)690-2817 to facilitate entry into the reading room. In addition, copies may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT . 8 Go to *http://www.regulations.gov* , click on the “Advanced Search” tab and select “Docket Search.” In the docket ID field, enter APHIS-2006-0040, “Submit,” then click on the Docket ID link in the search results page. The environmental assessment and finding of no significant impact will appear in the resulting list of documents. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget
(OMB)under OMB control number 0579-0308. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. Lists of Subjects 7 CFR Part 305 Irradiation, Phytosanitary treatment, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements. 7 CFR Part 319 Coffee, Cotton, Fruits, Imports, Logs, Nursery stock, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Rice, Vegetables. Accordingly, we are amending 7 CFR parts 305 and 319 as follows: PART 305—PHYTOSANITARY TREATMENTS 1. The authority citation for part 305 continues to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 2. In § 305.2, the table in paragraph (h)(2)(i) is amended by adding, under Thailand, new entries for litchi, longan, mango, mangosteen, pineapple, and rambutan to read as follows: § 305.2 Approved treatments.
(h)* * *
(2)* * *
(i)* * * Location Commodity Pest Treatment schedule * * * * * * * Thailand * * * * * * * Litchi Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. Longan Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. Mango Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. Mangosteen Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. Pineapple Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. Rambutan Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR. * * * * * * * PART 319—FOREIGN QUARANTINE NOTICES 3. The authority citation for part 319 continues to read as follows: 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. 4. A new § 319.56-2uu is added to read as follows: § 319.56-2uu Administrative instructions: Conditions governing the entry of certain fruits from Thailand. Litchi ( *Litchi chinensis* ), longan ( *Dimocarpus longan* ), mango ( *Mangifera indica* ), mangosteen ( *Garcinia mangoestana* L.), pineapple ( *Ananas comosus* ) and rambutan ( *Nephelium lappaceum* L.) may be imported into the United States from Thailand only under the following conditions:
(a)*Growing conditions.* Litchi, longan, mango, mangosteen, pineapple, and rambutan must be grown in a production area that is registered with and monitored by the national plant protection organization of Thailand.
(b)*Treatment.* Litchi, longan, mango, mangosteen, pineapple, and rambutan must be treated for plant pests of the class Insecta, except pupae and adults of the order Lepidoptera, with irradiation in accordance with § 305.31 of this chapter. Treatment must be conducted in Thailand prior to importation of the fruits into the United States.
(c)*Phytosanitary certificates.*
(1)Litchi must be accompanied by a phytosanitary certificate with an additional declaration stating that the litchi were treated with irradiation as described in paragraph
(b)of this section and that the litchi have been inspected and found to be free of *Peronophythora litchi.*
(2)Longan, mango, mangosteen, pineapple, and rambutan must be accompanied by a phytosanitary certificate with an additional declaration stating that the longan, mango, mangosteen, pineapple, or rambutan were treated with irradiation as described in paragraph
(b)of this section.
(d)*Labeling.* In addition to meeting the labeling requirements in § 305.31, cartons in which litchi and longan are packed must be stamped “Not for importation into or distribution in FL.” (Approved by the Office of Management and Budget under control number 0579-0308) Done in Washington, DC this 15th day of June 2007. W. Ron DeHaven, Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-12023 Filed 6-20-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [TD 9333] RIN 1545-BG64 Application of Section 6404(g) of the Internal Revenue Code Suspension Provisions AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Temporary regulations. SUMMARY: This document contains temporary regulations under section 6404(g)(2)(E) of the Internal Revenue Code on the suspension of any interest, penalty, addition to tax, or additional amount with respect to listed transactions or undisclosed reportable transactions. The temporary regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998, the American Jobs Creation Act of 2004, the Gulf Opportunity Zone Act of 2005, and the Tax Relief and Health Care Act of 2006. The temporary regulations provide guidance to individual taxpayers who have participated in listed transactions or undisclosed reportable transactions. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the **Federal Register** . DATES: *Effective Date:* These regulations are effective on June 21, 2007. *Applicability Date:* These regulations apply to interest relating to listed transactions and undisclosed reportable transactions accruing before, on, or after October 3, 2004. FOR FURTHER INFORMATION CONTACT: Stuart Spielman,
(202)622-7950 (not a toll-free call). SUPPLEMENTARY INFORMATION: Background This document amends the Procedure and Administration Regulations (26 CFR part 301) by adding rules under section 6404(g) relating to the suspension of interest, penalties, additions to tax, or additional amounts with respect to listed transactions or undisclosed reportable transactions. Section 3305 of the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206 (112 Stat. 685, 743) (RRA 98), added section 6404(g) to the Code, effective for taxable years ending after July 22, 1998. Section 6404(g) generally suspends interest and certain penalties if the IRS does not contact a taxpayer regarding possible adjustments to the taxpayer's liability within a specified period of time. Section 903(c) of the American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418, 1652) (AJCA), excepted from the general interest suspension rules any interest, penalty, addition to tax, or additional amount with respect to a listed transaction or an undisclosed reportable transaction, effective for interest accruing after October 3, 2004. Section 303 of the Gulf Opportunity Zone Act of 2005, Public Law 109-135 (119 Stat. 2577, 2608-09) (GOZA), modified the effective date of the exception from the suspension rules for certain listed and reportable transactions. Section 426(b) of the Tax Relief and Health Care Act of 2006, Public Law 109-432 (120 Stat. 2922, 2975), provided a technical correction regarding the authority to exercise the “reasonably and in good faith” exception to the effective date rules. Section 8242 of the Small Business and Work Opportunity Tax Act of 2007, Public Law 110-28 (121 Stat. 112, 200), extended the current eighteen-month period within which the IRS can, without suspension of interest, contact a taxpayer regarding possible adjustments to the taxpayer's liability to thirty-six months, effective for notices provided after November 25, 2007. Explanation of Provisions If an individual taxpayer files a Federal income tax return on or before the due date for that return (including extensions), and if the IRS does not timely provide a notice to that taxpayer specifically stating the taxpayer's liability and the basis for that liability, then the IRS must suspend any interest, penalty, addition to tax, or additional amount with respect to any failure relating to the return that is computed by reference to the period of time the failure continues and that is properly allocable to the suspension period. A notice is timely if provided before the close of the eighteen-month period (thirty-six month period, in the case of notices provided after November 25, 2007) beginning on the later of the date on which the return is filed or the due date of the return without regard to extensions. The suspension period begins on the day after the close of the eighteen-month period (or thirty-six month period) and ends twenty-one days after the IRS provides the notice. This suspension rule applies separately with respect to each item or adjustment. If, on or after December 21, 2005, a taxpayer provides to the IRS an amended return or other signed written document showing an additional tax liability, then the eighteen-month period (or thirty-six month period) does not begin to run with respect to the items that gave rise to the additional tax liability until that return or other signed written document is provided to the IRS. The general rule for suspension does not apply to any interest, penalty, addition to tax, or additional amount relating to any reportable transaction with respect to which the requirement of section 6664(d)(2)(A) is not met or a listed transaction as defined in section 6707A(c). This exception applies to interest accruing after October 3, 2004. With respect to interest relating to listed transactions or undisclosed reportable transactions accruing on or before October 3, 2004, the general rule for suspension applies only to
(1)a participant in a settlement initiative,
(2)a taxpayer acting reasonably and in good faith, or
(3)a closed transaction. A *participant in a settlement initiative* is a taxpayer who, as of January 23, 2006, was participating in a settlement initiative described in IRS Announcement 2005-80, 2005-2 CB 967 (see § 601.601(d)(2)(ii)(b)); or had entered into a settlement agreement under Announcement 2005-80 or any other prior or contemporaneous settlement initiative either formally published or directly communicated to taxpayers known to have participated in a tax shelter promotion. A *taxpayer acting reasonably and in good faith* is a taxpayer who the IRS determines has acted reasonably and in good faith, taking into account all the facts and circumstances surrounding a transaction. A *transaction* is a “closed transaction” if, as of December 14, 2005, the assessment of all federal income taxes for the taxable year in which the tax liability to which the interest relates is prevented by the operation of any law or rule of law. A transaction is also a closed transaction if a closing agreement under section 7121 has been entered into with respect to the tax liability arising in connection with the transaction. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. A regulatory assessment is therefore not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the cross-reference notice of proposed rulemaking published elsewhere in this issue of the **Federal Register** . Pursuant to section 7805(f) of the Internal Revenue Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal author of these regulations is Stuart Spielman of the Office of Associate Chief Counsel (Procedure and Administration). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Amendments to the Regulations Accordingly, 26 CFR part 301 is amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1** . The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.6404-0T is added to read as follows: § 301.6404-0T Table of contents (temporary). This section lists the paragraphs contained in § 301.6404-4T. *§ 301.6404-4T Listed transactions and undisclosed reportable transactions (temporary).*
(a)[Reserved]. (b)(1) through (b)(4) [Reserved].
(5)Listed transactions and undisclosed reportable transactions.
(i)In general.
(ii)Effective dates.
(iii)Special rule for certain listed or undisclosed reportable transactions.
(A)Participant in a settlement initiative. ( *1* ) Participant in a settlement initiative who as of January 23, 2006, had not reached agreement with the IRS. ( *2* ) Participant in a settlement initiative who, as of January 23, 2006, had reached agreement with the IRS.
(B)Taxpayer acting in good faith. ( *1* ) In general. ( *2* ) Presumption. ( *3* ) Examples.
(C)Closed transactions. **Par. 3** . Section 301.6404-4T is added to read as follows: § 301.6404-4T Listed transactions and undisclosed reportable transactions (temporary).
(a)[Reserved]. (b)(1) through
(4)[Reserved].
(5)*Listed transactions and undisclosed reportable transactions* —(i) *In general.* The general rule of suspension under section 6404(g)(1) does not apply to any interest, penalty, addition to tax, or additional amount with respect to any listed transaction as defined in section 6707A(c) or any undisclosed reportable transaction. For purposes of this section, an *undisclosed reportable transaction* is a reportable transaction described in the regulations under section 6011 that is not adequately disclosed under those regulations and that is not a listed transaction. Whether a transaction is a listed transaction or an undisclosed reportable transaction is determined as of the date the IRS provides notice to the taxpayer regarding that transaction that specifically states the taxpayer's liability and the basis for that liability.
(ii)*Effective/applicability dates.*
(A)These regulations apply to interest relating to listed transactions and undisclosed reportable transactions accruing before, on, or after October 3, 2004.
(B)The applicability of these regulations expires on or before June 21, 2010.
(iii)*Special rule for certain listed or undisclosed reportable transactions.* With respect to interest relating to listed transactions and undisclosed reportable transactions accruing on or before October 3, 2004, the exception to the general rule of interest suspension will not apply to a taxpayer who is a participant in a settlement initiative with respect to that transaction, to any transaction in which the taxpayer has acted reasonably and in good faith, or to a closed transaction. For purposes of this special rule, a “participant in a settlement initiative,” a “taxpayer acting in good faith,” and a “closed transaction” have the following meanings:
(A)*Participant in a settlement initiative* —( *1* ) *Participant in a settlement initiative who, as of January 23, 2006, had not reached agreement with the IRS.* A *participant in a settlement initiative* includes a taxpayer who, as of January 23, 2006, was participating in a settlement initiative described in Internal Revenue Service Announcement 2005-80, 2005-2 CB 967. See § 601.601(d)(2)(ii)(b) of this chapter. A taxpayer participates in the initiative by complying with Section 5 of the Announcement. A taxpayer is not a participant in a settlement initiative if, after January 23, 2006, the taxpayer withdraws from or terminates participation in the initiative, or the IRS determines that a settlement agreement will not be reached under the initiative within a reasonable period of time. ( *2* ) *Participant in a settlement initiative who, as of January 23, 2006, had reached agreement with the IRS.* A *participant in a settlement initiative* is a taxpayer who, as of January 23, 2006, had entered into a settlement agreement under Announcement 2005-80 or any other prior or contemporaneous settlement initiative either offered through published guidance or, if the initiative was not formally published, direct contact with taxpayers known to have participated in a tax shelter promotion.
(B)*Taxpayer acting in good faith* —( *1* ) *In general.* The IRS may suspend interest relating to a listed transaction or an undisclosed reportable transaction accruing on or before October 3, 2004, if the taxpayer has acted reasonably and in good faith. The IRS' determination of whether a taxpayer has acted reasonably and in good faith will take into account all the facts and circumstances surrounding the transaction. The facts and circumstances include, but are not limited to, whether the taxpayer disclosed the transaction and the taxpayer's course of conduct after being identified as participating in the transaction, including the taxpayer's response to opportunities afforded to the taxpayer to settle the transaction, and whether the taxpayer engaged in unreasonable delay at any stage of the matter. ( *2* ) *Presumption.* If a taxpayer and the IRS promptly enter into a settlement agreement with respect to a transaction on terms proposed by the IRS or, in the event of atypical facts and circumstances, on terms more favorable to the taxpayer, and the taxpayer has complied with the terms of that agreement without unreasonable delay, the taxpayer will be presumed to have acted reasonably and in good faith except in rare and unusual circumstances. Rare and unusual circumstances must involve specific actions involving harm to tax administration. Even if a taxpayer does not qualify for the presumption described in this paragraph (b)(5)(iii)(B)( *2* ), the taxpayer may still be granted interest suspension under the general facts and circumstances test set forth in paragraph (b)(5)(iii)(B)( *1* ) of this section. ( *3* ) *Examples.* The following examples illustrate the rules the IRS uses in determining whether a taxpayer has acted reasonably and in good faith. *Example 1.* The taxpayer participated in a listed transaction. The IRS, in a letter sent directly to the taxpayer in July 2005, proposed a settlement of the transaction. The taxpayer informed the IRS of his interest in the settlement within the prescribed time period. The revenue agent assigned to the taxpayer's case was not able to calculate the taxpayer's liability under the settlement or tender a closing agreement to the taxpayer until March 2006. The taxpayer promptly executed the closing agreement and returned it to the IRS with a proposal for arrangements to pay the agreed-upon liability. The IRS agreed with the proposed arrangements for full payment. For purposes of the application of section 6404(g)(2)(E), the taxpayer has acted reasonably and in good faith. Interest accruing on or before October 3, 2004, relating to the transaction in which the taxpayer participated will be suspended. *Example 2.* The facts are the same as in *Example 1,* except that the letter was sent by the IRS in February 2006, and the closing agreement was tendered to the taxpayer in April 2006. For purposes of the application of section 6404(g)(2)(E), the taxpayer has acted reasonably and in good faith. Interest accruing on or before October 3, 2004, relating to the transaction in which the taxpayer participated will be suspended. *Example 3.* The taxpayer participated in a listed transaction. In response to an offer of settlement extended by the IRS in August 2005, the taxpayer informed the IRS of her interest in entering into a closing agreement on the terms proposed by the IRS. The revenue agent assigned to the transaction calculated the taxpayer's liability under the settlement and tendered a closing agreement to the taxpayer in November 2005. The taxpayer executed the closing agreement but failed to make any arrangement for payment of the agreed-upon liability stated in the closing agreement. Taking into account all the facts and circumstances surrounding the transaction, the taxpayer did not act reasonably and in good faith. Interest accruing on or before October 3, 2004, relating to the transaction in which the taxpayer participated will not be suspended. *Example 4.* The taxpayer participated in a listed transaction. In a letter sent by the IRS directly to the taxpayer in July 2005, the IRS extended an offer of settlement. The July 2005 letter informed the taxpayer that, absent atypical facts and circumstances, the taxpayer should not expect resolution of the tax issues on more favorable terms than proposed in the letter. The taxpayer declined the proposed settlement terms of the letter and proceeded to Appeals to present what the taxpayer claimed were atypical facts and circumstances. The administrative file did not contain sufficient information bearing on atypical facts and circumstances, and the taxpayer failed to provide additional information when requested by Appeals to explain how the transaction originally proposed to the taxpayer differed in structure or types of tax benefits claimed, from the transaction as implemented by the taxpayer. Appeals determined that the taxpayer's facts and circumstances were not significantly different from those of other taxpayers who participated in that listed transaction and thus, were not atypical. In September 2006, the taxpayer and Appeals entered into a closing agreement on terms consistent with those originally proposed in the July 2005 letter. The taxpayer has complied with the terms of that closing agreement. For purposes of the application of section 6404(g)(2)(E), this taxpayer is not presumed to have acted reasonably and in good faith; instead, the IRS will apply the general rule to determine whether to suspend interest accruing on or before October 3, 2004, relating to the transaction in which the taxpayer participated. *Example 5.* The facts are the same as in *Example 4,* except that Appeals agrees that atypical facts were present that warrant additional concessions by the government. A settlement is reached on terms more favorable to the taxpayer than those proposed in the July 2005 letter. For purposes of the application of section 6404(g)(2)(E), this taxpayer is presumed to have acted reasonably and in good faith, and absent evidence of rare or unusual circumstances harmful to tax administration, is eligible for suspension of interest accruing on or before October 3, 2004, relating to the transaction in which the taxpayer participated.
(C)*Closed transactions.* A transaction is considered closed for purposes of this clause if, as of December 14, 2005, the assessment of all federal income taxes for the taxable year in which the tax liability to which the interest relates is prevented by the operation of any law or rule of law, or a closing agreement under section 7121 has been entered into with respect to the tax liability arising in connection with the transaction.
(c)[Reserved]. Kevin M. Brown, Deputy Commissioner for Services and Enforcement. Approved: June 15, 2007. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E7-12081 Filed 6-20-07; 8:53 am] BILLING CODE 4830-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 070213032-7032-01] RIN 0648 XA91 Fisheries of the Economic Exclusive Zone Off Alaska; Shallow-water Species Fishery by Catcher Processors in the Gulf of Alaska AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule; closure. SUMMARY: NMFS is prohibiting directed fishing for species that comprise the shallow-water species fishery by catcher processors subject to sideboard limits established under the Central Gulf of Alaska
(GOA)Rockfish Program in the GOA. This action is necessary because the 2007 Pacific halibut prohibited species catch
(PSC)sideboard limit specified for the shallow-water species fishery for catcher processors subject to sideboard limits established under the Central GOA Rockfish Program in the GOA is insufficient to support directed fishing for the shallow-water species fisheries. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), July 1, 2007, through 1200 hrs, A.l.t., July 31, 2007. FOR FURTHER INFORMATION CONTACT: Jennifer Hogan, 907-586-7228. SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska
(FMP)prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. The 2007 Pacific halibut PSC sideboard limit specified for the shallow-water species fishery by catcher processors subject to sideboard limits established under the Central GOA Rockfish Program in the GOA is 11 metric tons as established by the 2007 and 2008 harvest specifications for groundfish of the GOA (72 FR 9676, March 5, 2007; as corrected by 72 FR 13217, March 21, 2007), for the period 1200 hrs, A.l.t., July 1, 2007, through 1200 hrs, A.l.t., July 31, 2007. In accordance with § 679.82(d)(9)(ii), the Administrator, Alaska Region, NMFS, has determined that the 2007 Pacific halibut PSC sideboard limit specified for the shallow-water species fishery for catcher processors subject to sideboard limits established under the Central GOA Rockfish Program in the GOA is insufficient to support directed fishing for the shallow-water species fisheries. Consequently, in accordance with § 679.82(d)(9)(ii)(A), NMFS is prohibiting directed fishing for species that comprise the shallow-water species fishery for catcher processors subject to sideboard limits established under the Central GOA Rockfish Program in the GOA. The species and species groups that comprise the shallow-water species fishery for the sideboard limit are shallow-water flatfish and flathead sole. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and
(f)apply at any time during a trip. Classification This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of the shallow-water species fishery for catcher processors subject to sideboard limits established under the Central GOA Rockfish Program in the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of June 14, 2007. The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment. This action is required by § 679.21 and is exempt from review under Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: June 15, 2007, Alan D. Risenhoover, Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E7-12028 Filed 6-20-07; 8:45 am] BILLING CODE 3510-22-S 72 119 Thursday, June 21, 2007 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2007-0022] RIN 0579-AC34 Citrus Canker; Movement of Fruit From Quarantined Areas AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule. SUMMARY: We are proposing to amend the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. Under this proposed rule, we would eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead require that fruit produced in the quarantined area be treated with a surface disinfectant treatment in a packinghouse operating under a compliance agreement and that each lot of finished fruit be inspected at the packinghouse and found free of visible symptoms of citrus canker. We would, however, retain the current prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These proposed changes would relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that would help prevent the artificial spread of citrus canker. DATES: We will consider all comments regarding this proposed rule that we receive on or before July 23, 2007 and all comments regarding the information collection requirements associated with this proposed rule that we receive on or before August 20, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* , select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0022 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0022, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2007-0022. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Mr. Stephen Poe, Senior Operations Officer, Emergency Domestic Programs, Plant Protection and Quarantine, APHIS, 4700 River Road Unit 137, Riverdale, MD 20737-1231;
(301)734-4387. SUPPLEMENTARY INFORMATION: Background Citrus canker is a plant disease caused by the bacterium *Xanthomonas axonopodis* pv. *citri* (referred to below as *Xac* ) that affects plants and plant parts, including fresh fruit, of citrus and citrus relatives (Family Rutaceae). Citrus canker can cause defoliation and other serious damage to the leaves and twigs of susceptible plants. It can also cause lesions on the fruit of infected plants, which render the fruit unmarketable, and cause infected fruit to drop from the trees before reaching maturity. The aggressive A (Asiatic) strain of citrus canker can infect susceptible plants rapidly and lead to extensive economic losses in commercial citrus-producing areas. Citrus canker is only known to be present in the United States in the State of Florida. The regulations to prevent the interstate spread of citrus canker are contained in “Subpart—Citrus Canker” (7 CFR 301.75-1 through 301.75-14, referred to below as the regulations). The regulations restrict the interstate movement of regulated articles from and through areas quarantined because of citrus canker and provide, among other things, conditions under which regulated fruit may be moved into, through, and from quarantined areas for packing. These regulations are promulgated pursuant to the Plant Protection Act (7 U.S.C. 7701 *et seq.* ). The regulations governing the movement of regulated articles were first promulgated in 1984, at a time when citrus canker had very limited distribution within Florida. Although the regulations have been amended several times since then, the approach of the regulations had remained the same until recently, i.e., to quarantine those areas where the disease was found and promote eradication efforts while allowing the normal movement of regulated fruit and seed from those areas where the disease was not present. The exceptionally active hurricane seasons in 2004 and 2005 were devastating to the citrus canker eradication program. Surveys showed that citrus canker had become so widespread within Florida that approximately 75 percent of commercial groves in the State were located within 5 miles of a location where the disease had been detected, which is well within the range that the disease could be spread by future hurricanes or other tropical storms. With a significant portion of the commercial citrus acreage in the State either infected with citrus canker or at high risk of becoming infected, it became apparent that it would no longer be possible to identify and quarantine infected citrus acreage quickly enough to prevent further spread of the disease in Florida. Because of that situation, on January 10, 2006, the U.S. Department of Agriculture
(USDA)announced that it had determined that the established eradication program was no longer a scientifically feasible option to address citrus canker in Florida. In response to the widespread establishment of citrus canker in Florida, we published an interim rule in the **Federal Register** on August 1, 2006 (71 FR 43345-43352, Docket No. APHIS-2006-0114) in which we amended the regulations to list the entire State of Florida as a quarantined area for citrus canker and amended the requirements for the movement of regulated articles from Florida. We also amended the regulations to allow regulated articles that would not otherwise be eligible for interstate movement to be moved to a port for immediate export. More recently, we published an interim rule in the **Federal Register** on March 22, 2007 (72 FR 13423-13428, Docket No. APHIS-2007-0032) that clarified and amended the citrus canker quarantine regulations to explicitly prohibit, with limited exceptions, the interstate movement of regulated nursery stock from a quarantined area. We included two exceptions to the prohibition. The first exception allowed calamondin and kumquat plants, two types of citrus plants that are highly resistant to citrus canker, to be moved interstate from a quarantined area under a protocol designed to ensure their freedom from citrus canker. We also continued to allow the interstate movement of regulated nursery stock for immediate export, under certain conditions. Citrus Health Response Program In January 2006, in response to the widespread establishment of citrus canker in Florida, as well as other challenges to the citrus industry, the Animal and Plant Health Inspection Service (APHIS) convened key stakeholders in citrus protection and production and led a discussion on various options from which came the concept of a Citrus Health Response Program (CHRP). The CHRP is intended to improve the ability of the commercial citrus industry to produce, harvest, process, and ship healthy fruit in the presence of citrus canker. This program provides general guidance to all sectors of the citrus industry on ways to safeguard their products against citrus canker and other citrus pests of concern. While the CHRP is not mandatory for fruit production, the guidance is consistent with good production practices. Together with the State of Florida and other citrus producing States, their industries, and independent researchers, we prepared the CHRP plan, which is available on the Internet at *http://www.aphis.usda.gov/plant_health/index.shtml.* Pest Risk Analysis As we worked with States and industry to develop the CHRP, it became clear that the widespread presence of citrus canker in Florida posed a serious threat to the viability of the Florida fresh fruit industry. APHIS saw a need to reevaluate the regulations for the movement of citrus fruit to determine whether the long-standing grove certification and packinghouse requirements for the movement of citrus fruit remained scientifically justified and necessary and to determine whether, in light of widespread citrus canker, a program could be devised that would continue to allow the interstate movement of fresh citrus fruit from Florida and that would maintain adequate safeguards against the spread of citrus canker to other commercial citrus-producing States. As part of APHIS's reevaluation, we conducted a pest risk assessment
(PRA)titled, “Evaluation of asymptomatic citrus fruit ( *Citrus* spp.) as a pathway for the introduction of citrus canker disease ( *Xanthomonas axonopodis* pv. *citri* ).” The PRA considered all available evidence associated with asymptomatic citrus fruit as a pathway for the introduction of citrus canker. The PRA concluded that asymptomatic, commercially produced citrus fruit, treated with a disinfectant, and subject to other mitigations, is not epidemiologically significant as a pathway for the introduction and spread of citrus canker. On April 6, 2006, we published a notice in the **Federal Register** (71 FR 17434-17435, Docket No. APHIS-2006-0045), announcing the availability of the PRA. We made the PRA available for comment for 90 days, and submitted it for peer review in accordance with USDA's guidelines for peer review developed in response to the Office of Management and Budget's peer review bulletin. We received 19 comments by the end of the comment period, which we also submitted to the peer review panel members for their consideration. We carefully considered the comments of the public and peer reviewers, and made revisions to the analysis based on concerns they raised. 1 Even with those revisions, the key conclusion of the analysis remains unchanged: Asymptomatic, commercially produced citrus fruit, treated with a disinfectant, and subject to other mitigations, is not epidemiologically significant as a pathway for the introduction and spread of citrus canker. 1 The revised PRA is available on the Regulations.gov Web site and in our reading room (see ADDRESSES above) and may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT . However, in light of the comments by the public and peer reviewers, it became clear that additional analysis was necessary to apply the conclusions of the PRA to the situation in Florida. In order to do this, we needed to extend the application of the PRA to evaluate methods by which fruit 2 could be produced, processed, treated, inspected, packaged, and shipped without resulting in the spread of citrus canker to commercial citrus-producing areas. (Commercial citrus-producing areas are listed in § 301.75-5 of the regulations and are referred to in this document as commercial citrus-producing States. Those States, listed in § 301.75-5(a), are: American Samoa, Arizona, California, Florida, Guam, Hawaii, Louisiana, Northern Mariana Islands, Puerto Rico, Texas, and the U.S. Virgin Islands.) 2 Given the practical difficulties in ensuring that only asymptomatic fruit enters interstate commerce under any regulatory strategy—the strategy proposed in this document or the strategy currently in place—we refer here to host fruit in general. Risk Management Analysis To address the considerations described above, APHIS has prepared a risk management analysis
(RMA)titled, “Movement of commercially packed fresh citrus fruit ( *Citrus* spp.) from citrus canker ( *Xanthomonas axonopodis* pv. *citri* ) disease quarantine areas, March 2007,” that we are making available for comment along with this proposed rule. 3 The RMA will also be submitted for peer review, which will occur concurrently with the public comment period for this proposed rule. The RMA analyzes the potential of fresh commercially packed citrus fruit and associated packing material to serve as a pathway for the introduction and spread of citrus canker into new areas. It also identifies and evaluates options for regulating interstate movement with the goal of reducing the potential for citrus canker introduction and spread. The RMA extends the application of the PRA mentioned earlier to the citrus canker situation in Florida. 3 The RMA is available on the Regulations.gov Web site and in our reading room (see ADDRESSES above) and may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT . To develop the RMA, we reviewed available evidence regarding the biology and epidemiology of *Xac* and the management of citrus canker disease. The RMA concludes that the introduction and spread of *Xac* into other commercial citrus producing States through the movement of commercially packed fresh citrus fruit is unlikely because: • Fresh citrus fruit is produced and harvested using techniques that reduce the prevalence of *Xac* -infected fruit; • Citrus fruit is commercially packed using techniques that reduce the prevalence of infected or contaminated fruit, including disinfectant treatment that devitalizes epiphytic contamination; • For a successful *Xac* infection that results in disease outbreaks to occur an unlikely sequence of epidemiological events would have to occur; • Reports of citrus canker disease outbreaks linked to fresh fruit are absent; and • Large quantities of fresh citrus fruit shipped from regions with *Xac* have not resulted in any known outbreaks of citrus canker disease. Nevertheless, the evidence is not currently sufficient to conclude that fresh citrus fruit produced in a *Xac* -infested grove absolutely cannot serve as a pathway for the introduction of *Xac* into new areas. Furthermore, it is not possible to design an operationally feasible system that ensures only uninfected fruit moves from quarantined areas. Resource constraints and other practical considerations make it difficult to implement a grove-centered regulatory systems-approach in Florida that ensures full compliance with the conclusions of the evaluation described above. Therefore, the RMA evaluates several packinghouse-centered risk management options for the interstate movement of fresh commercially-packed citrus fruit from regions infested with citrus canker to regions without the disease: • *Option 1:* Allow unrestricted distribution of all types and varieties of commercially packed citrus fruit to all U.S. States. • *Option 2:* Allow distribution of all types and varieties of commercially packed citrus fruit to all U.S. States, subject to packinghouse treatment with APHIS-approved disinfectant and APHIS inspection of finished fruit that has completed the packinghouse washing, disinfection, grading, and inspection processes. • *Option 3:* Allow distribution of all types and varieties of commercially packed citrus fruit (except tangerines) in U.S. States except commercial citrus-producing States. Allow distribution of commercially packed tangerines to all U.S. States, including commercial citrus-producing States. Require packinghouse treatment of all such citrus fruit with APHIS-approved disinfectant and APHIS inspection of finished fruit (all types and varieties) for citrus canker disease symptoms. • *Option 4:* Allow distribution of all types and varieties of commercially packed citrus fruit in U.S. States except commercial citrus producing States and require packinghouse treatment of citrus fruit with APHIS-approved disinfectant and APHIS inspection of finished fruit (all types and varieties) for citrus canker disease symptoms. • *Option 5:* Leave the current regulations for the interstate movement of citrus fruit from citrus canker quarantined areas in place and unchanged. Each option was considered within the context of available scientific evidence. Option 1 would allow unrestricted distribution of all types and varieties of commercially packed citrus fruit to all U.S. States. Although the available evidence suggests fresh citrus fruit is an unlikely pathway, that evidence is not currently sufficient to unequivocally conclude that fresh citrus fruit cannot serve as a pathway for the introduction of *Xac* into new areas. Therefore, unrestricted movement of citrus fruit from quarantine areas was determined not to be scientifically justified. Consequently, the more restrictive Options 2, 3, 4 and 5 were evaluated and Option 1 was no longer considered. The objective in designing the proposed risk management options was to ultimately ensure that visibly infected fruit is not shipped and does not reach citrus producing States. To that end, we set out to design an inspection protocol that would achieve the maximum level of sensitivity (the protocol that would allow the fewest fruit with visible symptoms to escape detection by the APHIS packinghouse phytosanitary inspection) given the constraints of operational feasibility. To assist in evaluating Options 2, 3, and 4, we prepared a quantitative model (Appendix 1 to the RMA) based on Florida production and shipping data to evaluate the efficacy of three levels of phytosanitary inspection in ensuring that symptomatic fruit does not enter commercial citrus-producing States. The three inspection levels were determined by preliminary estimates of PPQ's Citrus Health Response Program staff of inspection levels that might be operationally feasible. The three inspection levels evaluated were 500 fruit per lot, 1,000 fruit per lot, and 2,000 fruit per lot. Statistically, inspection of 500, 1,000 fruit, or 2,000 fruit per lot will ensure, with 95 percent confidence, that the proportion of undetected symptomatic fruit in a cleared lot is no more than 0.75, 0.38, and 0.19 percent, respectively. The outputs of the quantitative model were probability distributions. The model determined, with 95 percent confidence, that the total number of citrus fruit shipped from Florida to five citrus-producing States (Arizona, California, Hawaii, Louisiana and Texas) over a single shipping season would be 181,283,744 or less if unlimited distribution is permitted. The model determined, with 95 percent confidence, that the number of *Xac* -symptomatic fruit reaching those five States in a single shipping season would be 633,152 or less at the 1,000 fruit inspection levels. We anticipate that about double that number (approximately 1,266,304 or less) of *Xac* -symptomatic fruit would reach those States at the 500 fruit inspectional level. About half that number (approximately 316,576 or less) would reach those States at the 2,000 fruit inspectional level. The model further determined with 95 percent confidence that the number of symptomatic fruit reaching citrus-producing areas within those States in a single shipping season would be 2,135 or less at the 1,000 fruit inspectional level, about double that number (approximately 4270 or less) at the 500 fruit inspectional level and about half that number (approximately 1067 or less) at the 2,000 fruit inspectional level. The base level inspection of 1,000 fruit per lot, was adopted because it is operationally feasible with small adjustments to the current phytosanitary inspection process in Florida. PPQ Staff from the Melbourne, Florida office of the Citrus Health Response program conducted a small test of the 2,000 fruit sampling protocol to evaluate its operational feasibility. The study found that the normal complement of two inspectors at the packinghouse chosen for the evaluation were physically unable to achieve the 2,000 fruit per lot inspection level. It was estimated that the number of inspectors would have to have been doubled to four in order to inspect 2,000 fruit per lot, but the packinghouse physically had room for only two inspectors. Based on this test and additional input from PPQ operational staff, it was determined that the higher inspection level that achieves 95 percent confidence of detecting at least 0.19 percent rate of symptomatic fruit (about 2,000 fruit per lot), is only feasible with increased inspectional resources and/or more substantial modifications to the packing/phytosanitary inspection processes, and could be justifiable only if the risk reduction benefits outweighed the cost. An inspection level of 1,000 fruit per lot that achieves a detection rate of 0.38 percent with 95 percent confidence was adopted because it provides the maximum level of detection that is operationally feasible with the phytosanitary inspection resources in Florida. Inspection of 500 fruit per lot was rejected because it did not meet the criteria of achieving the maximum level of detection that was operationally feasible. The potential for symptomatic fruit to reach citrus producing States, coupled with the aforementioned uncertainty regarding fruit as a pathway, led to the determination that additional mitigations were required. As mentioned above, Option 2 would allow distribution of all types and varieties of commercially packed citrus fruit to all U.S. States, subject to packinghouse treatment with APHIS-approved disinfectant and APHIS inspection of finished fruit that has completed the packinghouse washing, disinfection, grading, and inspection processes. Despite the determination that commercially packed fresh citrus fruit is an unlikely pathway for the introduction and spread of *Xac* , and a phytosanitary inspection that ensures, with high confidence, that a low level of shipped fruit has symptoms of citrus canker disease, the model indicates the potential for some symptomatic fruit to be shipped to citrus producing States. That potential for symptomatic fruit to reach citrus producing States coupled with the aforementioned uncertainty regarding fruit as a pathway led to the determination that the additional mitigation of limited distribution to non citrus-producing States only was required. Accordingly, Option 2 was no longer considered. APHIS was asked by representatives of the Florida citrus industry to consider regulating tangerines, which are thought to be more resistant to *Xac* infection than other citrus varieties, differently than other citrus fruit. Option 3 would allow for the movement of tangerines from Florida into all States, including commercial citrus producing States. In order to determine the viability of this option, we needed to determine whether adequate evidence was available to conclude that tangerines warrant different regulatory status than other fruit, so we reviewed published literature on tangerine varieties as well as grove surveys. Tangerines are generally grouped in the species *Citrus reticulata* and are widely regarded as less susceptible to citrus canker disease than other commercially grown *Citrus* species. But many of the “tangerine” varieties grown in Florida are hybrids of *C. reticulata* with other more susceptible *Citrus* species. Clearly, tangerines in Florida are not immune to citrus canker, as APHIS records indicate that, during the 2005-2006 growing season grove surveys, *Xac* was detected on 274 samples from tangerine, tangor, and tangelo groves. APHIS pest interception data indicate that between 1985 and 2006, *Xac* was intercepted 632 times on *C. reticulata* fruit. The level of susceptibility was expressed as a continuum across “tangerine” varieties rather than as a discrete immunity for all varieties. This creates a regulatory problem when an overlap occurs in the level of susceptibility expressed by, for example, a more susceptible tangerine variety and a more resistant non-tangerine citrus variety. Sufficient evidence does not exist to exclude tangerines from regulations applicable to other Florida citrus varieties and as such, Option 3 was rejected. Option 4 prohibits distribution of all types and varieties of citrus fruit, including tangerines, to citrus-producing States. Option 4 includes all the requirements of Option 3 and further mitigates the risk of *Xac* introduction by prohibiting the distribution of all types and varieties of citrus fruit, including tangerines, from areas with citrus canker disease to U.S. commercial citrus producing States. Option 4 would amend the regulations by substituting a packinghouse inspection for the preharvest grove inspections currently required by the regulations. Option 4 takes into account the possibility that fruit may be transported into commercial citrus-producing States, despite the prohibition, and compensates for uncertainty generated by that movement by requiring a disinfectant treatment and phytosanitary inspection in addition to the distribution restriction. These measures ensure that even if a given shipment were illegally moved to a commercial citrus-producing State, that shipment would have a low likelihood of containing symptomatic fruit. A packinghouse-based inspection that could ensure the same level of phytosanitary security as the preharvest grove survey required under the current regulations would be easier and potentially less costly to implement and enforce, and would be more reliable and less easily circumvented. In addition, a phytosanitary packinghouse inspection creates a performance standard for packed fruit that allows citrus producers greater flexibility to determine the most efficient and effective means of producing a product that will be eligible for interstate movement. Option 5 is the most restrictive option that we considered. It would leave the current regulations in place and unchanged, including the requirement for preharvest grove surveys. APHIS has concluded that a mandatory packinghouse treatment of citrus fruit with APHIS approved disinfectant and phytosanitary inspection, by APHIS, of finished fruit provides an effective safeguard to prevent the spread of *Xac* via the movement of commercially-packed citrus fruit, especially when combined with a limited distribution requirement that excludes shipment to U.S. citrus-producing States. Of the five options, we determined that Options 1, 2, and 3 are not viable at the present time. Those options would each allow for the movement of at least some types and varieties of fresh citrus fruit from Florida into commercial citrus-producing States. While the conclusions of both our PRA and RMA indicate that fresh citrus fruit is an unlikely pathway for citrus canker infection, we cannot conclusively rule out any type or variety of citrus fruit as a potential source of citrus canker infection at this time. In addition, the probabilistic model presented in our RMA document finds that if such distribution were to take place, fruit with symptoms of citrus canker disease could end up in citrus-producing States. We also determined that Options 4 and 5 offered similar levels of phytosanitary protection, but that Option 4 offered some relief of restrictions for growers of citrus fruit in Florida while maintaining conditions that would help prevent the artificial spread of *Xac* . We are proposing to implement Option 4 in this document. This option would pair limited distribution of all types and varieties of citrus fruit to non-citrus-producing States with mitigations conducted at packinghouses operating under compliance agreements. Those mitigations would be the use of an approved disinfectant for all fruit and phytosanitary inspection. The approved disinfectants listed in the regulations in § 301.75-11(a) have been shown to reduce or nearly eliminate any *Xac* bacterium that may exist as a surface contaminant on citrus fruit moving interstate from citrus canker quarantined areas. The RMA discusses the efficacy of currently approved disinfectant treatments in the context of the scientific evidence in greater detail. Decontaminant treatments for fruit are required under the current regulations and would continue to be required under our proposal. Based on our evaluation of production and processing procedures and their impact on removal of citrus canker from the fresh-fruit pathway, along with our review of the operational feasibility of enforcing various mitigation measures, APHIS has concluded that the mandatory packinghouse inspection of processed fruit provides an effective safeguard against the spread of citrus canker via the movement of commercial citrus fruit. After consultation with operational staff, APHIS determined that—given the resources currently available—the inspection of 1,000 fruit per lot is possible without significant additional resources or disruptions to citrus packing operations. This rate of inspection is sufficient to detect, with a 95 percent level of confidence, lots of fruit containing 0.38 percent or more fruit with visible canker lesions. This determination takes into account operational constraints in packinghouses as well as the availability of APHIS inspectors. The inspection would require visual examination of approximately 1,000 randomly selected fruit per lot, depending on the size of the lot and other factors. We ruled out inspecting at a rate of 2,000 fruit per lot because of the significant disruptions to citrus packing operations in the State of Florida. The 1,000 fruit inspectional unit is further justified given the added protection provided by allowing distribution only in non-citrus-producing States. Even with the limited distribution requirement, it is necessary to require packinghouse inspection to ensure that very few, if any, symptomatic fruit can move out of the quarantined area. This added safeguard ensures that any fruit moved into citrus-producing States, either inadvertently or intentionally, is very unlikely to be symptomatic. Additionally, we ruled out inspecting at a rate of 500 fruit per lot because inspection at the 1,000 inspectional rate provided a higher level of protection. A packinghouse phytosanitary inspection would be conducted on fruit immediately before shipping to provide a high level of assurance about the condition of the final product. Because a phytosanitary packinghouse inspection sets a performance standard for the packed fruit, it allows producers and packers greater flexibility in determining optimum methods for achieving that standard. Packinghouse phytosanitary inspections are relatively simple compared with the monitoring of field treatment and grove inspections. It is important to note that we recognize that different packinghouses may utilize different methods for quality control inspection and employ them at various points in the packing process. Our intention is to allow flexibility for both large and small packinghouses to have the ability to process, treat, pack, and ship fresh citrus fruit provided that all fruit, regardless of the size of the lot being packed, is subjected to inspection at a rate sufficient to detect, with a 95 percent level of confidence, lots of fruit containing 0.38 percent or more fruit with visible canker lesions. This equates to approximately 1,000 fruit per lot. We welcome comments and suggestions regarding the appropriate methodology and inspection level at packinghouses and the appropriate balance between the sensitivity of the inspection and the operational needs and constraints of the packinghouses. Because of the shift in emphasis from grove-freedom certification to packinghouse inspection and treatments, we wish to emphasize that only fresh citrus fruit that has been treated, inspected, and found free of symptoms of citrus canker and packaged in accordance with the proposed regulations in a packinghouse that is operating under a compliance agreement with APHIS would be eligible for interstate movement. Our proposed provisions would allow any Florida citrus growers, including commercial, gift fruit, and dooryard growers, to move their fruit interstate to non-citrus-producing States provided they comply with the conditions discussed in this proposed rule. Determination by the Secretary Under § 412(a) of the Plant Protection Act, the Secretary of Agriculture may prohibit or restrict the movement in interstate commerce of any plant or plant product if the Secretary determines that the prohibition or restriction is necessary to prevent the dissemination of a plant pest or noxious weed within the United States. Based on information provided in our risk assessment and risk management documents, we have determined that it is not necessary to prohibit the interstate movement of citrus fruit into non-citrus-producing States under the conditions described in this proposed rule. While APHIS has concluded that commercially packed citrus fruit is an unlikely pathway for the introduction and spread of citrus canker, the remaining uncertainty about the precise level of risk associated with the movement of citrus fruit from a quarantined area has led us to maintain the current prohibition on the movement of that citrus fruit into citrus-producing States. Changes to the Regulations This proposed rule, if adopted, would amend the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. Under this proposed rule APHIS would: • Eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker; • Require that fruit produced in the quarantined area be treated with a surface disinfectant treatment in a packinghouse operating under a compliance agreement; • Require that each lot of finished fruit would be inspected in a packinghouse operating under a compliance agreement and found free of visible symptoms of citrus canker prior to interstate movement; • Retain the current prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States; • Retain requirements that fruit to be moved interstate must be free of leaves, twigs and other plant parts, except for stems that are less than 1-inch long and attached to the fruit; • Retain requirements pertaining to the treatment of personnel, vehicles, and equipment in groves within a quarantined area; and • Require that boxes in which fruit are packed would be marked with a statement that fruit are being moved interstate under limited permit and may not be distributed in commercial citrus-producing States listed in § 301.75-5(a). Only fruit that has been treated, inspected, and found free of evidence of citrus canker may leave packinghouses in boxes marked with the limited permit stamp. The regulations in § 301.75-7 pertain to the interstate movement of regulated fruit from a quarantined area. Currently, the regulations require that a grove be free of citrus canker prior to movement of any regulated fruit. To certify grove freedom, the grove producing the regulated fruit must have received regulated plants only from nurseries located outside any quarantined areas, or from nurseries where an inspector has found every regulated plant free of citrus canker on each of three successive inspections conducted at intervals of no more than 45 days, with the third inspection no more than 45 days before shipment. In addition, every tree must have been inspected by an inspector and the grove found free of citrus canker no more than 30 days before the beginning of harvest. Further, in groves producing limes, every tree must have been inspected and the grove found free of citrus canker every 120 days or less thereafter for as long as harvest continued. Currently, if citrus canker is found in a grove when the preharvest inspection is conducted, or at any other time beginning August 1 of the year in which the fruit is to be harvested and extending through the harvest season (including into the next calendar year), fruit from that grove is not eligible for interstate movement for the remainder of the harvest season. We are proposing to remove provisions relating to the certification of grove freedom from citrus canker. Instead, APHIS would focus on the inspection of individual lots of citrus fruit at packinghouses, as described earlier in this document, to ensure that regulated fruit moving interstate is free of symptoms of citrus canker. Specifically, the new provisions in § 301.75-7(a)(1) would state that every lot of regulated fruit to be moved interstate must be inspected by an APHIS employee at the packinghouse for symptoms of citrus canker. Any lot found to contain fruit with visible symptoms of citrus canker would not be eligible for a limited permit to move interstate. The proposed regulations, as presented in this document, leave open the issue of allowing lots of fruit initially found to be ineligible for a limited permit to be reconditioned and resubmitted for inspection. Because we have not thoroughly examined all operational aspects of the reconditioning of fruit, we would like to invite comments on this topic. The number of fruit to be inspected would be the quantity that gives a statistically significant confidence, as discussed above, of detecting the disease at a level of infection to be determined by the Administrator. As stated previously, we intend to inspect fruit at a rate of inspection sufficient to detect, with a 95 percent level of confidence, lots of fruit containing 0.38 percent or more fruit with visible canker lesions. This is equivalent to 1,000 fruit per lot for most lots. If at some time in the future conditions warrant changing this rate of inspection, APHIS would provide for public participation in that process through the publication of a notice in the **Federal Register** . Because APHIS plans to focus on the inspection of individual lots, we would add a definition for the term *lot* in § 301.75-1. The term *lot* would be defined as “The inspectional unit for fruit composed of a single variety of fruit that has passed through the entire packing process in a single continuous run not to exceed a single work day ( *i.e.* , a run started one day and completed the next is considered two lots).” We would also require that packinghouse owners and operators involved with shipping citrus fruit must enter into a compliance agreement with APHIS in accordance with § 301.75-13, “Compliance agreements.” In the compliance agreement, the owner or operator of the packinghouse will agree to treat fruit to be moved interstate with one of the approved treatments according to the procedures specified in § 301.75-11, and to see that this fruit is packed only in boxes marked in accordance with the requirements in § 301.75-7(a)(6). The compliance agreement would also contain (but not to be limited to) specific provisions pertaining to: • Access to the facility, and to necessary records and documents by APHIS inspectors; • Means by which lots are designated and notice of estimated lot sizes and run times; • Need for notice when APHIS inspectors are not present on a regular basis; • Need for notice when there are significant changes in the amount of fruit being packed; • Conditions (access to fruit, lighting, safety, etc.) that must be met in order for APHIS inspectors to carry out the required inspections; • Provisions for handling and storage of fruit, including provisions not allowing the movement of any part of a lot from the packinghouse until APHIS inspection is complete; • Hazard-free access to decontamination areas so that APHIS inspectors can monitor the concentrations of chemicals used for fruit treatment; • Provisions for holding fruit when packing is done at a time when an APHIS inspector is not present; and • Hours of coverage for APHIS packinghouse inspections. The regulations already provide that any compliance agreement may be canceled orally or in writing by an inspector if the inspector finds that the person who entered into the compliance agreement has failed to comply with this subpart. This provision would remain in effect. We would retain the provision in § 301.75-7(a)(4) that requires the fruit to be treated in accordance with § 301.75-11(a), but would add a newly approved treatment, peroxyacetic acid, for use on fruit. Treatment instructions would specify that regulated fruit must be thoroughly wetted for at least 1 minute with a solution containing 85 parts per million peroxyacetic acid. At the request of growers in Florida, we evaluated the efficacy of this treatment and determined that the bactericide provides treatment that is at least as efficacious as the currently approved bactericides listed in the regulations. In addition to the new inspection requirements, we would revise the box marking requirements currently in § 301.75-7(a)(5) to clarify that regulated fruit may only be moved interstate with a limited permit and that the distribution of the fruit is limited to areas that are not designated as commercial citrus-producing States. Specifically, those proposed provisions would state that the regulated fruit must be accompanied by a limited permit issued in accordance with § 301.75-12. In order to be moved interstate, the regulated fruit would have to be packaged in boxes or other containers that are approved by APHIS and that are used exclusively for regulated fruit to be moved interstate. The boxes or other containers in which the fruit is packaged would have to be clearly marked with the statement “Limited Permit: USDA-APHIS-PPQ. Not for distribution in AZ, CA, HI, LA, TX, American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands of the United States.” Those proposed provisions would also state that only fruit that meets all of the requirements of the section may be packed in boxes or other containers that are marked with the above statement. These additional provisions would help ensure that only fruit that has been handled in accordance with all of the requirements described in § 301.75-7 will be packaged in boxes bearing the limited permit statement. Miscellaneous In addition to the changes discussed above, we would amend the definitions for *certificate* and *limited permit* in § 301.75-1. Currently, certificates and limited permits are referred to as “official documents.” We would amend those definitions to indicate that a certificate or limited permit may be a “stamp, form, or other official document.” This proposed change would provide us with a greater degree of flexibility in the issuance of those documents. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget. We are proposing to amend the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. Under this proposed rule, we would eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead require that fruit produced in the quarantined area be treated with a surface disinfectant treatment in a packinghouse operating under a compliance agreement and that each lot of finished fruit be inspected and found free of visible symptoms of citrus canker. We would, however, retain the current prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These proposed changes would relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that would prevent the artificial spread of citrus canker. For this proposed rule, we have prepared an economic analysis. The analysis, which is summarized below, addresses economic impacts of the proposed new protocol for treatment and inspection of citrus fruit intended for the fresh market. Expected benefits and costs are examined in accordance with Executive Order 12866. Possible impacts on small entities are considered in accordance with the Regulatory Flexibility Act. Copies of the full analysis are available at *http://www.regulations.gov.* Section 301.75-5 of the regulations lists the designated commercial citrus-producing States as American Samoa, Arizona, California, Florida, Guam, Hawaii, Louisiana, the Northern Mariana Islands, Puerto Rico, Texas, and the U.S. Virgin Islands. Of these 11 commercial citrus-producing States, only 4 States received fresh citrus interstate shipments from Florida during the 2004-05 and 2005-06 seasons: Arizona, California, Louisiana, and Texas. As of August 1, 2006, these four States no longer receive fresh citrus shipments from Florida. In this analysis, U.S. commercial citrus-producing States other than Florida are referred to as other commercial citrus-producing States. The overall objective of this proposed rule is to continue to prevent the spread of citrus canker to other commercial citrus-producing States, while relieving restrictions on Florida citrus producers, namely, the requirement for interstate movement of citrus fruit that every tree in the grove in which the fruit is grown be inspected, and that the grove be found to be free of citrus canker not more than 30 days before the beginning of harvest. Under the proposed rule, the citrus fruit would be treated and inspected at the packinghouse prior to interstate movement. We expect the net economic impact of the proposed changes would be positive. While citrus produced in Florida is primarily intended for the processed market, citrus produced in California, Texas, Arizona, and Louisiana is largely intended for the fresh market. This proposed rule would continue to prohibit the movement of fresh citrus fruit from Florida to other commercial citrus-producing States. The proposed measures are designed to ensure protection of the citrus industries in these States from the introduction of citrus canker and the increased production costs and loss of fresh fruit markets that would result if citrus canker were to be introduced in those States. Overview of the U.S. Citrus Industry The total value of U.S. citrus production rose by 16 percent from $2.30 billion to $2.68 billion, between the 2004-05 and 2005-06 seasons. These gains in value reflect increased values for processed utilization for most varieties of citrus in the United States with the exception of grapefruit, which declined in overall value by 4 percent. Florida is the largest citrus producer in the United States, accounting for approximately 68 percent of U.S. production during the 2005-06 season. California produced approximately 28 percent of the citrus in the United States during the same period, and production in Texas and Arizona comprised the remaining 4 percent. The hurricane season of 2004, which included 4 hurricanes that crossed Florida within a 2-month period, caused significant production losses to Florida's citrus industry and was largely to blame for the 42 percent decline of total utilized production in the United States between the 2003-04 and 2004-05 seasons. The major citrus varieties produced in Florida are early, mid-, and late-season orange varieties, red and white seedless grapefruit, navels, early tangerines, honey tangerines, temples, and tangelos. Although approximately 89 percent of all Florida citrus is intended for the processed market, the share of production that is processed is highly dependent upon the variety. Approximately 95 percent of all Florida orange production is intended for the processing sector, whereas nearly 68 percent of Florida tangerine production is utilized on the fresh market. During the 2005-06 season, nearly 36 percent of Florida grapefruit production was utilized on the fresh market. During the previous season, the packout rate for Florida fresh grapefruit was approximately 58 percent, suggesting that the post-hurricane higher prices for fresh grapefruit led to a diversion of Florida grapefruit from the processing sector to the fresh market. The reduced packout rate for the 2005-06 season may suggest a return to a more normal fresh market share of about 40 percent. The major citrus varieties produced in California are navel and Valencia oranges, grapefruit, tangerines, and lemons. Approximately 73 percent of California citrus was utilized on the fresh market during the 2005-06 season, including nearly 72 percent of California's oranges (making California the largest U.S. producer of fresh-market oranges), 88 percent of the State's grapefruit, 75 percent of its tangerines, and 72 percent of its lemons. The citrus varieties produced in Texas during the 2005-06 season were grapefruit, Valencia oranges, and midseason oranges. Fresh production accounted for approximately 67 percent of total production. Valencia and midseason orange production was destined primarily for the fresh market, accounting for 79 percent of total production. Also, 62 percent of grapefruit production in that State was utilized on the fresh market. Arizona produces Valencia and navel oranges, grapefruit, tangerines, and lemons. Approximately 58 percent of Arizona citrus was utilized on the fresh market during the 2005-06 season, including 52 percent of the State's orange production, 65 percent of its tangerine production, 55 percent of its lemon production, and all of its grapefruit production. Total and domestic shipments of Florida fresh citrus remained virtually unchanged during the 2005-06 season over the previous season, showing few signs of recovery from the dramatic decline between the 2003-04 and 2004-05 seasons, when total and domestic shipments declined by 42 percent and 29 percent, respectively. Fresh grapefruit continued to have the largest share of total shipments of fresh Florida citrus including exports, while oranges accounted for the State's largest share of domestic shipments. Expected Costs and Benefits The proposed changes described in this document are likely to primarily affect citrus producers and packinghouses in Florida whose operations rely on the interstate shipment of fresh citrus. The proposed changes would also affect the way resources are allocated for citrus canker mitigation activities at both Federal and State levels. Effects on Florida Fresh Citrus Shipments We expect the proposed rule to have little economic effect on the production of fresh citrus in Florida, but the shift from inspection for citrus canker in the citrus groves, tree by tree, to the inspection of fresh citrus fruit at the packinghouse may result in an increase in the quantity of citrus eventually approved for shipment interstate. As such, interstate shipment of fresh citrus fruit originating from groves previously prohibited from shipping outside of quarantined areas could lead to changes in market prices and increased competition. Although the changes to the supply of Florida fresh citrus in non-citrus-producing States resulting from these additional shipments are expected to be small, we are unable to estimate the extent of any such increase due to lack of data. APHIS welcomes public input on the possibility of increased fresh citrus shipments to non-citrus producing States as a result of the proposed changes. Under the proposed protocol, Florida citrus would still be prohibited from distribution to other commercial citrus-producing States. Effects on Florida Packinghouses and Citrus Growers Florida packinghouses are the segment of the citrus industry likely to be the most affected by the proposed regulations, since the focus of the new protocol for treatments and inspections would be shifted away from the citrus groves to packinghouse facilities. According to the proposed regulations, citrus packinghouses would be required to operate under an APHIS compliance agreement wherein the packinghouse operator agrees to meet all requirements of the regulations. The provisions in current § 301.75-7 pertaining to the inspection of groves for citrus canker as a prerequisite for the interstate movement of citrus fruit would be removed. While the new regulations would indirectly place a burden on the growers of fresh citrus to transport symptom-free fresh citrus to packinghouses for packing, the inspection and treatment activities that would be required would take place in the packinghouses. A packinghouse charge to the grower for citrus that does not meet the quality requirements is known as an elimination charge, and is an existing industry measure for ensuring high quality, symptom-free fruit. Table 1 outlines the average packinghouse charges for Florida fresh citrus during the 2005-06 season. Table 1.—Estimated Average Total Packing charges Paid by Growers, and Elimination Charges Paid by Growers for Lots That Do Not Meet Quality Requirements, 2005-06 1 Domestic grapefruit Export grapefruit Oranges Temples/ tangelos Tangerines $/Carton 3 Total packing charge 2 $4.016 $4.395 $4.347 $4.614 $5.469 $/Box 3 Drenching charge $0.181 $0.189 $0.181 $0.184 $0.188 Packinghouse elimination charges 0.545 0.553 0.548 0.548 0.552 Hauling charges for eliminations 0.505 0.534 0.515 0.531 0.534 Source: Ronald P. Muraro, University of Florida-IFAS, Citrus Research and Education Center, Lake Alfred, FL August 2006. 1 These packing charges are based on charges at four citrus packinghouses in the Interior production region and 13 citrus packinghouses in the Indian River production region. 2 Total packing charge refers to the charge to the grower for packed fruit, and is based upon packinghouse operational costs. Total packing charges are discussed in detail in the report “Average Packinghouse Charges for Florida Fresh Citrus—2005-06 Season,” ( *http://edis.ifas.ufl.edu* ). 3 One box is equivalent to two 4/5 -bushel cartons. Focusing regulatory enforcement in the packinghouse via required treatments and inspection of fruit intended for interstate movement is expected to be an economically efficient means of ensuring a high level of confidence that even a small percentage of infected fruit would be detected. Both packinghouses operating under compliance agreements with APHIS and growers seeking to minimize elimination charges and price discounts would have incentives to ensure that only fruit considered to be free from citrus canker would enter a packing facility. Minimizing the charges back to the grower associated the drenching, elimination, hauling of fruit unsuitable for the fresh market through the practice of grove surveys is commonly employed by growers as part of their operations. Tree inspections, which were previously conducted by APHIS and the Florida Department of Agriculture and Consumer Services (FDACS), will, we believe, be conducted as self-surveys by the industry. Given the possibility of elimination charges, growers will apply the additional resources needed to conduct these self-surveys as long as the benefits outweigh the costs. The inspection process would be largely dependent on the physical layout of each particular packinghouse. Conditions that must be met in order for APHIS inspectors to carry out the required inspections would translate into additional costs to the packinghouse. Inspections would either occur at the roll board prior to the fruit being physically packed or after the fruit is packed. In either case, adequate lighting would be a necessary component for the fruit inspection process. If the inspection occurs after fruit is packed, the packinghouse would be required to provide a table and personnel to repack the boxes after inspection. Lot size would be determined by the packinghouse, and varies according to the size of the packinghouse, the number of packing lines per facility, and the varieties of fresh citrus packed. APHIS field personnel estimate that under ideal circumstances, the inspection of 1,000 pieces of fruit would take approximately 1 hour and 23 minutes (approximately 5 seconds per fruit). If the lot takes longer than that to run, the inspection is not expected to result in a delay. However, a lot that would take less than 1 hour and 23 minutes to run the line may be delayed by the inspection of 1,000 pieces of fruit. The time it would take to run a lot of fruit varies by packinghouse, and is determined by numerous factors. It is reasonable to assume that an average time to run a lot of fruit is about 3 hours. On the average, then, the inspection of 1,000 pieces of fruit will not result in delays. If a packinghouse has its own groves and packs its own fruit, lot sizes are generally larger, and no delays should be expected. Packinghouses that do not pack their own fruit tend to run multiple smaller lots whose identity must be maintained to ensure proper payment to the respective growers. These packinghouses are more likely to experience delays caused by the inspection of 1,000 pieces of fruit. The decontamination of fruit, as reflected in the drenching charges in Table 1, occurs under the existing regulations and is conducted as a standard practice to extend shelf-life. It also is a requirement in the FDACS/DPI compliance agreement with packers. Therefore, there is no additional cost associated with the proposed provisions. APHIS requests comment on the costs that would be incurred by packinghouses due to implementation of the proposed compliance agreement provisions. The proposed compliance agreements would not present an entirely new situation for the packinghouses. Current compliance agreements with the State of Florida issued by the FDACS Division of Plant Industry are required of all packinghouses that ship fresh citrus interstate. They require the packinghouses to adhere to inspection requirements prior to the movement of fresh citrus. According to section IIIA of the FDACS packinghouse compliance agreement: Inspection of fruit for citrus canker lesions will take place during the washing/grading process, and a designated number of packed boxes will be required to be pulled, opened and made available for inspection by Federal or State regulatory officials. Effects on Public Sector Resources According to APHIS, 10 additional inspectors would be needed to implement the proposed rule at a cost of $450,000 per year. The added cost for increased inspection at the packinghouse is expected to be offset by a reduction in certain operational expenses in other program areas. For example, pre-harvest grove surveys would be reduced to only those required for phytosanitary certification to certain countries. The State of Florida allocated approximately $10 million for the 2007 fiscal year from the Agricultural Emergency Eradication Trust Fund to the CHRP for grove inspections (generally pre-harvest surveys), regulatory oversight, and nursery surveys. FDACS anticipates a reduction in field staff by 65 percent under the proposed rule, from 340 to 120 field staff members, for a cost savings of approximately $9.9 million. We anticipate that growers would conduct their own grove inspections, as long as the benefits outweigh the cost of resources needed for these self-surveys. Concluding Statement on Benefits and Costs The current regulations for the interstate movement for regulated fruit from quarantined areas place several restrictions on the interstate movement of citrus fruit from Florida, including inspections of citrus groves to ensure that they are free of citrus canker, preharvest inspections, treatments, and movement under limited permit. The proposed regulatory protocol would replace the current protocol for the movement of citrus fruit from citrus canker quarantined areas. A packinghouse that ships fresh citrus interstate would be required to operate under an APHIS compliance agreement wherein the packinghouse operator agrees to meet all requirements of the regulations. Inspections of fresh citrus would occur at the packinghouse level. The proposed regulations also specify treatment requirements for all commercially packed fresh citrus. The required treatment, however, is already employed at the top 50 packinghouses. We believe packinghouses would adjust to the new regulations with little to no economic hardship. Packinghouses currently face similar regulations as required by the Florida compliance agreements for packinghouses. Packinghouse charges to growers for eliminations and price discounts for fruit diverted from the fresh to the processed market are incentives to growers to ensure fruit sent to the packinghouse for packing is free of symptoms of citrus canker. Growers are thus highly likely to self-survey groves as long as the benefits outweigh the cost of the procedure. The proposed provisions would also provide the added benefit to growers of being able to ship symptom-free fresh citrus from groves which they were previously unable to move interstate due to the presence of canker in the grove. The proposed rule would also provide opportunities for the Florida packing industry to place in service underutilized packing equipment to treat, pack, and have inspected, interstate shipments of non-commercially produced citrus fruit. Benefits of this proposed rule may include the possibility of gains from a larger volume of Florida shipments to consumers in non-citrus producing States. Producers would no longer be prohibited from sending to the packinghouses for interstate shipment fruit from citrus groves in which citrus canker has been detected. As long as a lot of citrus fruit is found to be symptom free upon APHIS inspection, the lot would be considered eligible for shipment to non-citrus producing states. Growers with infected groves would have an additional marketing option for their fruit. Local consumers in Florida may benefit from increased market quantities and lower prices of fresh citrus if rejected lots are diverted to in-state fresh markets. We expect that Florida packinghouses that wish to ship interstate would continue to do so, should the new provisions be adopted, as long as financial benefits to them of operating under these provisions exceed their costs. The additional costs of the proposed regulations to the public sector are expected to be marginal in comparison to the benefits of a more efficient system for fresh citrus fruit movement. Initial Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires that agencies consider the economic impact of rule changes on small businesses, organizations, and governmental jurisdictions. Section 603 of the Act requires agencies to prepare and make available for public comment an initial regulatory flexibility analysis
(IRFA)describing the expected impact of proposed rules on small entities. Sections 603(b) and 603(c) of the Act specify the content of an IRFA. In this section, we address these IRFA requirements for this proposed rule. Reasons for Action Based on our evaluation of production and processing procedures and their impact on removal of citrus canker from the fresh fruit pathway, along with our review of the operational feasibility of enforcing various mitigation measures, APHIS has concluded that the mandatory packinghouse inspection of processed fruit provides an effective safeguard to prevent the spread of citrus canker via the movement of commercial citrus fruit. Since the current regulations require groves to be free of citrus canker in order for fruit to be eligible for interstate movement, the changes proposed in this document are necessary in order for the packinghouse-based treatment and inspection protocol to be implemented. Objectives of and Legal Basis for Rule Under this proposed rule, we would eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead require that fruit produced in the quarantined area be treated with a surface disinfectant treatment in a packinghouse operating under a compliance agreement and that each lot of finished fruit be inspected and found free of visible symptoms of citrus canker at the packinghouse. We would, however, retain the current prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These proposed changes would relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that would prevent the artificial spread of citrus canker. Under § 412(a) of the Plant Protection Act, the Secretary of Agriculture may prohibit or restrict the movement in interstate commerce of any plant or plant product if the Secretary determines that the prohibition or restriction is necessary to prevent the dissemination of a plant pest or noxious weed within the United States. Based on information provided in our risk assessment and risk management documents, we have determined that it is not necessary to prohibit the interstate movement of citrus fruit into non-citrus-producing States under the conditions described in this proposed rule. While APHIS has concluded that commercially packed citrus fruit is an unlikely pathway for the introduction and spread of citrus canker, the remaining uncertainty about the precise level of risk associated with the movement of citrus fruit from a quarantined area has led us to maintain the current prohibition on the movement of that citrus fruit into citrus-producing States. Description and Estimated Number of Small Entities Regulated Florida's citrus packinghouses and fresh citrus producers comprise the industries that we expect to be directly affected by the proposed rule. The small business size standards for citrus fruit packing, as identified by the Small Business Administration
(SBA)based upon the North American Industry Classification System (NAICS) code 115114 (Postharvest Crop Activities) is $6.5 million or less in annual receipts. According to the County Business Patterns report for Florida published by the U.S. Census Bureau, there were 71 post-harvest operations in Florida in 2004. Although this publication reports the number of employees, the number of firms by employment size, and the annual payroll for firms included in NAICS 115114, it does not report the distribution of annual sales for firms in this category. Neither is information on annual sales published in the Census of Agriculture or the Economic Census. There are at least 142 packinghouses currently registered in Florida. 4 While the classification of these establishments by sales volume is not available, it is believed that there are approximately 50 commercial citrus packinghouses and several small establishments known as gift packers in Florida. The Fresh Shippers Report, as reported by the Citrus Administrative Committee, details quantities of fresh citrus shipments of the top 40 to 50 shippers of each season. 5 That same report indicates that at least 95 percent of Florida fresh citrus shipments are packed through the top 40 packinghouses in the State. During the 2005-06 citrus season, annual sales for 21 of the top 40 shippers (52.5 percent) were below the SBA size standard of $6.5 million. It is estimated that at least 85 percent of citrus packers, including small gift packers, would be considered small according to the SBA size standards. 4 FDACS, Division of Fruit & Vegetable Inspection ( *http://www.doacs.state.fl.us/fruits* ). 5 “Fresh Shippers Report: 2005-06 Season Through July 31, 2006,” Citrus Administrative Committee, August 18, 2006 ( *http://www.citrusadministrativecommittee.org* /). The proposed changes may also affect producers of fresh citrus in Florida. Most, if not all, of the Florida citrus producers that would be affected by the proposed rule are small, based on 2002 Census of Agriculture data and SBA guidelines for entities classified within the farm categories Orange Groves (NAICS 111310) and Citrus (except Orange) Groves (NAICS 111320). SBA classifies producers in these categories with total annual sales of not more than $750,000 as small entities. According to 2002 Census data, there were a total of 7,653 citrus farms in Florida in 2002. Of this number, approximately 94 percent had annual sales in 2002 of less than $500,000, which is well below the SBA's small entity threshold of $750,000. 6 While it is likely this proposed rule would result in higher packinghouse charges to the grower, costs associated with the proposed rule are expected to be minimal. APHIS invites comment on these costs. 6 Source: SBA and *2002 Census of Agriculture.* Additionally, the proposed rule would provide marketing opportunities for fresh citrus previously prohibited from interstate shipment. APHIS invites comments on the additional costs of production and marketing opportunities for fresh citrus that would likely result from the implementation of this proposed rule. Although the proposed regulations will provide additional marketing opportunities for fresh citrus previously prohibited from interstate movement, adequate data is not available to measure the resulting price effects. APHIS invites comment on the possible increase in interstate shipment of fresh citrus and effect on fresh citrus prices that may result from the proposed rule. Description and Estimate of Reporting, Recordkeeping, and other Compliance Requirements. These considerations are discussed later in this document under the heading “Paperwork Reduction Act.” Duplication, Overlap, and Conflict with Existing Rules and Regulations APHIS has not identified any duplication, overlap, or conflict of the proposed rule with other Federal rules. Regulatory Alternatives An in-depth discussion of the alternatives we considered in preparing this proposed rule may be found earlier in this document under the heading “Risk Management Analysis” as well as in the accompanying full economic analysis. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted:
(1)All State and local laws and regulations that are inconsistent with this rule will be preempted;
(2)no retroactive effect will be given to this rule; and
(3)administrative proceedings will not be required before parties may file suit in court challenging this rule. National Environmental Policy Act To provide the public with documentation of APHIS' review and analysis of any potential environmental impacts associated with this proposed domestic citrus canker program, we have prepared an environmental assessment. The environmental assessment was prepared in accordance with:
(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),
(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),
(3)USDA regulations implementing NEPA (7 CFR part 1b), and
(4)APHIS' NEPA Implementing Procedures (7 CFR part 372). The environmental assessment may be viewed on the *Regulations.gov* Web site or in our reading room. (Instructions for accessing *Regulations.gov* and information on the location and hours of the reading room are provided under the heading ADDRESSES at the beginning of this proposed rule.) In addition, copies may be obtained by calling or writing to the individual listed under FOR FURTHER INFORMATION CONTACT . We invite the public to comment on the environmental assessment. Comments on the environmental assessment may be submitted in the same way as comments on this proposed rule (see ADDRESSES above). Paperwork Reduction Act In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. APHIS-2007-0022. Please send a copy of your comments to:
(1)Docket No. APHIS-2007-0022, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and
(2)Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule. We are proposing to amend the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. Under this proposed rule, we would eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead require that fruit produced in the quarantined area be treated with a surface disinfectant treatment in a packinghouse operating under a compliance agreement and that each lot of finished fruit be inspected at the packinghouse and found free of visible symptoms of citrus canker. We would, however, retain the current prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These proposed changes would relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that would help prevent the artificial spread of citrus canker. This proposed rule would, if adopted, require packinghouse operators to enter into a compliance agreement with APHIS. The compliance agreement would contain (but not be limited to) specific provisions pertaining to: • Access to the facility, and to necessary records and documents by APHIS inspectors; • Means by which lots are designated; • Need for notice when APHIS inspectors are not present on a regular basis; • Need for notice when there are significant changes in the amount of fruit being packed; • Conditions (access to fruit, lighting, safety, etc.) that must be met in order for APHIS inspectors to carry out the required inspections; • Provisions for handling and storage of fruit; • Hazard-free access to decontamination areas so that APHIS inspectors can monitor the concentrations of chemicals used for fruit treatment; • Provisions for holding fruit when packing is done at a time when an APHIS inspector is not present; and • Hours of coverage for APHIS packinghouse inspections. We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:
(1)Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses). *Estimate of burden:* Public reporting burden for this collection of information is estimated to average 1.25 hours per response. *Respondents:* 150. *Estimated annual number of respondents:* 1. *Estimated annual number of responses per respondent:* 1. *Estimated annual number of responses:* 150. *Estimated total annual burden on respondents:* 188 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, we propose to amend 7 CFR part 301 as follows: PART 301—DOMESTIC QUARANTINE NOTICES 1. The authority citation for part 301 would continue to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3. Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note). 2. In § 301.75-1, the definitions for *certificate* and *limited permit* would be amended by adding the words “stamp, form, or other” after the words “An official” and a definition of *lot* would be added to read as follows: § 301.75-1 Definitions. *Lot.* The inspectional unit for fruit composed of a single variety of fruit that has passed through the entire packing process in a single continuous run not to exceed a single work day (i.e., a run started one day and completed the next is considered two lots). 3. In § 301.75-7, paragraphs (a)(1), (a)(2), and (a)(6) would be revised to read as follows: § 301.75-7 Interstate movement of regulated fruit from a quarantined area.
(a)* * *
(1)Every lot of regulated fruit to be moved interstate must be inspected by an APHIS employee at the packinghouse for symptoms of citrus canker. Any lot found to contain fruit with visible symptoms of citrus canker will be ineligible for interstate movement from the quarantined area. The number of fruit to be inspected will be the quantity that is sufficient to detect, with a 95 percent level of confidence, lots of fruit containing 0.38 percent or more fruit with visible canker lesions or another quantity that gives a statistically significant confidence of detecting the disease at a level of infection to be determined by the Administrator.
(2)The owner or operator of any packinghouse that wishes to move citrus fruit interstate from the quarantined area must enter into a compliance agreement with APHIS in accordance with § 301.75-13.
(6)Each lot of regulated fruit found to be eligible for interstate movement must be accompanied by a limited permit issued in accordance with § 301.75-12. Regulated fruit to be moved interstate must be packaged in boxes or other containers that are approved by APHIS and that are used exclusively for regulated fruit that is eligible for interstate movement. The boxes or other containers in which the fruit is packaged must be clearly marked with the statement “Limited Permit: USDA-APHIS-PPQ. Not for distribution in AZ, CA, HI, LA, TX, and American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands of the United States.” Only fruit that meets all of the requirements of this section may be packed in boxes or other containers that are marked with this statement. 4. In § 301.75-11, paragraph (a), the introductory text would be amended by adding the words “at least” after the words “treated in” and a new paragraph (a)(4) would be added to read as follows: § 301.75-11 Treatments.
(a)* * *
(4)*Peroxyacetic acid.* The regulated fruit must be thoroughly wetted for at least 1 minute with a solution containing 85 parts per million peroxyacetic acid. Done in Washington, DC, this 18th day of June 2007. J. Burton Eller, Acting Under Secretary for Marketing and Regulatory Programs. [FR Doc. E7-12041 Filed 6-20-07; 8:45 am] BILLING CODE 3410-34-P FARM CREDIT ADMINISTRATION 12 CFR Part 615 RIN 3052-AC25 Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations; Capital Adequacy—Basel Accord AGENCY: Farm Credit Administration. ACTION: Advance notice of proposed rulemaking (ANPRM). SUMMARY: The Farm Credit Administration (FCA or we) is considering revisions to our risk-based capital rules to more closely align minimum capital requirements with risks taken by Farm Credit System (FCS or System) institutions. We are seeking comments to facilitate the development of a proposed rule that would increase the risk sensitivity of the regulatory capital framework without unduly increasing regulatory burden. This ANPRM addresses possible modifications to our risk-based capital rules that are similar to the recent proposals of the other Federal financial regulatory agencies. We are also seeking comments on other aspects of our regulatory capital framework. DATES: You may send comments on or before November 19, 2007. ADDRESSES: We offer several methods for the public to submit comments. For accuracy and efficiency reasons, commenters are encouraged to submit comments by e-mail or through the Agency's Web site or the Federal eRulemaking Portal. Regardless of the method you use, please do not submit your comment multiple times via different methods. You may submit comments by any of the following methods: • *E-mail:* Send us an e-mail at *reg-comm@fca.gov.* • *Agency Web site:* *http://www.fca.gov.* Select “Legal Info,” then “Pending Regulations and Notices.” • *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. • *Mail:* Gary K. Van Meter, Deputy Director, Office of Regulatory Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090. • *Fax:*
(703)883-4477. Posting and processing of faxes may be delayed, as faxes are difficult for us to process and achieve compliance with section 508 of the Rehabilitation Act. Please consider another means to comment, if possible. You may review copies of comments we receive at our office in McLean, Virginia, or on our Web site at *http://www.fca.gov.* Once you are in the Web site, select “Legal Info,” and then select “Public Comments.” We will show your comments as submitted, but for technical reasons we may omit items such as logos and special characters. Identifying information that you provide, such as phone numbers and addresses, will be publicly available. However, we will attempt to remove e-mail addresses to help reduce Internet spam. FOR FURTHER INFORMATION CONTACT: Laurie Rea, Associate Director, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102-5090,
(703)883-4232, TTY
(703)883-4434, or Wade Wynn, Policy Analyst, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102-5090,
(703)883-4262, TTY
(703)883-4434, or Rebecca Orlich, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090,
(703)883-4020, TTY
(703)883-4020. SUPPLEMENTARY INFORMATION: I. Objectives The objective of this ANPRM is to gather information to facilitate the development of a comprehensive proposal that would: 1. Promote safe and sound banking practices and a prudent level of regulatory capital; 2. Improve the risk sensitivity of our regulatory capital requirements while avoiding undue regulatory burden; 3. To the extent appropriate, minimize differences in regulatory capital requirements between System institutions and other federally regulated banking organizations; 1 and 1 Banking organizations include commercial banks, savings associations, and their respective bank holding companies. 4. Foster economic growth in agriculture and rural America through the effective allocation of System capital. II. Background The FCA's risk-based capital framework is based, in part, on the “International Convergence of Capital Measurement and Capital Standards” (Basel I) as published by the Basel Committee on Banking Supervision (Basel Committee) 2 and is broadly consistent with the capital requirements of the other Federal financial regulatory agencies. 3 We first adopted a risk-based capital framework for the System as part of our 1988 regulatory capital revisions 4 required by the Agricultural Credit Act of 1987 5 and made subsequent revisions in 1997, 6 1998 7 and 2005. 8 Under the current capital framework, each on- and off-balance sheet credit exposure is assigned to one of five broad risk-weighting categories to determine the risk-adjusted asset base, which is the denominator for computing the permanent capital, total surplus, and core surplus ratios. Our minimum regulatory capital requirements are contained in subparts H and K of part 615 of our regulations. 9 2 The Basel Committee on Banking Supervision was established in 1974 by central banks with bank supervisory authorities in major industrialized countries. The Basel Committee formulates standards and guidelines related to banking and recommends them for adoption by member countries and others. All Basel Committee documents are available at *http://www.bis.org.* 3 We refer collectively to the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision as the “other Federal financial regulatory agencies.” 4 *See* 53 FR 39229 (October 6, 1988). 5 Pub. L. 100-233 (January 6, 1988), section 301. The 1987 Act amended many provisions of the Farm Credit Act of 1971, as amended, which is codified at 12 U.S.C. 2001 et seq. 6 *See* 62 FR 4429 (January 30, 1997). 7 *See* 63 FR 39219 (July 22, 1998). 8 *See* 70 FR 35336 (June 17, 2005). 9 12 CFR part 615, subparts H and K. The financial services industry has changed significantly since we adopted the Basel I-based capital framework for the System. Financial markets have become increasingly global and interconnected. Deregulation and consolidation have created larger, more complex financial institutions. Technological innovation has enabled such institutions to create increasingly sophisticated and complex financial products and services. Risk management and measurement techniques have also vastly improved. Financial regulators and industry participants agree that Basel I is no longer the best regulatory capital framework for many of the larger, more complex financial institutions and should be modernized to better reflect recent developments in banking and capital market practices. For a number of years, the Basel Committee has worked to develop a new accord to incorporate the recent advancements in the financial services industry. In June 2004, it published the “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” (Basel II) to promote improved risk measurement and management processes and more closely align capital requirements with risk. 10 In September 2006, the other Federal financial regulatory agencies issued an interagency notice of proposed rulemaking for implementing Basel II in the United States (U.S. Basel II). 11 U.S. Basel II would require core banks 12 and permit opt-in banks 13 (collectively referred to as Basel II banking organizations) to implement the new framework using the advanced internal ratings-based approach 14 to calculate the regulatory capital requirement for credit risk and the advanced measurement approach 15 to calculate the regulatory capital requirement for operational risk. 16 10 *See http://www.bis.org/publ/bcbsca.htm* for the 2004 Basel II Accord as well as updates in 2005 and 2006. 11 *See* 71 FR 55830 (September 25, 2006). This document is at *http://www.federalreserve.gov/generalinfo/base12/USImplementation.htm.* 12 Core banks are banking organizations that have consolidated total assets of $250 billion or more or have consolidated on-balance sheet foreign exposures of $10 billion or more. 13 Opt-in banks are banking organizations that do not meet the definition of a core bank but have the risk management and measurement capabilities to voluntarily implement the advanced approaches of Basel II with supervisory approval. 14 A banking organization computes internal estimates of certain key risk parameters for each credit exposure or pool of exposures and feeds the results into regulatory formulas to determine the risk-based capital requirement for credit risk. 15 Internal operational risk management systems and processes are used to compute risk-based capital requirements for operational risk. 16 The proposed rule seeks comments on whether Basel II banking organizations should be permitted to use other credit and operational risk approaches. Given the complexity and cost associated with adopting the advanced approaches, most U.S. banking organizations (collectively referred to as non-Basel II banking organizations) will not be required to implement, or choose to implement, U.S. Basel II. As a result, a bifurcated regulatory capital framework would be created in the United States, which could result in different regulatory capital charges for similar products offered by Basel II and non-Basel II banking organizations. Financial regulators, banking organizations, trade associations and other interested parties have raised concerns that the bifurcated structure could create a competitive disadvantage for non-Basel II banking organizations. In December 2006, the other Federal financial regulatory agencies addressed these concerns by issuing an interagency notice of proposed rulemaking (Basel IA) to improve the risk sensitivity of the existing Basel I-based capital framework for non-Basel II banking organizations. 17 Basel IA is intended to help minimize the potential differences in the regulatory minimum capital requirements of Basel II and non-Basel II banking organizations. The proposal would allow non-Basel II banking organizations the option of adopting all the revisions of Basel IA or continuing to use the existing Basel I-based capital framework. 18 Proposed Basel IA would:
(1)Increase the number of risk-weight categories to which credit exposures may be assigned;
(2)expand the use of external credit ratings to risk weight certain exposures;
(3)expand the range of recognized collateral and eligible guarantors;
(4)employ loan-to-value ratios to determine the risk weight of most residential mortgages;
(5)increase the credit conversion factor for some commitments with an original maturity of 1 year or less;
(6)assess a risk-based capital charge for early amortizations in securitizations of revolving exposures; and
(7)remove the 50-percent limit on the risk weight for certain derivative transactions. 19 17 71 FR 77446 (December 26, 2006). This document is at *http://www.federalreserve.gov/generalinfo/basel2/USImplementation.htm.* 18 A banking organization that chooses to adopt Basel IA can return to the Basel I-based capital framework, provided the change is approved by its primary Federal regulator and is not for the purpose of capital arbitrage. The other Federal financial regulatory agencies have stated that they do not expect banking organizations to alternate between the Basel I and Basel IA risk-based capital rules. 19 Neither the U.S. Basel II nor the Basel IA proposed rules would affect the existing leverage ratio or prompt corrective action standards. FCA's objective is to develop a proposed rule that better reflects recent advances in banking and capital market practices, minimizes potential competitive distortions that could result from a bifurcated regulatory capital framework in the United States, and more closely aligns our minimum capital requirements with the relative risk factors inherent in the System. We are considering whether we should modify our risk-based capital rules so that they are consistent with Basel IA where appropriate. However, we are also considering how the modifications should be tailored to fit the System's distinct borrower-owned lending cooperative structure and Government-sponsored enterprise
(GSE)mission. 20 We seek comments from all interested parties to help us develop a comprehensive proposal that would enhance our regulatory capital framework and increase the risk sensitivity of our risk-based capital rules without unduly increasing regulatory burden. 20 The System was created by Congress in 1916 and is the oldest GSE in the United States. System institutions provide credit and financially related services to farmers, ranchers, producers or harvesters of aquatic products, and farmer-owned cooperatives. They also make credit available for agricultural processing and marketing activities, rural housing, certain farm-related businesses, agricultural and aquatic cooperatives, rural utilities, and foreign and domestic entities in connection with international agricultural trade. III. Questions When addressing the following questions, we ask commenters to consider the overarching objectives of Basel II and Basel IA to more closely align capital with the specific risks taken by the financial institution rather than relying on a “one-size-fits-all” approach for determining regulatory minimum risk-based capital requirements. The System is a specialized lender to agriculture and rural America with a unique structure and risk profile. One of our objectives is to create a more dynamic risk-based capital framework that is more sensitive to the relative risks inherent in System lending and other mission-related activities. We seek comments on specific criteria that might be used to determine appropriate risk weights that meet this objective without creating undue burden. Specifically, we ask that you support your comments and recommendations with data, to the extent possible, in response to our questions. 21 21 Please note that any data you submit will be made available to the public in our rulemaking file. 22 FCA's risk-weight categories are set forth in 12 CFR 615.5211. A. Increase the Number of Risk-Weight Categories Our existing risk-based capital rules assign exposures to one of five risk-weight categories: 0, 20, 50, 100, and 200 percent. 22 Basel IA proposes to add three new risk-weight categories to allow for greater differentiation of credit risk and solicits comment on whether a 10-percent risk-weight category would be appropriate for very low risk assets. The proposed risk-weight categories are 35, 75, and 150 percent. The 35 and 75 percent risk-weight categories would provide the opportunity to increase the risk sensitivity for those exposures that are currently assigned a higher risk-based capital charge than may be warranted. The 150-percent risk-weight category would provide a more appropriate risk-based capital charge for higher risk exposures than is currently permitted under our existing capital rules. *Question 1: We seek comment on what additional risk-weight categories, if any, we should consider for assigning risk weights to System institutions' on- and off-balance sheet exposures. If additional risk-weight categories are added, what assets should be included in each new risk-weight category?* B. Use of External Credit Ratings to Risk-Weight Exposures 1. Direct Exposures In recent years, the FCA has permitted System institutions to use external ratings to assign risk weights to certain credit exposures linked to nationally recognized statistical rating organizations (NRSROs) ratings. 23 For example, in March 2003, we adopted an interim final rule that permitted System institutions to use NRSRO ratings to risk-weight highly rated investments in non-agency asset-backed securities
(ABS)and mortgage-backed securities
(MBS)to the 20-percent risk-weight category. 24 In April 2004, we expanded the use of NRSRO ratings to assign risk weights to loans to other financing institutions. 25 In June 2005, we adopted a ratings-based approach to assign risk weights to recourse obligations, direct credit substitutes (DCS), residual interests (other than credit-enhancing interest-only strips), and other ABS and MBS investments. 26 Furthermore, we recently permitted the use of NRSRO ratings to assign risk weights to certain electric cooperative credit exposures. 27 23 An NRSRO is a credit rating organization that is recognized by and registered with the Securities and Exchange Commission
(SEC)as a nationally recognized statistical rating organization. *See* 12 CFR 615.5201. *See* also Pub. L. 109-291. 24 *See* 68 FR 15045 (March 28, 2003). 25 Other financing institutions are non-System financial institutions that borrow from System banks. *See* 69 FR 29852 (May 26, 2004).) 26 These changes are consistent with those of the other Federal financial regulatory agencies. *See* 70 FR 35336 (June 17, 2005). 27 *See* “Revised Regulatory Capital Treatment for Certain Electric Cooperatives Assets,” FCA Bookletter BL-053 (February 12, 2007). Basel IA proposes to expand the use of NRSRO ratings to determine the risk-based capital charge for exposures to sovereign entities, 28 non-sovereign entities, 29 and securitizations, as displayed in Table 1 (long-term exposures) and Table 2 (short-term exposures) set forth below. External ratings for direct exposures to sovereign entities would be based on the external rating of the exposure or the sovereign entity's issuer rating if the exposure is unrated. Direct exposures to non-sovereign entities and securitizations would be based only on the external rating of the exposure. 28 A sovereign entity is defined as a central government, including its agencies, departments, ministries, and the central bank. A sovereign entity does not include state, provincial, or local governments, or commercial enterprises owned by a central government. 29 Non-sovereign entities include securities firms, insurance companies, bank holding companies, savings and loan holding companies, multilateral lending and regional development institutions, partnerships, limited liability companies, business trusts, special purpose entities, associations and other similar organizations. 30 71 FR 77452 (December 26, 2006). Table 1.—Basel IA Proposed Risk Weights Based on External Ratings for Long-Term Exposures 30 Long-term rating category Example Sovereign risk weight (in percent) Non-sovereign risk weight (in percent) Securitization exposure* risk weight (in percent) Highest investment grade rating AAA 0 20 20 Second highest investment grade rating AA 20 20 20 Third highest investment grade rating A 20 35 35 Lowest investment grade rating-plus BBB+ 35 50 50 Lowest investment grade rating BBB 50 75 75 Lowest investment grade rating-minus BBB− 75 100 100 One category below investment grade BB+, BB 75 150 200 One category below investment grade-minus BB− 100 200 200 Two or more categories below investment grade B, CCC 150 200 (*) Unrated** n/a 200 200 (*) * A securitization exposure includes ABS and MBS, recourse obligations, DCS, and residuals (other than a credit-enhancing interest-only strip). For long-term securitization exposures that are externally rated more than one category below investment grade, short-term exposures that are rated below investment grade, or any unrated securitization exposures, the existing risk-based capital treatment as described in the agencies' recourse rule would be used. ** Unrated sovereign exposures and unrated debt securities issued by non-sovereigns would receive the risk weight indicated in Tables 1 and 2. Other unrated exposures, for example, unrated loans to non-sovereigns, would continue to be risk weighted under the existing risk-based capital rules. Table 2.—Basel IA Proposed Risk Weights Based on External Ratings for Short-Term Exposures 31 Short-term rating category Example Sovereign risk weight (in percent) Non-sovereign risk weight (in percent) Securitization exposure* risk weight (in percent) Highest investment grade rating A-1, P-1 0 20 20 Second-highest investment grade rating A-2, P-2 20 35 35 Lowest investment grade A-3, P-3 50 75 75 Unrated** n/a 100 100 * * A securitization exposure includes ABS and MBS, recourse obligations, DCS, and residuals (other than a credit-enhancing interest-only strip). For long-term securitization exposures that are externally rated more than one category below investment grade, short-term exposures that are rated below investment grade, or any unrated securitization exposures, the existing risk-based capital treatment as described in the agencies' recourse rule would be used. ** Unrated sovereign exposures and unrated debt securities issued by non-sovereigns would receive the risk weight indicated in Tables 1 and 2. Other unrated exposures, for example, unrated loans to non-sovereigns, would continue to be risk-weighted under the existing risk-based capital rules. System institutions provide financing to agriculture and rural America through a variety of lending 32 and investment 33 products. They also hold highly rated liquid investments to manage liquidity, short-term surplus funds, and interest rate risk. Our existing risk-based capital rules assign most agricultural and rural business 34 loans and mission-related investment assets to the 100-percent risk-weight category unless the risk exposure is mitigated by an acceptable guarantee or collateral. The FCA is considering the expanded use of NRSRO ratings to assign risk weights to other externally rated credit exposures in the System, such as corporate debt securities and loans. 31 71 FR 77452 (December 26, 2006). 32 The Farm Credit Banks provide wholesale funding to their affiliated associations who, in turn, make retail loans to eligible borrowers. CoBank, ACB, provides both wholesale funding to its affiliated associations and retail loans to cooperatives and other eligible borrowers. 33 System banks and associations are permitted to make mission-related investments to agriculture and rural America. *See* “Investments in Rural America—Pilot Investment Programs,” FCA Informational Memorandum (January 11, 2005). 34 Agricultural businesses include farmer-owned cooperatives, food and fiber processors and marketers, manufacturers and distributors of agricultural inputs and services, and other agricultural-related businesses. Rural businesses include electric utilities and other energy-related businesses, communication companies, water and waste disposal businesses, ethanol plants, and other rural-related businesses. *Question 2: We seek comments on all aspects of the appropriateness of using NRSRO ratings to assign risk weights to credit exposures. If we expand the use of external ratings, how should we align the risk-weight categories with NRSRO ratings to determine the appropriate capital charge for externally rated credit exposures? Should any externally rated positions be excluded from this new ratings-based approach?* 2. Recognized Financial Collateral Our current risk-based capital rules assign lower risk weights to exposures collateralized by:
(1)Cash held by a System institution or its funding bank;
(2)securities issued or guaranteed by the U.S. Government, its agencies or Government-sponsored agencies;
(3)securities issued or guaranteed by central governments in other OECD 35 countries;
(4)securities issued by certain multilateral lending or regional development institutions; or
(5)securities issued by qualifying securities firms. 35 OECD stands for the Organization for Economic Cooperation and Development. The OECD is an international organization of countries that are committed to democratic government and the market economy. An up-to-date listing of member countries is available at *http://www.oecd.org* or *http://www.oecdwash.org.* The banking industry has suggested that regulators recognize a wider variety of collateral types for the purpose of reducing risk-based capital requirements. In response, the other Federal financial regulatory agencies have proposed to expand the types of eligible collateral for risk-weighting purposes. Basel IA assigns lower risk weights to exposures collateralized by:
(1)Securities issued or guaranteed by sovereigns that are externally rated at least investment grade by an NRSRO ( *e.g.* , BBB- or Baa3) or the sovereign entity's issuer rating if the security is not rated; or
(2)securities issued by non-sovereign entities that are externally rated at least investment grade by an NRSRO ( *e.g.* , BBB or Baa2). The collateralized portion of the exposure would be assigned a risk weight (as listed in Table 1 and Table 2) according to the external rating of the collateral. The uncollateralized portion of the exposure would be assigned a risk weight according to the external rating of the exposure (or a sovereign entity's issuer rating where applicable). * Question 3: We seek comment on whether recognizing additional types of eligible collateral would improve the risk sensitivity of our risk-based capital rules without being overly burdensome. We also seek comment on what additional types of collateral, if any, we should consider and what effect the collateral should have on the risk weighting of System exposures. * 3. Eligible Guarantors Our existing capital rules permit the use of third party guarantees to lower the risk weight of certain exposures. Guarantors include:
(1)The U.S. Government, its agencies or Government-sponsored agencies;
(2)U.S. state and local governments;
(3)central governments and banks in OECD countries;
(4)central governments in non-OECD countries (local currency exposures only);
(5)banks in non-OECD countries (short-term claims only);
(6)certain multilateral lending and regional development institutions; and
(7)qualifying securities firms. Basel IA proposes to include guarantees from any entity that has long-term senior debt (without credit enhancements) rated at least investment grade by an NRSRO or, if the entity is a sovereign, an issuer rating that is at least investment grade ( *e.g.* , BBB- or Baa3 for sovereigns and BBB or Baa2 for non-sovereigns). 36 The guaranteed portion of the exposure would be assigned a risk weight (as detailed in Table 1) according to the NRSRO rating of the eligible guarantor's long-term senior debt or, if the guarantor is a sovereign and its long-term debt is not rated, then the exposure would be assigned a risk weight according to the NRSRO rating of the sovereign. Non-guaranteed portions of the exposure would be assigned to the external rating of the exposure (or a sovereign entity's issuer rating where applicable). 36 *See* 71 FR 77453 (December 26, 2006). A recognized third party guarantee would have to:
(1)Be written and unconditional, and if the third party is a sovereign, be backed by the full faith and credit of the sovereign;
(2)cover all or a pro rata portion of contractual payments of the obligor on the reference exposure;
(3)give the beneficiary a direct claim against the protection provider;
(4)be non-cancelable by the protection provider for reasons other than the breach of the contract by the beneficiary;
(5)be legally enforceable against the protection provider in a jurisdiction where the protection provider has sufficient assets against which a judgment may be attached and enforced; and
(6)require the protection provider to make payment to the beneficiary on the occurrence of a default (as defined in the guarantee) of the obligor on the reference exposure without first requiring the beneficiary to demand payment from the obligor. *Question 4: We seek comment on what additional types of third party guarantees, if any, we should recognize and what effect such guarantees should have on the risk weighting of System exposures.* C. Direct Loans to System Associations The FCA is considering ways to better align our risk-based capital requirements for direct loans with System associations. System banks make direct loans to their affiliated associations who, in turn, make retail loans to eligible borrowers. Our current risk-based capital rules assign a 20-percent risk weight to direct loans at the bank level and another risk weight (depending upon the type of loan) to retail loans at the association level. 37 The 20-percent risk weight is intended to recognize the risks to the banks associated with lending to their affiliated associations. The other Federal financial regulatory agencies also assign a 20-percent risk weight to similar GSE and OECD depository institution exposures. 38 We are exploring methods to improve the risk sensitivity of our risk-based capital rules by assigning different risk weights to direct loan exposures based on the System association's distinct risk profile. 37 Our risk-based capital rules also assign a 20-percent risk weight to similar GSE and OECD depository institution exposures. 38 Basel IA would retain the 20-percent risk weight for these types of exposures. *See* 71 FR 77451 and 77454 (December 26, 2006). *Question 5: We seek comment on what evaluative criteria or methods we might use to assign risk weights to direct loans to System associations. How should the criteria be used to adjust the risk weight as the quality of the direct loan changes over time?* D. Small Agricultural and Rural Business Loans Our existing risk-based capital rules assign small agricultural and rural business loans to the 100-percent risk-weight category unless the credit risk is mitigated by an acceptable guarantee or acceptable collateral. The other Federal financial regulatory agencies are exploring options to permit small business loans to qualify for a 75-percent risk weight. 39 They are also considering criteria for short-term loans that do not amortize, such as working capital loans and other revolving lines of credit. 40 39 *See* 71 FR 77462-77463 (December 26, 2006). The agencies suggest the following criteria for qualifying loans:
(1)Total credit exposure to the business must not exceed $1 million;
(2)loan(s) must be personally guaranteed by the owner(s) of the business and fully collateralized by the assets of the business;
(3)loan(s) must be prudently underwritten, performing, and fully amortize within 7 years;
(4)businesses must maintain a minimum debt service coverage ratio of 1.3;
(5)loan(s) must not have been restructured; and
(6)proceeds are not to be used to service any other outstanding loan obligation. 40 For example, loans or draws from a revolving line of credit that mature in 18 months could forgo the amortization requirement provided the loan is to be repaid from anticipated proceeds of previously established financial transactions and the proceeds are pledged for the repayment of the loan. *Question 6: We seek comment on what approaches we might use to improve the risk sensitivity of our risk-based capital rules for small agricultural and rural business loans. More specifically, what qualifying criteria might we use to assign small agricultural and rural business loans to risk-weight categories of less than 100 percent?* E. Loans Secured by Liens on Real Estate 1. First-Lien Loans The FCA is considering ways to use loan-to-value ratios
(LTV)and other criteria to determine the risk-based capital charges for farm real estate and qualified residential loans. Our existing capital rules assign farm real estate loans to the 100-percent risk-weight category and qualified residential loans 41 to the 50-percent risk-weight category. Basel IA proposes to risk weight first-lien residential mortgages, including mortgages held for sale and mortgages held in portfolio, based on LTV as outlined in Table 3 (farm real estate loans are not included in this table). 42 Basel IA proposes to include the risk-mitigating effects of loan-level private mortgage insurance in the calculation of LTV, provided the loan-level insurer is not affiliated with the banking organization and has long-term senior debt (without credit enhancement) externally rated at least the third highest investment grade by an NRSRO ( *e.g.* , AA or Aa2). 41 Qualified residential loans are rural home loans (as defined by 12 CFR 613.3030) and single-family residential loans to bona fide farmers, ranchers, or producers or harvesters of aquatic products that meet the requirements listed in 12 CFR 615.5201. 42 *See* 71 FR 77456 (December 26, 2006). Basel IA proposes to require institutions to calculate LTV at origination using the lower of the purchase price of the property or the value at origination in conformance with appraisal regulations and real estate lending guidelines. LTV would be updated quarterly to reflect any decrease in the principal balance, or if a negative amortization loan, an increase in the principal balance. Property values are updated only if a mortgage is refinanced and the banking organization extends additional funds. 43 *See* 71 FR 77455 (December 26, 2006). Table 3.—Basel IA Proposed LTV and Risk Weights for 1-4 Family First Liens 43 Loan-to-value ratio (in percent) Risk weight (in percent) 60 or less 20 Greater than 60 and less than or equal to 80 35 Greater than 80 and less than or equal to 85 50 Greater than 85 and less than or equal to 90 75 Greater than 90 and less than or equal to 95 100 Greater than 95 150 The other Federal financial regulatory agencies are also evaluating approaches that would consider borrower creditworthiness in conjunction with LTV to determine the appropriate risk weight for first-lien mortgages. 44 Borrowers would be grouped by credit history using default odds obtained from credit reporting agencies' validation charts. A banking organization would determine a borrower's default odds by mapping the borrower's credit score to the credit reporting agencies' validation charts. 44 *See* 71 FR 77456 (December 26, 2006). *Question 7: We seek comment on all aspects of using LTV to determine the risk-based capital charge for farm real estate and qualified residential loans. Specifically, we ask that you address farm real estate and qualified residential loans separately when answering the following questions:* • *How might we determine the value* ( *e.g.* , the denominator of the LTV) of the real estate at origination? • *How should PMI or guarantees be treated in the calculation of LTV?* • *How should LTV be adjusted over time?* • *How should LTV be mapped to risk-weight categories?* • *How might loan characteristics such as loan size, availability of credit scores, and payment frequency be used in conjunction with LTV?* • *How might borrower creditworthiness be used in conjunction with LTV and how might they be mapped to risk-weight categories?* 2. Junior-Lien Loans Our existing regulations permit System institutions to make short- and intermediate-term loans secured by a junior lien on a property as long as the System institution also holds the first lien on the property. Further, System institutions can make loans secured by stand-alone junior liens, provided the financing is used exclusively for repairs, remodeling, or other improvements to qualified rural homes. 45 Loans secured by junior liens are risk-weighted at 50 percent if the institution holds a first lien on a mortgage that is classified as a qualified residential loan. All other loans secured by junior liens are risk-weighted at 100 percent. 45 *See* 12 CFR 614.4200(b)(4). Basel IA proposes to risk-weight junior-lien mortgages based on a combined LTV. 46 For example, if a banking organization holds a first lien on a property, then the junior lien loan would be added to the first lien to determine the combined LTV and assigned the appropriate risk weight as outlined in Table 3. 47 For stand-alone junior liens, the banking organization would follow the same procedures, except the junior-lien loan would be combined with all senior-lien loans (all principal amounts outstanding would be aggregated) to determine the LTV and assigned the appropriate risk weight as outlined in Table 4. 46 *See* 71 FR 77458-77459 (December 26, 2006). 47 The steps for determining the risk-adjusted value of the unfunded portion of a junior-lien loan ( *e.g.* , a line of credit) would be as follows:
(1)The unfunded commitment is multiplied by the appropriate credit conversion factor to determine the on-balance sheet credit equivalent;
(2)the on-balance sheet credit equivalent is added to the first lien and the funded portion of the junior-lien loan to determine the combined LTV; and
(3)the combined LTV is assigned the appropriate risk weight as outlined in Table 3. The unfunded commitment would be adjusted accordingly as the borrower utilizes the junior-lien loan. 48 *See* 71 FR 77459 (December 26, 2006). Table 4.—Basel IA Proposed LTV and Risk Weights for 1-4 Family Junior Liens 48 Loan-to-value ratio (in percent) Risk weight (in percent) 60 or less 75 Greater than 60 and less than or equal to 90 100 Greater than 90 150 *Question 8: We seek comment on all aspects of using combined LTV to risk-weight junior-lien loans. Specifically, how should combined LTV be calculated at origination and adjusted over time? How should the combined LTVs be used to assign stand-alone junior-lien loans to risk-weight categories?* F. Short- and Long-Term Commitments Under § 615.5212, off-balance sheet commitments are generally risk-weighted in two steps:
(1)The off-balance sheet commitment is multiplied by a credit conversion factor
(CCF)49 to determine its on-balance sheet credit equivalent; and
(2)the on-balance sheet credit equivalent is assigned to the appropriate risk-weight category in § 615.5211 according to the obligor, after considering any applicable collateral and guarantees. 50 Basel IA proposes to retain the zero-percent CCF for commitments that are unconditionally cancelable 51 but assign a 10-percent CCF to all other short-term commitments. Further, Basel IA seeks comment on alternative approaches that would apply a single CCF of 20 percent to all short- and long-term commitments that are not unconditionally cancelable. 49 A CCF is a number by which an off-balance sheet item is multiplied to obtain a credit equivalent before placing the item in a risk-weight category. 50 50 Our existing regulations assign a zero-percent CCF to unused commitments with an original maturity of 14 months or less. Unused commitments with an original maturity of greater that 14 months can also receive a zero-percent CCF provided the commitment is unconditionally cancelable and the System institution has the contractual right to make a separate credit decision before each drawing under the lending arrangement. All other unused commitments with an original maturity of greater than 14 months are assigned a 50-percent CCF. 51 An unconditionally cancelable commitment is one that can be canceled for any reason at any time without prior notice. *Question 9: We seek comment on what approaches we might use to risk weight short- and long-term commitments that are not unconditionally cancelable.* G. Adjusting Risk Weights on Exposures Over Time The FCA welcomes comment on additional approaches or criteria (other than NRSRO credit ratings and LTVs addressed in previous sections) that might be used to adjust the risk weight of exposures throughout the life of the asset. Our existing risk-based capital rules assign a static risk weight to assets within a given asset class without allowing for risk-weight adjustments as asset quality improves or deteriorates. For example, most loans to System borrowers are risk-weighted at 100 percent throughout the life of the loan without making risk-weight adjustments based on credit classifications or other credit performance factors. *Question 10: We seek comment on what methods we might use to adjust the risk weight of credit exposures as the asset quality or default probability changes over time.* H. Capital Charge for Operational Risk The FCA welcomes comments on possible approaches for determining a capital charge for operational risk. The broad risk-weighting categories under our existing capital rules are intended to implicitly cover operational and other types of risks. As we move to a more risk-sensitive capital framework, it may be more appropriate to apply an explicit capital charge for operational risk, especially to cover risks associated with off-balance sheet activity. Basel IA is designed to implicitly cover risks other than credit risk, and therefore, does not propose an explicit capital charge for operational risk. *Question 11: We seek comment on whether we should consider a risk-based capital charge for operational risk.* I. Capital Leverage Ratio We are considering whether we should supplement our existing risk-based capital rules with a minimum capital leverage ratio requirement for all FCS institutions to further promote the safety and soundness of the System. Our existing capital regulations require System banks to maintain a minimum net collateral ratio
(NCR)52 of 103 percent 53 but do not impose a capital leverage ratio on System associations. The NCR provides a level of protection for operating and other forms of risk at System banks, but it does not differentiate higher quality from lower quality capital. The other Federal financial regulatory agencies currently supplement their risk-based capital rules with a leverage ratio of Tier 1 capital to total assets (Tier 1 leverage ratio). 54 The Tier 1 leverage ratio consists of only the most reliable and permanent forms of capital such as common stock, non-cumulative perpetual preferred stock, and retained earnings. Neither the U.S. Basel II nor the Basel IA proposed rules would affect the existing leverage ratio. 52 The net collateral ratio is a bank's net collateral as defined by 12 CFR 615.5301(c) divided by the bank's adjusted total liabilities. 53 *See* 12 CFR 615.5335(a). 54 *See* 12 CFR 3.6(b) and (c); 12 CFR part 208, appendix B and 12 CFR part 225, appendix D; 12 CFR 325.3; and 12 CFR 567.8. *Question 12: We seek comment on whether our capital rules should include a minimum capital leverage ratio requirement for all System institutions. We also seek comment on changes, if any, that should be made to the existing regulatory minimum NCR requirement applicable to System banks that would make it more comparable to the Tier 1 ratio used by the other Federal financial regulatory agencies.* J. Regulatory Capital Directives 55 55 12 CFR part 615, subpart M. We are considering whether we should modify our capital rules to specify potential early intervention criteria for the issuance of capital directives. Currently, FCA has the discretion to issue a capital directive 56 when an institution's capital is insufficient. The FCA, however, has not defined capital or other financial early intervention thresholds to require an institution to take corrective action as described in § 615.5355. Early intervention approaches have been used in other contexts, including the System's Market Access Agreement and the statutory requirements applicable to other regulated financial institutions. An early intervention capital directive framework could provide a clearer indication of when we would impose additional and increasing supervisory oversight on an institution to address continuing deterioration in its financial condition and capital position from credit, interest rate, or other financial risks. 56 A capital directive is defined in § 615.5355(a) as an order issued to an institution that does not have or maintain capital at or greater than the minimum ratios set forth in 12 CFR 615.5205, 615.5330, and 615.5335, or established under subpart L of part 615, or by a written agreement under an enforcement or supervisory action, or as a condition of approval of an application. The FCA's authority is set forth in sections 4.3(b)(2) and 4.3A(e) of the Farm Credit Act (12 U.S.C. 2154(b)(2) and 2154a(e)). *Question 13: We seek comment on revising our current capital directive regulations to include an early intervention framework. We also seek comment on potential financial thresholds, such as capital ratios or risk measures, that would trigger an FCA capital directive action.* K. Multi-Dimensional Regulatory Structure As stated above, one of FCA's objectives is to implement a revised capital framework that improves the risk sensitivity of our capital rules while avoiding undue regulatory burden. There are currently five banks and 95 associations in the System with varying degrees of asset size, complexity of operations, and sophistication in their risk management practices. Some System institutions have the risk management capabilities to apply more complex, risk-sensitive regulatory capital requirements than other System institutions. It may be appropriate for the FCA to adopt more than one set of capital rules to account for these differences. However, this approach could result in different capital requirements for the same type of transaction and increase examination and oversight costs. The other Federal financial regulatory agencies are proposing more than one set of capital rules for the financial institutions they regulate. For example, implementation of U.S. Basel II would be limited, for the most part, to the largest, internationally active banks that meet certain infrastructure requirements. Basel IA would permit non-Basel II banking organizations the option of applying the revised Basel IA-based capital framework or remaining subject to the existing Basel I-based capital framework. 57 Consequently, a trifurcated regulatory capital framework would be created in the United States. 57 A banking organization that chooses to apply Basel IA must do so in its entirety. However, a banking organization has the option of risk weighting existing mortgage loans using the existing Basel I-based capital rules. This option would apply only to those mortgage loans that the banking organization owned at the time it chose to apply Basel IA. While our expectation is to implement a revised capital framework similar to Basel IA, we also recognize that some aspects of Basel II may be appropriate for the larger, more complex System institutions. However, we are still reviewing Basel II and its potential application to the System. Therefore, we are not seeking comments on Basel II at this time. Rather, we are considering the overall regulatory capital framework for the System in light of the changes occurring in the financial services industry such as the Basel II and Basel IA proposed rules and recent best practices for economic capital modeling. *Question 14: We seek comment on the most appropriate risk-based capital framework for the System and the reasons we should implement one framework over another. Should we consider creating a uniform regulatory capital structure for the System or a multi-dimensional regulatory structure and allow each System institution the option of choosing which capital framework it will apply? How might this new risk-based capital framework increase the costs or regulatory burden to the System? Would the increased costs be justified by improved risk sensitivity, risk management, and more efficient capital allocation?* *Question 15: Additionally, we seek comment on any other methods that may be used to increase the risk sensitivity of our risk-based capital rules.* Dated: June 15, 2007. Roland E. Smith, Secretary, Farm Credit Administration Board. [FR Doc. E7-11990 Filed 6-20-07; 8:45 am] BILLING CODE 6705-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28246; Directorate Identifier 2007-CE-048-AD] RIN 2120-AA64 Airworthiness Directives; Cirrus Design Corporation Models SR20 and SR22 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive
(AD)for certain Cirrus Design Corporation
(CDC)Models SR20 and SR22 airplanes. This proposed AD would require you to inspect and, as necessary, adjust the aileron and rudder rigging and would require you to modify, inspect, and, as necessary, adjust the rudder-aileron interconnect system. This proposed AD results from an on-the-ground jamming of the aileron and rudder controls on a Model SR20 airplane, which resulted in loss of rudder and aileron flight controls. We are proposing this AD to prevent the possibility of jamming of the rudder-aileron interconnect system, which may result in loss of rudder and aileron flight controls. DATES: We must receive comments on this proposed AD by August 20, 2007. ADDRESSES: Use one of the following addresses to comment on this proposed AD: • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. For service information identified in this proposed AD, contact Cirrus Design Corporation, 4515 Taylor Circle, Duluth, Minnesota 55811; telephone:
(218)727-2737; Internet address: *http://www.cirrusdesign.com.* FOR FURTHER INFORMATION CONTACT: Wess Rouse, Aerospace Engineer, 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone:
(847)294-8113; fax:
(847)297-7834. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number, “FAA-2007-28246; Directorate Identifier 2007-CE-048-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive concerning this proposed AD. Discussion We received notification from CDC of an on-the-ground jamming of the aileron and rudder controls under full rudder and aileron cross control inputs on a Model SR20 airplane. During a turn from the taxiway onto the runway for takeoff, the pilot applied full rudder and full opposite aileron for a turn with a crosswind. He then found he could no longer move the controls. Subsequent examination of the airplane revealed the rudder-aileron interconnect system had become locked between the two control cables. This condition, if not corrected, could result in the possible jamming of the rudder-aileron interconnect system, which may result in loss of rudder and aileron flight controls. Relevant Service Information We have reviewed CDC Service Bulletin No. SB 2X-27-14 R1, Issued: May 9, 2007, Revised: May 24, 2007. The service information describes procedures for inspecting the aileron and rudder rigging and modifying, inspecting, and adjusting, as necessary, the rudder interconnect system. FAA's Determination and Requirements of the Proposed AD We are proposing this AD because we evaluated all information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design. This proposed AD would require you to inspect and, as necessary, adjust the aileron and rudder rigging, and would require you to modify, inspect, and, as necessary, adjust the rudder-aileron interconnect system. This proposed AD increases mechanical clearances within the rudder-aileron interconnect system and ensures correct rigging/adjustment of the ailerons, the rudder, and the rudder-aileron interconnect. Costs of Compliance We estimate that this proposed AD would affect 2,387 airplanes in the U.S. registry. We estimate the following costs to do the proposed inspections, modification, and any adjustments that may be necessary based on the results of the proposed inspections: Labor cost Parts cost Total cost per airplane Total cost on U.S. operators 1 work-hour × $80 per hour = $80 $18 $98 $233,926 Note: CDC will provide warranty credit to the extent noted in Service Bulletin No. SB 2X-27-14 R1, Issued May 9, 2007, Revised May 24, 2007. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. 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 proposed AD and placed it in the AD docket. Examining the AD Docket You may examine the AD docket that contains the proposed AD, the regulatory evaluation, any comments received, and other information 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 Docket Office (telephone
(800)647-5527) is located at the street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Cirrus Design Corporation:** Docket No. FAA-2007-28246; Directorate Identifier 2007-CE-048-AD. Comments Due Date
(a)We must receive comments on this airworthiness directive
(AD)action by August 20, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Model SR20 airplanes, serial numbers
(SN)1005 through 1796, and Model SR22 airplanes, SN 0002 through 2333, SN 2335 through 2419, and SN 2421 through 2437, that are certificated in any category. Unsafe Condition
(d)This AD results from an on-the-ground jamming of the aileron and rudder controls on a Model SR20 airplane. We are issuing this AD to prevent the possibility of jamming of the rudder-aileron interconnect system, which may result in loss of rudder and aileron flight controls. Compliance
(e)To address this problem, you must do the following, unless already done: Actions Compliance Procedures Inspect and, as necessary, adjust the aileron and rudder rigging and modify, inspect, and, as necessary, adjust the rudder-aileron interconnect system Within the next 25 hours time-in-service
(TIS)after the effective date of this AD or within the next 3 months after the effective date of this AD, whichever occurs first Follow Cirrus Service Bulletin No. SB 2X-27-14 R1, Issued: May 9, 2007, Revised: May 24, 2007. Note: Temporary revisions to the airplane maintenance manuals (AMM), SR20 AMM Temporary Revision No. 27-1 and SR22 AMM Temporary Revision No. 27-1, both dated May 9, 2007, contain information pertaining to this subject.
(f)Compliance will be acceptable if the above actions are done by following the procedures described in Cirrus Service Bulletin No. SB 2X-27-14, Issued: May 9, 2007. You may take “unless already done” credit, and no further action per this AD is necessary. Alternative Methods of Compliance (AMOCs)
(g)The Manager, Chicago Aircraft Certification Office (ACO), 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: Wess Rouse, Aerospace Engineer, FAA, 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone:
(847)294-8113; fax:
(847)297-7834. 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. Related Information
(h)To get copies of the service information referenced in this AD, contact Cirrus Design Corporation, 4515 Taylor Circle, Duluth, Minnesota 55811; telephone:
(218)727-2737; Internet address: *http://www.cirrusdesign.com.* To view the AD docket, go to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, or on the Internet at *http://dms.dot.gov.* The docket number is Docket No. FAA-2007-28246; Directorate Identifier 2007-CE-048-AD. Issued in Kansas City, Missouri, on June 14, 2007. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12006 Filed 6-20-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [REG-149036-04] RIN 1545-BG75 Application of Section 6404(g) of the Internal Revenue Code Suspension Provisions AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking and notice of public hearing. SUMMARY: This document proposes regulations for the suspension of interest, penalties, additions to tax, or additional amounts under section 6404(g) of the Internal Revenue Code
(Code)that explain the general rules for suspension as well as exceptions to those general rules. The proposed regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998, the American Jobs Creation Act of 2004, the Gulf Opportunity Zone Act of 2005, and the Tax Relief and Health Care Act of 2006. The proposed regulations affect individual taxpayers who file timely income tax returns with respect to whom the IRS does not timely provide a notice specifically stating an additional tax liability and the basis for that liability. This document also provides a notice of public hearing on the proposed regulations. DATES: Written or electronic comments must be received by September 19, 2007. Outlines of topics to be discussed at the public hearing scheduled for October 11, 2007, at 10 a.m. must be received by September 20, 2007. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-149036-04), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-149036-04), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS REG-149036-04). The public hearing will be held in the Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Stuart Spielman,
(202)622-7950; concerning submissions of comments, the hearing, or to be placed on the building access list to attend the hearing, Richard Hurst,
(202)622-7180 (not toll-free numbers) or *Richard.A.Hurst@irscounsel.treas.gov.* SUPPLEMENTARY INFORMATION: Background This document amends the Procedure and Administration Regulations (26 CFR part 301) by adding rules relating to the suspension of interest, penalties, additions to tax, or additional amounts under section 6404(g). Section 6404(g) was added to the Code by section 3305 of the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206 (112 Stat. 685, 743) (RRA 98), effective for taxable years ending after July 22, 1998. Section 6404(g) was amended by section 903(c) of the American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418, 1652) (AJCA), enacted on October 22, 2004; by section 303 of the Gulf Opportunity Zone Act of 2005, Public Law 109-135 (119 Stat. 2577, 2608-09) (GOZA), enacted on December 21, 2005; by section 426(b) of the Tax Relief and Health Care Act of 2006, Public Law 109-432 (120 Stat. 2922, 2975), enacted on December 20, 2006; and by section 8242 of the Small Business and Work Opportunity Tax Act of 2007, Public Law 110-28 (121 Stat. 112, 200), enacted on May 25, 2007. The Treasury Department and the Internal Revenue Service are aware that questions have been raised regarding the effective date of the changes made by the Small Business and Work Opportunity Act of 2007 and are considering further guidance. These regulations are prescribed under section 7805. Explanation of Provisions General Rule If an individual taxpayer files a Federal income tax return on or before the due date for that return (including extensions), and if the IRS does not timely provide a notice to that taxpayer specifically stating the taxpayer's liability and the basis for that liability, then the IRS must suspend any interest, penalty, addition to tax, or additional amount with respect to any failure relating to the return that is computed by reference to the period of time the failure continues and that is properly allocable to the suspension period. A notice is timely if provided before the close of the eighteen-month period (thirty-six month period, in the case of notices provided after November 25, 2007) beginning on the later of the date on which the return is filed or the due date of the return without regard to extensions. The suspension period begins on the day after the close of the eighteen-month period (or thirty-six month period) and ends twenty-one days after the IRS provides the notice. This suspension rule applies separately with respect to each item or adjustment. Amended Returns The proposed regulations provide guidance on applying section 6404(g) to amended returns and other signed documents that show an increased tax liability, as well as to amended returns that show a decreased tax liability. If, on or after December 21, 2005, a taxpayer provides to the IRS an amended return or other signed written document showing an additional tax liability, then the eighteen-month period (or thirty-six month period) does not begin to run with respect to the items that gave rise to the additional tax liability until that return or other signed written document is provided to the IRS. This rule is mandated by GOZA section 303(b). Except as provided in GOZA section 303(b), the filing of an amended return has no effect on the running of the eighteen-month period (or thirty-six month period) under section 6404(g). Accordingly, if a taxpayer files an amended return or other signed written document showing a decrease in tax liability and the IRS at any time proposes to adjust the changed item or items, any interest, penalty, addition to tax, or additional amount with respect to the changed item or items on the amended return or other signed written document will not be suspended. If married taxpayers file a return claiming a change in filing status to married filing jointly, the general rule authorizing suspension will not apply unless each spouse's separate return, if required to be filed, was timely. An amended return or other written document is provided to the IRS for purposes of these proposed regulations when it is received by the IRS. Notice of Liability and the Basis for Liability Notice to the taxpayer must be in writing and specifically state the amount of the liability and the basis for the liability. The notice must provide the taxpayer with sufficient information to identify which items of income, deduction, loss, or credit the IRS has adjusted or proposes to adjust, and the reason for that adjustment. Administrative proceedings pertaining to adjustments to partnership items of partnerships subject to the unified audit and litigation procedures of Subchapter C of Chapter 63 of Subtitle F of the Internal Revenue Code (TEFRA) occur at the partnership level. Each partner has the right to participate in partnership-level administrative proceedings. The tax matters partner
(TMP)of a TEFRA partnership has a fiduciary relationship to the partners and must provide the partners with information concerning significant administrative proceedings and actions within 30 days of the action or the receipt of information concerning the partnership matter. TEFRA partnership administrative proceedings at the partnership level concern the treatment of partnership items and the partners' allocable shares of those items rather than the specific tax liability of each partner attributable to the partnership items. Partners can, however, compute the specific tax attributable to adjustments to partnership items based on their interests in the partnership, so notice to the TMP concerning the treatment of partnership items constitutes notice to the partners under section 6404(g). Exceptions to the General Rule for Suspension The general rule for suspension does not apply to
(1)Any penalty imposed by section 6651 for failing to file a tax return or for failing to pay tax;
(2)any interest, penalty, addition to tax, or additional amount in a case involving fraud;
(3)any interest, penalty, addition to tax, or additional amount with respect to any tax liability shown on a return;
(4)any interest, penalty, addition to tax, or additional amount with respect to any gross misstatement;
(5)any interest, penalty, addition to tax, or additional amount with respect to any reportable transaction not meeting the disclosure requirement of section 6664(d)(2)(A) or any listed transaction as defined in section 6707A(c); and
(6)any criminal penalty. The proposed regulations limit the exception pertaining to a case involving fraud to the taxpayer and the taxable year in issue. The proposed regulations also provide that the exception in section 6404(g) for “a case involving fraud” means that fraud on the return with respect to any item will preclude suspension under section 6404(g) with respect to all items on the return. AJCA section 903(b) added subparagraph (D), pertaining to gross misstatements, to section 6404(g)(2), effective for taxable years beginning after December 31, 2003. The proposed regulations define “gross misstatement” as the reporting of any item on the original or any amended return if that item is attributable to a gross valuation misstatement as defined in section 6662(h), a substantial omission of income as described in section 6501(e)(1) or section 6229(c), or a frivolous position or a desire to delay or impede the administration of the Federal income tax laws as described in section 6702. Special Rules Section 6404(g)(2)(C) provides that interest suspension does not apply to any tax liability shown on a return. Consistent with this exception, any interest, penalty, addition to tax, or additional amount with respect to an erroneous tentative carryback or refund adjustment will not be suspended because the disallowance of the erroneous tentative carryback or refund adjustment does not change the tax liability originally shown on the taxpayer's return. An election under section 183(e) to defer the determination as to whether the presumption applies that an activity is engaged in for profit tolls the notification period and the suspension period described in section 6404(g)(1), in that the election calls for the IRS to defer proposing adjustments regarding the activity. Proposed Effective Date The regulations, as proposed, apply as of the date of publication of a Treasury decision adopting these rules as final regulations in the **Federal Register** . Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight
(8)copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be made available for public inspection and copying. A public hearing has been scheduled for October 11, 2007, beginning at 10 a.m. in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments on September 19, 2007, and an outline of the topics to be discussed, and the time to be devoted to each topic (signed original and eight
(8)copies) by September 20, 2007. A period of ten minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Information The principal author of these regulations is Stuart Spielman of the Office of Associate Chief Counsel (Procedure and Administration). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1.** The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.6404-0 is amended as follows: 1. The introductory text is revised. 2. Entries are added for § 301.6404-4. The addition reads as follows: § 301.6404-0 Table of contents. This section lists the paragraphs contained in §§ 301.6404-1 through 301.6404-4. *§ 301.6404-4 Suspension of interest and certain penalties where the Internal Revenue Service does not contact the taxpayer.*
(a)Suspension.
(1)In general.
(2)Treatment of amended returns and other documents.
(i)Amended returns filed on or after December 21, 2005, that show an increase in tax liability.
(ii)Amended returns that show a decrease in tax liability.
(iii)Amended return and other documents as notice.
(iv)Joint return after filing separate return.
(3)Separate application.
(4)Duration of suspension period.
(5)Example.
(6)Notice of liability and the basis for the liability.
(i)In general.
(ii)Tax attributable to TEFRA partnership items.
(iii)Examples.
(7)Providing notice by the IRS.
(i)In general.
(ii)Providing notice in TEFRA partnership proceedings.
(b)Exceptions.
(1)Failure to file tax return or to pay tax.
(2)Fraud.
(3)Tax shown on return.
(4)Gross misstatement.
(i)Description.
(5)[Reserved].
(c)Special rules.
(1)Tentative carryback and refund adjustments.
(2)Election under section 183(e).
(d)Effective/applicability date. **Par. 3.** Section 301.6404-4 is added to read as follows: § 301.6404-4 Suspension of interest and certain penalties where the Internal Revenue Service does not contact the taxpayer.
(a)*Suspension* —(1) *In general.* Except as provided in paragraph
(b)of this section, if an individual taxpayer files a return of tax imposed by subtitle A on or before the due date for the return (including extensions) and the Internal Revenue Service
(IRS)does not timely provide the taxpayer with a notice specifically stating the amount of any increased liability and the basis for that liability, then the IRS must suspend any interest, penalty, addition to tax, or additional amount with respect to any failure relating to the return. This suspension is computed by reference to the period of time the failure continues to exist. The notice described in this paragraph (a)(1) is timely if provided before the close of the eighteen-month period (thirty-six month period in the case of notices provided after November 25, 2007) beginning on the later of the date on which the return is filed or the due date of the return without regard to extensions.
(2)*Treatment of amended returns and other documents—*
(i)*Amended returns filed on or after December 21, 2005, that show an increase in tax liability.* If a taxpayer, on or after December 21, 2005, provides to the IRS an amended return or one or more other signed written documents showing an increase in tax liability, the date on which the return was filed will, for purposes of this paragraph (a), be the date on which the last of the documents was provided. Documents described in this paragraph (a)(2)(i) are provided on the date that they are received by the IRS.
(ii)*Amended returns that show a decrease in tax liability.* If a taxpayer provides to the IRS an amended return or other signed written document that shows a decrease in tax liability, any interest, penalty, addition to tax, or additional amount will not be suspended if the IRS at any time proposes to adjust the changed item or items on the amended return or other signed written document.
(iii)*Amended return and other documents as notice.* As to the items reported, an amended return or one or more other signed written documents showing that the taxpayer owes an additional amount of tax for the taxable year serves as the notice described in paragraph (a)(1) of this section.
(iv)*Joint return after filing separate return.* A joint return filed under section 6013(b) is subject to the rules for amended returns described in this paragraph (a)(2). The IRS will not suspend any interest, penalty, addition to tax, or additional amount on a joint return filed under section 6013(b) unless each spouse, if required to file a return, filed a timely separate return.
(3)*Separate application.* This paragraph
(a)shall be applied separately with respect to each item or adjustment.
(4)*Duration of suspension period.* The suspension period described in paragraph (a)(1) of this section begins the day after the close of the eighteen-month period (thirty-six month period, in the case of notices provided after November 25, 2007) beginning on the later of the date on which the return is filed or the due date of the return without regard to extensions. The suspension period ends twenty-one days after the earlier of the date on which the IRS mails the required notice to the taxpayer's last known address, the date on which the required notice is hand-delivered to the taxpayer, or the date on which the IRS receives an amended return or other signed written document showing an increased liability.
(5)*Example.* The following example illustrates the rules of this paragraph (a): Example. An individual taxpayer timely files an income tax return for taxable year 2004 on the due date of the return, April 15, 2005. On December 11, 2006, the taxpayer mails to the IRS an amended return reporting an additional item of income and an increased tax liability for taxable year 2004. The IRS receives the amended return on December 13, 2006. On January 16, 2007, the IRS provides the taxpayer with a notice stating that the taxpayer has an additional tax liability based on the disallowance of a deduction the taxpayer claimed on his original return and did not change on his amended return. The date the amended return was received substitutes for the date that the original return was filed with respect to the additional item of tax liability reported on the amended return. Thus, the IRS will not suspend interest, penalties, additions to tax, or additional amounts with respect to the additional item of income and the increased tax liability reported on the amended return. The suspension period for the additional tax liability based on the IRS' disallowance of the deduction begins on October 15, 2006, so the IRS will suspend interest, penalties, additions to tax, and additional amounts with respect to the disallowed deduction and additional tax liability from that date through February 6, 2007, which is twenty-one days after the IRS provided notice of the additional tax liability and the basis for that liability.
(6)*Notice of liability and the basis for the liability* —(i) *In general.* Notice to the taxpayer must be in writing and specifically state the amount of the liability and the basis for the liability. The notice must provide the taxpayer with sufficient information to identify which items of income, deduction, loss, or credit the IRS has adjusted or proposes to adjust, and the reason for that adjustment. Notice of the reason for the adjustment does not require a detailed explanation or a citation to any Internal Revenue Code section or other legal authority. The IRS does not have to incorporate all the information necessary to satisfy the notice requirement within a single document or provide all the information at the same time. Documents that may contain information sufficient to qualify as notice, either alone or in conjunction with other documents, include, but are not limited to, statutory notices of deficiency, examination reports (for example, Forms 4549 “Income Tax Examination Changes,” Forms 886-A “Explanation of Items”), Forms 870 “Waiver of Restrictions on Assessments and Collection of Deficiency in Tax and Acceptance of Overassessment,” notices of proposed deficiency that allow the taxpayer an opportunity for review in the Office of Appeals (30-day letters), notices pursuant to section 6213(b) (mathematical or clerical errors), and notice and demand for payment of a jeopardy assessment under section 6861.
(ii)*Tax attributable to TEFRA partnership items.* Notice to the partner or the tax matters partner
(TMP)of a partnership subject to the Unified Audit and Litigation Procedures of subchapter C of chapter 63 of subtitle F of the Internal Revenue Code (TEFRA) that provides specific information about the basis for the adjustments to partnership items is sufficient notice if a partner could reasonably compute the specific tax attributable to the partnership item based on the proposed adjustments as applied to the partner's individual tax situation. Documents provided by the IRS during a TEFRA partnership proceeding that may contain information sufficient to satisfy the notice requirements include, but are not limited to, a Notice of Final Partnership Administrative Adjustment, examination reports (for example, Forms 4549, Forms 886-A), or a letter that allows the partners an opportunity for review in the Office of Appeals (60-day letter).
(iii)*Examples.* The following examples illustrate the rules of this paragraph (a)(6). Example 1. During an audit of Taxpayer A's 2005 taxable year return, the IRS questions a charitable deduction claimed on the return. The IRS provides A with a “30-day letter” that proposes a deficiency of $1,000 based on the disallowance of the charitable deduction and informs A that A may file a written protest of the proposed deficiency to the Office of Appeals within 30 days. The letter includes as an attachment a copy of the revenue agent's report that states that “It has not been established that the amount shown on your return as a charitable contribution was paid during the tax year. Therefore, this deduction is not allowable.” The information in the 30-day letter and attachment provides A with notice of the specific amount of the liability and the basis for that liability as described in this paragraph (a). Example 2. Taxpayer B is a partner in partnership P, a TEFRA partnership for taxable year 2005. B claims a distributive share of partnership income on B's Federal income tax return for 2005 filed on April 17, 2006. On October 1, 2007, during the course of a partnership audit of P for taxable year 2005, the IRS provides P's TMP a “60-day letter” proposing to adjust P's income by $10,000. The IRS had previously provided the TMP with a copy of the examination report explaining that the adjustment was based on $10,000 of unreported net income. On October 31, 2007, P's TMP informs B of the proposed adjustment as required by § 301.6223(g)-1(b). By accounting for B's distributive share of the $10,000 of unreported income from P with B's other income tax items, B can determine B's tax attributable to the $10,000 partnership adjustment. The information in the 60-day letter and the examination report allows B to compute the specific amount of the liability attributable to the adjustment to the partnership item and the basis for that adjustment and therefore satisfies the notice requirement of paragraph (a). Because the IRS provided that notice to the TMP, B's agent under the TEFRA partnership provisions, within eighteen months of the April 17, 2006, filing date of B's return, any interest, penalty, addition to tax, or additional amount with respect to B's tax liability attributable to B's distributive share of the $10,000 of unreported partnership income will not be suspended under section 6404(g).
(7)*Providing notice by the IRS* —(i) *In general.* The IRS may provide notice by mail or in person to the taxpayer or the taxpayer's representative. If the IRS mails the notice, it must be sent to the taxpayer's last known address under rules similar to section 6212(b), except that certified or registered mail is not required. Notice is considered provided as of the date of mailing or delivery in person.
(ii)*Providing notice in TEFRA partnership proceedings.* In the case of TEFRA partnership proceedings, the IRS must provide notice of final partnership administrative adjustments
(FPAA)by mail to those partners specified in section 6223. Within 60 days of an FPAA being mailed, the TMP is required to forward notice of the FPAA to those partners not entitled to direct notice from the IRS under section 6223. Certain partners with small interests in partnerships with more than 100 partners may form a Notice Group and designate a partner to receive the FPAA on their behalf. The IRS may provide other information after the beginning of the partnership administrative proceeding to the TMP who, in turn, must provide that information to the partners specified in § 301.6223(g)-1 within 30 days of receipt. Pass-thru partners who receive notices and other information from the IRS or the TMP must forward that notice or information within 30 days to those holding an interest through the pass-thru partner. Information provided by the IRS to the TMP is deemed to be notice for purposes of this section to those partners specified in § 301.6223(g)-1 as of the date the IRS provides that notice to the TMP. A similar rule applies to notice provided to the designated partner of a Notice Group, and to notice provided to a pass-thru partner. In the foregoing situations, the TMP, designated partner, and pass-thru partner are agents for direct and indirect partners. Consequently, notice to these agents is deemed to be notice to the partners for whom they act.
(b)*Exceptions* —(1) *Failure to file tax return or to pay tax.* Paragraph
(a)of this section does not apply and interest will not be suspended with respect to any penalty imposed by section 6651.
(2)*Fraud.* Paragraph
(a)of this section does not apply and interest will not be suspended with respect to any interest, penalty, addition to tax, or additional amount in a case involving fraud. Fraud has the same meaning in this paragraph
(b)as in section 6501(c)(1) and is not attributed from one taxpayer to another taxpayer. If a taxpayer files a fraudulent return for one year, paragraph
(a)of this section may apply to any other tax year of the taxpayer that does not involve fraud. Fraud affecting one item on a return precludes paragraph
(a)of this section from applying to any other items on that return.
(3)*Tax shown on return.* Paragraph
(a)of this section does not apply and interest will not be suspended with respect to any interest, penalty, addition to tax, or additional amount with respect to any tax liability shown on a return.
(4)*Gross misstatement* —(i) *Description.* Paragraph
(a)of this section does not apply and interest will not be suspended with respect to any interest, penalty, addition to tax, or additional amount with respect to a gross misstatement. A *gross misstatement* for purposes of this paragraph
(b)means—
(A)A substantial omission of income as described in section 6501(e)(1) or section 6229(c)(2);
(B)A gross valuation misstatement within the meaning of section 6662(h); or
(C)A misstatement to which the penalty under section 6702(a) applies.
(ii)If a gross misstatement occurs, then interest will not be suspended with respect to any items of income omitted from the return and with respect to overstated deductions, even though one or more of the omitted items would not constitute a substantial omission, gross valuation misstatement, or misstatement to which section 6702(a) applies.
(5)[Reserved].
(c)*Special rules* —(1) *Tentative carryback and refund adjustments.* If an amount applied, credited, or refunded under section 6411 exceeds the overassessment properly attributable to a tentative carryback or refund adjustment, any interest, penalty, addition to tax, or additional amount with respect to the excess will not be suspended.
(2)*Election under section 183(e)* . If a taxpayer elects under section 183(e) to defer the determination as to whether the presumption applies that an activity is engaged in for profit, the 18-month (or 36-month) notification period described in paragraph (a)(1) of this section or, if that period has passed as of the date the election is made, the suspension period described in paragraph (a)(4) of this section will be tolled for the period to which the election applies. Tolling will begin on the date the election is made and end on the later of the date the return for the last taxable year to which the election applies is filed or is due without regard to extensions.
(d)*Effective/applicability date.* The rules of this section apply as of the date of publication of a Treasury decision adopting these rules as final regulations in the **Federal Register** . Kevin M. Brown, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-12082 Filed 6-20-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [REG-149036-04] RIN 1545-BE07 Application of Section 6404(g) of the Internal Revenue Code Suspension Provisions AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing. SUMMARY: In the Rules and Regulations section of this issue of the **Federal Register** , the IRS is issuing temporary regulations relating to the application of section 6404(g) of the Internal Revenue Code
(Code)suspension provisions. The regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998, the American Jobs Creation Act of 2004, the gulf Opportunity zone act of 2005, and the Tax Relief and Health Care Act of 2006. The regulations provide guidance to individual taxpayers who have participated in listed transactions or undisclosed reportable transactions. The text of those regulations also serve as the text of these proposed regulations. This document also provides notice of a public hearing on these proposed regulations. DATES: Written or electronic comments must be received by September 19, 2007. Outlines of topics to be discussed at the public hearing scheduled for October 11, 2007, at 10 a.m. must be received by September 20, 2007. ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-149036-04), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-149036-04), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov.* (IRS REG-149036-04). The public hearing will be held in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Stuart Spielman,
(202)622-7950; concerning submissions of comments, the hearing, and to be placed on the building access list to attend the hearing, Richard Hurst,
(202)622-7180 (not toll-free numbers) or *Richard.A.Hurst@irscounsel.treas.gov.* SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Temporary regulations in the Rules and Regulations section of this issue of the **Federal Register** amend the Regulations on Procedure and Administration (26 CFR part 301) relating to section 6404(g). The temporary regulations add rules relating to the suspension of interest, penalties, additions to tax, or additional amounts with respect to listed or other reportable transactions. The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. A regulatory assessment is therefore not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight
(8)copies) or electronic comments that are timely submitted to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be made available for public inspection and copying. A public hearing has been scheduled for October 11, 2007, beginning at 10 a.m. in the Auditorium of the Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments by September 19, 2007, and an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight
(8)copies) by September 20, 2007. A period of ten minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting information The principal author of these regulations is Stuart Spielman of the Office of Associate Chief Counsel (Procedure and Administration). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1** . The authority citation for part 301 continues to read in part as follows: **Authority:** 26 U.S.C. 7805 * * * **Par. 2.** Section 301.6404-0 is amended as follows: 1. The introductory text is revised. 2. Entries are added for § 301.6404-4. The additions read as follows: § 301.6404-0 Table of contents. This section lists the paragraphs contained in §§ 301.6404-1 through 301.6404-4. *§ 301.6404-4 Listed transactions and undisclosed reportable transactions.* [Reserved]. The text of the entries or this section is the same as the text of the entries in § 301.6404T published elsewhere in this issue of the **Federal Register** . **Par. 3.** Section 301.6404-4 is added to read as follows: § 301.6404-4 Listed transactions and undisclosed reportable transactions.
(a)through (b)(4) [Reserved]. (b)(5) [The text of proposed § 6404-4(b)(5) is the same as the text of § 301.6404-4T(b)(5) published elsewhere in this issue of the **Federal Register** ].
(c)and
(d)[Reserved]. Kevin M. Brown, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-12085 Filed 6-20-07; 8:53 am] BILLING CODE 4830-01-P DEPARTMENT OF JUSTICE 28 CFR Part 16 [Docket No. OAG 106; A.G. Order No. 2884-2007] RIN 1105-AB21 Office of the Attorney General; Production of Certain Information or Testimony by State or Local Law Enforcement or Prosecutive Officials Serving on a Department of Justice Task Force AGENCY: Department of Justice. ACTION: Proposed rule. SUMMARY: The United States Department of Justice is proposing to amend its regulations concerning agency management. The production of certain information or testimony by Department officials in response to subpoenas or demands of courts or other authorities is governed by 28 CFR 16.21-16.29, often referred to as the Department's *Touhy* regulations, *see United States ex rel. Touhy* v. *Ragen,* 340 U.S. 462 (1951). The revision avoids any doubt that the *Touhy* regulations cover information acquired by a State or local law enforcement and prosecutive official while serving as a task force official on a Department of Justice task force. DATES: Comments must be received on or before August 20, 2007. ADDRESSES: To ensure proper handling of comments, please reference “Docket No. OAG 106” on all written and electronic correspondence. Written comments being sent via regular mail should be sent to Robert Hinchman, Senior Counsel, Office of Legal Policy, 950 Pennsylvania Avenue, NW., Room 4252, Washington, DC 20530. Comments may be directly sent to the Office of Legal Policy
(OLP)electronically by sending an electronic message to *olpregs@usdoj.gov.* Comments may also be sent electronically through *www.regulations.gov* using the electronic comment form provided on that site. An electronic copy of this document is also available at the *www.regulations.gov* Web site. OLP will accept electronic comments containing MS Word, WordPerfect, Adobe PDF, or Excel files only. OLP will not accept any file format other than those specifically listed here. FOR FURTHER INFORMATION CONTACT: Robert Hinchman, Senior Counsel, Office of Legal Policy, 950 Pennsylvania Avenue, NW., Room 4252, Washington, DC 20530; Telephone:
(202)514-8059. SUPPLEMENTARY INFORMATION: State and local law enforcement and prosecutive personnel often participate voluntarily and cooperatively on Department of Justice task forces. The cohesive efforts of task force members serve to multiply the expertise of each participating law enforcement organization in pursuing its law enforcement mission. Examples of these mutually beneficial Department task forces include drug task forces, joint terrorism task forces, gun violence reduction task forces, and fugitive apprehension task forces. Depending upon operational needs, these task forces operate on an *ad hoc* basis or more formally, such as pursuant to written agreement, *see, e.g.* , 21 U.S.C. 873(a)(7); 31 U.S.C. 6305; 28 U.S.C. 566(c) and (c)(1)(B). When such Department task forces are established—whether on an *ad hoc* basis or under formal arrangements, involving, for example, a memorandum of understanding between the participating agencies or the deputation of the participating State and local law enforcement officials—State or local law enforcement and prosecutive officials are frequently provided access to sensitive Department information. The Department has always considered Special Deputy United States Marshals and Special Assistant United States Attorneys to be subject to the Attorney General's direction with respect to carrying out their respective responsibilities. It is also recognized that although Department task force investigations generally will be prosecuted in Federal courts, there may be specific circumstances to indicate that prosecution should be made in State court, depending upon which method of prosecution will result in the greatest benefit to law enforcement and the public. To clarify that the Department retains appropriate controls over the use and dissemination of such sensitive information by non-Department employees who acquire the information through service on Department task forces, this revision is being proposed to the Department's *Touhy* regulations, Subpart B of part 16, chapter I, Title 28, CFR, *i.e.* , 28 CFR 16.21-16.29. Those regulations take their name for *United States ex rel. Touhy* v. *Ragen,* 340 U.S. 462 (1951), which held that the Attorney General could validly prescribe regulations regarding the release of government documents and witnesses. The *Touhy* regulations set forth procedures to be followed for producing or disclosing Department materials or information in response to subpoenas or demands of courts or other authorities. The proposed revision of the regulations would make clear that the regulation now also covers any proceeding relating to a task force investigation where the Department has declined to exercise jurisdiction over a particular case or class of cases. The proposed rule defines the term “task force official” as meaning “an employee of a State or local law enforcement agency or prosecutive office serving on a Department of Justice task force established for a law enforcement or national security purpose under the authority of the Attorney General or one of the components of the Department of Justice.” In addition, the term “current and former task force official” would be inserted in appropriate parts of the regulation to ensure that such officials are subject to the same requirements with respect to responding to demands for information acquired through task force service as apply to current and former Department employees responding to requests for information acquired through their official status. Regulatory Flexibility Act The Attorney General, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this rule and, by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities because it pertains to personnel and administrative matters affecting the Department. The rule affects only State and local law enforcement and prosecutive officials voluntarily serving under *ad hoc* or formal arrangements on Department task forces and does not impose any economic impact on small entities. Executive Order 12866 This rule has been drafted and reviewed in accordance with Executive Order 12866, Regulatory Planning and Review, section 1(b), Principles of Regulation. The Department of Justice has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this rule has not been reviewed by the Office of Management and Budget. Executive Order 12988 This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform. Executive Order 13132 This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. The State or local law enforcement agencies and prosecutive offices affected by the rule are not mandated to serve on Department task forces, and the rule affects only officials in such agencies or offices who voluntarily serve on such task forces through *ad hoc* or formal arrangements with Department components. Therefore, in accordance with Executive Order 13132, Federalism, the Department has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 *et seq.* Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a “major rule” as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. List of Subjects in 28 CFR Part 16 Administrative practice and procedure, Courts, Freedom of Information, Privacy, Sunshine Act. Accordingly, part 16 of title 28 of the Code of Federal Regulations is proposed to be amended as follows: PART 16—PRODUCTION OR DISCLOSURE OF MATERIAL OR INFORMATION 1. The authority for citation for part 16 continues to read as follows: Authority: 5 U.S.C. 301, 552, 552a, 552b(g), 553; 18 U.S.C. 4203(a)(1); 28 U.S.C. 509, 510, 534; 31 U.S.C. 3717, 9701. 2. Revise paragraphs
(a)and
(b)of § 16.21 to read as follows: § 16.21 Purpose and scope.
(a)This subpart sets forth procedures to be followed with respect to the production or disclosure of any material contained in the files of the Department, any information relating to material contained in the files of the Department, any information acquired by any person while such person was an employee of the Department as part of the performance of that person's official status or because of that person's official status, or any information acquired by a State or local law enforcement or prosecutive official while serving *ad hoc* or formally as a task force official on a Department of Justice task force:
(1)In all Federal and State proceedings in which the United States is a party; and
(2)In all Federal and State proceedings in which the United States is not a party, including any proceedings in which the Department is representing a government employee solely in that employee's individual capacity or any proceedings relating to a task force investigation in which the Department has declined to exercise jurisdiction over a particular case or class of cases, when a subpoena, order, or other demand (collectively, a “demand”) of a court or other authority is issued for such material or information.
(b)For purpose of this subpart:
(1)The term *employee of the Department* includes all officers and employees of the United States appointed by, or subject to the supervision, jurisdiction, or control of the Attorney General of the United States, including United States Attorneys, United States Marshals, U.S. Trustees, and members of the staffs of those officials; and
(2)The term *task force official* means an employee of a State or local law enforcement agency or prosecutive office serving on a Department of Justice task force established for a law enforcement or national security purpose under the authority of the Attorney General or one of the components of the Department of Justice. 3. Revise paragraphs (a), (b), and
(c)of § 16.22 to read as follows: § 16.22 General prohibition of production or disclosure in Federal and State proceedings in which the United States is not a party.
(a)In any Federal or State case or matter in which the United States is not a party, no employee or former employee of the Department of Justice or present or former task force official shall, in response to a demand, produce any material contained in the files of the Department, or disclose any information relating to or based upon material contained in the files of the Department, or disclose any information or produce any material acquired as part of the performance of that person's official duties or because of that person's official status or because of that person's service on a Department of Justice task force without prior approval of the proper Department official in accordance with §§ 16.24 and 16.25 of this part.
(b)Whenever a demand is made upon an employee or former employee or a present or former task force official as described in paragraph
(a)of this section, the employee or task force official shall immediately notify the United States Attorney for the district where the issuing authority is located. The responsible U.S. Attorney shall follow procedures set forth in § 16.24 of this part.
(c)If oral testimony is sought by a demand in any case or matter in which the United States is not a party, an affidavit, or, if that is not feasible, a statement by the party seeking the testimony or by his attorney, setting forth a summary of the testimony sought and its relevance to the proceeding, must be furnished to the responsible U.S. Attorney. Any authorization for testimony by a present or former employee or a present or former task force official of the Department shall be limited to the scope of the demand as summarized in such statement. 4. Revise paragraph
(a)of § 16.23 to read as follows: § 16.23 General disclosure authority in Federal and State proceedings in which the United States is a party.
(a)Every attorney in the Department of Justice in charge of any case or matter in which the United States is a party is authorized, after consultation with the “originating component” as defined in paragraph 16.24(a) of this part, to reveal and furnish to any person, including an actual or prospective witness, a grand jury, counsel, or a court, either during or preparatory to a proceeding, such testimony, and relevant unclassified material, documents, or information secured by any attorney, or investigator of the Department of Justice, or task force official, as such attorney shall deem necessary or desirable to the discharge of the attorney's official duties, *provided:*
(1)Such an attorney shall consider, with respect to any disclosure, the factors set forth in paragraph 16.26(a) of this part; and
(2)An attorney shall not reveal or furnish any material, documents, testimony or information when, in the attorney's judgment, any of the factors specified in paragraph 16.26(b) exists, without the express prior approval by the Assistant Attorney General in charge of the division responsible for the case or proceeding, the Director of the Executive Office for United States Trustees (“EOUST”), or such persons” designees. 5. Revise paragraphs (a),
(b)introductory text, and
(c)of § 16.24 to read as follows: § 16.24 Procedure in the event of a demand where disclosure is not otherwise authorized.
(a)Whenever a matter is referred under § 16.22 of this part to a U.S. Attorney or, under § 16.23 of this part, to an Assistant Attorney General, the Director of the EOUST, or their designees (collectively, “responsible official”), the responsible official shall immediately advise the official, or the official's designee, in charge of the bureau, division, office, or agency of the Department:
(1)That was responsible for the collection, assembly, or other preparation of the material demanded; or
(2)That, at the time the person whose testimony was demanded acquired the information in question:
(I)Employed such person; or
(ii)Designated such person as a task force official; (collectively, “originating component”). In any instance in which the responsible official is also the official in charge of the originating component, the responsible official may perform all functions and make all determinations that this regulation vests in the originating component.
(b)The responsible official, subject to the terms of paragraph
(c)of this section, may authorize the appearance and testimony of a present or former Department employee or a present or former task force official, or the production of material from Department files if:
(1)* * *
(2)* * *
(3)* * *
(c)It is Department policy that the responsible official shall, following any necessary consultation with the originating component, authorize testimony by a present or former employee or a present or former task force official of the Department or the production of material from Department files without further authorization from Department officials whenever possible: provided, that, when information is collected, assembled, or prepared in connection with litigation or an investigation supervised by a division of the Department or by the EOUST, the Assistant Attorney General in charge of such a division or the Director of the EOUST may require that the originating component obtain the division's or the EOUST's approval before authorizing a responsible official to disclose such information. Prior to authorizing such testimony or production, however, the responsible official shall, through negotiation and, if necessary, appropriate motions, seek to limit the demand to information, the disclosure of which would not be inconsistent with the considerations specified in § 16.26 of this part. Dated: June 15, 2007. Alberto R. Gonzales, Attorney General. [FR Doc. E7-12038 Filed 6-20-07; 8:45 am] BILLING CODE 4410-09-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R03-OAR-2007-0450; FRL-8329-6] Approval and Promulgation of Air Quality Implementation Plans; Delaware; Open Burning AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to approve a State Implementation Plan
(SIP)revision submitted by the State of Delaware. This SIP revision pertains to the amendments of Delaware's open burning regulation. This action is being taken under the Clean Air Act (CAA). DATES: Written comments must be received on or before July 23, 2007. ADDRESSES: Submit your comments, identified by Docket ID Number EPA-R03-OAR-2007-0450 by one of the following methods: A. *www.regulations.gov.* Follow the on-line instructions for submitting comments. B. *E-mail: cripps.christopher@epa.gov.* C. *Mail:* EPA-R03-OAR-2007-0450, Christopher Cripps, Acting Chief, Air Quality Planning Branch, Mailcode 3AP21, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. D. *Hand Delivery:* At the previously-listed EPA Region III address. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-R03-OAR-2007-0450. 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 information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. 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. *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 during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Delaware Department of Natural Resources & Environmental Control, 89 Kings Highway, P.O. Box 1401, Dover, Delaware 19901. FOR FURTHER INFORMATION CONTACT: Rose Quinto,
(215)814-2182, or by e-mail at *quinto.rose@epa.gov.* SUPPLEMENTARY INFORMATION: I. Background On May 2, 2007, the Delaware Department of Natural Resources and Environmental Control (DNREC) submitted a revision to its SIP for Regulation No. 1113—Open Burning. The SIP revision includes
(1)Expanding the open burning ban from New Castle and Kent Counties to statewide;
(2)expanding the open burning ban from June 1 through August 31 in the current regulation to May 1 through September 30; and
(3)to clarify the prohibitions in the existing regulation and their interaction with other applicable laws and regulations. II. Summary of SIP Revision Delaware's Open Burning Regulation, Regulation No. 1113, applies to all open burning activities in the State of Delaware which includes the counties of New Castle, Kent and Sussex. The following are the prohibitions and provisions of open burning activities in the State of Delaware during May 1 through September 30:
(1)The regulation prohibits leaf and refuse burning statewide.
(2)The regulation allows the following without permission from DNREC: domestic burning of branches and limbs from trees and shrubs statewide; and agricultural burning statewide to cultivate and/or prepare soil for the production of crops or the support of livestock.
(3)The regulation requires permission from DNREC for the following types of open burning: prescribed burning for conservation practices, wildlife habitat management, or plant, pest or disease control; and burning of wooden buildings for fire fighting instruction conducted by authorized fire companies.
(4)Commercial operations are not permitted to burn for disposal, e.g. burning of tree limbs, stumps as a result of land clearing, and construction debris.
(5)All allowable types of burning can be conducted between the hours of 8 a.m. to 4 p.m. Approval can be obtained from DNREC to burn outside of those hours for reasons of safety, smoke reduction or a more efficient or complete burn.
(6)The following types of burning are exempt from the regulation, and can be conducted at any time: cooking fires; recreational fires; ceremonial fires; emergency signaling flares; backburning to suppress wildfires; and fire fighting instruction conducted by the Delaware State Fire School. III. Proposed Action EPA is proposing to approve the Delaware SIP revision for Regulation No. 1113—Open Burning submitted on May 2, 2007. This regulation will result in the control of volatile organic compound
(VOC)and nitrogen oxides (NO <sup>X</sup> ) emissions by establishing rules for open burning activities in the State of Delaware during the ozone season. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action. IV. 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 action merely proposes to approve State law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. 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 a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely proposes to approve a state rule implementing a Federal requirement, 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 (62 FR 19885, April 23, 1997), because it approves a state rule 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 submission, 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. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This proposed rule pertaining to Delaware's Open Burning Regulation, 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 in 40 CFR Part 52 Environmental protection, Air pollution control, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. Authority: 42 U.S.C. 7401 *et seq.* Dated: June 12, 2007. Donald S. Welsh, Regional Administrator, Region III. [FR Doc. E7-12051 Filed 6-20-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 60 and 61 [AZ and NV-EPA-R09-OAR-2006-1014; FRL-8329-9] Delegation of New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants for the States of Arizona and Nevada AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to update the Code of Federal Regulations
(CFR)tables for delegations to state and local agencies in Region IX of certain New Source Performance Standards
(NSPS)and National Emission Standards for Hazardous Air Pollutants (NESHAPs). This document addresses general authorities mentioned in the regulations for NSPS and NESHAPs, proposes to update the delegations tables for Arizona and Nevada, and clarifies those authorities that are retained by EPA. We are taking comments on this proposal and intend to follow with a final action. DATES: Any comments must arrive by July 23, 2007. ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-2006-1014, by one of the following methods: 1. *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the on-line instructions. 2. *E-mail: steckel.andrew@epa.gov.* 3. *Mail or deliver:* Andrew Steckel (Air-4), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901. *Instructions:* All comments will be included in the public docket without change and may be made available online at *http://www.regulations.gov,* including any personal information provided, unless the comment includes Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through *www.regulations.gov* or e-mail. *www.regulations.gov* is an “anonymous access” system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send e-mail directly to EPA, your e-mail address will be automatically captured and included as part of the public comment. 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. *Docket:* The index to the docket for this action is available electronically at *www.regulations.gov* and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location ( *e.g.* , copyrighted material), and some may not be publicly available in either location ( *e.g.* , CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section. FOR FURTHER INFORMATION CONTACT: Cynthia G. Allen, EPA Region IX,
(415)947-4120, *allen.cynthia@epa.gov.* SUPPLEMENTARY INFORMATION: The supplementary information is organized in the following order: What is the purpose of this document? Who is authorized to delegate these authorities? What does delegation accomplish? What authorities are not delegated by EPA? Does EPA keep some authority? Administrative Requirements What is the purpose of this document? Through this document, EPA is proposing to accomplish the following objectives:
(1)Update the delegations tables in the Code of Federal Regulations, Title 40 (40 CFR), Parts 60 and 61 to provide an accurate listing of the delegated standards for Arizona and Nevada; and
(2)Clarify those authorities that are retained by EPA and not granted to state or local agencies as part of delegation. These actions are described below. Today's action proposes to update the delegation tables in 40 CFR Parts 60 and 61, to allow easier access by the public to the status of delegations in Arizona and Nevada jurisdictions. The updated delegation tables would include the delegations approved in response to recent requests, as well as those previously granted. The proposed tables are shown at the end of this document. Recent requests for delegation that will be incorporated into the updated CFR tables are identified below. Each individual submittal identifies the specific NSPS and NESHAPs for which delegation was requested. All of these requests have already been approved by letter and simply need to be included in the CFR tables. Agency Date of request Date of EPA approval by letter Nevada Division of Environmental Protection December 27, 2004; June 22, 2005; August 17, 2005; April 4, 2006; and October 26, 2006 September 21, 2005; May 12, 2006; and January 12, 2007. Maricopa County Air Quality Department April 21, 2006 May 18, 2006, and June 14, 2006. Who is authorized to delegate these authorities? Sections 111(c)(1) and 112(l) of the Clean Air Act, as amended in 1990, authorize the Administrator to delegate his or her authority for implementing and enforcing standards in 40 CFR Parts 60 and 61. What does delegation accomplish? Delegation grants a State or local agency the primary authority to implement and enforce Federal standards. All required notifications and reports should be sent to the delegated State or local agency, as appropriate, with a copy to EPA Region IX. Acceptance of delegation constitutes agreement by the State or local agency to follow 40 CFR Parts 60 and 61, and EPA's test methods and continuous monitoring procedures. What authorities are not delegated by EPA? In general, EPA does not delegate to State or local agencies the authority to make decisions that are likely to be nationally significant, or alter the stringency of the underlying standards. For a more detailed description of the authorities in 40 CFR Parts 60 and 61 that are retained by EPA, please see the proposed rule published on January 14, 2002 (67 FR 1676). As additional assurance of national consistency, State and local agencies must send to EPA Region IX Air Division's Enforcement Office Chief a copy of any written decisions made pursuant to the following delegated authorities: • Applicability determinations that State a source is not subject to a rule or requirement; • Approvals or determinations of construction, reconstruction, or modification; • Minor or intermediate site-specific changes to test methods or monitoring requirements; or • Site-specific changes or waivers of performance testing requirements. For decisions that require EPA review and approval (for example, major changes to monitoring requirements), EPA intends to make determinations in a timely manner. In some cases, the standards themselves specify that specific provisions cannot be delegated. State and local agencies should review each individual standard for this information. Does EPA keep some authority? EPA retains independent authority to enforce the standards and regulations of 40 CFR parts 60 and 61. Administrative Requirements 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. This proposed action merely proposes to delegate authority to implement existing Federal requirements to state and local agencies and imposes no additional requirements. 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 does not impose any additional enforceable duty beyond that required by existing federal 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 a substantial direct effect on one or more Indian tribes, on the relation between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the states, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive 13132 (64 FR 43255, August 10, 1999), because it would merely approve a State rule implementing a federal standard, 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. In reviewing delegation requests, 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 delegation request for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a request for delegation, to use VCS in place of a 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. As required by Section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of this action in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This 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 in 40 CFR Parts 60 and 61 Environmental protection, Administrative practice and procedure, Air pollution control, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements. Authority: This action is issued under the authority of Sections 111 and 112 of the CAA, as amended (42 U.S.C. 7411 and 7412). Dated: June 7, 2007. Deborah Jordan, Director, Air Division, Region IX. For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is proposed to be amended as follows: PART 60—[AMENDED] 1. The authority citation for part 60 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart A—General Provisions 2. Section 60.4 is amended by revising paragraphs (d)(1) and (d)(4) to read as follows: § 60.4 Address.
(d)* * *
(1)Arizona. The following table identifies delegations as of May 18, 2006: Delegation Status for New Source Performance Standards for Arizona Subpart Air Pollution Control Agency Arizona DEQ Maricopa County Pima County Pinal County A General Provisions X X X X D Fossil-Fuel Fired Steam Generators Constructed After August 17, 1971 X X X X Da Electric Utility Steam Generating Units Constructed After September 18, 1978 X X X X Db Industrial-Commercial-Institutional Steam Generating Units X X X X Dc Small Industrial Steam Generating Units X X X X E Incinerators X X X X Ea Municipal Waste Combustors Constructed After December 20, 1989 and On or Before September 20, 1994 X X X X Eb Municipal Waste Combustors Constructed After September 20, 1994 X X X Ec Hospital/Medical/Infectious Waste Incinerators for Which Construction is Commenced After June 20, 1996 X X F Portland Cement Plants X X X X G Nitric Acid Plants X X X X H Sulfuric Acid Plant X X X X I Hot Mix Asphalt Facilities X X X X J Petroleum Refineries X X X X K Storage Vessels for Petroleum Liquids for Which Construction, Reconstruction, or Modification Commenced After June 11, 1973, and Prior to May 19, 1978 X X X X Ka Storage Vessels for Petroleum Liquids for Which Construction, Reconstruction, or Modification Commenced After May 18, 1978, and Prior to July 23, 1984 X X X X Kb Volatile Organic Liquid Storage Vessels (Including Petroleum Liquid Storage Vessels) for Which Construction, Reconstruction, or Modification Commenced After July 23, 1984 X X X X L Secondary Lead Smelters X X X X M Secondary Brass and Bronze Production Plants X X X X N Primary Emissions from Basic Oxygen Process Furnaces for Which Construction is Commenced After June 11, 1973 X X X X Na Secondary Emissions from Basic Oxygen Process Steelmaking Facilities for Which Construction is Commenced After January 20, 1983 X X X X O Sewage Treatment Plants X X X X P Primary Copper Smelters X X X X Q Primary Zinc Smelters X X X X R Primary Lead Smelters X X X X S Primary Aluminum Reduction Plants X X X X T Phosphate Fertilizer Industry: Wet Process Phosphoric Acid Plants X X X X U Phosphate Fertilizer Industry: Superphosphoric Acid Plants X X X X V Phosphate Fertilizer Industry: Diammonium Phosphate Plants X X X X W Phosphate Fertilizer Industry: Triple Superphosphate Plants X X X X X Phosphate Fertilizer Industry: Granular Triple Superphosphate Storage Facilities X X X X Y Coal Preparation Plants X X X X Z Ferroalloy Production Facilities X X X X AA Steel Plants: Electric Arc Furnaces Constructed After October 21, 1974 and On or Before August 17, 1983 X X X X AAa Steel Plants: Electric Arc Furnaces and Argon-Oxygen Decarburization Vessels Constructed After August 7, 1983 X X X X BB Kraft pulp Mills X X X X CC Glass Manufacturing Plants X X X X DD Grain Elevators X X X X EE Surface Coating of Metal Furniture X X X X FF (Reserved) GG Stationary Gas Turbines X X X X HH Lime Manufacturing Plants X X X X KK Lead-Acid Battery Manufacturing Plants X X X X LL Metallic Mineral Processing Plants X X X X MM Automobile and Light Duty Trucks Surface Coating Operations X X X X NN Phosphate Rock Plants X X X X PP Ammonium Sulfate Manufacture X X X X QQ Graphic Arts Industry: Publication Rotogravure Printing X X X X RR Pressure Sensitive Tape and Label Surface Coating Operations X X X X SS Industrial Surface Coating: Large Appliances X X X X TT Metal Coil Surface Coating X X X X UU Asphalt Processing and Asphalt Roofing Manufacture X X X X VV Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry X X X X WW Beverage Can Surface Coating Industry X X X X XX Bulk Gasoline Terminals X X X X AAA New Residential Wool Heaters X X X X BBB Rubber Tire Manufacturing Industry X X X X CCC (Reserved) DDD Volatile Organic Compounds
(VOC)Emissions from the Polymer Manufacturing Industry X X X X EEE (Reserved) FFF Flexible Vinyl and Urethane Coating and Printing X X X X GGG Equipment Leaks of VOC in Petroleum Refineries X X X X HHH Synthetic Fiber Production Facilities X X X X III Volatile Organic Compound
(VOC)Emissions From the Synthetic Organic Chemical Manufacturing Industry (SOCMI) Air Oxidation Unit Processes X X X X JJJ Petroleum Dry Cleaners X X X X KKK Equipment Leaks of VOC From Onshore Natural Gas Processing Plants X X X X LLL Onshore Natural Gas Processing: SO2 Emissions X X X X MMM (Reserved) NNN Volatile Organic Compound
(VOC)Emissions From Synthetic Organic Chemical Manufacturing Industry (SOCMI) Distillation Operations X X X X OOO Nonmetallic Mineral Processing Plants X X X X PPP Wool Fiberglass Insulation Manufacturing Plants X X X X QQQ VOC Emissions From Petroleum Refinery Wastewater Systems X X X X RRR Volatile Organic Compound Emissions from Synthetic Organic Chemical Manufacturing Industry (SOCMI) Reactor Processes X X SSS Magnetic Tape Coating Facilities X X X X TTT Industrial Surface Coating: Surface Coating of Plastic Parts for Business Machines X X X X UUU Calciners and Dryers in Mineral Industries X X X VVV Polymeric Coating of Supporting Substrates Facilities X X X X WWW Municipal Solid Waste Landfills X X X AAAA Small Municipal Waste Combustion Units for Which Construction is Commenced After August 30, 1999 or for Which Modification or Reconstruction is Commended After June 6, 2001 X X CCCC Commercial and Industrial Solid Waste Incineration Units for Which Construction Is Commenced After November 30, 1999 or for Which Modification or Reconstruction Is Commenced on or After June 1, 2001 X X EEEE Other Solid Waste Incineration Units for Which Construction is Commenced After December 9, 2004, or for Which Modification or Reconstruction is Commenced on or After June 16, 2006 KKKK Stationary Combustion Turbines GGGG (Reserved)
(4)Nevada. The following table identifies delegations as of January 12, 2007: Delegation Status for New Source Performance Standards for Nevada Subpart Air pollution control agency Nevada DEP Clark County Washoe County A General Provisions X X X D Fossil-Fuel Fired Steam Generators Constructed After August 17, 1971 X X X Da Electric Utility Steam Generating Units Constructed After September 18, 1978 X Db Industrial-Commercial-Institutional Steam Generating Units X Dc Small Industrial Steam Generating Units X E Incinerators X X X Ea Municipal Waste Combustors Constructed After December 20, 1989 and On or Before September 20, 1994 X Eb Municipal Waste Combustors Constructed After September 20, 1994 X Ec Hospital/Medical/Infectious Waste Incinerators for Which Construction is Commenced After June 20, 1996 X F Portland Cement Plants X X X G Nitric Acid Plants X X H Sulfuric Acid Plants X X I Hot Mix Asphalt Facilities X X X J Petroleum Refineries X X K Storage Vessels for Petroleum Liquids for Which Construction, Reconstruction, or Modification Commenced After June 11, 1973, and Prior to May 19, 1978 X X X Ka Storage Vessels for Petroleum Liquids for Which Construction, Reconstruction, or Modification Commenced After May 18, 1978, and Prior to July 23, 1984 X X X Kb Volatile Organic Liquid Storage Vessels (Including Petroleum Liquid Storage Vessels) for Which Construction, Reconstruction, or Modification Commenced After July 23, 1984 X L Secondary Lead Smelters X X X M Secondary Brass and Bronze Production Plants X X N Primary Emissions from Basic Oxygen Process Furnaces for Which Construction is Commenced After June 11, 1973 X X Na Secondary Emissions from Basic Oxygen Process Steelmaking Facilities for Which Construction is Commenced After January 20, 1983 X O Sewage Treatment Plants X X X P Primary Copper Smelters X X X Q Primary Zinc Smelters X X X R Primary Lead Smelters X X X S Primary Aluminum Reduction Plants X X T Phosphate Fertilizer Industry: Wet Process Phosphoric Acid Plants X X U Phosphate Fertilizer Industry: Superphosphoric Acid Plants X X V Phosphate Fertilizer Industry: Diammonium Phosphate Plants X X W Phosphate Fertilizer Industry: Triple Superphosphate Plants X X X Phosphate Fertilizer Industry: Granular Triple Superphosphate Storage Facilities X X Y Coal Preparation Plants X X X Z Ferroalloy Production Facilities X X AA Steel Plants: Electric Arc Furnaces Constructed After October 21, 1974 and On or Before August 17, 1983 X X AAa Steel Plants: Electric Arc Furnaces and Argon-Oxygen Decarburization Vessels Constructed After August 7, 1983 X BB Kraft pulp Mills X X CC Glass Manufacturing Plants X X DD Grain Elevators X X X EE Surface Coating of Metal Furniture X X X FF (Reserved) GG Stationary Gas Turbines X X X HH Lime Manufacturing Plants X X X KK Lead-Acid Battery Manufacturing Plants X X X LL Metallic Mineral Processing Plants X X X MM Automobile and Light Duty Trucks Surface Coating Operations X X X NN Phosphate Rock Plants X X X PP Ammonium Sulfate Manufacture X X QQ Graphic Arts Industry: Publication Rotogravure Printing X X X RR Pressure Sensitive Tape and Label Surface Coating Operations X X SS Industrial Surface Coating: Large Appliances X X X TT Metal Coil Surface Coating X X X UU Asphalt Processing and Asphalt Roofing Manufacture X X X VV Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry X X X WW Beverage Can Surface Coating Industry X X XX Bulk Gasoline Terminals X X AAA New Residential Wool Heaters BBB Rubber Tire Manufacturing Industry X CCC (Reserved) DDD Volatile Organic Compounds
(VOC)Emissions from the Polymer Manufacturing Industry X EEE (Reserved) FFF Flexible Vinyl and Urethane Coating and Printing X X GGG Equipment Leaks of VOC in Petroleum Refineries X X HHH Synthetic Fiber Production Facilities X X III Volatile Organic Compound
(VOC)Emissions From the Synthetic Organic Chemical Manufacturing Industry (SOCMI) Air Oxidation Unit Processes X JJJ Petroleum Dry Cleaners X X X KKK Equipment Leaks of VOC From Onshore Natural Gas Processing Plants X LLL Onshore Natural Gas Processing: SO <sup>2</sup> Emissions X MMM (Reserved) NNN Volatile Organic Compound
(VOC)Emissions From Synthetic Organic Chemical Manufacturing Industry (SOCMI) Distillation Operations X OOO Nonmetallic Mineral Processing Plants X X PPP Wool Fiberglass Insulation Manufacturing Plants X X QQQ VOC Emissions From Petroleum Refinery Wastewater Systems X RRR Volatile Organic Compound Emissions from Synthetic Organic Chemical Manufacturing Industry (SOCMI) Reactor Processes X SSS Magnetic Tape Coating Facilities X TTT Industrial Surface Coating: Surface Coating of Plastic Parts for Business Machines X UUU Calciners and Dryers in Mineral Industries X VVV Polymeric Coating of Supporting Substrates Facilities X WWW Municipal Solid Waste Landfills X AAAA Small Municipal Waste Combustion Units for Which Construction is Commenced After August 30, 1999 or for Which Modification or Reconstruction is Commended After June 6, 2001 X CCCC Commercial and Industrial Solid Waste Incineration Units for Which Construction Is Commenced After November 30, 1999 or for Which Modification or Reconstruction Is Commenced on or After June 1, 2001 X EEEE Other Solid Waste Incineration Units for Which Construction is Commenced After December 9, 2004, or for Which Modification or Reconstruction is Commenced on or After June 16, 2006 X KKKK Stationary Combustion Turbines X GGGG (Reserved) PART 61—[AMENDED] 1. The authority citation for part 61 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart A—General Provisions 2. Section 61.04 is amended by revising paragraphs (c)(9)(i) and (c)(9)(iv) to read as follows: § 61.04 Address.
(c)* * *
(9)* * *
(i)Arizona. The following table identifies delegations as of June 14, 2006: Delegation Status for National Emissions Standards for Hazardous Air Pollutants for Arizona Subpart Air Pollution Control Agency Arizona DEQ Maricopa County Pima County Pinal County A General Provisions X X X X B Radon Emissions From Underground Uranium C Beryllium X X X X D Beryllium Rocket Motor Firing X X X X E Mercury X X X X F Vinyl Chloride X X X X G (Reserved) H Emissions of Radionuclides Other Than Radon From Department of Energy Facilities I Radionuclide Emissions From Federal Facilities Other Than Nuclear Regulatory Commission Licensees and Not Covered by Subpart H J Equipment Leaks (Fugitive Emission Sources) of Benzene X X X X K Radionuclide Emissions From Elemental Phosphorus Plants L Benzene Emissions from Coke By-Product Recovery Plants X X X X M Asbestos X X X X N Inorganic Arsenic Emissions From Glass Manufacturing Plants X X X O Inorganic Arsenic Emissions From Primary Copper Smelters X X X P Inorganic Arsenic Emissions From Arsenic Trioxide and Metallic Arsenic Production Facilities X X Q Radon Emissions From Department of Energy Facilities R Radon Emissions From Phosphogypsum Stacks S (Reserved) T Radon Emissions From the Disposal of Uranium Mill Tailings U (Reserved) V Equipment Leaks (Fugitive Emission Sources) X X X X W Radon Emissions From Operating Mill Tailings X (Reserved) Y Benzene Emissions From Benzene Storage Vessels X X X X Z-AA (Reserved) BB Benzene Emissions From Benzene Transfer Operations X X X X CC-EE (Reserved) FF Benzene Waste Operations X X X X
(iv)Nevada. The following table identifies delegations as of September 21, 2005: Delegation Status for National Emissions Standards for Hazardous Air Pollutants for Nevada Subpart Air Pollution Control Agency Nevada DEP Clark County Washoe County A General Provisions X X B Radon Emissions From Underground Uranium C Beryllium X X X D Beryllium Rocket Motor Firing X X E Mercury X X X F Vinyl Chloride X X G (Reserved) H Emissions of Radionuclides Other Than Radon From Department of Energy Facilities X I Radionuclide Emissions From Federal Facilities Other Than Nuclear Regulatory Commission Licensees and Not Covered by Subpart H X J Equipment Leaks (Fugitive Emission Sources) of Benzene X K Radionuclide Emissions From Elemental Phosphorus Plants X L Benzene Emissions from Coke By-Product Recovery Plants X M Asbestos X X N Inorganic Arsenic Emissions From Glass Manufacturing Plants X O Inorganic Arsenic Emissions From Primary Copper Smelters X P Inorganic Arsenic Emissions From Arsenic Trioxide and Metallic Arsenic Production Facilities X Q Radon Emissions From Department of Energy Facilities R Radon Emissions From Phosphogypsum Stacks S (Reserved) T Radon Emissions From the Disposal of Uranium Mill Tailings U (Reserved) V Equipment Leaks (Fugitive Emission Sources) X W Radon Emissions From Operating Mill Tailings X (Reserved) Y Benzene Emissions from Benzene Storage Vessels X Z-AA (Reserved) BB Benzene Emissions From Benzene Transfer Operations X CC-EE (Reserved) FF Benzene Waste Operations X [FR Doc. E7-12044 Filed 6-20-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 RIN 1018-AU87 Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for Five Endangered and Two Threatened Mussels in Four Northeast Gulf of Mexico Drainages AGENCY: Fish and Wildlife Service, Interior. ACTION: Revised proposed rule; reopening of comment period, availability of draft economic analysis and revised proposed critical habitat units, and announcement of public hearings. SUMMARY: We, the U.S. Fish and Wildlife Service (Service), are reopening the comment period on our proposed designation of critical habitat under the Endangered Species Act of 1973, as amended
(Act)for seven southeastern U.S. mussels. On June 6, 2006, we published our original proposed rule to designate critical habitat for five endangered mussel species—fat threeridge, shinyrayed pocketbook, Gulf moccasinshell, Ochlockonee moccasinshell, and oval pigtoe—as well as two threatened species—Chipola slabshell and purple bankclimber (in this document, we refer to all seven species collectively as the seven mussels). We propose the following changes to our original proposed rule:
(1)We are enlarging two previously proposed critical habitat units, and
(2)we are adding one of the mussels to the list of species associated with one of our previously proposed units. We also have corrected inadvertent oversights in our original proposal. The draft economic analysis estimates potential future impacts associated with conservation efforts for the seven mussels in areas proposed for designation to be $42.7 million to $67.9 million over the next 20 years (undiscounted). The present value of these impacts is $33.0 million to $52.1 million, using a discount rate of three percent (2.21 million to 3.49 million annually), or $24.7 million to $38.8 million, using a discount rate of seven percent (2.31 million to 3.63 million annually). All dollar amounts include those costs coextensive with listing. We now announce public hearings and reopen the comment period to allow all interested parties an opportunity to comment simultaneously on the original proposed rule, the newly available associated draft economic analysis, and the changes to the original proposed rule included in this document. If you previously submitted comments, you need not resubmit them; they are already part of the public record that we will consider in preparing our final rule. With the inclusion of our newly proposed river lengths, our proposed critical habitat area totals 1,908.5 river kilometers (river km) (1,185.9 river miles (river mi)). Aside from the amendments we describe in this document, our original proposed rule of June 6, 2006, stands. DATES: We will accept public comments until August 6, 2007. We will hold three public hearings, on July 9, 10, and 11, 2007, on the proposed critical habitat designation and the draft economic analysis. See “Public Hearings” under SUPPLEMENTARY INFORMATION for details. ADDRESSES: If you wish to comment, you may submit your comments and information concerning this proposal by any one of the following methods: 1. Mail or hand-deliver written comments and information to the Field Supervisor, U.S. Fish and Wildlife Service, Panama City Field Office, 1601 Balboa Avenue, Panama City, FL 32405. 2. Send comments by electronic mail (e-mail) to *FW4ESFRPanamaCity@fws.gov.* Please see the “Public Comments Solicited” under SUPPLEMENTARY INFORMATION for additional information about this method. 3. Provide oral or written comments at any of the public hearings. 4. Fax your comments to 850-763-2177. 5. Submit comments via the Federal Rulemaking portal at *http://www.regulations.gov.* Follow the instructions on the site. Please see the “Public Comments Solicited” section below for more information about submitting comments or viewing our received materials. FOR FURTHER INFORMATION CONTACT: Gail Carmody, Field Supervisor, U.S. Fish and Wildlife Service, Panama City, FL 32405; telephone 850-769-0552; facsimile 850-763-2177. Persons who use a telecommunications device for the deaf
(TDD)may call the Federal Information Relay Service
(FIRS)at 800-877-8339. SUPPLEMENTARY INFORMATION: Public Hearings We will hold three public hearings on the proposed critical habitat designation and the draft economic analysis. At each location, an information session from 5 p.m. to 6:30 p.m. will precede the hearing. The public hearing will then run from 6:30 p.m. to 8:30 p.m.:
(1)July 9, 2007, Elizabeth Bradley Turner Center, Auditorium, Columbus State University, 4225 University Avenue, Columbus, GA 31807.
(2)July 10, 2007, Academic Auditorium, Room 150, Albany State University, 504 College Drive, Albany, GA 31705.
(3)July 11, 2007, Economic and Workforce Development, Building 38, Tallahassee Community College, 444 Appleyard Drive, Tallahassee, FL 32304. Public Comments Solicited We intend that any final action resulting from this proposal be as accurate and as effective as possible. Therefore, we solicit comments or suggestions from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning this proposed rule. We particularly seek comments concerning:
(1)The reasons why habitat should or should not be designated as critical habitat under section 4 of the Act (16 U.S.C. 1531 *et seq.* ), including whether the benefit of designation would outweigh threats to the species caused by designation such that designation of critical habitat is prudent;
(2)Specific information on the amount and distribution of habitat for the seven mussels, particularly what areas we should include in our designations that the species occupied at the time of listing that contain features that are essential for the conservation of the species and why; and what areas the species did not occupy at the time of listing are essential to the conservation of the species and why;
(3)Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat;
(4)Any foreseeable economic, national security, or other potential impacts resulting from the proposed designation and, in particular, any impacts on small entities, and the benefits of including or excluding areas that exhibit these impacts;
(5)Information from the Department of Defense to assist the Secretary of the Interior in evaluating critical habitat on lands administered by or under the control of the Department of Defense based on any benefit provided by an Integrated Natural Resources Management Plan (INRMP) to the conservation of the seven mussels; and information regarding impacts to national security associated with the proposed designation of critical habitat;
(6)Whether the draft economic analysis identifies all State and local costs attributable to the proposed critical habitat designation, and information on any costs that we could have inadvertently overlooked;
(7)Whether the draft economic analysis makes appropriate assumptions regarding current practices and likely regulatory changes imposed as a result of the designation of critical habitat;
(8)Whether the draft economic analysis correctly assesses the effect on regional costs associated with any land use controls that may derive from the designation of critical habitat;
(9)Any foreseeable economic or other impacts resulting from the proposed designation of critical habitat, and in particular, any impacts on small entities or families; and other information that would indicate that the designation of critical habitat would or would not have any impacts on small entities or families;
(10)Whether the draft economic analysis appropriately identifies all costs and benefits that could result from the designation;
(11)Whether our approach to critical habitat designation could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concern and comments;
(12)Whether the benefits of exclusion in any particular area outweigh the benefits of inclusion under section 4(b)(2) of the Act; and
(13)Economic data on the incremental effects that would result from designating any particular area as critical habitat. If you wish to comment, you may submit your comments and materials concerning this proposal by any one of several methods (see ADDRESSES ). Please submit comments electronically to *FW4ESFRPanamaCity@fws.gov.* Please also include “Attn: 7 mussels critical habitat” in your e-mail subject header and your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your electronic message, contact us directly by calling the Panama City U.S. Fish and Wildlife Service Office at 850-769-0552. Please note that at the termination of the public comment period we will close out the e-mail address *FW4ESFRPanamaCity@fws.gov.* Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Copies of the draft economic analysis and the proposed rule for critical habitat designation are available on the Internet at *http://www.fws.gov/panamacity* or from the Panama City U.S. Fish and Wildlife Service Office at the address and contact numbers above. Our final designation of critical habitat will take into consideration all comments and any additional information we received during both comment periods. If you submitted previous comments and information during the initial comment period on the June 6, 2006, proposed rule (71 FR 32746), you need not resubmit them, because they are currently part of our record and we will consider them in our development of our final rule. On the basis of public comment on this analysis and on the critical habitat proposal, and the final economic analysis, we may, during the development of our final determination, find that areas proposed are not essential, are appropriate for exclusion under section 4(b)(2) of the Act, or are not appropriate for exclusion. We may exclude an area from critical habitat if we determine that the benefits of such exclusion outweigh the benefits of including a particular area as critical habitat, unless the failure to designate such area as critical habitat will result in the extinction of the species. We may exclude an area from designated critical habitat based on economic impacts, national security, or any other relevant impact. Background On June 6, 2006, we published a proposed rule to designate a total of 1,864 river km (1,158 river mi) in Alabama, Florida, and Georgia as critical habitat for seven mussels (71 FR 32746). These seven mussels are the fat threeridge ( *Amblema neislerii* ), shinyrayed pocketbook ( *Lampsilis subangulata* ), Gulf moccasinshell ( *Medionidus penicillatus* ), Ochlockonee moccasinshell ( *Medionidus simpsonianus* ), oval pigtoe ( *Pleurobema pyriforme* ), Chipola slabshell ( *Elliptio chipolaensis* ), and purple bankclimber ( *Elliptoideus sloatianus* ). For more information about each of these species, and our previous Federal actions concerning them, see our original proposed critical habitat rule (June 6, 2006; 71 FR 32746). We will submit for publication in the **Federal Register** a final critical habitat designation for the seven mussels on or before October 31, 2007. Critical habitat is defined in section 3 of the Act as the specific areas within the geographic area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographic area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. Federal agencies proposing actions affecting areas designated as critical habitat must consult with us on the effects of their proposed actions, pursuant to section 7(a)(2) of the Act. Changes to the Proposed Rule We announce the following changes to the June 6, 2006, proposed rule (71 FR 32746). We propose to modify the boundaries of 2 of the 11 proposed critical habitat units (Unit 2—Chipola River, and Unit 8—Apalachicola River) based upon new information we received from the States of Alabama and Florida during our first public comment period. We are also adding the fat threeridge to the list of species associated with proposed Unit 7 (Lower Flint River, Georgia), based on new information. In the original proposed rule, we delineated the full extent of the known post-1990 live occurrence records for the seven mussels in flowing streams as critical habitat. Barriers to the movement of potential fish hosts of the larval life stage of the mussels (dams and salt water) divided the collective extent of occurrence for the 7 species into 11 units, and we proposed each of these 11 units as critical habitat for whichever of the seven species occupy that particular unit. The upstream boundary of a unit in an occupied stream was the first perennial tributary confluence or first permanent barrier to fish passage (such as a dam) upstream of the upstream-most current occurrence record. The downstream boundary of a unit in an occupied stream was the mouth of the stream, the upstream extent of tidal influence, or the upstream extent of an impoundment, whichever comes first, downstream of the downstream-most occurrence record. Chipola River (Unit 2) Proposed Changes By letter dated July 28, 2006, the Wildlife and Freshwater Fisheries Division of the Alabama Department of Conservation and Natural Resources (ADCNR) provided survey data for the shiny-rayed pocketbook and the oval pigtoe within the Chipola River Basin in Alabama. In June 2006, ADCNR surveyors found live oval pigtoes and a single live shiny-rayed pocketbook at a site in Big Creek approximately 3.7 river km (2.3 river mi) upstream of the proposed boundary for critical habitat Unit 2. ADCNR surveyors also found live oval pigtoes and shiny-rayed pocketbooks at three sites in Cowarts Creek, which we did not include in the originally proposed Unit 2. These sites are located in Houston County, Alabama, in stream segments that are contiguous with the stream segments we proposed for inclusion in Unit 2—Chipola River. The mussel survey data provided by ADCNR show that the extent of occurrence of the listed mussels in the Chipola River Basin includes Cowarts Creek and an additional portion of Big Creek that we did not include within our originally proposed boundaries of critical habitat Unit 2. These stream reaches are perennially flowing streams that support two of the seven mussels and are contiguous for the movement of potential fish hosts within Unit 2. Therefore, consistent with the methods we employed in the original proposal, we propose to revise the boundaries of Unit 2 to include an additional portion of Big Creek (5.1 river km (3.2 river mi)) and a portion of Cowarts Creek (33.5 river km (20.8 river mi)). With these revisions, the total stream length we propose for Unit 2 increases from 190.0 river km (118.1 river mi) to 228.7 river km (142.1 river mi). Unit 2 will now include the main stem of the Chipola River and seven of its tributaries. Please see the “Proposed Regulation Promulgation” section below for a complete description of Unit 2. Apalachicola River (Unit 8) Proposed Changes By letter dated August 4, 2006, the Florida Fish and Wildlife Conservation Commission (FFWCC) provided survey data for the fat threeridge and purple bankclimber within the Apalachicola River Basin in Florida. On June 7, 2000, FFWCC and Florida Department of Environmental Protection
(FDEP)biologists found a single live purple bankclimber in the River Styx about 1.21 river km (0.75 river mi) upstream of its confluence with the Apalachicola River, and found live fat threeridges in Kennedy Slough/Kennedy Creek, another tributary of the lower Apalachicola River (EnviroScience 2006). The FFWCC letter also identified two additional unnamed distributaries of the Apalachicola River (small streams flowing from the main channel to Brushy Creek) as streams containing the purple bankclimber and fat threeridge. However, FFWCC staff found only dead shells of both species in one of these two distributaries, and EnviroScience
(2006)found only dead shells of the purple bankclimber in the other. All of these sites are located in Liberty County, Florida, in stream segments that are contiguous with the stream segments proposed for inclusion in Unit 8—Apalachicola River. From the survey data provided by FFWCC, we have determined that the extent of occurrence of the listed mussels in the Apalachicola River Basin includes the River Styx, Kennedy Slough, and Kennedy Creek, which we did not include within our originally proposed boundaries of Unit 8. These stream reaches are perennially flowing streams that support two of the seven mussels and are contiguous for the movement of potential fish hosts with Unit 8. The FFWCC data do not constitute evidence that the two unnamed distributaries of the Apalachicola River (feeder streams to Brushy Creek) support listed species. Only dead shells of the listed species were found in these streams a relatively short distance from the main channel of the Apalachicola River, where live fat threeridge and purple bankclimber were found. Therefore, consistent with the methods we employed in the original proposal, we propose to revise the boundaries of Unit 8 to include a portion of the River Styx (3.8 river km (2.4 river mi)), Kennedy Slough (0.9 river km (0.5 river mi)), and Kennedy Creek (1.1 river km (0.7 river mi)). With these revisions, the total stream length we propose for Unit 8 increases from 155.4 river km (96.6 river mi) to 161.2 river km (100.2 river mi). Unit 8 will now include the main stem of the Apalachicola River, two of its distributaries, Chipola Cutoff and Swift Slough, and three of its tributaries, River Styx, Kennedy Slough, and Kennedy Creek. Please see the “Proposed Regulation Promulgation” section below for a complete description of Unit 8. Lower Flint River (Unit 7) Proposed Change We are adding the fat threeridge to the list of species associated with proposed Unit 7 (Lower Flint River, Georgia). Fat threeridges were considered extirpated from the Flint River Basin; however, in August 2006, live individuals were found in the mainstem of the Flint River in Mitchell and Baker Counties, Georgia. This revision does not alter the proposed boundaries of Unit 7, only the listed species for which we consider Unit 7 to be critical habitat. This addition is consistent with our 2003 recovery plan for the seven mussels, in which we stated that reintroduction into a portion of the Flint Basin was necessary for the recovery of the fat threeridge. In addition to the above substantive revisions to our proposal, we have removed Clayton County, Georgia, from the list of counties that contain proposed critical habitat. Because none of the stream segments we proposed, either originally or now, for designation is located within Clayton County, Georgia, this change is merely an editorial correction. Summary of Economic Analysis Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific data available, after taking into consideration the economic or any other relevant impact of specifying any particular area as critical habitat. We will continue to review any conservation or management plans that address the species within the areas we have proposed for designation, pursuant to section 4(b)(2) and based on the definition of critical habitat provided in section 3(5)(A) of the Act. Based on the June 6, 2006, proposed rule (71 FR 32746) to designate critical habitat for the seven mussels, we prepared a draft economic analysis of the proposed critical habitat designation (see “Public Comments Solicited” for how to obtain a copy). The draft economic analysis considers the potential economic effects of actions relating to the conservation of the seven mussels, including costs associated with sections 4, 7, and 10 of the Act, which would include costs attributable to designating critical habitat. It further considers the economic effects of protective measures taken as a result of other Federal, State, and local laws that aid habitat conservation for the seven mussels in critical habitat areas. The draft analysis considers both economic efficiency and distributional effects. In the case of habitat conservation, efficiency effects generally reflect the “opportunity costs” associated with the commitment of resources to comply with habitat protection measures (such as lost economic opportunities associated with restrictions on land use). This analysis also addresses how potential economic impacts are likely to be distributed, including an assessment of any local or regional impacts of habitat conservation and the potential effects of conservation activities on small entities and the energy industry. Decision-makers can use this information to assess whether the effects of the designation might unduly burden a particular group or economic sector. Finally, this draft analysis looks retrospectively at costs that have been incurred since the date we listed these species as endangered or threatened (March 16, 1998; 63 FR 12664; effective date of listing was April 15, 1998) and considers costs that may occur in the 20 years following a designation of critical habitat. As stated earlier, we solicit data and comments from the public on this draft economic analysis, as well as on all aspects of our proposal. We may revise the proposal, or its supporting documents, to incorporate or address new information we receive during this comment period. The draft economic analysis is intended to quantify the economic impacts of all potential conservation efforts for the seven musselslet; some of these costs will likely be incurred regardless of whether critical habitat is designated. It estimates potential future impacts associated with conservation efforts for the seven mussels in areas we have proposed for designation to be $42.7 million to $67.9 million over the next 20 years (undiscounted). The present value of these impacts is $33.0 million to $52.1 million, using a discount rate of 3 percent (2.21 million to 3.49 million annually), or $24.7 million to $38.8 million, using a discount rate of 7 percent (2.31 million to 3.63 million annually). All dollar amounts include those costs coextensive with listing. The analysis measures lost economic efficiency associated with water management and use changes, in the event that flow regimes are modified to provide sufficient flow to conserve the seven mussels. These water management and use changes include agricultural irrigation and recreation. Up to 82 percent of the total impacts estimated in this report are associated with these water management and use changes to conserve the seven mussels. This analysis assumes that conservation efforts for the seven mussels may result in changes to water management and use, and that these changes may result in both economic efficiency and regional economic impacts. This analysis does not, however, make assumptions or recommendations regarding whether or how such water diversions could occur. Required Determinations—Amended In our June 6, 2006, proposed rule (71 FR 32746), we indicated that we would be deferring our determination of compliance with several statutes and Executive Orders until the information concerning potential economic impacts of the designation and potential effects on landowners and stakeholders was available in the draft economic analysis. Those data are now available for our use in making these determinations. We now affirm the information contained in original proposed rule concerning Executive Order (E.O.) 13132 (Federalism); E.O. 12988 (Civil Justice Reform); the Paperwork Reduction Act; the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951); and the National Environmental Policy Act. Based on the information made available to us in the draft economic analysis, we are amending our Required Determinations, as provided below, concerning E.O. 12866 and the Regulatory Flexibility Act, E.O. 13211 (Energy Supply, Distribution, or Use), E.O. 12630 (Takings), and the Unfunded Mandates Reform Act. Regulatory Planning and Review In accordance with E.O. 12866, this document is a significant rule, because it may raise novel legal and policy issues. However, we do not anticipate that it will have an annual effect on the economy of $100 million or more or affect the economy in a material way. Due to the timeline for publication in the **Federal Register** , the Office of Management and Budget
(OMB)did not formally review the proposed rule. Further, E.O. 12866 directs Federal agencies promulgating regulations to evaluate regulatory alternatives (OMB, Circular A-4, September 17, 2003). Pursuant to Circular A-4, if the agency determines that a Federal regulatory action is appropriate, the agency will need to consider alternative regulatory approaches. Since the determination of critical habitat is a statutory requirement pursuant to the Act, we must then evaluate alternative regulatory approaches, where feasible, when promulgating a designation of critical habitat. In developing our designations of critical habitat, we consider economic impacts, impacts to national security, and other relevant impacts pursuant to section 4(b)(2) of the Act. Based on the discretion allowable under this provision, we may exclude any particular area from the designation of critical habitat, providing that the benefits of such exclusion outweigh the benefits of specifying the area as critical habitat and that such exclusion would not result in the extinction of the species. We believe that the evaluation of the inclusion or exclusion of particular areas, or combination thereof, in a designation constitutes our regulatory alternative analysis. Regulatory Flexibility Act Under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* , as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 (5 U.S.C. 802(2)), whenever an agency is required to publish a proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. In our proposed rule, we withheld our determination of whether this designation would result in a significant effect as defined under SBREFA until we completed our draft economic analysis of the proposed designation so that we would have the factual basis for our determination. According to the Small Business Administration (SBA), small entities include small organizations, such as independent nonprofit organizations, and small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents, as well as small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation, as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations. To determine if the proposed designation of critical habitat for the seven mussels would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities (such as residential and commercial development). We considered each industry or category individually to determine if certification is appropriate. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement; some kinds of activities are unlikely to have any Federal involvement and so will not be affected by the designation of critical habitat. Designation of critical habitat only affects activities conducted, funded, permitted, or authorized by Federal agencies; non-Federal activities are not affected by the designation. In our draft economic analysis of the proposed critical habitat designation, we evaluated the potential economic effects on small business entities resulting from conservation actions related to the listing of the seven mussels and proposed designation of their critical habitat. This analysis estimated prospective economic impacts due to the implementation of conservation efforts for the seven mussels in three categories: agricultural irrigation, recreation, and other economic activities (changes in water management facilities, transportation, water quality, species management, and administrative costs of section 7 consultations). The types of small entities that may bear the regulatory costs are associated with these land use activities: irrigated agriculture; recreation; water supply, hydropower, and other impoundment projects; and deadhead logging. The draft economic analysis includes an Initial Regulatory Flexibility Analysis to identify opportunities and minimize the impacts in the final rulemaking. The number of potentially affected small entities for irrigated agriculture is between 4 (a few farms bearing all the impact) and 1,096 (all farms bearing a portion of the impact) with an estimated impact per small entity of $78 to $87,000. Recreation could impact up to 5,100 regional small businesses at an estimated $2,700 per business. Water supply, hydropower, and other impoundment projects could have one hydropower operation affected for an estimated impact of $5,600. Deadhead logging could have ten logging businesses affected for an estimated impact of $2,500 per business. Based on currently available information, the Service believes that this is not a significant economic impact. Unfunded Mandates Reform Act In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501), we make the following findings:
(a)This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments,” with two exceptions. It excludes “a condition of Federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding” and the State, local, or Tribal governments “lack authority” to adjust accordingly. At the time of enactment, these entitlement programs were: Medicaid; Aid to Families with Dependent Children work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement. “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except
(i)a condition of Federal assistance; or
(ii)a duty arising from participation in a voluntary Federal program.” The designation of critical habitat does not impose a legally binding duty on non-Federal government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. Non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat. However, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply; nor would critical habitat shift the costs of the large entitlement programs listed above onto State governments.
(b)As discussed in the draft economic analysis of the proposed designation of critical habitat for the seven mussels, we expect the impacts on nonprofits and small governments to be negligible. It is likely that small governments involved with developments and infrastructure projects will be interested parties or involved with projects involving section 7 consultations for the seven mussels within their jurisdictional areas. Any costs associated with this activity are likely to represent a small portion of a local government's budget. Consequently, we do not believe that the designation of critical habitat for the seven mussels will significantly or uniquely affect these small governmental entities. As such, a Small Government Agency Plan is not required. Takings In accordance with E.O. 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have analyzed the potential takings implications of proposing critical habitat for the seven mussels. Critical habitat designation does not affect landowner actions that do not require Federal funding or permits, nor does it preclude development of habitat conservation programs or issuance of incidental take permits to permit actions that do require Federal funding or permits to go forward. In conclusion, the designation of critical habitat for the seven mussels does not pose significant takings implications. Author The primary author of this notice is the Panama City (Florida) Field Office of the U.S. Fish and Wildlife Service. List of Subjects in 50 CFR Part 17 Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation. Proposed Regulation Promulgation Accordingly, we propose to further amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as proposed to be amended at 71 FR 32746, June 6, 2006, as follows: PART 17—[AMENDED] 1. The authority citation for part 17 continues to read as follows: Authority: 16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted. 2. Critical habitat for the seven mussel species (in four northeastern Gulf of Mexico drainages) in § 17.95, which was proposed to be added to the end of paragraph
(f)on June 6, 2006, at 71 FR 32746, is proposed to be amended by revising paragraph (f)(1)(iii), the table in paragraph (6), paragraph (8), the introductory text of paragraph (13), and paragraph
(14)in the entry for “Seven mussel species (in four northeast Gulf of Mexico drainages): purple bankclimber ( *Elliptoideus sloatianus* ), Gulf moccasinshell ( *Medionidus penicillatus* ), Ochlockonee moccasinshell ( *Medionidus simpsonianus* ), oval pigtoe ( *Pleurobema pyriforme* ), shinyrayed pocketbook ( *Lampsilis subangulata* ), Chipola slabshell ( *Elliptio chipolaensis* ), and fat threeridge ( *Amblema neislerii* ),” to read as follows: § 17.95 Critical habitat—fish and wildlife.
(f)*Clams and snails.* Seven mussel species (in four northeast Gulf of Mexico drainages): purple bankclimber ( *Elliptoideus sloatianus* ), Gulf moccasinshell ( *Medionidus penicillatus* ), Ochlockonee moccasinshell ( *Medionidus simpsonianus* ), oval pigtoe ( *Pleurobema pyriforme* ), shinyrayed pocketbook ( *Lampsilis subangulata* ), Chipola slabshell ( *Elliptio chipolaensis* ), and fat threeridge ( *Amblema neislerii* ).
(1)* * *
(iii)*Georgia:* Baker, Calhoun, Coweta, Crawford, Crisp, Decatur, Dooly, Dougherty, Early, Fayette, Grady, Lee, Macon, Marion, Meriwether, Miller, Mitchell, Peach, Pike, Schley, Spalding, Sumter, Talbot, Taylor, Terrell, Thomas, Upson, Webster, and Worth.
(6)* * * Seven Mussel Species, Their Critical Habitat Units, and States Containing Those Critical Habitat Units Species Critical habitat units States Purple bankclimber ( *Elliptoideus sloatianus* ) Units 5, 6, 7, 8, 9, 10 AL, FL, GA. Gulf moccasinshell ( *Medionidus penicillatus* ) Units 1, 2, 4, 5, 6, 7 AL, FL, GA. Ochlockonee moccasinshell ( *Medionidus simpsonianus* ) Unit 9 FL, GA. Oval pigtoe ( *Pleurobema pyriforme* ) Units 1, 2, 4, 5, 6, 7, 9, 11 AL, FL, GA. Shinyrayed pocketbook ( *Lampsilis subangulata* ) Units 2, 3, 4, 5, 6, 7, 9 AL, FL, GA. Chipola slabshell ( *Elliptio chipolaensis* ) Unit 2 AL, FL. Fat threeridge (mussel) ( *Amblema neislerii* ) Units 2, 7, 8 AL, FL, GA.
(8)Unit 2. Chipola River and Dry, Rocky, Waddells Mill, Baker, Marshall, Big, and Cowarts Creeks; Houston County, Alabama; and Calhoun, Gulf, and Jackson Counties, Florida. This is a critical habitat unit for the fat threeridge, shinyrayed pocketbook, Gulf moccasinshell, oval pigtoe, and Chipola slabshell.
(i)*General Description:* Unit 2 includes the main stem of the Chipola River and seven of its tributaries, encompassing a total length of 228.7 river km (142.1 river mi). In the original proposed rule, we delineated the full extent of post-1990 live occurrence records for the seven mussels in flowing streams as critical habitat. Barriers to the movement of potential fish hosts of the larval life stage of the mussels (dams and salt water) divided the collective extent of occurrence for the 7 species into 11 units, and we proposed each of these 7 units as critical habitat for whichever of the seven species occupy that particular unit. The upstream boundary of a unit in an occupied stream was the first perennial tributary confluence or first permanent barrier to fish passage (such as a dam) upstream of the upstream-most current occurrence record. The downstream boundary of a unit in an occupied stream was the mouth of the stream, the upstream extent of tidal influence, or the upstream extent of an impoundment, whichever comes first, downstream of the downstream-most occurrence record. The main stem of the Chipola River extends from its confluence with the Apalachicola River (−85.09 longitude, 30.01 latitude) in Gulf County, Florida, upstream 144.9 river km (90.0 river mi), including the reach known as Dead Lake, to the confluence of Marshall and Cowarts creeks (−85.27 longitude, 30.91 latitude) in Jackson County, Florida; Dry Creek from the Chipola River upstream 7.6 river km (4.7 river mi) to Ditch Branch (−85.24 longitude, 30.69 latitude), Jackson County, Florida; Rocky Creek from the Chipola River upstream 7.1 river km (4.4 river mi) to Little Rocky Creek (−85.13 longitude, 30.68 latitude), Jackson County, Florida; Waddells Mill Creek from the Chipola River upstream 3.7 river km (2.3 river mi) to Russ Mill Creek (−85.29 longitude, 30.87 latitude), Jackson County, Florida; Baker Creek from Waddells Mill Creek upstream 5.3 river km (3.3 river mi) to Tanner Springs (−85.32 longitude, 30.83 latitude), Jackson County, Florida; Marshall Creek from the Chipola River upstream 13.7 river km (8.5 river mi) to the Alabama-Florida State line (−85.33 longitude, 31.00 latitude), Jackson County, Florida; Cowarts Creek from the Chipola River in Jackson County, Florida, upstream 33.5 river km (20.8 river mi) to the Edgar Smith Road bridge (−85.29 longitude, 31.13 latitude), Houston County, Alabama; and Big Creek from the Alabama-Florida State line upstream 13.0 river km (8.1 river mi) to Limestone Creek (−85.42 longitude, 31.08 latitude), Houston County, Alabama. The short segment of the Chipola River that flows underground within the boundaries of Florida Caverns State Park is not included within this unit.
(ii)*Note:* Unit 2 map follows: BILLING CODE 4310-55-P EP21JN07.000
(13)Unit 7. Lower Flint River and Spring, Aycocks, Dry, Ichawaynochaway, Mill, Pachitla, Little Pachitla, Chickasawhatchee, and Cooleewahee creeks in Baker, Calhoun, Decatur, Dougherty, Early, Miller, Mitchell, and Terrell Counties, Georgia. This is a critical habitat unit for the fat threeridge, shinyrayed pocketbook, Gulf moccasinshell, oval pigtoe, and purple bankclimber. * * *
(14)Unit 8. Apalachicola River, Chipola Cutoff, Swift Slough, River Styx, Kennedy Slough, and Kennedy Creek in Calhoun, Franklin, Gadsden, Gulf, Jackson, and Liberty Counties, Florida. This is a critical habitat unit for the fat threeridge and purple bankclimber.
(i)*General Description:* Unit 8 includes the main stem of the Apalachicola River, two of its distributaries, Chipola Cutoff and Swift Slough, and three of its tributaries, River Styx, Kennedy Slough, and Kennedy Creek, encompassing a total length of 161.2 river km (100.2 river mi). The main stem of the Apalachicola River extends from the downstream end of Bloody Bluff Island (river mile 15.3 on U.S. Army Corps of Engineers Navigation Charts) (−85.01 longitude, 29.88 latitude), Franklin County, Florida, through Calhoun and Liberty Counties, Florida, upstream to the Jim Woodruff Lock and Dam (which impounds Lake Seminole) (−84.86 longitude, 30.71 latitude), Gadsden and Jackson Counties, Florida; Chipola Cutoff from the Apalachicola River in Gulf County, Florida, downstream 4.5 river km (2.8 river mi) to its confluence with the Chipola River; Swift Slough from the Apalachicola River in Liberty County, Florida, downstream 3.6 river km (2.2 river mi) to its confluence with the River Styx (−85.12 longitude, 30.10 latitude); River Styx from the mouth of Swift Slough (−85.12 longitude, 30.10 latitude) in Liberty County, Florida, downstream 3.8 river km (2.4 river mi) to its confluence with the Apalachicola River; Kennedy Slough from (−85.07 longitude, 30.01 latitude) in Liberty County, Florida, downstream 0.9 river km (0.5 river mi) to its confluence with Kennedy Creek; and Kennedy Creek from Brushy Creek Feeder (−85.06 longitude, 30.01 latitude) in Liberty County, Florida, downstream 1.1 river km (0.7 river mi) to its confluence with the Apalachicola River.
(ii)*Note:* Unit 8 map follows: EP21JN07.001 Dated: June 12, 2007. David M. Verhey, Acting Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. E7-11897 Filed 6-20-07; 8:45 am] BILLING CODE 4310-55-C 72 119 Thursday, June 21, 2007 Notices DEPARTMENT OF AGRICULTURE Forest Service Withdrawal of Notice of Intent To Prepare an Environmental Impact Statement for the Helena National Forest, Broadwater, Lewis & Clark, Meagher, and Powell Counties, MT; Travel Management Plan for the South Belts, Divide, and Blackfoot Project Areas AGENCY: Forest Service, USDA. ACTION: Cancellation notice. SUMMARY: On April 18, 2003, a Notice of Intent
(NOI)to prepare an environmental impact statement called the Helena National Forest, Montana; Travel Management Plan for the South Belts, Divide, and Blackfoot Project Areas was published in the 68 FR 19185. This NOI is hereby rescinded due to elapsed time since the appearance of the NOI in the **Federal Register** and changed scope of the proposal as directed by 36 CFR Parts 212, 251, 261, and 295 Travel Management; Designated Routes and Areas for Motor Vehicle Use; Final Rule; November 9, 2005. Dated: June 5, 2007. Kevin T. Riordan, Forest Supervisor. [FR Doc. E7-12000 Filed 6-20-07; 8:45 am] BILLING CODE 3410-11-P DEPARTMENT OF COMMERCE Economic Development Administration [Docket No.: 070607177-7178-01] Solicitation of Applications for the National Technical Assistance, Training, Research and Evaluation Program: Information Dissemination and National Symposium AGENCY: Economic Development Administration, Department of Commerce. ACTION: Notice and request for applications. SUMMARY: The Economic Development Administration
(EDA)is soliciting applications for FY 2007 National Technical Assistance, Training, Research and Evaluation program (NTA Program) funding. Through this notice, EDA solicits applications for funding that address one or both of the following two projects:
(1)Information dissemination to practitioners serving economically distressed areas; and
(2)a national symposium to bring together leaders to discuss current and future trends in economic development and how to improve and implement economic development best practices. EDA's mission is to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy. Through its NTA Program, EDA works towards fulfilling its mission by funding research and technical assistance projects to promote competitiveness and innovation in rural and urban regions throughout the United States and its territories. By working in conjunction with its research partners, EDA will help States, local governments, and community-based organizations to achieve their highest economic potential. DATES: To be considered timely, a completed application, regardless of the format in which it is submitted, must be either:
(1)Received by the EDA representative listed below under “Paper Submissions” no later than July 23, 2007 at 5 p.m. EST; or
(2)transmitted and time-stamped at www.grants.gov no later than July 23, 2007 at 5 p.m. EST. Any application received or transmitted, as the case may be, after 5 p.m. EST on July 23, 2007 will be considered non-responsive and will not be considered for funding. Please see the instructions below under “Submitting Application Packages” for information regarding format options for submitting completed applications. The closing date and time are the same for paper submissions as for electronic submissions. By August 20, 2007, EDA expects to notify the applicants selected for investment assistance under this notice. The selected applicants should expect to receive funding for their projects within thirty days of EDA's notification of selection. Applicants choosing to submit completed applications electronically in whole or in part through www.grants.gov should follow the instructions set out below under “Electronic Access” and in section IV. of the complete Federal Funding Opportunity
(FFO)announcement for this request for applications. ADDRESSES: *Paper Submissions:* Full or partial paper (hardcopy) applications submitted pursuant to this notice and request for applications may be: 1. E-mailed to William P. Kittredge, Senior Program Analyst, at *wkittredge@eda.doc.gov;* or 2. Hand-delivered or mailed to William P. Kittredge, Senior Program Analyst, Economic Development Administration, Room 7009, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230. Applicants submitting full or partial paper submissions are encouraged to do so by e-mail. Applicants are advised that, due to mail security measures, EDA's receipt of mail sent via the United States Postal Service may be substantially delayed or suspended in delivery. *Electronic Submissions:* Applicants may submit applications electronically in whole or in part in accordance with the instructions provided at www.grants.gov and in section IV.B. of the FFO announcement. EDA strongly encourages that applicants not wait until the application closing date to begin the application process through www.grants.gov. The preferred file format for electronic attachments (e.g., the project narrative and additional exhibits to Form ED-900A and Form ED-900A's program-specific component) is portable document format (PDF); however, EDA will accept electronic files in Microsoft Word, WordPerfect, Lotus or Excel formats. FOR FURTHER INFORMATION CONTACT: For additional information regarding paper submissions, please contact William P. Kittredge, Senior Program Analyst, via e-mail at *wkittredge@eda.doc.gov* (preferred) or by telephone at
(202)482-5442. For additional information regarding electronic submissions, please access the following link for assistance in navigating www.grants.gov and for a list of useful resources: *http://www.grants.gov/applicants/applicant_help.jsp.* If you do not find an answer to your question under *Frequently Asked Questions,* try consulting the *Applicant's User Guide.* If you still cannot find an answer to your question, contact www.grants.gov via email at *support@grants.gov* or telephone at 1-800-518-4726. The hours of operation for www.grants.gov are Monday-Friday, 7 a.m. to 9 p.m.
(EST)(except for federal holidays). Additional information about EDA and its NTA Program may be obtained from EDA's Internet Web site at *http://www.eda.gov.* The complete FFO announcement for this request for applications is available at *http://www.grants.gov* and at *http://www.eda.gov.* SUPPLEMENTARY INFORMATION: *Background Information:* EDA is soliciting applications for FY 2007 NTA Program funding. Through this notice, EDA solicits applications for funding that address one or both of the following two projects:
(1)Information dissemination to practitioners serving economically distressed areas; and
(2)a national symposium to bring together leaders to discuss current and future trends in economic development and how to improve and implement economic development best practices. EDA's intent is to implement a coordinated and complementary information dissemination program that, through strategic linkages, reaches the maximum number of economic development practitioners. As described in the FFO announcement, the information dissemination project has three component tasks:
(1)Broadcasting of strategy telecasts;
(2)preparation and dissemination of monthly electronic newsletters; and
(3)preparation and dissemination of a quarterly magazine. Applicants must address each of these three components of the information dissemination project. *The 2008 EDA National Symposium* will bring together nationally-recognized leaders to discuss “what's next” in economic development and how to implement economic development best practices. Qualified applicants must submit applications for organizing, supporting, promoting, holding and reporting on the symposium. The focus of the symposium is to disseminate and share the strategies, policies and best practices of 21st century economic development. *Application Package:* An application package consists of the following three forms: 1. Form ED-900A, *Application for Investment Assistance* (OMB Control No. 0610-0094); 2. Form ED-900A's program-specific component, *National Technical Assistance, Training, and Research and Evaluation Program Requirements* (OMB Control No. 0610-0094); and 3. Form SF-424, *Application for Federal Assistance* (OMB Control No. 4040-0004). Please note that applicants must submit all three forms in accordance with the instructions provided in sections IV. and VII.B. of the FFO announcement. *Submitting Application Packages:* Applications may be submitted in three formats:
(1)Full paper (hardcopy) submission;
(2)partial paper (hardcopy) submission and partial electronic submission; or
(3)full electronic submission, each in accordance with the procedures provided in section IV.B. of the FFO announcement. The content of the application is the same for paper submissions as it is for electronic submissions. Applications completed in accordance with the instructions set forth in the FFO announcement, regardless of the option chosen for submission, will be considered for EDA funding under this request for applications. Incomplete applications and applications submitted by facsimile will not be considered. *Paper Access:* Each of the three forms listed above under “Application Package” are separate attachments available at *http://www.eda.gov/InvestmentsGrants/Application.xml.* You may print copies of each of these forms from *http://www.eda.gov/InvestmentsGrants/Application.xml.* You also may obtain paper application packages by contacting the EDA representative listed above under “For Further Information Contact.” *Electronic Access:* Applicants may apply electronically through www.grants.gov, and may access this grant opportunity synopsis by following the instructions provided on *http://www.grants.gov/search/basic.do.* The synopsis will have an application package, which is an electronic file that contains forms pertaining to this specific grant opportunity. On *http://www.grants.gov/search/basic.do,* applicants can perform a basic search for this grant opportunity by completing the “ *Keyword Search,* ” the “ *Search by Funding Opportunity Number,* ” or the “ *Search by CFDA Number* ” field, and then clicking the “ *Search* ” button. *Funding Availability:* EDA may use funds appropriated under the Revised Continuing Appropriations Resolution, 2007, Pub. L. No. 110-5 (February 15, 2007) to make awards under the NTA Program authorized under section 207 of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3147), as amended (PWEDA), and 13 CFR part 306, subpart A. Approximately $2,700,000 is available, and shall remain available until expended, for funding awards pursuant to this notice and request for applications. Based on past awards for similar projects, the range of total expenditures for
(1)information dissemination projects has been from $150,000 to $250,000 and
(2)national symposia has been from $250,000 to $450,000. EDA anticipates publishing additional FFO announcements (and corresponding notices in the **Federal Register** ) under the NTA Program later during this fiscal year. Please note that the FFO announcement published on March 22, 2007 for EDA's economic development assistance programs references program funds allocated for Local Technical Assistance and National Technical Assistance. EDA may allocate additional funds currently available for the NTA Program to the Local Technical Assistance program for additional Local Technical Assistance projects. *Statutory Authority:* The authority for the NTA Program is PWEDA. EDA published final regulations (codified at 13 CFR chapter III) in the **Federal Register** on September 27, 2006 (71 FR 56658). The final regulations became effective upon publication and reflect changes made to PWEDA by the Economic Development Administration Reauthorization Act of 2004 (Pub. L. No. 108-373, 118 Stat. 1756 (2004)). The final regulations and PWEDA are accessible on EDA's Internet Web site at *http://www.eda.gov/InvestmentsGrants/Lawsreg.xml.* These regulations will govern an award made under this notice and request for applications. *Catalog of Federal Domestic Assistance
(CFDA)Numbers:* 11.303, Economic Development—Technical Assistance; 11.312, Economic Development—Research and Evaluation *Eligibility Requirement:* Pursuant to PWEDA, eligible applicants for and eligible recipients of EDA investment assistance include a District Organization; an Indian Tribe or a consortium of Indian Tribes; a State; a city or other political subdivision of a State, including a special purpose unit of a State or local government engaged in economic or infrastructure development activities, or a consortium of political subdivisions; an institution of higher education or a consortium of institutions of higher education; a public or private non-profit organization or association; and, as provided in section 207 of PWEDA (42 U.S.C. 3147) for the NTA Program, a private individual or a for-profit organization. *See* section 3 of PWEDA (42 U.S.C. 3122) and 13 CFR 300.3. *Cost Sharing Requirement:* Generally, the amount of the EDA grant may not exceed fifty
(50)percent of the total cost of the project. However, a project may receive an additional amount that shall not exceed thirty
(30)percent, based on the relative needs of the region in which the project will be located, as determined by EDA. *See* section 204(a) of PWEDA (42 U.S.C. 3144) and 13 CFR 301.4(b)(1). Under this competitive solicitation, the Assistant Secretary of Commerce for Economic Development (Assistant Secretary) also has the discretion to establish a maximum EDA investment rate of up to one hundred
(100)percent where the project
(i)merits and is not otherwise feasible without an increase to the EDA investment rate; or
(ii)will be of no or only incidental benefit to the recipient. *See* section 204(c)(3) of PWEDA (42 U.S.C. 3144) and 13 CFR 301.4(b)(4). While cash contributions are preferred, in-kind contributions, consisting of assumptions of debt or contributions of space, equipment, and services, may provide the non-federal share of the total project cost. *See* section 204(b) of PWEDA (42 U.S.C. 3144). EDA will fairly evaluate all in-kind contributions, which must be eligible project costs and meet applicable federal cost principles and uniform administrative requirements. Funds from other federal financial assistance awards are considered matching share funds only if authorized by statute that allows such use, which may be determined by EDA's reasonable interpretation of the statute. *See* 13 CFR 300.3. The applicant must show that the matching share is committed to the project, available as needed and not conditioned or encumbered in any way that precludes its use consistent with the requirements of EDA investment assistance. *See* 13 CFR 301.5. *Intergovernmental Review:* Applications under the NTA Program are not subject to Executive Order 12372, “ *Intergovernmental Review of Federal Programs.* ” *Evaluation and Selection Procedures:* To apply for an award under this request for applications, an eligible applicant must submit a completed application package to EDA before the closing date and time specified in the DATES section of this notice, and in the manner provided in section IV. of the FFO announcement. Any application received or transmitted, as the case may be, after 5 p.m. EST on July 23, 2007 will not be considered for funding. Applications that do not meet all items required or that exceed the page limitations set forth in section IV.C. of the FFO announcement will be considered non-responsive and will not be considered by the review panel. By August 20, 2007, EDA expects to notify the applicants selected for investment assistance under this notice. Unsuccessful applicants will be notified by postal mail that their applications were not selected for funding. Applications that meet all the requirements will be evaluated by a review panel comprised of at least three
(3)EDA staff members, all of whom will be full-time federal employees. *Evaluation Criteria:* The review panel will evaluate the applications and rate and rank them using the following criteria of approximate equal weight: 1. Conformance with EDA's statutory and regulatory requirements, including the extent to which the proposed project satisfies the award requirements set out below and as provided in 13 CFR 306.2: a. Strengthens the capacity of local, State or national organizations and institutions to undertake and promote effective economic development programs targeted to regions of distress; b. Benefits distressed regions; and c. Demonstrates innovative approaches to stimulate economic development in distressed regions; 2. The degree to which an EDA investment will have strong organizational leadership, relevant project management experience and a significant commitment of human resources talent to ensure the project's successful execution ( *see* 13 CFR 301.8(b)); 3. The ability of the applicant to implement the proposed project successfully ( *see* 13 CFR 301.8); 4. The feasibility of the budget presented; and 5. The cost to the Federal government. *Selection Factors* : The Assistant Secretary, as the Selecting Official, expects to fund the highest ranking applications, as recommended by the review panel, submitted under this competitive solicitation. However, the Assistant Secretary may not make any selection, or he may select an application out of rank order for the following reasons:
(1)A determination that the application better meets the overall objectives of sections 2 and 207 of PWEDA (42 U.S.C. 3121 and 3147);
(2)the applicant's performance under previous awards; or
(3)the availability of funding. The Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative Agreements *The Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative Agreements,* published in the **Federal Register** on December 30, 2004 (69 FR 78389), are applicable to this competitive solicitation. This notice may be accessed by entering the **Federal Register** volume and page number provided in the previous sentence at the following Internet Web site: *http://www.gpoaccess.gov/fr/retrieve.html* . Paperwork Reduction Act This request for applications contains collections of information subject to the requirements of the Paperwork Reduction Act (PRA). The Office of Management and Budget
(OMB)has approved the use of Form ED-900A ( *Application for Investment Assistance* ) under control number 0610-0094. Form ED-900A's program-specific component ( *National Technical Assistance, Training, and Research and Evaluation Program Requirements* ) also is approved under OMB control number 0610-0094, and incorporates Forms SF-424A ( *Budget Information—Non-Construction Programs,* OMB control number 0348-0044) and SF-424B ( *Assurances—Non-Construction Programs,* OMB control number 0348-0040). OMB has approved the use of Form SF-424 ( *Application for Financial Assistance* ) under control number 4040-0004. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless the collection of information displays a currently valid OMB control number. Executive Order 12866 This notice has been determined to be not significant for purposes of Executive Order 12866, “Regulatory Planning and Review.” Executive Order 13132 It has been determined that this notice does not contain “policies that have Federalism implications,” as that phrase is defined in Executive Order 13132, “Federalism.” Administrative Procedure Act/Regulatory Flexibility Act Prior notice and an opportunity for public comments are not required by the Administrative Procedure Act or any other law for rules concerning grants, benefits, and contracts (5 U.S.C. 553(a)(2)). Because notice and opportunity for comment are not required pursuant to 5 U.S.C. 553 or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) are inapplicable. Therefore, a regulatory flexibility analysis has not been prepared. Dated: June 15, 2007. Benjamin Erulkar, Deputy Assistant Secretary of Commerce for Economic Development and Chief Operating Officer. [FR Doc. E7-12003 Filed 6-20-07; 8:45 am] BILLING CODE 3510-24-P DEPARTMENT OF COMMERCE International Trade Administration Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of Duty AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: June 21, 2007. FOR FURTHER INFORMATION CONTACT: Maura Jeffords, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave., NW, Washington, D.C. 20230, telephone:
(202)482-3146. SUPPLEMENTARY INFORMATION: Section 702 of the Trade Agreements Act of 1979 (as amended) (“the Act”) requires the Department of Commerce (“the Department”) to determine, in consultation with the Secretary of Agriculture, whether any foreign government is providing a subsidy with respect to any article of cheese subject to an in-quota rate of duty, as defined in section 702(h) of the Act, and to publish an annual list and quarterly updates of the type and amount of those subsidies. We hereby provide the Department's quarterly update of subsidies on articles of cheese that were imported during the period January 1, 2007 through March 31, 2007. The Department has developed, in consultation with the Secretary of Agriculture, information on subsidies (as defined in section 702(h) of the Act) being provided either directly or indirectly by foreign governments on articles of cheese subject to an in-quota rate of duty. The appendix to this notice lists the country, the subsidy program or programs, and the gross and net amounts of each subsidy for which information is currently available. The Department will incorporate additional programs which are found to constitute subsidies, and additional information on the subsidy programs listed, as the information is developed. The Department encourages any person having information on foreign government subsidy programs which benefit articles of cheese subject to an in-quota rate of duty to submit such information in writing to the Assistant Secretary for Import Administration, U.S. Department of Commerce, 14th Street and Constitution Ave., NW, Washington, D.C. 20230. This determination and notice are in accordance with section 702(a) of the Act. Dated: June 12, 2007. Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration. Appendix Subsidy Programs On Cheese Subject To An In-Quota Rate Of Duty Country Program(s) Gross 1 Subsidy ($/lb) Net 2 Subsidy ($/lb) 27 European Union Member States 3 European Union Restitution Payments $ 0.00 $ 0.00 Canada Export Assistance on Certain Types of Cheese $ 0.30 $ 0.30 Norway Indirect
(Milk)Subsidy $ 0.00 $ 0.00 Consumer Subsidy $ 0.00 $ 0.00 Total $ 0.00 $ 0.00 Switzerland Deficiency Payments $ 0.00 $ 0.00 1 Defined in 19 U.S.C. 1677(5). 2 Defined in 19 U.S.C. 1677(6). 3 The 27 member states of the European Union are: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, the United Kingdom; and Bulgaria and Romania that completed accession to European Union on January 1, 2007. [FR Doc. E7-12047 Filed 6-20-07; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration [XRIN: 0648-XA93] Gulf of Mexico Fishery Management Council; Public Hearings AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of public hearings. SUMMARY: The Gulf of Mexico Fishery Management Council (Council) will convene public hearings on an Aquaculture Amendment. DATES: The public hearings will held from July 9 - 12, 2007 at 7 locations throughout the Gulf of Mexico. For specific dates and times, see SUPPLEMENTARY INFORMATION . ADDRESSES: The public hearings will be held in the following locations: N. Redington Beach and Destin, FL; Biloxi, MS; Orange Beach, AL; New Orleans, LA; Galveston and Corpus Christi, TX. For specific locations, see SUPPLEMENTARY INFORMATION . *Council address* : Gulf of Mexico Fishery Management Council, 2203 North Lois Avenue, Suite 1100, Tampa, FL 33607. FOR FURTHER INFORMATION CONTACT: Wayne Swingle, Executive Director; telephone:
(813)348-1630. SUPPLEMENTARY INFORMATION: The Gulf of Mexico Fishery Management Council (Council) is preparing an amendment which will require persons to obtain a permit from NMFS to participate in aquaculture by constructing an aquaculture facility in the exclusive economic zone
(EEZ)of the Gulf of Mexico. Each application for a permit must comply with many permit conditions related to record keeping and operation of the facility. These permit conditions will assure the facility has a minimal affect on the environment and on other fishery resources. Compliance with the conditions will be evaluated annually for the duration of the permit as the basis for renewal of the permit for the next year. The public hearings will begin at 6 p.m. and conclude at the end of public testimony or no later than 10 p.m. at each of the following locations: *Monday, July 9, 2007* , Doubletree Beach Resort, 17120 Gulf Blvd., N. Redington Beach, FL 33708, telephone:
(727)391-4000; *Monday, July 9, 2007* , Best Western Cypress Creek, 7921 Lamar Poole Road, Biloxi, MS 39532, telephone:
(228)875-7111; *Tuesday, July 10, 2007* , City of Orange Beach, Parks & Rec, 27235 Canal Road, Orange Beach, AL 36561,telephone:
(251)981-6028; *Tuesday, July 10, 2007* , W New Orleans, 333 Poydras St., New Orleans, LA 70130, telephone:
(504)525-9444; *Wednesday, July 11, 2007* , Embassy Suites Hotel, 570 Scenic Gulf Drive, Destin, FL 32550, telephone:
(850)337-7000; *Wednesday, July 11, 2007* , San Luis Resort, 5222 Seawall Boulevard, Galveston, TX 77550, telephone:
(409)744-1500; *Thursday, July 12, 2007* , Best Western Marina Grand, 300 N. Shoreline Blvd., Corpus Christi, TX 78401, telephone:
(361)883-5111. Copies of the Amendment a can be obtained by calling the Council office at
(813)348-1630. Special Accommodations These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Tina Trezza at the Council (see ADDRESSES ) at least 5 working days prior to the meeting. Dated: June 18, 2007. Tracey L. Thompson, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E7-12004 Filed 6-20-07; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE Patent and Trademark Office Submission for OMB Review; Comment Request The United States Patent and Trademark Office (USPTO) has submitted to the Office of Management and Budget
(OMB)for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35). *Agency:* United States Patent and Trademark Office (USPTO). *Title:* Practitioner Records Maintenance, Disclosure, and Discipline Before the United States Patent and Trademark Office (USPTO). *Form Number(s):* None. *Agency Approval Number:* 0651-0017. *Type of Request:* Extension of a currently approved collection. *Burden:* 10,402 hours annually. *Number of Respondents:* 532 responses per year. *Avg. Hours Per Response:* The USPTO estimates that practitioners spend 26 hours per year keeping and maintaining records concerning their client's cases. The USPTO estimates that practitioners seeking reinstatement to practice before the agency will spend 60 hours per year keeping and maintaining records showing their compliance with the suspension or exclusion orders. It is estimated that it takes 2 hours to report a complaint/violation. These estimates include the time to maintain the records, and to gather the necessary information and prepare the complaint/violation and submit it to the USPTO. *Needs and Uses:* This information is required by 35 U.S.C. 2(b)(2)(D) and 32, and administered by the USPTO through the USPTO Code of Professional Responsibility (37 CFR 10.20 to 10.112) and the Investigations and Disciplinary Proceedings rules (37 CFR 10.130 to 10.170). This information is used by the Director of the Office of Enrollment and Discipline
(OED)to investigate and, where appropriate, prosecute for violations of the USPTO Code of Professional Responsibility. Registered practitioners are mandated to maintain proper documentation so that they can fully cooperate with an investigation in the event of a report of an alleged violation. Additionally, practitioners who have been excluded or suspended from practice before the USPTO must keep and maintain records of their steps to comply with the suspension or exclusion order. These records serve as the practitioner's proof of compliance with the order. No forms are associated with this information collection. *Affected Public:* Business or other for-profit. *Frequency:* On occasion. *Respondent's Obligation:* Mandatory. *OMB Desk Officer:* David Rostker,
(202)395-3897. Copies of the above information collection proposal can be obtained by any of the following: *E-mail* : *Susan.Fawcett@uspto.gov* . Include “0651-0017 copy request” in the subject line of the message. *Fax:* 571-273-0112, marked to the attention of Susan K. Fawcett. *Mail:* Susan K. Fawcett, Records Officer, Office of the Chief Information Officer, Customer Information Services Group, Public Information Services Division, U.S. Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450. Written comments and recommendations for the proposed information collection should be sent on or before July 23, 2007 to David Rostker, OMB Desk Officer, Room 10202, New Executive Office Building, Washington, DC 20503. Dated: June 15, 2007. Susan K. Fawcett, Records Officer, USPTO, Customer Information Services Group, Public Information Services Division. [FR Doc. E7-12005 Filed 6-20-07; 8:45 am] BILLING CODE 3510-16-P DEPARTMENT OF DEFENSE Department of the Army Notice of Availability of the Record of Decision
(ROD)for the Environmental Impact Statement
(EIS)on Base Realignment and Closure
(BRAC)Actions at Fort Sam Houston, TX AGENCY: Department of the Army, DoD. ACTION: Record of decision. SUMMARY: The Department of the Army announces the availability of a ROD which documents the potential environmental impacts associated with realignment actions directed by the BRAC Commission at Fort Sam Houston, TX and Camp Bullis, TX. ADDRESSES: For more information or to obtain a copy of the ROD, please contact Mr. Phillip Reidinger, Public Affairs Office, Building 124, 1212 Stanley Road, Fort Sam Houston, TX 78234; e-mail *Phillip.Reidinger@us.army.mil.* FOR FURTHER INFORMATION CONTACT: Mr. Phillip Reidinger at
(210)221-1151. SUPPLEMENTARY INFORMATION: The subject of the ROD, EIS and Proposed Action are the construction and renovation activities and movement of personnel associated with the BRAC directed realignment of Fort Sam Houston. The documents also evaluate effects of Army Modular Force
(AMF)transformation activities that will occur at Fort Sam Houston at the same time that the BRAC actions are being implemented. To implement the applicable portions of the BRAC recommendations, Fort Sam Houston will be receiving personnel, equipment, and missions from various realignment and closure actions within the Department of Defense. Additionally, the Army had planned to conduct a series of non-BRAC transformations to position its forces strategically for the future. Additionally, permanent facilities will be constructed or renovated to house the 470th Military Intelligence Brigade and various Headquarters units of the new Army North and Sixth Army that are currently located in a mix of temporary and existing facilities. To enable implementation of the BRAC Commission recommendations and accommodation of the concurrent Army initiatives, the Army must provide the necessary facilities/buildings and infrastructure to support the changes in force structure. Following a rigorous examination of all implementation alternatives, those alternatives found not to be viable were dropped from further analysis in the EIS. Alternatives carried forward included
(1)The Preferred Alternative and
(2)a No Action Alternative. The Preferred Alternative included construction, renovation, and operation of proposed facilities to accommodate incoming military missions at Fort Sam Houston. Minor siting variations of proposed facilities were also evaluated. Planned undertakings within the National Historical Landmark
(NHL)District, including the demolition of existing buildings and construction of new buildings, will be reviewed using the Installation Design Guide historic review requirements and the Standard Operating Procedures
(SOPs)in the Historic Properties Component
(HPC)of the Integrated Cultural Resources Management Plan. If demolition cannot be avoided, the determination of effects to cultural resources of the NHL District and required mitigations will be determined per the HPC SOPs. The EIS analyses indicated that implementation of the preferred alternative would have no long-term, significant impacts on the other environmental resources of Fort Sam Houston, Camp Bullis or their surrounding areas. Potential minor impacts to visual resources from implementation of the preferred alternative would generally occur only within the physical boundaries of Fort Sam Houston and Camp Bullis. No long-term significant impacts to geology, topography, caves, karst features, soils or wetlands will occur at either installation. Potential land use impacts are expected at Fort Sam Houston. Use of utilities and generation of hazardous and non-hazardous wastes will likely increase at both installations but not in significant amounts. Minor air, noise and transportation impacts would also occur during short-term construction activities under the preferred alternative at both installations and continue after final construction and occupancy. No significant impacts to biological resources (vegetation, wildlife, and threatened and endangered species) are expected from the implementation of the preferred alternative. Alternative siting variations would result in similar impacts and benefits as compared to the preferred alternative. The ROD has considered the results of the analyses presented in the Final EIS and has determined that the EIS adequately addresses the impacts associated with implementation of the Army's proposed action. As a result of this ROD, the Army will proceed with implementation of the Realignment Alternative as presented Final EIS, with all or any of its assessed siting variations, if required to implement the BRAC Commission's recommendations at Fort Sam Houston. In making this decision, a 30-day waiting period for comments on the Final EIS was observed. No new issues that would require modifying or supplementing the EIS were identified. The Fort Sam Houston ROD also takes into consideration transcripts of scoping and Draft EIS public meetings, oral and written comments received during the public comment periods, and provisions of relevant statutes, regulations, and Executive Orders that bear on the installation disposal process and environmental stewardship responsibilities of the Army. An electronic version of the ROD can be viewed or downloaded from the following Web site: *http://www.hqda.army.mil/acsim/brac/nepa_eis_docs.htm.* Dated: June 15, 2007. Addison D. Davis, IV, Deputy Assistant Secretary of the Army (Environment, Safety and Occupational Health). [FR Doc. 07-3056 Filed 6-20-07; 8:45 am]
Connectionstraces to 56
Traces to 56 documents
U.S. Code
- Rule making§ 553
- Purposes§ 3501
- Price support§ 1421
- Congressional declaration of purpose§ 4321
- Additional inspection services§ 136
- Transferred§ 450
- Rules and regulations§ 7805
- Findings, purposes and policy§ 1801
- Findings§ 7701
- Definitions§ 601
- DEFINITIONS.§ 2001
- Capital adequacy of banks and institutions§ 2154
- Federal Aviation Administration§ 106
- Cooperative arrangements§ 873
- Using cooperative agreements§ 6305
- Powers and duties§ 566
- Avoidance of duplicative or unnecessary analyses§ 605
- Purposes§ 1501
- EXPEDITED PROCESSING OF REQUESTS FOR JAPANESE IMPERIAL GOVERNMENT RECORDS.§ 804
- Departmental regulations§ 301
- Functions of the Attorney General§ 509
- Interest and penalty on claims§ 3717
- Establishment, functions, and activities§ 272
- Congressional findings and declaration of purpose§ 7401
- Standards of performance for new stationary sources§ 7411
- Congressional findings and declaration of purposes and policy§ 1531
- DESIGNATION.§ 802
- Definitions§ 658
- Grants for training, research, and technical assistance§ 3147
- Definitions§ 3122
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register
CFR
- Ionizing radiation for the treatment of food.§ 179.26
- Definitions.§ 615.5201
- Rural home financing.§ 613.3030
- General requirements.§ 614.4200
- Applicability.§ 325.3
- Minimum permanent capital standards.§ 615.5205
- May I address the unsafe condition in a way other than that set out in the airworthiness directive?§ 39.19
- Rules and regulations.§ 601.601
- What size standards has SBA identified by North American Industry Classification System codes?§ 121.201
- Definitions.§ 300.3
- Investment rates.§ 301.4
- Matching share requirements.§ 301.5
- Award requirements.§ 306.2
- Application evaluation criteria.§ 301.8
57 references not yet in our index
- 7 CFR 301
- 7 CFR 301.50
- 7 CFR 3015
- 7 USC 7701-7772
- 7 CFR 2.22
- Pub. L. 106-113
- Pub. L. 106-224
- 114 Stat. 400
- 7 CFR 319.56
- 9 CFR 372
- 7 CFR 305
- 40 CFR 1500
- 7 CFR 1
- 7 CFR 372
- 7 CFR 319
- 26 CFR 301
- T.D. 9333
- Pub. L. 105-206
- Pub. L. 108-357
- 118 Stat. 1418
- Pub. L. 109-135
- 119 Stat. 2577
- Pub. L. 109-432
- 120 Stat. 2922
- Pub. L. 110-28
- 50 CFR 679
- 50 CFR 600
- 7 CFR 301.75-1
- 12 CFR 615
- Pub. L. 100-233
- 12 CFR 615.5211
- Pub. L. 109-291
- 12 CFR 615.5301(c)
- 12 CFR 615.5335(a)
- 12 CFR 3.6(b)
- 12 CFR 208
- 12 CFR 225
- 12 CFR 567.8
- 14 CFR 39
- 28 CFR 16
+ 17 more
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