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Code · REGISTER · 2007-11-19 · Federal Highway Administration (FHWA), DOT · Notices

Notices. Notice of Limitation on Claims for Judicial Review of Actions by FHWA

75,364 words·~343 min read·/register/2007/11/19/07-5768

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

BILLING CODE 4910-13-M DEPARTMENT OF TRANSPORTATION Federal Highway Administration Notice of Final Federal Agency Actions on Proposed Highway in California AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of Limitation on Claims for Judicial Review of Actions by FHWA. SUMMARY: This notice announces actions taken by the California Department of Transportation (Caltrans) pursuant to its assigned responsibilities under 23 U.S.C. 327 that are final within the meaning of 23 U.S.C. 139(l)(1).
The actions relate to a proposed highway project, State Route 91 from post miles 15.6-21.6 in Riverside County, California. Those actions grant licenses, permits, and approvals for the project. DATES: By this notice, the FHWA is advising the public of final agency actions subject to 23 U.S.C. 139(l)(1). A claim seeking judicial review of the Federal agency actions on the highway project will be barred unless the claim is filed on or before May 19, 2008. If the Federal law that authorizes judicial review of a claim provides a time period of less than 180 days for filing such claim, then that shorter time period still applies.
FOR FURTHER INFORMATION CONTACT: Marie J. Petry, California Department of Transportation District 8, 464 W. 4th Street, San Bernardino, CA 94201-1400, telephone
(909)383-6379, *Marie_Petry@dot.ca.gov* . SUPPLEMENTARY INFORMATION: Notice is hereby given that the California Department of Transportation (Caltrans), pursuant to its assigned responsibilities under 23 U.S.C. 327, has taken final agency actions subject to 23 U.S.C. 139(l)(1) by approving the following highway project in the State of California. When completed, the State Route 91 (SR-91) High Occupancy Vehicle
(HOV)project will widen existing SR-91 by adding one HOV lane in each direction, adjacent to the median between Adams Street (Kilometer Post [KP] 25.11 [Post Mile {PM 15.6]) and University Avenue (KP 32.93 [PM 20.46]) in the city of Riverside by adding a single HOV lane adjacent to the median in each direction. The westbound HOV lane will begin immediately after the State Route 60/SR-91/ Interstate 215 (SR-60/91/I-215) separation and continue to west of Mary Street. The eastbound HOV lane will connect to the existing HOV lane east of Adams Street, will continue to approximately 1,000 feet west of the SR 60/91/I-215 interchange, and will then merge into the existing mixed-flow lane. The project will include an addition of one eastbound auxiliary lane between Indiana Avenue and Central Avenue and a westbound auxiliary lane between Central Avenue and Arlington Avenue. In addition, the project will reconfigure existing interchanges, replacement of existing over crossings, widening of existing under crossings, and re-striping within existing right-of-way to accommodate the mainline and interchange improvements. Other project improvements include retaining walls, sound walls, landscaping, pavement re-striping, and the modification and extension of various drainage structures to accommodate the widening of SR-91. Project improvements between University Avenue and the SR-60/91/I-215 interchange consist of pavement re-striping only. The actions by the Federal agencies, and the laws under which such actions were taken, are described in the Final Environmental Assessment
(FEA)for the project, approved on August 30, 2007, in the FHWA Finding of No Significant Impact (FONSI) issued on August 30, 2007, and in other documents in the FHWA project records. The FEA, FONSI, and other project records are available by contacting FHWA or the California Department of Transportation, District 8 at the addresses provided above. The FHWA FONSI can be viewed and downloaded from the project Web site at *http://district8.dot.ca.gov/projects/index.htm* . This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to: 1. *General:* National Environmental Policy Act [42 U.S.C. 4321-4351]; Federal-Aid Highway Act [23 U.S.C. 109]. 2. *Air:* Clean Air Act, as amended [42 U.S.C. 7401-7671(q)]. 3. *Land:* Section 4(f) of the Department of Transportation Act of 1966 [49 U.S.C. 303]; Landscaping and Scenic Enhancement (Wildflowers) [23 U.S.C. 319]. 4. *Wildlife:* Endangered Species Act [16 U.S.C. 1531-1544]; Anadromous Fish Conservation Act [16 U.S.C. 757(a)-757(g)]; Fish and Wildlife Coordination Act [16 U.S.C. 661-667(d)]; Magnuson-Stevenson Fishery Conservation and Management Act of 1976, as amended [16 U.S.C. 1801 *et seq.* ]. 5. *Historic and Cultural Resources:* Section 106 of the National Historic Preservation Act of 1966, as amended [16 U.S.C. 470(f) *et seq.* ]; Archaeological Resources Protection Act of 1977 [16 U.S.C. 470(aa)-11]; Archaeological and Historic Preservation Act [16 U.S.C. 469-469(c)]; Native American Grave Protection and Repatriation Act [25 U.S.C. 3001-3013]. 6. *Social and Economic:* Civil Rights Act of 1964 [42 U.S.C. 2000(d)-2000(d)(1)]; American Indian Religious Freedom Act [42 U.S.C. 1996]; Farmland Protection Policy Act [7 U.S.C. 4201-4209]; the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended [42 U.S.C. 61]. 7. *Wetlands and Water Resources:* Clean Water Act, 33 U.S.C. 1251-1377 (Section 404, Section 401, Section 319); Coastal Zone Management Act [16 U.S.C. 1451-1465]; Land and Water Conservation Fund [16 U.S.C. 4601-4604]; Safe Drinking Water Act [42 U.S.C. 300(f)-300(j)(6)]; Rivers and Harbors Act of 1899 [33 U.S.C. 401-406]; TEA-21 Wetlands Mitigation [23 U.S.C. 103(b)(6)(m), 133(b)(11)]; Flood Disaster Protection Act [42 U.S.C. 4001-4128]. 8. *Hazardous Materials:* Comprehensive Environmental Response, Compensation, and Liability Act [42 U.S.C. 9601-9675]; Superfund Amendments and Reauthorization Act of 1986 [PL 99-499]; Resource Conservation and Recovery Act [42 U.S.C. 6901-6992(k)]. 9. *Executive Orders:* E.O. 11990 Protection of Wetlands; E.O. 11988 Floodplain Management; E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations; E.O. 11593 Protection and Enhancement of Cultural Resources; E.O. 13007 Indian Sacred Sites; E.O. 13287 Preserve America; E.O. 13175 Consultation and Coordination with Indian Tribal Governments; E.O. 11514 Protection and Enhancement of Environmental Quality; E.O. 13112 Invasive Species. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.) Authority: 23 U.S.C. 139(l)(1). Issued on: November 9, 2007. Maiser Khaled, Director, Project Development & Environment, Sacramento, California. [FR Doc. E7-22580 Filed 11-16-07; 8:45 am] BILLING CODE 4910-RY-P DEPARTMENT OF TRANSPORTATION Federal Railroad Administration Proposed Agency Information Collection Activities; Comment Request AGENCY: Federal Railroad Administration, DOT. ACTION: Notice. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 and its implementing regulations, the Federal Railroad Administration
(FRA)hereby announces that it is seeking approval of the following information collection activities. Before submitting these information collection requirements for clearance by the Office of Management and Budget (OMB), FRA is soliciting public comment on specific aspects of the activities identified below. DATES: Comments must be received no later than January 18, 2008. ADDRESSES: Submit written comments on any or all of the following proposed activities by mail to either: Mr. Robert Brogan, Office of Safety, Planning and Evaluation Division, RRS-21, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 17, Washington, DC 20590, or Ms. Gina Christodoulou, Office of Support Systems Staff, RAD-43, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 35, Washington, DC. 20590. Commenters requesting FRA to acknowledge receipt of their respective comments must include a self-addressed stamped postcard stating, “Comments on OMB control number 2130-0557, OMB control number 2130-0564, or OMB control number 2130-0565.” Alternatively, comments may be transmitted via facsimile to
(202)493-6230 or
(202)493-6170, or via E-mail to Mr. Brogan at *robert.brogan@dot.gov* , or to Ms. Christodoulou at *gina.christodoulou@dot.gov* . Please refer to the assigned OMB control number or collection title in any correspondence submitted. FRA will summarize comments received in response to this notice in a subsequent notice and include them in its information collection submission to OMB for approval. FOR FURTHER INFORMATION CONTACT: Mr. Robert Brogan, Office of Planning and Evaluation Division, RRS-21, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 17, Washington, DC 20590 (telephone:
(202)493-6292) or Ms. Gina Christodoulou, Office of Support Systems Staff, RAD-43, Federal Railroad Administration, 1120 Vermont Ave., NW., Mail Stop 35, Washington, DC 20590 (telephone:
(202)493-6139). (These telephone numbers are not toll-free.) SUPPLEMENTARY INFORMATION: The Paperwork Reduction Act of 1995 (PRA), Public Law No. 104-13, 2, 109 Stat. 163
(1995)(codified as revised at 44 U.S.C. 3501-3520), and its implementing regulations, 5 CFR part 1320, require Federal agencies to provide 60-days notice to the public for comment on information collection activities before seeking approval by OMB. 44 U.S.C. 3506(c)(2)(A); 5 CFR 1320.8(d)(1), 1320.10(e)(1), 1320.12(a). Specifically, FRA invites interested respondents to comment on the following summary of proposed information collection activities regarding
(i)whether the information collection activities are necessary for FRA to properly execute its functions, including whether the activities will have practical utility;
(ii)the accuracy of FRA's estimates of the burden of the information collection activities, including the validity of the methodology and assumptions used to determine the estimates;
(iii)ways for FRA to enhance the quality, utility, and clarity of the information being collected; and
(iv)ways for FRA to minimize the burden of information collection activities on the public by automated, electronic, mechanical, or other technological collection techniques or other forms of information technology ( *e.g.* , permitting electronic submission of responses). *See* 44 U.S.C. 3506(c)(2)(A)(i)-(iv); 5 CFR 1320.8(d)(1)(i)-(iv). FRA believes that soliciting public comment will promote its efforts to reduce the administrative and paperwork burdens associated with the collection of information mandated by Federal regulations. In summary, FRA reasons that comments received will advance three objectives:
(i)Reduce reporting burdens;
(ii)ensure that it organizes information collection requirements in a “user friendly” format to improve the use of such information; and
(iii)accurately assess the resources expended to retrieve and produce information requested. *See* 44 U.S.C. 3501. Below is a brief summary of current information collection activities that FRA will submit for clearance by OMB as required under the PRA: *Title:* Safety Integration Plans. *OMB Control Number:* 2130-0557. *Abstract:* The Federal Railroad Administration
(FRA)and the Surface Transportation Board (STB), working in conjunction with each other, have issued joint final rules establishing procedures for the development and implementation of safety integration plans (“SIPs” or “plans”) by a Class I railroad proposing to engage in certain specified merger, consolidation, or acquisition of control transactions with another Class I railroad, or a Class II railroad with which it proposes to amalgamate operations. The scope of the transactions covered under the two rules is the same. FRA uses the information collected, notably the required SIPs, to maintain and promote a safe rail environment by ensuring that affected railroads (Class Is and some Class IIs) address critical safety issues unique to the amalgamation of large, complex railroad operations. *Form Number(s):* N/A. *Affected Public:* Railroads. *Respondent Universe:* Class I Railroads. *Frequency of Submission:* On occasion. CFR section Respondent universe Total annual responses Average time per response Total annual burden hours Total annual burden cost 244.13—Safety Integration Plans: Amalgamation of Operations—SIP Development & Quarterly Meetings 8 railroads 1 plan 340 hours 340 hours $24,016 244.17—Procedures 8 railroads 25 reports 40 hours/2 hours 88 hours 5,632 —Responses to FRA Inquiries Re: SIP data 8 railroads 6 responses 8 hours 48 hours 3,072 —Coordination in Implementing Approved SIP 8 railroads 25 phone calls 10 minutes 4 hours 256 —Request for Confidential Treatment 8 railroads 1 request 16 hours 16 hours 2,512 244.19—Disposition: —Comments on Proposed SIP Amendments 8 railroads 2 reports 16 hours 32 hours 2,048 *Total Responses:* 60. *Estimated Total Annual Burden:* 528 hours. *Status:* Extension of a Currently Approved Collection. *Title:* Locomotive Crashworthiness. *OMB Control Number:* 2130-0564. *Abstract:* In a final rule published June 28, 2006, the Federal Railroad Administration
(FRA)issued comprehensive standards for locomotive crashworthiness. These crashworthiness standards are intended to help protect locomotive cab occupants in the event of a locomotive collision. The collection of information is used by FRA to ensure that locomotive manufacturers and railroads meet minimum performance standards and design load requirements for newly manufactured and re-manufactured locomotives in order to help protect locomotive cab occupants in the event that one of these covered locomotives collides with another locomotive, the rear of another train, a piece of on-track equipment, a shifted load on a freight car on an adjacent parallel track, or a highway vehicle at a rail-highway grade crossing. *Form Number(s):* N/A. *Affected Public:* Railroads. *Respondent Universe:* 685 Railroads/4 Locomotive Manufacturers. *Frequency of Submission:* On occasion. CFR section Respondent universe Total annual responses Average time per response Total annual burden hours Total annual burden cost 229.207—Petition for FRA Approval of New Locomotive Crashworthiness Standards 685 Railroads + 4 Loco. Manufacturers 2 petitions 1,050 hours 2,100 hours $4,000 —Subsequent Years—Petitions 685 Railroads + 4 Loco. Manufacturers 1 petition 1,050 hours 1,050 hours 2,000 —Petition for FRA Approval of Substantive Change to FRA-Approved Crashworthiness Design Standard 685 Railroads + 4 Loco. Manufacturers 2 petitions 1,050 hours 2,100 hours 254,000 —Petition for FRA Approval of Non-Substantive Change to FRA-Approved Crashworthiness Design Standard 685 Railroads + 4 Loco. Manufacturers 4 petitions 400 hours 1,600 hours 183,000 229.109—Petition for FRA Approval of Alternative Locomotive Crashworthiness Design Standard 685 Railroads + 4 Loco. Manufacturers 1 petition 2,550 hours 2,550 hours 2,000 229.211—Comments on FRA Notice of Petitions Received by Agency 4 Loco. Manuf./RR Association/Labor Organizations/Public 10 comments 16 hours 160 hours 6,400 —Agency Request for Additional Information Concerning Petitions: Hearings 685 Railroads/4 Loco. Manuf./Other Interested Parties/Public 4 hearings (16 comments) 24 hours 96 hours 3,840 229.213—Locomotive Manufacturing Information: Retention of Required Info 685 Railroads 700 records or stickers or badge plates 6 minutes 70 hours 2,800 229.215—Retention of Records—Original Designs 4 Loco. Manuf. 24 loco. rcds. 8 hours 192 hours 7,680 —Retention of Records—Repairs and Modifications 685 Railroads 6 records 4 hours 24 hours 960 —Inspection of Records 6 Loco. Manuf./Rebuilders 10 records 2 minutes .33 hour 13 *Total Responses:* 764. *Estimated Total Annual Burden:* 9,942 hours. *Status:* Extension of a Currently Approved Collection. *Title:* Safety Appliance Concern Recommendation Report; Guidance Checklist Forms. *OMB Control Number:* 2130-0565. *Abstract:* In an ongoing effort to conduct more thorough and more effective inspections of railroad freight equipment and to further enhance safe rail operations, FRA has developed a safety concern recommendation report form, and a group of guidance checklist forms that facilitate railroad, rail car owner, and rail equipment manufacturer compliance with agency Railroad Safety Appliance Standards regulations. In lieu of completing an official inspection report (Form FRA F 6180.96), which takes subject railroad equipment out of service and disrupts rail operations, Form FRA F 6180.4a enables Federal and State safety inspectors to report to agency headquarters systemic or other safety concerns. FRA headquarters safety specialists can then contact railroads, car owners, and equipment manufacturers to address the reported issue(s) and institute necessary corrective action(s) in a timely fashion without unnecessarily having to take affected rail equipment out of service, unless deemed defective. Forms FRA F 6180.4(b)-(m) are used in conjunction with the Special Inspection of Safety Appliance Equipment form (Form FRA F 6180.4) to assist Federal Motive, Power, and Equipment (MP&E) field inspectors in ensuring that critical sections of 49 CFR part 231 (Railroad Safety Appliance Standards), pertaining to various types of freight equipment, are complied with through use of a check-off list. By simplifying their demanding work, check-off lists for 12 essential sections of part 231 ensure that FRA MP&E field personnel completely and thoroughly inspect each type of freight car for compliance with its corresponding section in part 231. The Guidance Checklist forms may later be used by state field inspectors as well. FRA believes that this collection of information will result in improved construction of newly designed freight cars and improved field inspections of all freight cars currently in use. This, in turn, will serve to reduce the number of accidents/incidents and corresponding injuries and fatalities that occur every year due to unsafe or defective equipment that was not promptly repaired/replaced. *Form Number(s):* FRA F 6180.4(a)-(m). *Affected Public:* Businesses. *Reporting Burden:* Form No. Respondent universe Total annual responses (forms) Average time per response (minutes) Total annual burden hours (hours) Total annual burden cost FRA F 6180.4a—MP&E Safety Concern and Recommendation Report 100 Fed'l & State Inspectors 50 60 50 $2,450 FRA F 6180.4b—Check List Sec. 231.1 100 Fed'l & State Inspectors 20 60 20 980 FRA F 6180.4—Check List Sec. 231.2 100 Fed'l & State Inspectors 20 60 20 980 FRA F 6180.4d—Check List Sec. 231.3 100 Fed'l & State Inspectors 10 60 10 490 FRA F 6180.4e—Check List Sec. 231.4 100 Fed'l & State Inspectors 5 60 5 245 FRA F 6180.4f—Check List Sec. 231.5 100 Fed'l & State Inspectors 5 60 5 245 FRA F 6180.4g—Check List Sec. 231.6 100 Fed'l & State Inspectors 30 60 30 1,470 FRA F 6180.4h—Check List Sec. 231.7 100 Fed'l & State Inspectors 5 60 5 245 FRA F 6180.4i—Check List Sec. 231.8 100 Fed'l & State Inspectors 5 60 5 245 FRA F 6180.4j—Check List Sec. 231.9 100 Fed'l & State Inspectors 5 60 5 245 FRA F 6180.4k—Check List Sec. 231.21 100 Fed'l & State Inspectors 50 60 50 2,450 FRA F 6180.4l—Check List Sec. 231.27 100 Fed'l & State Inspectors 25 60 25 1,225 FRA F 6180.4m—Check List Sec. 231.28 100 Fed'l & State Inspectors 10 60 10 490 *Respondent Universe:* Federal and State Safety Inspectors. *Frequency of Submission:* On occasion. *Total Responses:* 240 Forms. *Estimated Total Annual Burden:* 240 hours. *Status:* Extension of a Currently Approved Collection. Pursuant to 44 U.S.C. 3507(a) and 5 CFR 1320.5(b), 1320.8(b)(3)(vi), FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Authority: 44 U.S.C. 3501-3520. Issued in Washington, DC, on November 13, 2007. D.J. Stadtler, Director, Office of Budget, Federal Railroad Administration. [FR Doc. E7-22593 Filed 11-16-07; 8:45 am] BILLING CODE 4910-06-P DEPARTMENT OF TRANSPORTATION Maritime Administration [Docket No. MARAD 2007 0010] Information Collection Available for Public Comments and Recommendations ACTION: Notice of intention to request extension of OMB approval and request for comments. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Maritime Administration's (MARAD's) intention to request extension of approval (with modifications) for three years of a currently approved information collection. DATES: Comments should be submitted on or before January 18, 2008. FOR FURTHER INFORMATION CONTACT: Patricia Thomas, Maritime Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. Telephone: 202-366-2646; or E-Mail: *patricia.thomas@dot.gov.* Copies of this collection also can be obtained from that office. SUPPLEMENTARY INFORMATION: *Title of Collection:* Regulations for Making Excess or Surplus Federal Property Available to the U.S. Merchant Marine Academy, State Maritime Academies and Non-Profit Maritime Training Facilities. *Type of Request:* Extension of currently approved information collection. *OMB Control Number:* 2133-0504. *Form Numbers:* None. *Expiration Date of Approval:* Three years from date of approval by the Office of Management and Budget. *Summary of Collection of Information:* The Maritime Administration requires approved maritime training institutions seeking excess or surplus government property to provide a statement of need/justification prior to acquiring the property. *Need and Use of the Information:* This information is needed by MARAD to determine compliance with applicable statutory requirements regarding surplus government property. *Description of Respondents:* Maritime training institutions such as the U.S. Merchant Marine Academy, State Maritime Academies and non-profit maritime institutions. *Annual Responses:* 40 responses. *Annual Burden:* 40 hours. *Comments:* Comments should refer to the docket number that appears at the top of this document. Written comments may be submitted to the Docket Clerk, U.S. DOT Dockets, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. Comments also may be submitted by electronic means via the Internet at *http://dms.dot.gov/submit.* Specifically address whether this information collection is necessary for proper performance of the functions of the agency and will have practical utility, accuracy of the burden estimates, ways to minimize this burden, and ways to enhance the quality, utility, and clarity of the information to be collected. All comments received will be available for examination at the above address between 10 a.m. and 5 p.m. EDT (or EST), Monday through Friday, except Federal Holidays. An electronic version of this document is available on the World Wide Web at *http://dms.dot.gov.* *Privacy Act:* Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit *http://dms.dot.gov.* Authority: 49 CFR 1.66. Dated: November 7, 2007. By Order of the Maritime Administrator. Christine S. Gurland, Acting Secretary, Maritime Administration. [FR Doc. E7-22188 Filed 11-16-07; 8:45 am] BILLING CODE 4910-81-P DEPARTMENT OF THE TREASURY Submission for OMB Review; Comment Request November 13, 2007. The Department of the Treasury will submit the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the publication date of this notice. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220. *Dates:* Written comments should be received on or before December 19, 2007 to be assured of consideration. Bureau of Public Debt
(BPD)*OMB Number:* 1535-0117. *Type of Review:* Revision. *Title:* Resolution For Transactions Involving Registered Securities. *Forms:* PD-F-1010. *Description:* Completed by an official of an organization that is designated to act on behalf of the organization. *Respondents:* Businesses or other for-profit institutions. *Estimated Total Burden Hours:* 85 hours. *Clearance Officer:* Vicki S. Thorpe,
(304)480-8150. Bureau of the Public Debt, 200 Third Street, Parkersburg, West Virginia 26106. *OMB Reviewer:* Alexander T. Hunt,
(202)395-7316. Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503. Robert Dahl, Treasury PRA Clearance Officer. [FR Doc. E7-22600 Filed 11-16-07; 8:45 am] BILLING CODE 4810-39-P DEPARTMENT OF THE TREASURY Submission for OMB Review; Comment Request November 9, 2007. The Department of the Treasury will submit the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220. *Dates:* Written comments should be received on or before December 19, 2007 to be assured of consideration. Internal Revenue Service
(IRS)*OMB Number:* 1545-1317. *Type of Review:* Extension. *Title:* NTL-79-91 (Final) Information Returns Required of United States Persons with Respect to Certain Foreign Corporations. *Description:* These regulations clarify certain requirements of sections 1.6035-1, 1.6038-2 and 1.6046-1 of the Income Tax Regulations relating to Form 5471 and affect controlled foreign corporations and their United States shareholders. *Respondents:* Businesses and other for-profits. *Estimated Total Burden Hours:* 1 hour. *OMB Number:* 1545-1361. *Type of Review:* Extension. *Title:* PS-89-91 (Final) Exports of Chemicals That Deplete the Ozone Layer; Special Rules for Certain Medical Uses of Chemicals That Deplete the Ozone Layer. *Description:* Section 4681 imposes a tax on ozone-depleting chemicals sold or used by a manufacturer or importer thereof. Section 4682 provides exemptions and reduced rates of tax for certain uses of ozone-depleting chemicals. This regulation provides reporting and recordkeeping rules. *Respondents:* Businesses and other for-profit institutions. *Estimated Total Burden Hours:* 201 hours. *OMB Number:* 1545-1743. *Type of Review:* Extension. *Title:* Summary of Archer MSAs. *Description:* This form is used by the IRS to determine whether numerical limits set forth in section 220(j)(1) have been exceeded. *Respondents:* Businesses and other for-profits. *Estimated Total Burden Hours:* 1,540,000 hours. *OMB Number:* 1545-1341. *Type of Review:* Extension. *Title:* EE-43-92 (Final) Direct Rollovers and 20-Percent Withholding Upon Eligible Rollover Distributions from Qualified Plans. *Description:* These regulations provide rules implementing the provisions of the Unemployment Compensation Amendments (Pub. L. 102-318) requiring 20 percent income tax withholding upon certain distributions from qualified pension plans or tax-sheltered annuities. *Respondents:* Individuals or households. *Estimated Total Burden Hours:* 2,129,669 hours. *OMB Number:* 1545-1904. *Type of Review:* Extension. *Title:* Revenue Procedure 2004-56, Model 457 Plan Provisions. *Description:* This revenue procedure contains model amendments to be used by section 457(b) plans (deferred compensation plans) of state or local governments. *Respondents:* State, Local, or Tribal Governments. *Estimated Total Burden Hours:* 41,040 hours. *OMB Number:* 1545-1416. *Type of Review:* Extension. *Title:* Credit for Contributions to Selected Community Development Corporations. *Form:* 8847. *Description:* Form 8847 is used to claim a credit for qualified contributions to a selected community development corporation (CDC). *Respondents:* Businesses or other for-profit institutions. *Estimated Total Burden Hours:* 41 hours. *OMB Number:* 1545-1201. *Type of Review:* Revision. *Title:* REG-152549-03 (NPRM/Temporary) Section 179 Elections; TD 8455 (Final) Election to Expense Certain Depreciable Business Assets. *Description:* The regulations provide rules on the election described in section 179(b)(4); the apportionment of the dollar limitation among component members of a controlled group; the proper order for deducting the carryover of disallowed deduction; and the maintenance of information which permits the specific identification of each piece of section 179 property and reflects how and from whom such property was acquired and when such property was placed in service. The recordkeeping and reporting is necessary to monitor compliance with the section 179 rules. *Respondents:* Businesses and other for-profits. *Estimated Total Burden Hours:* 3,022,500 hours. *OMB Number:* 1545-2072. *Type of Review:* Extension. *Title:* RP-144921-06 Statistical Sampling for purposes of Section 199. *Description:* The revenue procedure provides for determining when statistical sampling may be used for purposes of section 199, which provides a deduction for income attributable to domestic production activities, and establishes acceptable statistical sampling methodologies. The collection of information in the proposed revenue procedure involves a recordkeeping requirement for taxpayer that use statistical sampling under section 199. *Respondents:* Businesses and other for-profits. *Estimated Total Burden Hours:* 2,400 hours. *Clearance Officer:* Glenn P. Kirkland,
(202)622-3428, Internal Revenue Service, Room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224. *OMB Reviewer:* Alexander T. Hunt,
(202)395-7316, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503. Robert Dahl, Treasury PRA Clearance Officer. [FR Doc. E7-22601 Filed 11-16-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Office of Foreign Assets Control Additional Designations of Entities Pursuant to Executive Order 13405 AGENCY: Office of Foreign Assets Control, Treasury. ACTION: Notice. SUMMARY: The Treasury Department's Office of Foreign Assets Control (“OFAC”) is publishing the names of two newly-designated entities whose property and interests in property are blocked pursuant to Executive Order 13405 of June 16, 2006, “Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus.” DATES: The designation by the Director of OFAC of the two entities identified in this notice, pursuant to Executive Orders 13405, is effective November 13, 2007. FOR FURTHER INFORMATION CONTACT: Assistant Director, Compliance Outreach & Implementation, Office of Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania Avenue NW., (Treasury Annex), Washington, DC 20220, Tel.: 202/622-2490. SUPPLEMENTARY INFORMATION: Electronic and Facsimile Availability Information about this designation and additional information concerning OFAC are available from OFAC's Web site ( *http://www.treas.gov/ofac* ) or via facsimile through a 24-hour fax-on-demand service, Tel.: 202/622-0077. Background On June 16, 2006, the President issued Executive Order 13405 (the “Order”) pursuant to, *inter alia,* the International Emergency Economic Powers Act (50 U.S.C. 1701-06). In the Order, the President declared a national emergency to address political repression, electoral fraud, and public corruption in Belarus. The Order imposes economic sanctions on persons responsible for actions or policies that undermine democratic processes or institutions in Belarus. The President identified ten individuals as subject to the economic sanctions in the Annex to the Order. Section 1 of the Order blocks, with certain exceptions, all property, and interests in property, that are in, or hereafter come within, the United States or the possession or control of United States persons for persons listed in the Annex and those persons determined by the Secretary of the Treasury, after consultation with the Secretary of State, to satisfy any of the criteria set forth in subparagraphs (a)(ii)(A) through (a)(ii)(E) of Section 1. On November 13, 2007, the Director of OFAC exercised the Secretary of the Treasury's authority to designate, pursuant to one or more of the criteria set forth in Section 1, subparagraphs (a)(ii)(A) through (a)(ii)(E) of the Order, the following two entities, whose names have been added to the list of Specially Designated Nationals and whose property and interests in property are blocked, pursuant to Executive Order 13405: 1. BELNEFTEKHIM (a.k.a. BELARUSIAN STATE CONCERN FOR OIL AND CHEMISTRY; a.k.a. BELARUSIAN STATE PETROLEUM AND CHEMICALS CONCERN; a.k.a. BELNEFTEKHIM CONCERN; a.k.a. CONCERN BELNEFTEKHIM), 73 Dzerzhinskogo Avenue, Minsk 220116, Belarus; Oederweg 43, Frankfurt-am-Main D-60318, Germany; ul Trevskaya, 20/1, Room 536, Moscow 103789, Russia; ul Pavlovskaya, 29, Kiev 01135, Ukraine; Tower B 19-B Oriental Kenzo, 48 Dongzhimenwai Street, Dongcheng District, Beijing 100027, China; GP 1 Apes Street, Riga LV-1039, Latvia [BELARUS] 2. BELNEFTEKHIM USA, INC., 13 Branch St., # 213, Methuen, MA 01844; U.S. FEIN 000920912 (United States) [BELARUS] Dated: November 13, 2007. Adam J. Szubin, Director, Office of Foreign Assets Control. [FR Doc. E7-22559 Filed 11-16-07; 8:45 am] BILLING CODE 4811-42-P DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Collection; Comment Request for Notice 2005-04 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. SUMMARY: The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Notice 2005-04, Fuel Tax Guidance, and Request for comments. DATES: Written comments should be received on or before January 18, 2008 to be assured of consideration. ADDRESSES: Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6129, 1111 Constitution Avenue NW., Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the form and instructions should be directed to Carolyn N. Brown at Internal Revenue Service, room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or at
(202)622-6688, or through the Internet at *Carolyn.N.Brown@irs.gov* . SUPPLEMENTARY INFORMATION: *Title:* Fuel Tax Guidance, Request for comments. *OMB Number:* 1545-1915. *Notice Number:* Notice 2005-04. *Abstract:* Notice 2005-04 provides guidance on certain excise tax Code provisions that were added or effected by the American Jobs Creation Act of 2004. The information will be used by the IRS to verify that the proper amount of tax is reported, excluded, refunded, or credited. *Current Actions:* There are no changes being made to the notice at this time. *Type of Review:* Extension of a currently approved collection. *Affected Public:* Business or other for-profit organizations, not-for-profit institutions, farms, Federal, state, local or tribal governments. *Estimated Number of Respondents:* 20,263. *Estimated Time per Respondent:* 3 hours, 46 minutes. *Estimated Total Annual Burden Hours:* 76,190. The following paragraph applies to all of the collections of information covered by this notice: An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. *Request for Comments:* Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information to be collected;
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e)estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Approved: November 8, 2007. Glenn P. Kirkland, IRS Reports Clearance Officer. [FR Doc. E7-22579 Filed 11-16-07; 8:45 am] BILLING CODE 4830-01-P 72 222 Monday, November 19, 2007 Rules and Regulations Part II Department of Energy 10 CFR Part 430 Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential Furnaces and Boilers; Final Rule DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number: EE-RM/STD-01-350] RIN 1904-AA78 Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential Furnaces and Boilers AGENCY: Department of Energy. ACTION: Final rule. SUMMARY: The Department of Energy
(DOE)has determined that revised energy conservation standards for residential furnaces and boilers will result in significant conservation of energy, are technologically feasible, and are economically justified. On this basis, DOE is today amending the existing energy conservation standards for these products. DATES: The rule is effective January 18, 2008. The standards established in today's final rule have a compliance date of November 19, 2015. ADDRESSES: For access to the docket to read background documents, the technical support document (TSD), transcripts of the public meetings in this proceeding, or comments received, visit the U.S. Department of Energy, the Resource Room of the Building Technologies Program at 950 L'Enfant Plaza Drive, SW., Washington, DC. 20024,
(202)586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards at the above telephone number for additional information regarding visiting the Resource Room. Please note: DOE's Freedom of Information Reading Room (formerly Room 1E-190 at the Forrestal Building) no longer houses rulemaking materials. You may also obtain copies of certain previous rulemaking documents from this proceeding (i.e., Framework Document, advance notice of proposed rulemaking (ANOPR), notice of proposed rulemaking (NOPR or proposed rule)), draft analyses, public meeting materials, and related test procedure documents from the Office of Energy Efficiency and Renewable Energy's Web site at *http://www.eere.energy.gov/buildings/appliance_standards/residential/furnaces_boilers.html* . FOR FURTHER INFORMATION CONTACT: Mohammed Khan, Project Manager, Energy Conservation Standards for Residential Furnaces and Boilers, U.S. Department of Energy, Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121,
(202)586-7892, e-mail: *Mohammed.Khan@ee.doe.gov;* or Chris Calamita, Esq. or Francine Pinto, Esq., U.S. Department of Energy, Office of the General Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-0121,
(202)586-9507, e-mail: *Christopher.Calamita@hq.doe.gov* or *Francine.Pinto@hq.doe.gov.* SUPPLEMENTARY INFORMATION: I. Summary of the Final Rule and Its Benefits A. The Standard Levels B. Current Federal Standards for Residential Furnaces and Boilers C. Consumer Benefits D. Impact on Manufacturers E. National Benefits F. Conclusion II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for Residential Furnaces and Boilers III. General Discussion A. Test Procedures B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels C. Energy Savings D. Economic Justification 1. Specific Criteria a. Economic Impact on Consumers and Manufacturers b. Life-Cycle Costs c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need of the Nation to Conserve Energy g. Other Factors 2. Rebuttable Presumption IV. Methodology and Revisions to the Analyses Employed in the Proposed Rule A. Engineering Analysis B. Life-Cycle Cost and Payback Period Analyses C. National Impact Analysis D. Consumer Subgroup Analysis E. Manufacturer Impact Analysis F. Employment Impact Analysis G. Regulatory Impact Analysis H. Utility Impact Analysis I. Environmental Analysis V. Discussion of Other Comments A. Information and Assumptions Used in Analysis 1. Engineering Analysis 2. Life-Cycle Cost Analysis 3. Manufacturer Impact Analysis B. Other Issues 1. Joint Stakeholder Recommendation for Boilers 2. Regional Standards and Waiver from Federal Preemption for States 3. Effective Date for New Standards 4. Consumer Benefits From Reduction in Natural Gas Prices Associated With a Standard of 90-Percent AFUE or Higher for Non-Weatherized Gas Furnaces 5. Efficiency Standards for Electric Furnaces 6. Electricity Consumption of Furnace Fans 7. Use of LCC Results in Selecting Standard Levels 8. Definition of Trial Standard Levels 9. Test Procedure 10. Structural Cost Associated With Condensing Furnaces VI. Analytical Results and Conclusions A. Trial Standard Levels B. Significance of Energy Savings C. Economic Justification 1. Economic Impact on Consumers a. Life-Cycle Costs and Payback Period b. Consumer Subgroup Analysis 2. Economic Impact on Manufacturers a. Industry Cash-Flow Analysis Results b. Impacts on Manufacturing Capacity and Subgroups of Manufacturers c. Cumulative Regulatory Burden 3. National Net Present Value and Net National Employment 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors D. Conclusion VII. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review M. Review Under Executive Order 12898 N. Congressional Notification VIII. Approval of the Office of the Secretary I. Summary of the Final Rule and Its Benefits A. The Standard Levels The Energy Policy and Conservation Act, as amended (42 U.S.C. 6291 et seq.; EPCA), directs the Department of Energy
(DOE)to consider amending the energy conservation standards for residential furnaces and boilers established under EPCA. (42 U.S.C. 6295(f)(3)(B)) Any amended standard must be designed to “achieve the maximum improvement in energy efficiency * * * which the Secretary determines is technologically feasible and economically justified.” (42 U.S.C. 6295(o)(2)(A)) Moreover, EPCA states that the Secretary may not establish an amended standard if such standard would not result in “significant conservation of energy,” or “is not technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B)) The standards in today's final rule, which apply to non-weatherized and weatherized gas furnaces, mobile home gas furnaces, oil-fired furnaces, and gas- and oil-fired boilers, 1 satisfy these requirements. 1 These types of products are referred to collectively hereafter as “residential furnaces and boilers” or “furnaces and boilers.” Table I.1 shows the standard levels DOE is promulgating today. These standards will apply to products manufactured for sale in the United States, or imported to the United States, on or after November 19, 2015. Table I.1.—Standard Levels for Furnaces and Boilers Product class AFUE* (%) Non-weatherized gas furnaces 80 Weatherized gas furnaces 81 Mobile home gas furnaces 80 Oil-fired furnaces 82 Gas boilers 82 Oil-fired boilers 83 *AFUE = annual fuel utilization efficiency. B. Current Federal Standards for Residential Furnaces and Boilers Table I.2 presents the current Federal minimum energy conservation standards for residential furnaces and boilers. Table I.2.—Current Federal Standards for Residential Furnaces and Boilers Product class AFUE (%) Non-weatherized gas furnaces 78 Weatherized gas furnaces 78 Mobile home gas furnaces 75 Oil-fired furnaces 78 Gas boilers 80 Oil-fired boilers 80 C. Consumer Benefits Table I.3 summarizes the implications of today's standards for consumers of residential furnaces and boilers. Table I.3.—Implications of New Standards for Consumers* Product class AFUE (%) Installed cost Installed cost increase Life-cycle cost savings Payback period (years) Non-weatherized gas furnaces 80 $2,044 $8 $2 1.7 Weatherized gas furnaces 81 3,907 19 62 3.4 Mobile home gas furnaces 80 940 96 111 3.7 Oil-fired furnaces 82 3,142 17 177 0.7 Gas boilers 82 3,826 199 208 12 Oil-fired boilers 83 3,920 28 69 0.9 * Average values. The economic impacts on consumers (i.e., the average life-cycle cost
(LCC)savings) are positive. For example, a non-weatherized gas furnace meeting the standard is projected to have a very small increase in average total installed cost, and the annual energy savings result in an average LCC savings of $2 and a payback period of 1.7 years. No households purchasing non-weatherized gas furnaces, including southern households, would experience a net LCC increase. A gas boiler meeting the standard is projected to have an increase in average total installed cost of $199, but the annual energy savings result in an average LCC savings of $208 and a payback period of 12 years. D. Impact on Manufacturers Using a real corporate discount rate of 7.4 percent for furnaces and 6.2 percent for boilers, DOE estimates the industry net present value
(INPV)of the residential furnace industry to be $1,528 million and the INPV of the residential boiler industry to be $279 million, in 2006$. DOE estimates the impact of today's standards on the INPV of the residential furnace and boiler industry to be between a 4.0 percent loss and a 2.7 percent loss (-$74 million to -$48 million). Based on DOE's interviews with the major manufacturers of residential furnaces and boilers, DOE estimates minimal plant closings or loss of employment as a result of the standards promulgated today. E. National Benefits DOE estimates the standards will save approximately 0.25 quads (quadrillion (10 15 ) British thermal units (Btu)) of energy over 24 years (2015-2038). For comparison, approximately four quads are used annually for space heating in U.S. homes. These energy savings are projected to result in cumulative greenhouse gas emission reductions of approximately 7.8 million tons
(Mt)of carbon dioxide (CO 2 ). Additionally, the standards will help alleviate air pollution by resulting in approximately 9.2 thousand tons
(kt)of nitrogen oxides (NO X ) emission reductions from 2015 through 2038, or a similar amount of NO X emissions allowance credits in areas where such emissions are subject to emissions caps, and approximately 1.8 kt of household emission reductions of sulfur dioxide (SO 2 ). DOE expects the standards to have negligible impact on electricity generating capacity. The national net present value
(NPV)of the standards is $0.69 billion using a seven-percent discount rate and $2.18 billion using a three-percent discount rate, cumulative from 2015 to 2038 in 2006$. This is the estimated total value of future savings minus the estimated increased costs for purchasing complying products, discounted to the year 2007. The benefits and costs of today's final rule can also be expressed in terms of annualized 2006$ values over the forecast period 2015 through 2038. Using a seven percent discount rate for the annualized cost analysis, the cost of the standards established in today's final rule is $41 million per year in increased equipment and installation costs while the annualized benefits are $144 million per year in reduced equipment operating costs. Using a three percent discount rate, the cost of the standards established n today's final rule is $40 million per year while the benefits of today's standards are $204 million per year. F. Conclusion DOE concludes that the benefits (energy savings, consumer LCC savings, national NPV increases, and emissions reductions) to the Nation of the standards outweigh their costs (loss of manufacturer INPV and consumer LCC increases for a relatively small number of furnace and boiler users). DOE also concludes that today's standards for furnaces and boilers represent that maximum improvement in energy efficiency that is technologically feasible and economically justified, and will result in significant energy savings. At present, products that meet the new standard levels are commercially available. II. Introduction A. Authority Title III of EPCA sets forth a variety of provisions designed to improve energy efficiency; specifically, Part B of title III establishes the Energy Conservation Program for Consumer Products other than Automobiles. (42 U.S.C. 6291-6309) The program covers consumer products (referred to hereafter as “covered products”), including residential furnaces and boilers. (42 U.S.C. 6292(a)(5)) Under EPCA, the energy conservation program consists essentially of the following: Testing, labeling, and Federal energy conservation standards. The Federal Trade Commission
(FTC)has primary responsibility for labeling, and DOE implements the remainder of the program. (42 U.S.C. 3294) Section 323 of EPCA authorizes DOE, with assistance from the National Institute of Standards and Technology
(NIST)and subject to certain criteria and conditions, to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6293) The applicable furnace and boiler test procedures appear at Title 10 of the Code of Federal Regulations
(CFR)part 430, subpart B, Appendix N. EPCA provides criteria for prescribing new or amended standards for covered products. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Additionally, EPCA provides specific prohibitions on prescribing new and amended standards. Generally, DOE may not prescribe an amended or new standard for products if no test procedure has been established for the product. 2 (42 U.S.C. 6295(o)(3)(A). Further, DOE may not prescribe an amended or new standard if DOE determines by rule that such standard would not result in “significant conservation of energy,” or “is not technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B)) 2 This prohibition does not apply to standards for dishwashers, clothes washers, clothes dryers, and kitchen ranges and ovens. (42 U.S.C. 3295(o)(3)(A)) EPCA also provides that, in deciding whether a standard is economically justified, DOE must, after receiving comments on a proposed standard, determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors:
(1)The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
(2)The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the imposition of the standard;
(3)The total projected amount of energy savings likely to result directly from the imposition of the standard;
(4)Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard;
(5)The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;
(6)The need for national energy conservation; and
(7)Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)) EPCA contains what is commonly known as an “anti-backsliding” provision. This provision mandates that the Secretary not prescribe any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or a new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of any covered product type (or class) with performance characteristics, features, sizes, capacities, and volume that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4)) Section 325(q) of EPCA is applicable to promulgating a standard for a type or class of covered product that has two or more subcategories. (42 U.S.C. 6295(q)) DOE must specify a different standard level than that which applies generally to such type or class of products “for any group of covered products which have the same function or intended use, if * * * products within such group—(A) consume a different kind of energy from that consumed by other covered products within such type (or class); or
(B)have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard” than applies or will apply to the other products. (42 U.S.C. 6295(q)(l)(A) and (B)) In determining whether a performance-related feature justifies such a different standard for a group of products, DOE must consider “such factors as the utility to the consumer of such a feature” and other factors DOE deems appropriate. (42 U.S.C. 6295(q)(1)) Any rule prescribing such a standard must include an explanation of the basis on which DOE established such higher or lower level. (42 U.S.C. 6295(q)(2)) In 1993, DOE relied on this authority to establish four product classes of residential furnaces and two product classes of residential boilers, which are the subject of this rulemaking. 58 FR 47326 (September 8, 1993). Federal energy conservation requirements generally preempt State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297) DOE is authorized, however, to grant waivers from preemption for particular State laws or regulations, in accordance with the procedures and provisions set forth in section 327(d) of EPCA. (42 U.S.C. 6297(d)) Specifically, States with a regulation that provides for an energy conservation standard for any type of covered product for which there is a Federal energy conservation standard may petition the Secretary for a DOE rule that permits the State regulation to become effective with respect to such covered product. In order for a petition to be granted, a State must establish by a preponderance of the evidence that its regulation is needed to meet “unusual and compelling State or local energy * * * interests.” (42 U.S.C. 6297(d)(1)(B)) B. Background 1. Current Standards EPCA established an energy conservation standard for residential furnaces and boilers. It set the standard in terms of the annual fuel utilization efficiency
(AFUE)descriptor at a minimum value of 78 percent for most furnaces. (42 U.S.C. 6295(f)(1)) It set the minimum AFUE at 75 percent for gas steam boilers and 80 percent for other boilers. (42 U.S.C. 6295(f)(1)(A)) For mobile home furnaces, EPCA set the minimum AFUE at 75 percent. (42 U.S.C. 6295(f)(2)) These standards became effective on January 1, 1992, with the exception of the standard for mobile home furnaces, for which the effective date was September 1, 1990. (42 U.S.C. 6295(f)(1) and (2)) 2. History of Standards Rulemaking for Residential Furnaces and Boilers As discussed in the October 2006 notice of proposed rulemaking (NOPR), this rulemaking began with the publication of an advance notice of proposed rulemaking (ANOPR) on September 28, 1990. 55 FR 39624. A second ANOPR was published on July 29, 2004. 69 FR 45420. On October 6, 2006, DOE published a NOPR in the **Federal Register** proposing amended energy efficiency standards for residential furnace and boilers. 71 FR 59203. In conjunction with the October 2006 NOPR, DOE also published on its Web site the complete technical support document
(TSD)for the proposed rule, which incorporated the final analyses DOE conducted and technical documentation of each analysis. The NOPR TSD included the engineering analysis spreadsheet, the LCC spreadsheets, the national and regional impact analysis spreadsheets, and the manufacturer impact analysis
(MIA)spreadsheet—all of which are available at *http://www.eere.energy.gov/buildings/appliance_standards/residential/fb_nopr_analysis.html* . The energy efficiency standards proposed for furnaces and boilers were as shown in Table II.1. Table II.1.—October 2006 Proposed Energy Efficiency Standards for Furnaces and Boilers Product class AFUE* (%) Non-weatherized gas furnaces 80 Weatherized gas furnaces 83 Mobile home gas furnaces 80 Oil-fired furnaces 82 Gas boilers 84 Oil-fired boilers 83 * AFUE = annual fuel utilization efficiency. The October 2006 NOPR also included additional background information on the history of this rulemaking and on DOE's use in this rulemaking of the procedures, interpretations, and policies set forth in the Process Rule. 71 FR 59207-59208. DOE held a public meeting in Washington, DC, on October 30, 2006, to hear oral comments relevant to the October 2006 proposed rule. After the publication of the October 2006 proposed rule, DOE met with GAMA, Carrier, and Rheem on December 14, 2006, to receive comments regarding cost and safety issues concerning weatherized gas furnaces that are manufactured to operate at 83-percent AFUE. (GAMA, No. 146 at p. 1) 3 These comments are further described in section IV.A. In addition, DOE issued a notice of data availability and reopening of comment period on February 9, 2007, to respond to questions raised at the public meeting concerning DOE's assumptions regarding shipments in the base case and the installation cost for oil-fired furnaces. 72 FR 6184. 3 A notation in the form “GAMA, No. 146 at p. 1” identifies a written comment DOE has received and has included in the docket of this rulemaking. This particular notation refers to a comment
(1)By the Gas Appliance Manufacturers Association (GAMA),
(2)under document number 146 in the docket of this rulemaking (maintained in the Resource Room of Building Technologies Program), and
(3)appearing on page 1 of document number 146. III. General Discussion A. Test Procedures Section 7(c) of the Process Rule indicates that, if modifications are needed to its test procedures for a covered product, DOE will issue a final, modified test procedure before issuing a proposed rule for energy conservation standards for that product. DOE has determined that modifications are not needed to its existing test procedure for furnaces and boilers, and accordingly has not adopted a revised test procedure for these products. Comments received about test procedures are discussed in section V.B.9. B. Technological Feasibility 1. General As stated above, standards that DOE establishes for furnaces and boilers must be technologically feasible. (42 U.S.C. 6295(o)(2)(A) and (o)(3)(B)) DOE considers a design option to be technologically feasible if it is in use by the respective industry or if research has progressed to the development of a working prototype. The Process Rule sets forth a definition of technological feasibility as follows: “Technologies incorporated in commercial products or in working prototypes will be considered technologically feasible.” 10 CFR part 430, subpart C, Appendix A, section 4(a)(4)(i). This final rule considers the same design options as those evaluated in the October 2006 proposed rule. (See the final rule TSD accompanying this notice, Chapter 4.) The evaluated technologies all have been used (or are being used) in commercially available products or working prototypes. The designs all incorporate materials and components that are commercially available in today's furnace and boiler supply market. DOE has determined that all of the efficiency levels evaluated in this notice are technologically feasible. 2. Maximum Technologically Feasible Levels In developing the October 2006 proposed rule, consistent with section 325(p)(2) of EPCA, DOE identified the maximum technologically feasible levels. (See NOPR TSD Chapter 6.) DOE did not receive any comments on the October 2006 proposed rule to lead DOE to consider changes to the maximum technologically feasible (max tech) levels. Therefore, for today's final rule, the max tech levels for all classes are the same max tech levels identified in the October 2006 proposed rule and are provided in Table II.2 below. 71 FR 59211. Table II.2.—Max Tech Levels Considered in Furnace and Boiler Rulemaking Product class AFUE* (%) Non-weatherized gas furnaces 96 Weatherized gas furnaces 83 Mobile home gas furnaces 90 Oil-fired furnaces 85 Gas boilers 99 Oil-fired boilers 95 * AFUE = annual fuel utilization efficiency. C. Energy Savings As stated above, EPCA directs DOE to establish amended standards at a level of maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE is prohibited from adopting a standard for a product if that standard would not result in “significant” energy savings, or is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(B)) While EPCA does not define the term “significant,” the U.S. Court of Appeals, in *Natural Resources Defense Council* v. *Herrington* , indicated that Congress intended “significant” energy savings in this context to be savings that were not “genuinely trivial.” 768 F.2d 1355, 1373 (D.C. Cir. 1985). The energy savings for energy conservation standards at each of the trial standard levels
(TSLs)considered in this rulemaking are nontrivial, and therefore, DOE has determined them to be “significant” within the meaning of section 325 of EPCA. DOE forecasted energy savings attributable to the TSLs using the national energy savings
(NES)spreadsheet tool, as discussed in the October 2006 proposed rule. 71 FR 59211-59212, 59224-59227, and 59245-59246. For the purpose of today's final rule, DOE has relied on the NES analysis as presented in the October 2006 proposed rule. EPCA further requires consideration of energy savings in the context of the economic justification. D. Economic Justification 1. Specific Criteria As noted earlier, EPCA provides seven factors for DOE to evaluate in determining whether an energy conservation standard for residential furnaces and boilers is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The following discusses how DOE has addressed each of those seven factors in this rulemaking. Changes to considerations of those criteria between the proposed rule and the final rule are also discussed below. The inputs relied upon in consideration of each criterion and changes to those inputs are discussed in section V, below. a. Economic Impact on Consumers and Manufacturers DOE considered the economic impact of the standard on consumers and manufacturers, as discussed in the October 2006 proposed rule. 71 FR 59212, 59219-59223, 59228-59233, 59234-59245. For this final rule, DOE updated the analyses to incorporate more recent material price information. b. Life-Cycle Costs DOE considered life-cycle costs of furnaces and boilers, as discussed in the October 2006 proposed rule. 71 FR 59212-59213, 59219-59224, 59234-59239. It calculated the sum of the purchase price and the operating expense—discounted over the lifetime of the products—to estimate the range in expected LCC benefits to consumers due to the standards. c. Energy Savings While significant conservation of energy is a separate statutory requirement for imposing an energy conservation standard, EPCA also requires DOE, in determining the economic justification of a proposed standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As in the October 2006 Proposed Rule, DOE used the NES spreadsheet results in its consideration of total projected savings that are directly attributable to the considered standard levels. 71 FR 59211-59212, 59224-59227, 59245-59246. d. Lessening of Utility or Performance of Products As reflected in the October 2006 proposed rule, DOE considered whether any lessening of the utility or performance of furnaces and boilers would be likely to result from today's standards. 71 FR 59213. e. Impact of Any Lessening of Competition DOE considers any lessening of competition that is likely to result from standards. Accordingly, as discussed in the October 2006 proposed rule, 71 FR 59213, 59247, DOE requested that the Attorney General transmit to the Secretary a written determination of the impact, if any, of any lessening of competition likely to result from the standard, together with an analysis of the nature and extent of such impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the Attorney General in making such a determination, DOE provided the Department of Justice
(DOJ)with copies of the October 2006 proposed rule and the NOPR TSD for review. The Attorney General's response is discussed in section VI.C.5 below, and is reprinted at the end of this final rule. f. Need of the Nation To Conserve Energy In considering standards for furnaces and boilers, the Secretary must consider the need of the Nation to conserve energy. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The Secretary recognizes that energy conservation benefits the Nation in several important ways, including slowing the depletion of domestic natural gas resources, improving the security of the Nation's energy system, and reducing greenhouse gas emissions. The potential benefits from additional natural gas conservation are further discussed in section V.B.4 below. g. Other Factors The Secretary, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In considering amended standards in the October 2006 proposed rule and in adopting today's standards, the Secretary considered the potential for furnace and boiler standards to pose public health risks due to carbon monoxide release into the home as a result of venting system or heat exchanger failure. As discussed in section VI of this preamble, potential safety concerns were weighed against adopting certain standard levels. 2. Rebuttable Presumption Section 325(o)(2)(B)(iii) of EPCA states that there is a rebuttable presumption that an energy conservation standard is economically justified if the increased installed cost for a product that meets the standard is less than three times the value of the first-year energy savings resulting from the standard, as calculated under the applicable DOE test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) Under the standard levels adopted in this document for non-weatherized and weatherized gas furnaces, mobile home gas furnaces, and hot-water oil-fired boilers, DOE determined that this presumption applies. Regardless of the rebuttable presumption, DOE also determined that all of the standard levels adopted in today's final rule are economically justified based on the above-described analyses. IV. Methodology and Revisions to the Analyses Employed in the Proposed Rule DOE used a number of analytical tools that it previously developed and adapted for use in this rulemaking. One of the tools is a spreadsheet that calculates LCC and payback period (PBP). Another tool calculates NES and national NPV. DOE also used the Government Regulatory Impact Model (GRIM), along with other methods, in its MIA. Finally, DOE developed an approach using the National Energy Modeling System
(NEMS)to estimate impacts of residential furnace and boiler energy efficiency standards on utilities and the environment. Each of the analytical tools is discussed in detail in the October 2006 NOPR. 71 FR 59213-59234. As a basis for this final rule, DOE has continued to use the spreadsheets and approaches explained in the October 2006 NOPR. DOE used the same general methodology as applied in the October 2006 NOPR but revised some of the assumptions and inputs for the final rule in response to stakeholder comments. These updates are discussed in the sections below. A. Engineering Analysis The purpose of the engineering analysis was to characterize the relationship between the efficiency and the cost of residential furnaces and boilers. As discussed in the NOPR, DOE used the design-option approach, the efficiency-level approach, and the cost-assessment approach to the engineering analysis. 71 FR 59214-59219. As part of the analysis, DOE developed data—including manufacturing costs, markups, installation costs, and maintenance costs—that it used to establish the manufacturing selling price of more-efficient equipment. Chapter 6 of the TSD contains detailed discussion of the engineering analysis methodology. In response to the publication of the October 2006 proposed rule, DOE received a number of comments on the engineering analysis methodology. These comments referred to the assumptions concerning the heat exchanger materials, costs for weatherized gas furnaces, the installation costs for gas-fired boilers, and other topics. In response to these comments, DOE made several changes to the data applied in its approach. Table IV.1 summarizes the data DOE used to derive the inputs to the engineering analysis for the NOPR and for today's final rule. Table IV.1.—Approach and Data Used to Derive the Inputs to the Engineering Analysis Input NOPR analysis Final rule analysis Equipment Cost For the most widely used efficiency levels, DOE used a cost model of manufacturing costs created by tear-down analysis. For the remaining levels, DOE used design-option analysis. Incorporated industry feedback from GAMA and individual manufacturers to generate manufacturing-cost-versus-efficiency curves. Updated manufacturing-cost-versus-efficiency curves Same method, using average materials prices for the period 2002 to 2006. For weatherized gas furnaces, assumed stainless steel heat exchangers for 82-percent and 83-percent AFUE products. For gas boilers, assumed those fractions of boilers requiring Category III venting at various AFUE levels will also incorporate a draft inducer into the product design. Markups Derived markups from an analysis of corporate financial data. Multiplied manufacturing costs by manufacturer, distributor, contractor, and builder markups, and sales tax, as appropriate, to get equipment price No change. Installation Cost Used a distribution of weighted-average installation costs from the Installation Model. Installation configurations are weight-averaged by frequency of occurrence in the field, and vary by installation size. The Installation Model is based on a commonly used cost-estimation method and is comparable to available, known data. New assumption that all 81-percent AFUE gas furnaces use double-wall vents No change. Maintenance Costs Used Gas Research Institute data for gas furnaces and boilers, water heater rulemaking survey results for oil-fired equipment, and data from the 1993 rulemaking for mobile home furnaces. Accounted for higher maintenance frequency for modulating design option, and used same costs for condensing and non-condensing equipment Same sources for maintenance costs. Included repair costs for gas-fired equipment as a function of the equipment price. Annual Energy Use * Calculated energy use using the DOE test procedure No change. Energy Prices * *Annual Energy Outlook (AEO)2005* forecast prices for effective date of 2015 *AEO2007* forecast prices for effective date of 2015. * Inputs required to calculate rebuttable-presumption payback period. For more details on the rebuttable-presumption payback period, refer to sections III.D.2 and VI.C.1.a. GAMA, Lennox, Carrier, and Trane submitted comments urging DOE to revise the costs assumed in the engineering analysis for manufacturing high-efficiency weatherized gas furnaces. Specifically, GAMA commented that DOE underestimated the cost of attaining 83-percent AFUE. GAMA stated that a significant amount of condensation can build up upon start-up of a weatherized gas furnace having an 83-percent AFUE and that the unit must run for a considerable amount of time before the heat exchanger completely dries out. As a result, GAMA commented that manufacturers would need to design their weatherized gas furnaces at 83-percent AFUE to handle condensate. (GAMA, No. 116 at pp. 5-8) 4 Lennox pointed out that it is physically possible to design a furnace that will deliver 83-percent AFUE in a laboratory test, but that the variability of outdoor conditions will pose condensation problems at efficiency levels above 80-percent AFUE. At 83-percent AFUE, which translates to a steady-state efficiency of 85.5 percent or higher, Lennox stated that it may also be necessary to provide a condensate disposal system for the furnace. (Public Meeting Transcript, No. 107.6 at p. 107) Carrier commented that weatherized gas furnaces are installed outdoors, and moisture in the flue gas cannot be allowed to condense, regardless of the corrosion-resistance of the material used. (Carrier, No. 118 at pp. 1-2) Carrier stated its belief that a means to dispose of the condensate in cold outdoor ambient conditions must be developed to provide for drainage or freeze protection. It further stated that, when cold outside air and safety factors are taken into account, the maximum design efficiency to avoid significant potential for continuous condensation on a complete model family is 80-percent AFUE. (Carrier, No. 118 at pp. 1-2) Trane commented that 83-percent AFUE for weatherized gas furnaces would result in a steady-state efficiency of 85-86 percent, which would necessitate different, more costly materials than the materials DOE assumed in the October 2006 proposed rule. (Public Meeting Transcript, No. 107.6 at p. 107) GAMA and Lennox specifically commented on DOE's incremental manufacturing cost increase of $30 for an 83-percent AFUE weatherized gas furnace over the baseline. GAMA pointed out that DOE's NOPR analysis used increased heat exchanger area as the only design option needed to achieve 83-percent AFUE. GAMA stated that, based on manufacturer experience, the proposed 83-percent AFUE standard for weatherized gas furnaces would require the use of stainless steel for internal components such as the heat exchanger, collector box, and internal flue, due to the expected internal condensation. GAMA also commented that AL 29-4C is the most probable type of stainless steel that manufacturers would use, which would significantly increase the cost of the product. GAMA also stated its opinion that weatherized gas furnaces at 83-percent AFUE would also require a condensate disposal system that could function in below-freezing temperatures. GAMA surveyed its members and provided estimates of the incremental manufacturing costs to reach 83-percent AFUE over the baseline, which range from $78 to $320. (GAMA, No. 116 at pp. 5-8) Lennox also disagreed with DOE's analysis, which indicated that an 83-percent AFUE weatherized gas furnace with characteristics satisfactory for the expected use can be manufactured and sold to the consumer for an additional $30. Lennox stated that GAMA's average incremental manufacturing cost estimate of $223 over the baseline for an 83-percent AFUE weatherized gas furnace, for the addition of stainless steel heat exchangers and condensate removal components, results in an increase in consumer cost of approximately $500. (Lennox, No. 130 at pp. 2-3) DOE reviewed all the statements from GAMA, Lennox, Carrier, and Trane and revised its engineering analysis accordingly. Specifically, DOE revised its cost assumptions for the heat exchangers in 82-percent- and 83-percent-AFUE weatherized gas furnaces. In the October 2006 proposed rule, DOE assumed that these heat exchangers were made of aluminized steel—the same material used for the higher volume non-weatherized gas furnaces, which would allow manufacturers to take advantage of high-volume material pricing. Thus, the incremental costs of increasing from the baseline to an 83-percent AFUE were only $30. (See NOPR TSD Chapter 6.) In light of the comments, DOE revised the cost model to include heat exchangers made of AL 29-4C at these two AFUE levels and included the cost of a condensate disposal system that could function at below-freezing temperatures. DOE specifically reviewed the costs that GAMA submitted and, based on information obtained during manufacturing interviews and internal engineering expertise, DOE believes GAMA's estimates are within the range of possible manufacturing costs for these systems (see Chapter 6 of the final rule TSD). Therefore, DOE conducted analysis at both the low and high points of the cost range ( *i.e.* , $78 and $320, respectively). DOE examined both the low and high scenarios using the LCC spreadsheet and presented the results in Chapter 8 of the final rule TSD. Ultimately, DOE used the low-cost scenario as the basis for the analysis because DOE's estimates corresponded more closely to the low-range cost that GAMA provided (i.e., $78). However, DOE recognizes that some installations may incur a higher cost. DOE believes inclusion of stainless steel heat exchanger and condensate removal component costs takes into account manufacturer longevity and safety concerns associated with near-condensing weatherized gas furnaces. DOE did not include the cost of stainless steel heat exchangers for weatherized gas furnaces at 81-percent AFUE. Given the presence of 81-percent AFUE products in the marketplace that do not contain stainless steel heat exchangers, DOE assumed that only units with an AFUE of 82 percent and 83 percent would need stainless steel heat exchangers to prevent corrosion. Burnham and GAMA commented that DOE neglected to consider the costs associated with adding induced-draft technology to a Category III gas-fired boiler at 84-percent AFUE and above. Burnham further stated that some 84-percent AFUE boilers are natural draft with draft hoods, vent dampers, and electronic ignition, and some are induced draft with either Category I or Category III venting, depending on the manufacturer's requirements in a given installation. In its comments on the October 2006 proposed rule, Burnham pointed out that DOE estimated that 24 percent of installations at 84-percent AFUE would be Category III, and this percentage represents a partial transformation of the baseline boiler market. However, although DOE included the costs associated with Category III special gas vents, Burnham noted that all Category III installations are induced-draft boilers, and that DOE neglected the costs associated with adding induced-draft technology to the boiler. (Public Meeting Transcript, No. 107.6 at p. 42; Burnham, No. 99 at p. 4) Burnham also predicted that, to avoid the venting risks associated with installing natural draft 84-percent AFUE boilers in every installation, all boiler installations at 84-percent AFUE will become induced-draft, and most or all of those will require Category III venting. Burnham urged DOE to apply the costs associated with adding induced-draft technology to all Category III installations. (Public Meeting Transcript, No. 107.6 at p. 42; Burnham, No. 99 at p. 4) GAMA commented that additional concerns regarding venting safety would require manufacturers to reconsider the application and installation guidelines if the minimum standards for gas-fired boilers were set at 84-percent AFUE. GAMA noted that atmospheric units cost less and meet certain customers' requirements, but they can only be installed in a subset of locations due to venting limitations. At 84-percent AFUE, GAMA commented these gas-fired boilers would be operating at near-condensing conditions, which would lead to potential venting corrosion. GAMA stated that it has been told by its members that concern for safety and reliability would force manufacturers to specify AL 29-4C stainless steel chimney liners and vent connectors in all Category I installations. GAMA estimated the cost of this change to 100-percent stainless steel venting to be roughly $700 to $900. GAMA stated that manufacturers desiring an additional margin of safety might eliminate natural draft products from their product lines completely in favor of induced-draft units. (GAMA, No. 116 at p. 11) GAMA stated that safety concerns would force manufacturers to specify Category II or III stainless steel venting systems in some gas boiler installations. GAMA stated its belief that DOE's projections for venting consequences of 86-percent and 85-percent-AFUE gas-fired boilers would actually occur at 84-percent and 83-percent AFUE. GAMA further commented that 84-percent-AFUE gas-fired boilers would require 100 percent stainless steel venting. GAMA surveyed its boiler manufacturer members regarding the additional cost of incorporating induced-draft technology and provided DOE with the resulting cost estimates, ranging between $108.75 and $145.75. (GAMA, No. 116 at pp. 10-11) In response to the comments from Burnham and GAMA, DOE revised the cost model for gas-fired boilers and added the cost of induced-draft technology to the fraction of Category III boilers assumed for each AFUE level. In other words, DOE applied the cost of induced-draft technology to the 24 percent of installations requiring Category III venting at 84-percent AFUE. DOE agrees with stakeholders that induced-draft technology is likely required for the population of installations using Category III venting. DOE specifically reviewed the costs that GAMA submitted and, based on information obtained during manufacturing interviews and internal engineering expertise, DOE believes GAMA's estimates are within the range of possible manufacturing costs for these systems. Therefore, DOE conducted analyses at both the low and high points of the cost range (i.e., $108.75 and $145.75, respectively). DOE used the low and high scenarios as inputs to the LCC model; the results are presented in Chapter 6 of the final rule TSD. DOE did not revise its estimates of the fraction of installations requiring Category III venting and induced-draft technology from that relied upon in October 2006 proposed rule. In other words, DOE did not apply the added cost to the entire population of gas-fired boilers at 84-percent AFUE and above, as both Burnham and GAMA suggested. DOE relied on the survey data of actual installations requiring Category III venting that GAMA originally supplied. GAMA and Burnham did not provide any additional survey data to validate their claim that all boilers at 84-percent AFUE and above would require Category III venting and induced-draft technology. DOE acknowledges Burnham's and GAMA's assertions of safety concerns relating to venting systems failure at 84-percent AFUE and above, and considered this issue for a standard level for gas-fired boilers. B. Life-Cycle Cost and Payback Period Analyses The purpose of the LCC and PBP analyses was to evaluate the economic impacts of possible new furnace and boiler energy conservation standards on individual consumers. The LCC is the total consumer expense over the life of the furnace or boiler, including purchase and installation expense and operating costs (energy expenditures and maintenance costs). The PBP is the number of years it would take for the consumer to recover the increased costs of a higher-efficiency product through energy savings. As discussed in the NOPR, the LCC and PBP analyses calculated furnace and boiler energy consumption under field conditions for a representative sample of housing units. 71 FR 59219-59220. To compute LCCs, DOE discounted future operating costs to the time of purchase and summed them over the lifetime of the furnace or boiler. DOE measured the change in LCC and the change in PBP associated with a given efficiency level relative to a base case forecast of equipment efficiency. The base case forecast reflects the market in the absence of amended mandatory energy conservation standards. As part of the LCC and PBP analyses, DOE developed data that it used to establish equipment prices, installation costs, annual household energy consumption, marginal natural gas and electricity prices, maintenance and repair costs, equipment lifetime, and discount rates. Chapter 8 of the TSD contains detailed discussion of the methodology followed for the LCC and PBP analyses. In response to the publication of the proposed rule, DOE received several comments on the LCC and PBP methodology. In response to these comments, DOE made several changes in its approach. Table IV.2 summarizes the approaches and data DOE used to derive the inputs to the LCC and PBP calculations for the NOPR, and the changes it made for today's final rule. Discussion of the inputs and the changes follows in the sections below. Table IV.2.—Summary of Inputs and Key Assumptions Used in the Life-Cycle Cost and Payback Period Analyses Inputs NOPR analysis Final rule analysis *Affecting Installed Costs* Equipment Price Derived by multiplying manufacturer cost by manufacturer, distributor, contractor, and builder markups and sales tax, as appropriate Same method, using average materials prices for the period 2002-2006. For weatherized gas furnaces, assumed stainless steel heat exchanger for 82% and 83% AFUE. For gas boilers, assumed that furnaces that require Category III venting incorporate a draft inducer. Installation Cost Used a distribution of weighted-average installation costs from the Installation Model. Weight-averaged installation configuration by frequency of occurrence in the field No change. *Affecting Operating Costs* Maintenance and Repair Costs Used Gas Research Institute data for gas furnaces and boilers, water heater rulemaking survey results for oil-fired equipment, and data from the 1993 rulemaking for mobile home furnaces. Supplemented with information that indicates higher maintenance frequency for modulating equipment, and identical maintenance costs for condensing and non-condensing equipment. Did not include repair costs Same sources for maintenance costs. Included repair costs for gas-fired equipment. Annual Heating Load Calculated heating loads using 2001 Residential Energy Consumption Survey
(RECS)data (cooling loads not considered). Incorporated adjustment to account for change in new home size and shell performance between 2001 and 2015 No change. Annual Energy Use Used 26 virtual models that captured the range of common furnace sizes. Energy calculations used annual heating load for each housing unit based on RECS 2001 No change. Energy Prices Calculated 2001 average and marginal energy prices for each sample house. Used *AEO2005* forecasts to estimate future average and marginal energy prices Same method, using *AEO2007* forecasts to estimate future average and marginal energy prices. *Affecting Present Value of Annual Operating Cost Savings* Lifetime Used 2001.58(9) Appliance Magazine survey results, except for boilers, for which DOE developed new estimates based on a literature review No change. Discount Rate Applied data from 1998 and 2001 Survey of Consumer Finances and other sources to estimate a discount rate for each house Same sources, using additional data from 1989, 1992, 1995, and 2004 Survey of Consumer Finances. (See TSD, Chapter 8). The changes in the approach for estimating the equipment prices are discussed in Chapter 6 of the TSD. In the October 2006 proposed rule analysis, DOE assumed that maintenance costs would not vary with the AFUE level of furnaces and boilers. Several stakeholders commented that DOE should apply a higher maintenance cost for condensing gas furnaces than for non-condensing equipment. (Carrier, No. 100 at p. 3; Public Meeting Transcript, No. 107.6 at p. 57; GAMA, No. 116 at p. 5; Rheem, No. 138 at p. 3) In its analysis for today's final rule, DOE included repair costs for gas furnaces and boilers. The repair cost is the cost to the consumer for replacing or repairing components that have failed in the space-conditioning equipment, while the maintenance cost is a regular expense. Since representative data on repair costs were not available, DOE used the same approach as in the 2001 Central Air Conditioner standards rulemaking (67 FR 36383) and assumed that annualized repair costs are equal to one-half the equipment price divided by the average lifetime. Since the equipment cost is higher for equipment that contains more sophisticated mechanical or electronic components, such as condensing furnaces, DOE applied a higher repair cost for these products. Since all gas equipment components are fully covered by a manufacturer warranty for five years, DOE assumed that consumers would not incur any repair costs in the first five years. As a conservative assumption, DOE applied the annualized cost beginning in the sixth year and ending in the last year of service for the equipment. For oil-fired furnaces and boilers, DOE included an annual maintenance contract, which typically includes repair of failed components. Therefore, DOE did not include a separate repair cost for these products. DOE defines the equipment lifetime as the age at which a furnace or boiler is retired from service. The American Council for an Energy-Efficient Economy (ACEEE) commented that DOE's equipment lifetime estimate for oil-fired furnaces should be 18 years rather than 15 years, which DOE assumed in the NOPR analysis. (ACEEE, No. 120 at p. 10) DOE based the assumed lifetime of 15 years from *Appliance Magazine,* which reports data provided by furnace manufacturers. ACEEE did not provide data to substantiate the 18-year lifetime. Thus, DOE did not change its assumption about equipment lifetime for oil-fired furnaces. As it has done in previous rulemakings, DOE derived the discount rates for the LCC analysis from estimates of the finance cost to purchase a furnace or boiler. The Natural Resources Defense Council
(NRDC)commented that DOE's decision to use consumer-borrowing rates as a basis for consumer discount rates in the LCC analysis is flawed. (NRDC, No. 63 at p. 12) Consistent with financial theory, the finance cost of raising funds to purchase appliances can be interpreted as:
(1)The financial cost of any debt incurred to purchase products, or
(2)the opportunity cost of equity used to purchase equipment. DOE used both of these interpretations in estimating discount rates for the LCC analysis for furnaces and boilers. For the NOPR analysis, DOE used data from the Federal Reserve Board's 1998 and 2001 Survey of Consumer Finances (SCF). 71 FR 59233. For the analysis in today's final rule, DOE expanded the data to include the 1989, 1992, 1995, and 2004 SCF. These additional data on consumer finances represent a wide range of economic conditions affecting consumer behavior. Thus, DOE decided to continue to use consumer-borrowing rates as a suitable basis for consumer discount rates in the LCC analysis. C. National Impact Analysis The purpose of the national impact analysis
(NIA)was to evaluate the energy and economic impacts of possible new furnace and boiler energy conservation standards at the national level. As discussed in the NOPR, DOE calculated the NES and the NPV of total customer costs and savings expected to result from new standards at specific efficiency levels. 71 FR 59224-59228. Table IV.3 summarizes the approach and data DOE used to derive the inputs to the shipments analysis for the NOPR, and the changes it made in the analysis for final rule. In the analysis for the NOPR, DOE analyzed fuel switching only in the new construction market. For this final rule, DOE also analyzed fuel switching in the replacement market, using the same method as for the new construction market. This change results in a larger drop in shipments of non-weatherized gas furnaces at higher efficiency levels than reported in the NOPR. As part of the MIA, furnace manufacturers provided a shipments scenario (i.e., the manufacturers' shipments scenario) that shows significantly greater decreases in gas furnace shipments with a standard at condensing levels (see section E, below). Table IV.3.—Approach and Data Used To Derive the Inputs to the Shipments Analysis Input NOPR analysis Final rule analysis Shipments Calculated total shipments for replacements based on past shipments and retirement function, and for new homes based on projection of new housing from *(AEO)2005* . The projected market shares in new homes were a function of relative heating equipment prices. Based conversions-upon-replacement on historic survey data. Model used two additional shipment categories to calibrate with GAMA data. Included shipments for mobile home furnace replacement Same approach as NOPR, with projection of new housing updated to *AEO2007* . Replacements in Kind Replacement of worn-out heating equipment with unit of same equipment type (i.e., furnace or boiler) and same fuel. Applied a replacement probability distribution based on equipment lifetime Same approach as NOPR, except for non-weatherized gas furnaces, for which DOE modeled fuel switching in the replacement market according to energy and equipment price trends, using same method and data as for installations in new housing. Conversions Replacement of worn-out heating equipment with equipment using a different fuel. Based on utility surveys conducted by American Gas Association that report the numbers of households that converted from oil or electricity to natural gas space heating No change. Installations in New Housing Installation of heating equipment into new single-family, multi-family, or mobile homes according to construction rates and equipment type market shares. Used housing completions according to *AEO* forecast and modeled fuel market shares according to energy and equipment price trends No change. Gas Furnace Early Replacement Early replacement of non-condensing furnaces with more-efficient condensing furnaces. Model calibrated to GAMA data, which show a large increase in condensing furnace shipments in response to rising natural gas prices No change. Conversion from Non-Central Gas Heating to Central Heating with a Gas Furnace Conversion from non-central gas heating to central heating with a gas furnace. Model used Residential Energy Consumption Survey data, which show a large increase between 1993 and 2001 in homes with central gas heating that were built before 1990 No change. In its assessment of fuel switching from gas to electric heating, DOE estimated that heat pumps and electric resistance furnaces would have the same market shares. The Appliance Standards Awareness Project (ASAP), GAMA, Nordyne, the Northeast Power Coordinating Council, and Rheem commented that market shares might change over the analysis period. (Public Meeting Transcript, No. 107.6 at p. 96; Public Meeting Transcript, No. 107.6 at p. 96; public Meeting Transcript, No. 107.6 at p. 98; Public Meeting Transcript, No. 107.6 at p. 97; Rheem, No. 101 at p. 2) DOE reviewed the projections of heating equipment market shares in EIA's AEO2007, and found that EIA's projections show little change in the national market shares of heat pumps and electric resistance furnaces until 2030. Thus, DOE believes that its assumption of constant market shares is reasonable. Table IV.4 summarizes the approach and data DOE used to derive the inputs to the NES and NPV analyses for the NOPR, and the changes it made in the analyses for this final rule. Table IV.4.—Approach and Data Used To Derive the Inputs to the National Energy Savings and Net Present Value Analyses Input NOPR analysis Final rule analysis Shipments Annual shipments from shipments model See Table IV.3. Date Products Must Meet Standard 2015 No change. Annual Unit Energy Consumption
(UEC)Annual weighted-average values were a function of efficiency level. Base case UEC for non-weatherized gas furnaces accounted for projected share of condensing furnaces No change. Installed Cost per Unit Annual weighted-average values were a function of efficiency level (established from the LCC analysis) No change. Maintenance Cost per Unit Annual weighted-average values were a function of efficiency level (established from the LCC analysis) No change. Energy Prices AEO2005 forecasts to 2025 and extrapolation beyond 2025 *AEO2007* forecasts to 2030 and extrapolation beyond 2030. Energy Site-to-Source Conversion Generated by DOE/EIA's NEMS includes electric generation, transmission, and distribution losses No change. Discount Rate 7-percent and 3-percent real No change. Present Year Future expenses discounted to year 2004 Future expenses discounted to year 2006. The NPV calculation for the October 2006 proposed rule used marginal energy prices to value energy savings for natural gas and electricity, and average energy prices to value energy savings for fuel oil and liquefied petroleum gas
(LPG)from *AEO2005.* 71 FR 59227. ACEEE commented that DOE should use the *AEO2007* price forecast in its analysis for the final rule. (ACEEE, No. 120 at p. 10) DOE used energy price projections from *AEO2007* (which ends in 2030) in its analysis for the final rule. For the years after 2030, DOE applied the average annual growth rate in 2020-2030, except for heating oil prices, for which DOE applied the average annual growth rate in 2015-2030. The above approach follows guidance provided by EIA. 5 5 Memorandum about Energy Price Projections for Federal LCC Analysis, Attachment 2, EIA/DOE, 2/10/2006. To discount future impacts, DOE used discount rates of both seven percent and three percent, in accordance with the Office of Management and Budget (OMB)'s guidelines contained in Circular A-4, Regulatory Analysis, September 17, 2003. (OMB Circular A-4, § E (September 17, 2003)). NRDC commented that DOE should rely exclusively on a three-percent discount rate in making determinations about the economic value of prospective standards, in part because investments in energy efficiency reduce overall societal risk. (NRDC, No. 131 at p. 16) As mentioned above, OMB recommends using discount rates of both seven percent and three percent for regulatory analysis. DOE concluded that both seven percent and three percent are appropriate to use because they reflect a broad range of discount rates at a national level. D. Consumer Subgroup Analysis In analyzing the potential consumer impact of new or amended standards, DOE evaluates the impact on identifiable groups of consumers (i.e., subgroups) that may be disproportionately affected by a new national standard level. For this rulemaking, DOE analyzed the potential effect of standards on households with low income levels and households occupied by seniors, two consumer subgroups of interest. (See TSD, Chapter 11.) For today's final rule, DOE also analyzed the impact of standards for non-weatherized gas furnaces on households located in northern and southern regions. DOE defined the southern region as comprising states with an average of less than 5,000 heating degree-days
(HDD)6 , and the northern region as comprising states with an average of more than 5,000 HDD. DOE also performed an analysis using a definition of the southern region as comprising states with an average of less than 6,000 HDD and a definition of the northern region as comprising states with an average of more than 6,000 HDD. See TSD Chapter 11 for a listing of the states included in each grouping. 6 HDDs are quantitative indices demonstrated to reflect demand for energy to heat residential buildings. These indices are derived from daily temperature observations. E. Manufacturer Impact Analysis In determining whether a standard for a covered product is economically justified, the Secretary of Energy is required to consider in part “the economic impact of the standard on the manufacturers and on the consumers of the products subject to such standard.” (42 U.S.C. 6295(o)(2)(B)(i)(I)) EPCA also requires for an assessment of the impact of any lessening of competition as determined by the Attorney General. (42 U.S.C. 6295(o)(2)(B)(i)(V)) DOE performed the MIA to estimate the financial impact of efficiency standards on the residential furnace and boiler industry and to assess the impact of such standards on employment and manufacturing capacity, and published the results in the October 2006 NOPR. 71 FR 59228-59232, 59240-59245. For this final rule, DOE did not introduce changes to the methodology as described in the October 2006 NOPR, but did update the manufacturers' shipments scenario based on the updated NIA results. (See TSD, Chapter 12.) F. Employment Impact Analysis The Process Rule includes employment impacts among the factors DOE considers in selecting a proposed standard. Employment impacts include direct and indirect impacts. Direct employment impacts are any changes in the number of employees for furnace and boiler manufacturers. Indirect impacts are those changes of employment in the larger economy that occur due to the shift in expenditures and capital investment that is caused by the purchase and operation of more efficient furnace and boiler equipment. The MIA addresses direct employment impacts; the employment impact analysis describes indirect impacts. For today's final rule, DOE estimated indirect national employment impacts using a model of the U.S. economy called IMBUILD (impact of building energy efficiency programs). DOE's Office of Building Technology, State, and Community Programs (now the Building Technologies Program) developed the model. IMBUILD is a personal-computer-based, economic-analysis model that characterizes the relationships among 35 sectors of the economy using national input/output structural matrices, and data from the U.S. Bureau of Labor Statistics (BLS). The IMBUILD model estimates changes in employment, industry output, and wage income in the overall economy of the United States resulting from changes in expenditures in the various sectors of the economy. In comments on the proposed rule, NRDC stated that DOE failed to consider the economic value of increased employment at TSL 4. (NRDC, No. 131 at p. 12) DOE takes employment impacts into account without quantifying the net economic value of such impacts. While both the IMBUILD input/output model and the direct use of BLS employment data suggest the proposed furnace and boiler standards could increase the net demand for labor in the economy, DOE believes the gains would most likely be very small relative to total national employment. DOE, therefore, concludes only that the furnace and boiler standards are likely to produce employment benefits that are sufficient to offset any adverse impacts on employment in the furnace and boiler or energy industries. (See TSD, Chapter 14.) G. Regulatory Impact Analysis The regulatory impact analysis provides a description and analysis of the feasible policy alternatives to this regulation and a quantitative comparison of the impacts of the alternatives. In this analysis, DOE also investigated the impact of standards on northern and southern regions. DOE used the NIA spreadsheet, which uses inputs generated by LCC spreadsheets constructed to separately analyze the northern and southern regions, to generate the results presented in the NOPR for both regions. DOE performed the national LCC analysis on the basis of the nine Census divisions, plus four large States (New York, California, Texas, and Florida), rather than on a State-by-State basis. Commenting on the NOPR, ASAP stated that the results for the northern region, defined as areas with more than 6,000 HDDs, appear to be incorrect. (Public Meeting Transcript, No. 107.6 at p. 154) For the NOPR analysis of the potential impacts of regional standards, DOE based the distribution of furnace efficiency in the base case on data that GAMA provided on the percentage of condensing furnace sales in each State. DOE combined the State-level GAMA data into Census divisions, and then assumed condensing gas furnaces were installed in households solely on the basis of climate (i.e., high HDDs). This assumption led to the comparatively small energy savings estimated to result from a condensing-level standard for the northern region. Upon review, DOE determined that the assumption that the existing (and future) market for condensing furnaces (absent a standard) was likely to be concentrated in the coldest states was not an accurate reflection of the State-level data that GAMA provided. By using distribution assumptions that are based on the State-level data, DOE subsequently developed an alternative analysis, which it now believes is a better indicator of the energy savings likely to result in specified regions from various standard levels. In the revised analysis, a much lower percentage (45 percent) of households in the States with HDDs of 6,000 or higher is assigned condensing furnaces. This share is half of the comparable 90 percent value in the NOPR analysis and is close to the 48 percent share of condensing furnaces for the 20 States with an average HDD of 6,000 or higher in the GAMA shipments data. See Appendix V of the TSD for further discussion. H. Utility Impact Analysis The utility impact analysis estimates the change in the forecasted power generation capacity for the Nation. This analysis separately determines the changes in energy supply and demand as a result of natural gas, fuel oil, LPG, or electricity residential consumption savings due to the standard. DOE calculated these changes using the NEMS-BT computer model. 7 The analysis output provides a forecast for the needed generation capacities at each TSL. The estimated net benefit of the standard is the difference between the generation capacities forecasted by NEMS-BT and the *AEO2006* Reference Case. 7 NEMS, which is available in the public domain, is a large, multi-sectoral, partial-equilibrium model of the U.S. energy sector. The EIA uses NEMS to produce its AEO—a widely recognized baseline energy forecast for the U.S. DOE used a variant known as NEMS-BT. DOE obtained the energy savings inputs associated with electricity and natural gas consumption savings from the NES analysis. These inputs reflect the effects of efficiency improvement on furnace energy consumption, including both fuel (natural gas, fuel oil, and LPG) and electricity. The inputs also reflect the impacts associated with the market shift from natural gas heating to electric heating projected to occur at TSLs that result in an increased installed cost for gas furnaces. See Chapter 13 of the TSD for further discussion. The American Gas Association
(AGA)stated that DOE's approach for analyzing utility impacts, and in particular its evaluation of market shifts from gas to electric heating equipment, does not adequately account for impacts on gas utilities. (AGA, No. 137 at p. 6) Historically, DOE's approach for the utility impact analysis has been to only evaluate the impact of market shifts associated with standards on utility energy sales. DOE has not been able to characterize what the impacts of standards would be on gas utilities, other than the financial impacts as measured by sales. Thus, DOE was not able to perform further evaluation of the gas utility impacts for the furnace and boiler standards rulemaking. I. Environmental Analysis Under 42 U.S.C. 6295(o)(2)(B)(i)(VI), DOE estimated the environmental impacts of the standards established in today's final rule. DOE estimated direct emissions impacts at the household level as well as impacts on power plant emissions. While DOE regulating furnace and boiler electricity use, the electricity consumption of these appliances affects power plant emissions. As discussed in the NOPR, DOE calculated the reduction in power plant emissions of CO <sup>2</sup> and NO <sup>X</sup> using the NEMS-BT computer model. 8 DOE does not report estimated reduction in power plant emissions of SO <sup>2</sup> because any such reduction resulting from an efficiency standard would not affect the overall level of SO <sup>2</sup> emissions in the U.S. 9 8 Power sector NO <sup>X</sup> emissions impacts will be affected by the Clean Air Interstate Rule (CAIR), which the U.S. Environmental Protection Agency
(EPA)issued on March 10, 2005. CAIR will permanently cap emissions of NO <sup>X</sup> in 28 eastern States and the District of Columbia. 70 FR 25162 (May 12, 2005). As with SO <sup>2</sup> emissions, a cap on NO <sup>X</sup> emissions means that equipment efficiency standards may result in no physical effects on these emissions. When NO <sup>X</sup> emissions are subject to emissions caps, DOE's emissions reduction estimate corresponds to incremental changes in emissions allowance credits in cap-and-trade emissions markets rather than physical emissions reductions. Therefore, while the emissions cap may not result in physical emissions reduction from the proposed standards, it does produce an environment-related economic benefit in the form of emissions allowance credits. 9 The Clean Air Act Amendments of 1990 set an SO <sup>2</sup> emissions cap on all power generation. The attainment of this target is flexible among generators and is enforced through the use of emissions allowances and tradable permits. Accurate simulation of SO <sup>2</sup> trading implies that the effect of efficiency standards on physical emissions will be near zero because emissions will always be at or near the allowed ceiling. However, although there may not be an environmental benefit from reduced SO <sup>2</sup> emissions from electricity savings, there still may be an economic benefit. Electricity savings can decrease the need to purchase or produce SO <sup>2</sup> emissions allowance credits, which decreases the costs of complying with regulatory caps on emissions. The operation of most furnaces and boilers requires use of fossil fuels, and results in household emissions of CO <sup>2</sup> , NO <sup>X</sup> , and SO <sup>2</sup> at the sites where appliances are used. NEMS-BT provides no means for estimating such household emissions, so DOE calculated separate estimates of the effect of the standards on household emissions of CO <sup>2</sup> , NO <sup>X</sup> , and SO <sup>2</sup> , based on emissions factors derived from the literature. DOE reports household SO <sup>2</sup> emissions savings, because the SO <sup>2</sup> emissions caps do not apply to household emissions. The operation of furnaces and boilers requires use of fossil fuels, and results in household emissions of CO <sup>2</sup> , NO <sup>X</sup> , and SO <sup>2</sup> at the sites where appliances are used. NEMS-BT provides no means for estimating such household emissions, so DOE calculated separate estimates of the effect of the standards on household emissions of CO <sup>2</sup> , NO <sup>X</sup> , and SO <sup>2</sup> , based on emissions factors derived from the literature. DOE reports household SO <sup>2</sup> emissions savings, because SO <sup>2</sup> emissions caps do not apply to household emissions. NRDC and Dow Chemical commented that, although DOE had quantified emissions savings, it failed to put an economic value on them. (NRDC, No. 131 at p. 13; NRDC and Dow Chemical, No. 132 at p. 9) In keeping with the guidance of the 1996 Process Rule, DOE's analysis of the environmental impacts of standards included estimated impacts on emission of carbon and relevant criteria pollutants. 61 FR 36983 (July 15, 1996). For the purpose of promulgating new standard levels for furnaces and boilers, DOE considers the potential changes to physical emission resulting from new standards. The detailed environmental analysis is part of the TSD. V. Discussion of Other Comments Since DOE opened the docket for this rulemaking, it received more than 150 comments from a diverse set of parties, including manufacturers and their representatives, States, energy conservation advocates, consumer advocates, and utilities. Comments regarding the analytic methodologies DOE used are discussed in section IV of this preamble. Other comments addressed the burdens and benefits associated with new energy efficiency standards, the information DOE used in its analyses, results of and inferences drawn from the analyses, impacts of standards, the merits of the different TSLs DOE considered, other issues affecting adoption of standards for residential furnaces and boilers, and the DOE rulemaking process. DOE addressed the comments raised regarding the ANOPR in the October 2006 NOPR. Comments received on the October 2006 proposed rule are addressed below. A. Information and Assumptions Used in Analyses As a basis for analysis for this final rule, DOE has continued to use the types of data as explained in the October 2006 NOPR. 71 FR 59213-59234. For the final rule, DOE revised some inputs and expanded some of the data sources in response to stakeholder comments on the October 2006 proposed rule. These revisions are discussed below. 1. Engineering Analysis In the October 2006 proposed rule analyses, DOE used a five-year average of materials prices from years 2000 through 2004. 71 FR 59216. For the final rule, DOE revised the material price averages used in the cost model to include material price data from 2005 and 2006. For this rulemaking, DOE believes a five-year span is the longest span that would still provide appropriate weighting to current prices experienced in the market. DOE calculated a new five-year average materials price for cold rolled steel, aluminized steel, galvanized steel, painted cold rolled steel, and stainless steel. DOE used the BLS Producer Price Indices
(PPIs)for cold rolled steel and stainless steel spanning from 2002 to 2006 to calculate new averages, which incorporate the changes within each material industry and inflation. Finally, DOE adjusted all averages to 2006$ using the gross-domestic-product implicit-price deflator. As was the case for the October 2006 proposed rule, DOE created two scenarios for the material-price-sensitivity analysis: a low-bound and a high-bound scenario. DOE calculated the low-bound scenario by finding the year ranging between 2002 and 2006 with the lowest cost of cold rolled steel, which was 2002. DOE then used the annual prices for all other materials in 2002 and applied a 15-percent reduction to each of the raw material costs. Likewise, DOE calculated the high-bound scenario using the annual average price for each of the raw materials from 2006, when prices of raw materials were uncharacteristically high. DOE expressed both the low-bound scenario and the high-bound scenario in 2006$. DOE evaluated the results of the material-price-sensitivity analysis, using all three material-cost scenarios, in the engineering analysis and then used them as inputs for the LCC analysis. The results for the material-price-sensitivity analysis are presented in Appendix Z of the final rule TSD. GAMA commented that DOE's analysis for non-weatherized gas furnaces appears to be in error, especially as related to the 81-percent AFUE option, for several reasons. First, while DOE estimated in the October 2006 NOPR that eight percent of non-weatherized gas furnace installations would require Category III venting at 81-percent AFUE, GAMA stated that this number is too low. Second, DOE concluded in the October 2006 NOPR that a significant fraction of the replacement installations will require a Type B vent connector, but GAMA pointed out that DOE only added the additional costs for these connectors to 40 percent of the installations. Lastly, GAMA stated its belief that the number of horizontal venting configurations assumed in the October 2006 NOPR analyses is too low. Regarding GAMA's first point, DOE used the approach described by GAMA in the ANOPR analysis. For the NOPR, DOE determined that non-weatherized gas furnaces at 81-percent AFUE when applied in vertical venting installations fall into Category I. To GAMA's second point, DOE accounted for the cost of Type-B double-wall vent connectors for all replacement installations. GAMA appears to be referring to the fraction of existing models that already have a double walled vent connector in DOE's Installation Model, which was approximately 40 percent as discussed in the NOPR. To GAMA's last point regarding the number of horizontal venting configurations, DOE's October 2006 proposed rule analysis based the number of non-condensing horizontal vent configurations on the Gas Research Institute's venting survey (see NOPR TSD Chapter 6). DOE then verified this percentage in consultations with installers. Consequently, DOE did not revise the number of horizontal venting configurations for today's final rule. 2. Life-Cycle Cost Analysis The base case forecasts equipment that consumers are expected to purchase in the absence of new standards. In the NOPR analysis, DOE assigned gas furnaces to sampled housing units in the base case to reflect the trend toward a higher market share for condensing furnaces, as shown in shipments data through 2003, which GAMA provided. DOE also based the projected market share of condensing furnaces in 2015 on an evaluation of the correlation between condensing furnace market share and the natural gas price for the 1990-2003 period, projected natural gas prices from *AEO2005,* and market factors that could sustain the condensing furnace market share even with a lower gas price. The projected condensing furnace market share for 2015 was 35.6 percent. Therefore, for the LCC analysis base case, DOE assigned condensing furnaces to 35.6 percent of the sampled housing units with non-weatherized gas furnaces. GAMA stated the market share for condensing furnaces might continue to grow because of growth in the replacement market, and thus DOE's assumption may be low. (Public Meeting Transcript, No. 107.6 at p. 105) Lennox commented that the market share for condensing furnaces should consider the replacement market. (Public Meeting Transcript, No. 107.6 at p. 105) Rheem disagreed with DOE's estimate of market share for condensing furnaces, and stated that the share will be higher if historic trends continue. (Rheem, No. 138 at p. 5) ACEEE stated that the market share for condensing furnaces will depend on the price of natural gas and that DOE's assumptions should be internally consistent and reflect the price projections it uses. (Public Meeting Transcript, No. 107.6 at p. 102) DOE found that the empirical, national-level data strongly support a correlation between condensing furnace market share and the natural gas price. The natural gas projections DOE used in this rulemaking ( *AEO2007* ) forecast that the national-average natural gas price in the period to 2015 does not exceed the recent level of prices. The condensing furnace market share in 2005 was approximately 35 percent. DOE determined that its assumption of a market share of 35.6 percent in 2015 reflects the empirical correlation. 3. Manufacturer Impact Analysis NRDC stated that DOE's assessment of the impact of TSL 4 on manufacturers is flawed because a decline in sales of furnaces associated with TSL 4 would result in increased sales of heat pumps, many of which are sold by the furnace manufacturers. (NRDC, No. 131 at p. 14) Pacific Gas and Electric (PG&E) also commented that DOE's analysis overstates the deleterious effect of TSL 4 on INPV. PG&E commented that experience with other standards has shown that the costs and competitiveness difficulties presented by improved energy efficiency standards are less burdensome in implementation than initially projected. (PG&E, No. 129 at p. 1) While some larger manufacturers of furnaces and boilers sell both heat pumps and furnaces, DOE is tasked with assessing the impacts of increased efficiency standards on furnace and boiler manufacturers, not on the heating, ventilation, and air-conditioning industry as a whole. In the furnace and air conditioner businesses, some manufacturers produce both types of products, switching primarily to furnaces in the winter and air conditioners in the summer. Heat pumps, on the other hand, tend to be manufactured in other manufacturing facilities. For the large production volume shifts found for TSL 4, DOE determined that the furnace divisions of large companies likely will be impacted as analyzed in the October 2006 proposed rule MIA. The capital (equipment) and labor (location) in a manufacturing facility cannot easily be transformed from manufacturing furnaces to manufacturing heat pumps. For small companies, which focus on fewer types of product lines, the material costs are less interchangeable. DOE also notes that, under TSL 4, other options—such as electric furnaces—become a choice for consumers. In light of these uncertainties, DOE determined that its MIA captures the potential range of impacts at TSL 4 on furnace manufacturers. NRDC commented that, in determining industry value, DOE should not give equal weight to scenarios of product sales created by DOE and those provided by manufacturers. (NRDC, No. 131 at pp. 14-15) DOE looked at a range of impacts for each of the six product classes of furnaces and boilers and presented this entire range of results in the October 2006 NOPR. In doing so, DOE used both the NES shipments projections and the manufacturers' shipments scenario to assess the range of impacts on the industry value at each TSL. Although this final rule presents results using both shipments scenarios for the MIA, DOE only used the NES shipments scenario to assess the impacts on the Nation in the NIA. NRDC stated its belief that DOE's assumptions regarding markups biased the INPV result. (NRDC, No. 131 at pp. 14-15) NRDC also questioned DOE's assumption that the industry cost structure will not decrease. NRDC stated that manufacturers could distinguish value-added products in the mid-90s AFUE range based on modulating capacity and continue to collect higher markups on above-standard products. NRDC further stated that, as manufacturers gain more experience with 90-percent AFUE products, the price of the products will come down; it requested that the cost structure in DOE's analysis account for this. (NRDC, No. 131 at pp. 14-15) With regard to markups, DOE considered up to four distinct markup scenarios to bound the range of expected product prices following standards. For each product class, DOE used the markup scenarios that characterize the markup conditions described by manufacturers, and that reflect the type of market responses manufacturers expect as a result of standards. Details of the markup scenarios by product class were presented in the October 2006 NOPR. 71 FR 59240. DOE has determined that these scenarios capture the range of variability within the furnace and boiler industry. As to NRDC's point on the industry cost structure, for condensing, non-weatherized gas furnaces that are already made in high volumes in an industry with decades of manufacturer experience, the potential cost of innovation prompted by higher standards is limited to that of an already mature industry. DOE recognizes that manufacturers' continuous improvement programs will continue to reduce future costs, with or without increased efficiency standards. DOE believes these programs are not a result of energy conservation standard rulemakings and are not appropriate to consider when estimating the impacts of energy conservation standards. DOE estimated the manufacturing cost of a condensing furnace to be $422.85 in the engineering analysis and DOE recognizes these costs could be reduced in a standards case scenario. Therefore, the MIA analysis excludes this effect, and shows a range of impacts on the industry results from an amended standard. Rheem stated that DOE's assessment of impacts on manufacturers is inadequate with respect to domestic manufacturing employment, capacity, plant closures, and loss of capital investment. Rheem commented that domestic manufacturing of refrigerators has declined substantially as a result of three energy standards and the phaseout of chlorofluorocarbons
(CFCs)and hydrochlorofluorocarbons (HCFCs), since manufacturers have chosen to invest outside the USA in new facilities rather than upgrade their domestic facilities. Rheem summarized by stating that the cumulative burden of environmental and efficiency regulations has been a factor in the consolidation of the domestic appliance industry. (Rheem, No. 138 at p. 3) DOE notes that the two most significant regulatory actions affecting the furnace and boiler industries are more stringent Federal energy conservation standards for residential and commercial air conditioners, and the EPA-mandated phaseout of hydrofluorocarbon
(HFC)and HCFC refrigerants. DOE is aware that manufacturers are working to redesign all of the product lines of residential air conditioners and have allocated most of their capital resources for redesigning and retooling their production lines to meet the new minimum efficiency standard and refrigerant phaseout. DOE quantified the anticipated level of investment needed to meet each of these two regulatory actions along with others facing the industry in Chapter 12 of the NOPR TSD. 71 FR 59244-29245. In the October 2006 NOPR, DOE specifically sought comment on information that would allow it to monetize changes in warranty costs resulting from the installation of products at near-condensing levels. 71 FR 59258. GAMA stated that DOE should consider changes in warranty costs related to gas-fired boilers at 84-percent AFUE. However, GAMA also stated that it is inappropriate with respect to anti-trust considerations for manufacturers to discuss information related to monetizing changes in warranty costs. (Public Meeting Transcript, No. 107.6 at pp. 108-109) Rheem stated that it is inappropriate to provide DOE with information that attempts to monetize the changes in warranty costs resulting from installation of products at near-condensing levels. Rheem further commented that these products should not be considered as an option due to their unacceptable safety and reliability. (Rheem, No. 101 at p. 2; Public Meeting Transcript, No. 107.6 at p. 82; Rheem, No. 138 at p. 6) Trane stated that it is inappropriate for manufacturers to discuss information related to monetizing changes in warranty costs for products at near-condensing levels. (Public Meeting Transcript, No. 107.6 at p. 108) In light of the comments, DOE was not able to monetize the changes in warranty costs resulting from the installation of products at near-condensing levels. However, as discussed in section VI of this preamble, safety concerns for standards at near-condensing levels were a greater factor in considering such standards, which were eventually rejected. B. Other Issues 1. Joint Stakeholder Recommendation for Boilers On July 14, 2006, GAMA and ACEEE, on behalf of 28 residential boiler manufacturers and four energy efficiency organizations, submitted a joint recommendation for new national standards for residential boilers that would consist of a performance requirement (minimum AFUE levels) and design requirements. Table V.1 exhibits the performance and design requirements in the joint stakeholder recommendation for boilers. Table V.1.—Joint Stakeholder Recommendation for Boilers Performance and Design Requirements Product class Joint stakeholder recommendation for boilers Gas Boiler Water 82% No Standing Pilot * Temperature Reset **. Steam 80 No Standing Pilot *. Oil-Fired Boiler Water 84 Temperature Reset. Steam 82 None. * The manufacturer shall not equip gas boilers with standing pilots. ** The manufacturer shall equip hot water heating boilers with automatic means for adjusting the temperature of the water supplied by the boiler such that an incremental change in inferred heat load produces a corresponding incremental change in supply water temperature. When there is no inferred heat load, such automatic means shall adjust the supply water temperature to no more than 140 deg. F. The boiler shall be operable only when the automatic means is installed. These requirements should be implemented five
(5)years after publication of the Final Rule. For gas-fired boilers, the recommendation calls for a ban on standing pilots. For gas-fired water boilers only, it suggests two design requirements: In addition to the ban on standing pilots, the recommendation also requires a “temperature reset” feature that automatically adjusts the boiler output according to the outdoor ambient air temperature. For oil-fired water boilers, the recommendation contains the design requirement for the same “temperature reset” feature. In the October 2006 NOPR, DOE determined that the recommended standards in the joint stakeholder recommendation are beyond the scope of its statutory authority. 71 FR 59209. In comments on the October 2006 proposed rule, all of the parties to the joint recommendation urged DOE to reconsider and adopt the standards in the recommendation. (Public Meeting Transcript, No. 107.6 at p. 58; ACEEE, No. 120 at p. 4; Public Meeting Transcript, No. 107.6 at pp. 69, 142; Burnham, No. 99 at pp. 1-3; Public Meeting Transcript, No. 107.6 at p. 38; GAMA, No. 102 at p. 2; GAMA, No. 116 at p. 2; Public Meeting Transcript, No. 107.6 at p. 28; Lochinvar, No. 106 at p. 2; Public Meeting Transcript, No. 107.6 at p. 74) Despite these comments, DOE cannot promulgate design requirements for unspecified products: The plain language of section 321(6)(B) of EPCA limits design requirements to only those products for which design requirements are specified in the statute. (42 U.S.C. 6291(6)(b)) Furnaces are not one of those specified products. DOE legally cannot establish a design requirement for furnaces. Congress's establishment of a design requirement on an unspecified product, i.e., a ceiling fan, does not lift the bar on DOE placing design requirements on unspecified products as suggest by ACEEE. (ACEEE, No. 120 at p. 4) While Congress may have amended provisions of EPCA to require design requirements in conjunction with performances requirements, it did not amend section 321(6)(B) of EPCA, 42 U.S.C. 6291(6)(B), which remains applicable to furnaces and boilers. Burnham suggested that section 325(r) of EPCA (42 U.S.C. 6295(r)) grants DOE the authority to add design requirements covered by performance standards under certain conditions. (Burnham, No. 99 at pp. 1-3) Section 325(r) states in relevant part: Any new or amended energy conservation standard prescribed under this section * * * may include any requirement which the Secretary determines is necessary to assure that each covered product to which such standard applies meets the required level of energy efficiency * * * specified in such a standard. (42 U.S.C. 6295(r)) Despite Burnham's suggestion, the plain language of section 325(r) grants authority to establish requirements necessary to assure compliance with a required level of energy efficiency. It does not grant authority to establish requirements that affect the required level of energy efficiency, e.g., design requirements. Further, if the language were such that DOE could interpret the language as broadly as Burnham suggested, the distinction made in section 321(6)(A) and
(B)between products for which design standards can be established and those for which such standards cannot, would be rendered meaningless. 2. Regional Standards and Waiver From Federal Preemption for States In the October 2006 NOPR, DOE stated that the establishment of regional standards or design requirements for residential furnaces and boilers is beyond the scope of DOE's statutory authority. 71 FR 59209; see also, 69 FR 45420, 45425 (July 29, 2004). DOE received numerous comments advocating the adoption of separate standards for northern and southern regions. (ACEEE, No. 120 at p. 3; Public Meeting Transcript, No. 107.6 at p. 59; Public Meeting Transcript, No. 107.6 at p. 54; Public Meeting Transcript, No. 107.6 at p. 68; Office of the Ohio Consumers' Counsel (OCC), No. 125 at p. 9; National Consumer Law Center (NCLC), No. 108 at p. 2; Belmont Housing Trust, Inc., No. 127 at p. 8; City of Boston, No. 115 at p. 1; Consumer Group, No. 121 at pp. 9-10; Northeast Division of Energy Resources (NEDER), No. 123 at p. 4; New Hampshire Office of Consumer Advocate (NHOCA), No. 134 at p. 1; State of Michigan (SOM), No. 114 at p. 1; State of New Hampshire Office of Energy and Planning, No. 139 at p. 1; NRDC, No. 131 at p. 18; Public Meeting Transcript, No. 107.6 at p. 116; NRDC, No. 132 at p. 10; Ohio Department of Development (ODD), No. 124 at p. 1; Western Electricity Coordinating Council (WECC), No. 113 at p. 1) DOE received comments that DOE incorrectly determined that it cannot implement regional standards. Conversely, DOE also received comments opposing the adoption of separate standards for northern and southern regions. (Air Conditioning Contractors of America, No. 135 at p. 1; Air-Conditioning and Refrigeration Institute (ARI), No. 133 at p. 1; National Propane Gas Association (NPGA), No. 142 at p. 3) DOE recognizes the potential benefit that could be achieved through regional standards. As discussed in the October 2006 NOPR, DOE analyzed a regional regulatory scheme based on heating degree-days. 71 FR 59253. This scheme contemplated efficiency standards for non-weatherized gas furnaces only, depending on the region of the country. DOE modeled the policy of regional performance standards by aggregating States into two broad geographic regions based on climate (i.e., based on heating degree-days). DOE selected the efficiency level for this scheme based on maximizing consumer NPV. Under this analysis the TSL projected to yield the maximum consumer NPV at a seven-percent discount rate for the cold-climates (i.e., ≥5,000 heating degree days and ≥6,000 heating degree days) was the proposed TSL 4, with the proposed TSL 2 for the warm climates. The projected results for both regions, the proposed TSL 2 (South) and the proposed TSL 4 (North), combined were estimated to yield higher energy savings than the than the proposed TSL 2 standard levels. The projected results for both regions combined were estimated to yield greater national NPVs (at 7% discount rate) than the proposed levels of TSL 2, applied as national standards. A more detailed discussion of this analysis is provided in the October 2006 NOPR and in the February 9, 2007 Notice of Data Availability (72 FR 6184). However, DOE has determined that it does not have authority under EPCA to establish regional standards. The language of EPCA demonstrates that the Secretary's authority to establish and amend standards for furnaces and boilers is limited to establishing and amending a single national standard for a particular type of furnace and boiler, as opposed to a national standard plus one or more regional standards. Section 325(a)(2) of EPCA authorizes the “Secretary to prescribe amended or new energy conservation standards for each type (or class) of covered product.” (42 U.S.C. 6295(a)(2)) In defining an energy conservation standard, EPCA employs “a performance standard” or “a design requirement” in the singular. (42 U.S.C. 6291(6)) This use of the singular indicates that the Secretary generally may only set one energy conservation standard for a product. Further, were the language of EPCA not clear as to DOE's authority for setting national standards, interpreting section 325 as generally prohibiting the establishment of regional standards is reasonable, particularly when section 325 is read in total. Consumer Groups stated that, under 1 U.S.C. section 1, the use of the singular tense includes consideration of the plural tense unless context indicates otherwise. (No. 121 at p. 10) However, the context of EPCA indicates that the reliance on the singular tense in the definition of energy conservation standard for the purpose of the Secretary establishing amended standards for furnaces and boilers is proper. EPCA specifies that the Secretary can only set multiple standards for a product if that product has more than one major function: The Secretary may set more than 1 energy conservation standard for products that serve more than 1 major function by setting 1 energy conservation standard for each major function. (42 U.S.C. 6295(o)(5)). If DOE could adopt multiple performance standards or design requirements under a single conservation standard, as suggested by commenters, EPCA's limit of one conservation standard per major product function would be meaningless. Additional commenters stated that because Congress established in certain instances multiple requirements on a single product, section 321(6) should be read more broadly to define a “conservation standard.” 10 However, while Congress has enacted multiple performance and design standards for covered products, the Secretary's authority to do so is limited under section 325(o)(5) as stated above. 10 Section 325(ff) of EPCA establishes multiple requirements for ceiling fans. (42 U.S.C. 6295(ff)). Moreover, the Senate Report language accompanying the amendments to EPCA under the National Appliance Energy Conservation Act (NAECA; Pub. L. 95-619) indicates that the Secretary is to set national standards. “The purpose of [NAECA] is to reduce the Nation's consumption of energy and to reduce the regulatory and economic burdens on the appliance manufacturing industry through the establishment of *national* energy conservation standards for major residential appliances.” S. Rep. No. 100-6, at 2
(1987)(Emphasis added). The two basic provisions of the NAECA amendments to EPCA concern the establishment of Federal standards and the preemption of State standards. Id. Although NAECA goes on to state that States have the ability to petition DOE for a waiver from the national standard, NAECA warns that achieving such a waiver is “difficult,” again indicating a preference for a national standard. Id. As a policy matter, national standards established under EPCA enable DOE to address the Nation's need to conserve energy while reducing the regulatory burden on manufacturers. The establishment of regional standards would be overly complicated due to the structure of DOE's enforcement authority as established in EPCA. Under EPCA, DOE's enforcement authority generally applies to products as manufactured. (42 U.S.C. 6302 and 6303) Under current authority, enforcement of Federal regional standards would be difficult given that a furnace or boiler could be manufactured for compliance in one region, yet be easily transported to a region in which it would be noncompliant. The potential interaction of various standards between regions, the subsequent potential for products to be shipped and installed in regions in which they are not compliant, and the resulting impact on energy savings would have to be considered when establishing standards. DOE recognizes the potential for regional standards to increase the net benefits of energy conservation programs under certain circumstances. However, establishing regional standards in the context of DOE's current enforcement authority would make it more difficult to achieve the goals of improved energy conservation and reduced regulatory burden. While DOE is prohibited from promulgating regional standards under the authority in section 325 of EPCA, States can apply for waivers from Federal preemption under section 327 of EPCA. (42 U.S.C. 6297) In the October 2006 NOPR, DOE discussed the necessary conditions in order for it to grant States a waiver from Federal preemption of State energy efficiency standards for appliances subject to Federal regulation, as established in 10 CFR 430.41(a)(1). 71 FR 59209. DOE received several comments with regard to the waiver from Federal preemption discussion in the NOPR. Some commenters expressed concern that DOE was encouraging States to apply for waivers. (Public Meeting Transcript, No. 107.6 at p. 111; AGA, No. 103 at p. 5; Association of Home Appliance Manufacturers (AHAM), No. 141 at pp. 1-2; ARI, No. 133 at pp. 2-3; GAMA, No. 102 at pp. 2-3; GAMA, No. 116 at p. 2; Public Meeting Transcript, No. 107.6 at p. 30; Lennox, No. 130 at p. 3; NPGA, No. 142 at pp. 3-4; Rheem, No. 138 at p. 3; Public Meeting Transcript, No. 107.6 at p. 113; GAMA, No. 153 at p. 1) Other commenters supported DOE giving States guidance with regard to waivers from Federal preemption. (Public Meeting Transcript, No. 107.6 at p. 112; ACEEE, No. 120 at pp. 2-3; Public Meeting Transcript, No. 107.6 at p. 70; Consumer Groups, No. 121 at p. 2; Public Meeting Transcript, No. 107.6 at p. 116; NEDER, No. 123 at p. 3; NRDC, No. 131 at p. 18; NRDC and Dow Chemical, No. 132 at p. 10; New York State Energy Research and Development Authority (NYSERDA), No. 117 at p. 2; OCC, No. 125 at p. 9; SOM, No. 114 at p. 2; WECC, No. 113 at p. 2) While the October 2006 NOPR provided a discussion of the necessary elements of a petition for waiver from Federal preemption, DOE recognizes the practical limitations of the process as well as the potential burden resulting from multiple standards. For example, DOE suggested that a State may include information regarding the efficiencies of product shipments to that State. 71 FR 59210. One commenter raised concern that such information may be considered proprietary or confidential by the manufacturers or trade organizations. (NCLC, No. 108 at p. 19) However, DOE notes that inclusion of such information was a suggestion of what a State should consider including if available, and that such information is not required for a State waiver petition. NCLC expressed concern that petitions filed by more than one State, especially if filed by contiguous or nearby States with similar HDDs, could be deemed in per se violation of the requirement that a petition must demonstrate an “unusual and compelling State or local energy interest.” (NCLC, No. 108 at p. 19) DOE provided guidance on this matter in the denial of the California petition for waiver from Federal preemption for residential clothes washer standards. 71 FR 78157 (December 28, 2006). In that notice, DOE stated that whether a State has an “unusual and compelling State interest,” DOE will evaluate that interest in terms of national averages. 71 FR 58161. DOE has estimated that the potential energy savings likely under a scenario in which all northern States with 5000 HDD or 6000 HDD obtained waivers at a level of 90-percent AFUE is 2 quads and 1.45 quads, respectively. While DOE does not have authority to issue regional standards, EPCA does provide an avenue for DOE to consider this savings through the waiver provision in section 327(d). As stated in the October 2006 NOPR, and as required under section 327(d), DOE would be required to evaluate the benefit of such savings from State level standards against the potential effects on manufacturers and consumer. 71 FR 59210; 42 U.S.C. 6297(d)(3) and (4). 3. Effective Date for New Standards In the October 2006 NOPR, DOE proposed approximately an eight-year implementation period for the proposed standards; i.e., DOE proposed an effective date in 2015. 71 FR 59223. DOE noted that EPCA had directed DOE to publish a final rule to determine whether to amend standards for furnaces and boilers by January 1, 1994, and that any amendment shall apply to products manufactured on or after January 1, 2002. (42 U.S.C. 6295(f)(3)(B)) DOE applied the eight-year implementation period of the EPCA schedule to determine the effective date of the proposed standard. 71 FR 59233. NRDC stated that the eight-year implementation period is not required by law and that the earlier central air conditioner efficiency standard rulemaking established an implementation period shorter than that provided in the statute. (NRDC, No. 131 at p. 13; Public Meeting Transcript, No. 107.6 at pp. 54, 150) ACEEE stated that large amounts of equipment already meet the proposed 2015 standards and are already available on the market. (ACEEE, No. 107 at pp. 61, 149) For furnaces, ACEEE suggested that DOE rely on a five-year implementation period associated with the second round of rulemaking for furnaces and boilers specified in section 325 of EPCA. (42 U.S.C. 6295(f)(3)(C)) With regard to boilers, ACEEE requested that DOE use the dates in the ACEEE-GAMA joint recommendation, given that manufacturers have agreed on those timeframes. (ACEEE, No. 120 at p. 9) A number of other stakeholders also stated that DOE should make the effective date earlier than 2015. (Public Meeting Transcript, No. 107.6 at p. 69; North American Insulation Manufacturers Association, No. 136 at p. 2; NEDER, No. 123 at p. 6; NHOCA, No. 134 at p. 1; NRDC and Dow Chemical, No. 132 at p. 9; NYSERDA, No. 117 at p. 2; OCC, No. 125 at p. 9; ODD, No. 124 at p. 1; State of New Hampshire Office of Energy and Planning (OEP), No. 139 at p. 1; South Coast Air Quality Management District, No. 128 at p. 1; SOM, No. 114 at p. 2; WECC, No. 113 at p. 2; National Multi Housing Council, No. 148 at p. 2) Other stakeholders stated that DOE should maintain the effective date given in the NOPR. (Public Meeting Transcript, No. 107.6 at p. 150; GAMA, No. 116 at p. 4; GAMA, No. 153 at p. 1; Rheem, No. 156 at p. 2; Midwest Energy Efficiency Alliance, No. 150 at p. 1) The standards adopted in today's final rule are applicable to products manufactured on or after the date 8 years following publication of this notice of final rulemaking. DOE is maintaining an eight-year implementation period consistent with EPCA. NRDC is correct that DOE established standards with implementation periods substantially shorter than that specified in EPCA for central air conditioners. However, in that instance all of the participants in the rulemaking, including representatives of the manufacturers who would have to comply with the standards and who had expressed a view about the matter, had agreed that five years (the period provided in the statute) of lead time was not needed for central air conditioner manufacturers to come into compliance with the standards. 69 FR 50997, 50998 (Aug. 17, 2004); 67 FR 36368, 36394 (May 23, 2002). There is no similar consensus among furnace and boiler manufacturers. In today's final rule, DOE is providing a lead time consistent with that provided under EPCA. Today's final rule has a compliance date that begins on the date 8 years following publication of this notice. 4. Consumer Benefits From Reduction in Natural Gas Prices Associated With a Standard of 90-Percent AFUE or Higher for Non-Weatherized Gas Furnaces In the October 2006 NOPR, DOE stated that it believed it would be unable to consider the potential impact of energy efficiency standards on natural gas prices because DOE believed that the analytical methods necessary to estimate such an impact were not available. 71 FR 59210. DOE acknowledged a then recent study 11 that considered the potential impacts of furnace and boiler standards on natural gas prices, but stated that DOE did not find that the study provided any conclusive evidence. 71 FR 59280. 11 Wiser, R., M. Bolinger, M. St. Clair. Easing the Natural Gas Crisis: Reducing Natural Gas Prices through Increased Deployment of Renewable Energy and Energy Efficiency. Lawrence Berkley National Laboratory. January 2005. ( *http://eetd.lbl.gov/EA/reports/56756.pdf* ). NRDC and Dow Chemical challenged DOE's decision not to consider the potential impacts of reductions in natural gas use due to furnace and boiler standards with increased stringency, including the impact on natural gas prices. Commenters stated the Wiser study as well as an analysis performed by ACEEE indicate “major influences of efficiency on price.” (NRDC and DOW, No. 132 at p. 4) NRDC and Dow stated that such a price impact provides a substantial economic benefit that may be estimated using EIA's NEMS model. (NRDC and Dow, No. 132 at p. 10) In response to these comments, DOE undertook further review of the issue of the potential impact of residential furnace and boiler energy efficiency standards on natural gas prices. A review of the economic literature indicates that there is support for the idea that an impact will occur and that that impact would result in a reduction in overall natural gas prices. DOE conducted a preliminary analysis using a version of the 2007 NEMS-BT, modified to account for energy savings associated with possible standards. The preliminary analysis estimated that gas demand reductions resulting from a 90-percent-AFUE non-weatherized gas furnace standard would reduce the U.S. average wellhead natural gas price by an average of 0.7 cents per million Btu over the 2015-2030 forecast period and would reduce the average user price of gas by an average of 1.4 cents per million Btu. 12 12 DOE only analyzed the impact of a 90-percent AFUE standard because it anticipates that impacts to natural gas prices would not result from energy savings associated with the efficiency levels considered by DOE, which are below 90-percent AFUE. The projected change in the natural gas price varies among the end use sectors. DOE estimated that natural gas prices would decrease for the industrial and electric power sectors, and increase for residential consumers. The estimated average price changes amount to a decrease of 0.7 cents per million Btu for the industrial sector and of 0.6 cents per million Btu for the electric power sector, an increase of 4.2 cents per million Btu for the residential sector, and no change for the commercial sector. The increase in the residential price occurs because the fixed charges ( *e.g.* , transmission infrastructure costs) are spread over fewer million Btu of gas sales in the standards case, thus placing upward pressure on the average price per million Btu. A projected decrease for the electric power sector would likely result in a small reduction in electricity prices across all sectors. Although the estimated reduction in average natural gas prices is small, the estimated economy-wide savings in natural gas expenditures over the 2015-2030 forecast period have an estimated net present value of $1.7 billion at a seven-percent discount rate. 13 13 The economy-wide savings over 2015-2038 (the period used to estimate the NPV of the national consumer benefits) equals $3.6 billion at a seven-percent discount rate. In addition to conducting its own analysis using NEMS, DOE reviewed the results of:
(1)Studies that used NEMS to investigate the price impact of reductions in natural gas demand, and
(2)studies that used other energy-economic models to investigate the price impact of substantial change in natural gas demand. While the results vary considerably among the different studies, they generally show a price response similar to or larger than that shown by DOE's NEMS analysis. 14 14 The ratio of the percentage change in price to the percentage change in consumption is termed “inverse price elasticity.” DOE's analysis using NEMS found an average inverse price elasticity
(IPE)over the forecast period of 0.9. Analysis of the results from studies using six other models (as reported by Stanford's Energy Modeling Forum in a 2003 report “Natural Gas, Fuel Diversity and North American Energy Markets”) found a wide range of inverse price elasticities for change in natural gas consumption. Four of the models show an IPE in the range of 1.1 to 2.1; two others show unusually high values of 6.3 and 7.3. DOE also reviewed studies that used the Energy and Environmental Analysis Corporation's model and found that this model results in higher inverse price elasticity (ranging from 4 to 16) than does NEMS. NRDC and Dow Chemical argued that this outcome would likely represent a net gain to society since most gas users would be better off, and producers, whose revenues and costs both would fall, would likely be no worse off. (NRDC and Dow, No. 132 at pp. 4-8). In the short run, DOE's preliminary analysis indicates that consumer savings from lower natural gas prices would be offset by declines in gas producer revenue. In most instances, a reduction in the price of a good would not represent a net economic benefit, but rather a transfer from producers (domestic or foreign) to consumers. In other words, there is a corresponding $1.7 billion *reduction* in revenue to natural gas producers. However, since natural gas is an exhaustible resource, price effects may be felt differently. There is a literature 15 16 indicating that, for exhaustible resources, at least some portion of a price reduction reflects the fact that reduced demand effectively increases future supply and as such would represent a net economic or resource benefit, rather than just a transfer between parties. Although, it is uncertain as to the magnitude of price reduction that would not be a transfer benefit. 15 Fisher, A., Resource and Environmental Economics. Cambridge University Press. 1981. 16 Hotelling, H., The economics of exhaustible resources. Journal of Political Economy. Vol. 39, 137-75. 1931. Based on the discussed analysis, DOE recognizes that there is uncertainty about the magnitude, distribution, and timing of the costs, benefits, and net benefits within the economy. DOE's preliminary analysis indicates that the prices of natural gas to residential consumers would increase slightly. If there is an increase in the prices of natural gas for residential consumers the LCCs will be affected and the LCC savings would be reduced if such price changes were incorporated in the LCC analysis. While DOE has not been able to estimate these potential effects, DOE anticipates the effect will be small since the magnitude of the residential gas price change is small (but likely to vary as the natural gas savings increases). Similarly, DOE is uncertain of the effects of the drop in natural gas on producers and distributors of natural gas. While their revenues and costs are expected to drop, it is uncertain whether they will drop in proportion over time. The supply side will likely experience revenue loss due to both the price changes and the reduction in gas sales that they will experience. DOE considered the potential impact on natural gas prices in the establishment of the final standards, but because of the uncertainty of these impacts, and because DOE's analysis has not been subjected to public review, this factor had little impact on DOE's conclusion. The Department did seek to provide an opportunity for public review and comment on this analysis, which if affirmed, would have merited consideration in deciding whether to finalize higher efficiency levels in this rulemaking, but because certain parties opposed DOE's ability to provide opportunity for additional comment and because the U.S. District Court ultimately denied DOE the additional time that would be required, DOE was unable to do so. More specifically, this rulemaking is subject to a Consent Decree filed with the U.S. District Court for the Southern District of New York, which settled the consolidated cases of *State of New York, et al.* v. *Bodman, and Natural Resources Defense Council, Inc., et al.* , v. *Bodman (No. 05-Civ.-7807
(JES)and No. 05-Civ.-7808 (JES), respectively (S.D.N.Y consolidated December 6, 2005)* . Under that Consent Decree, DOE was required to publish a final rule for amended energy conservation standards for residential furnaces and boilers by September 30, 2007. DOE had received comments on the NOPR that indicated the feasibility and desirability of addressing natural gas price impacts as a result of the standards at issue in this rulemaking. DOE wished to consider those impacts prior to promulgating a final rule, and preliminarily believed that, if confirmed, would have merited consideration in evaluating higher efficiency standards for the products covered by this rulemaking, including a 90% AFUE standard for non-weatherized gas furnaces. Therefore, in order to further address the natural gas price analysis and potentially promulgate higher efficiency standard levels, DOE moved the Court to modify the Consent Decree so that the required publication date for the final rule would be extended nine months, which would allow DOE to publish a supplemental notice of proposed rulemaking, consider the additional information, and potentially use it to form the basis for a final rule. However, certain other parties—specifically, the Gas Appliance Manufactures Association, the Air-Conditioning and Refrigeration Institute, the Association of Home Appliance Manufacturers objected to DOE's motion. The State of New York *et al.* and NRDC *et al.* submitted that DOE did not establish the requisite “good cause” for modifying the Consent Decree, but would be willing to stipulate to the DOE's proposed extension, provided that certain conditions are met. On September 25, 2007, the Court granted a stay of the September 30th deadline to further consider DOE's motion, then on November 1, 2007, the Court denied the motion, thus necessitating DOE's issuance of a final rule by November 8, 2007. As part of its basis for denying the motion, the Court said that the 90-percent AFUE standard for non-weatherized gas furnaces was previously subject to public review. However, nowhere had DOE made available an analysis of the potential impact of such a standard on natural gas prices. As indicated by GAMA, DOE must provide a rationale for the final standard level, and that generally requires that the analysis underlying DOE's determination be subject to review and comment. See, Memorandum Filed in Support of Plaintiff-Intervenors' Opposition to Motion to Modify the Consent Decree, p. 23. Because DOE was denied additional time to promulgate a final rule, DOE was unable to solicit data and comment on its natural gas price analysis, particularly with regard to the uncertainty thereof. Therefore, DOE must issue a final rule by November 8, 2007, as ordered by the Court, based on the record available to DOE at this time. 5. Efficiency Standards for Electric Furnaces In the October 2006 NOPR, DOE did not propose energy efficiency standards for electric furnaces because DOE found that the resulting energy savings would be de minimis given the high efficiency level of such furnaces. AGA and NPGA objected to DOE's decision not to propose efficiency standards for electric furnaces, stating that these furnaces meet the statutory definition of 'furnaces' under current law. (AGA, No. 103 at p. 3; NPGA, No. 142 at p. 4) AGA disagreed with DOE's finding that energy savings would be de minimis. (AGA, No. 137 at p. 4) DOE found that the reports of furnace manufacturers to the FTC list the efficiency of the electric furnaces at 100-percent AFUE. 16 CFR Part 305, Appendix G2. As stated in the October 2006 NOPR, DOE did not consider electric furnaces since their efficiency approaches 100-percent AFUE and improvements to them would also offer de minimis energy-savings potential. 71 FR 59214. In addition, commenters did not provide any additional data to substantiate their claims for electric furnaces. Therefore, for electric furnaces, DOE is not adopting standards in today's final rule. 6. Electricity Consumption of Furnace Fans ACEEE, NEDER, NHOCA, NYSERDA, ODD, and OEP commented that DOE should consider standards concerning the electricity consumption of furnace fans, either in the current rulemaking or in the future. (ACEEE, No. 120 at p. 9; Public Meeting Transcript, No. 107.6 at p. 69; NEDER, No. 123 at pp. 5-6; NHOCA, No. 134 at p. 1; NYSERDA, No. 117 at p. 1; ODD, No. 124 at p. 2; OEP, No. 139 at p. 1) As stated in the October 2006 NOPR, since adding electricity consumption standards to this rulemaking would likely cause further substantial delay in the rulemaking process, DOE accepted the recommendations from GAMA and ASAP and decided not to address furnace electricity consumption in this rulemaking. 71 FR 59209. DOE may consider furnace electricity consumption separately in a subsequent rulemaking. 7. Use of LCC Results in Selecting Standard Levels ACEEE commented that the average LCC results reported in the October 2006 NOPR show inconsequential differences among “mainstream” efficiency options. Therefore, ACEEE stated that, given “virtually indistinguishable differences in LCC and the fact that all of these options are technically feasible,” DOE should follow NAECA's dictate to select standards with the maximum savings that are technically feasible and economically justified. (ACEEE, No. 120 at p. 11) As discussed above in section III.D.1.b, the LCC is one factor DOE used in determining whether an energy conservation standard for residential furnaces and boilers is economically justified. In its consideration, DOE took into account the magnitude of differences in average LCC impacts between alternative standards, as well as the percentages of consumers predicted to experience a positive or negative LCC impact. 8. Definition of Trial Standard Levels NRDC and Dow Chemical commented that DOE should analyze two intermediate levels between 90-percent AFUE and 96-percent AFUE (92-percent AFUE and 94-percent AFUE) for non-weatherized gas furnaces. NRDC stated that DOE has failed to determine whether these two additional levels may be economically justified. (NRDC and Dow Chemical, No. 132 at p. 8; NRDC, No. 131 at p. 10) DOE included the 92-percent AFUE for non-weatherized gas furnaces in most of the rulemaking analyses. DOE did not include this efficiency level in any TSL because it has a lower NPV (at a three-percent discount rate) than the 90-percent-AFUE furnace. DOE did not include 94-percent AFUE for non-weatherized gas furnaces in any TSL because DOE's initial evaluations indicate the costs and benefits of this efficiency level are similar to those of the 96-percent-AFUE level, which DOE has initially determined is the max-tech option. 9. Test Procedure National Oilheat Research Alliance
(NORA)encouraged DOE to more fully integrate information about energy saving strategies into the DOE test procedure for oil-fired equipment. (Public Meeting Transcript, No. 107.6 at p. 63) While the test procedure for furnaces and boilers is not under revision at this time, DOE acknowledges the comment from NORA and will take it into consideration when DOE revises the test procedure. 10. Structural Costs Associated With Condensing Furnaces DOE stated in the October 2006 NOPR that it recognizes that some consumers may experience additional costs that exceed those used in DOE's analysis to address necessary structural changes for installing a condensing furnace, primarily for the vent systems associated with non-weatherized gas furnaces and for mobile home gas furnaces at or above 90-percent-AFUE. 71 FR 59218. DOE noted that, for some dwellings, it may be necessary to make “structural” changes, such as the removal or penetration of an interior wall, exterior wall, or roof, to accommodate new vent systems (and combustion air intakes). While DOE did not have data to quantify the number of consumers that may be affected in this manner and the cost magnitude, it believes the possible cost impacts may be significant enough to warrant consideration in evaluating the adoption of a standard level that would require condensing technology. Therefore, DOE invited comments on the number of consumers that may be affected by structural changes for installing a condensing furnace and the cost magnitude of any structural changes. 71 FR 59218. DOE received two opposing comments on this issue. ACEEE commented that it does not believe there are extraordinary costs or structural changes needed for condensing furnaces that DOE did not account for in the Installation Model. (Public Meeting Transcript, No. 107.6 at p. 94) Conversely, Rheem acknowledged that there could be structural changes associated with installing a new vent system in a house, assuming it is physically feasible to do so in the existing house. (Rheem, No. 101 at p. 2; Rheem, No. 138 at p. 4) Specifically, Rheem stated that major building structural changes could be required when changing from a traditional, 80-percent-AFUE, Category I vent, which is a high-temperature and negative-pressure metal B-vent, to a 90-percent-AFUE, Category IV vent, which is a low-temperature, sealed, positive-pressure vent made with polyvinyl chloride (PVC). In many cases, Rheem pointed out that installing a new condensing furnace in retrofit applications may be impossible, which would require the consumer to change to all-electric heating. (Rheem, No. 101 at p. 2; Rheem, No. 138 at p. 4) DOE did not revise the Installation Model to include costs associated with the structural changes that could be required for installing a condensing furnace in retrofit applications. DOE accounted for many types of installation configurations and the costs associated with each of these in the Installation Model, which it derived with consultations and studies conducted by the Gas Research Institute. See, Appendix C of the TSD. VI. Analytical Results and Conclusions A. Trial Standard Levels Table VI.1 presents the TSLs analyzed for today's final rule and the efficiency levels within each TSL for each class of product. TSL 5 is the max-tech level for each class of product. TSL levels 1, 2, 4, and 5 represent the corresponding TSL levels evaluated in the October 2006 NOPR, but with the revisions to the analysis discussed above. TSL levels A and B are comprised of standard levels presented in the NOPR, but not in the particular grouping as present in TSL A and B. TSL A and B were also evaluated using the updated analysis. Table VI.1.—Trial Standard Levels for Furnaces and Boilers Product classes Trial standard levels (AFUE, %) TSL 1 TSL A TSL 2 TSL B TSL 4 TSL 5 Non-weatherized gas furnaces 80 80 81 90 90 96 Weatherized gas furnaces 80 81 81 81 81 83 Mobile home gas furnaces 80 80 80 90 90 90 Oil-fired furnaces 80 82 82 82 84 85 Gas boilers 82 82 84 82 84 99 Oil-fired boilers 83 83 83 84 84 95 TSL 1 represents the most common product efficiencies of the current market. For example, for non-weatherized gas furnaces, TSL 1 is 80-percent AFUE, which represents the highest number of models listed in the 2005 GAMA directory. TSL 2 is the set of efficiencies for all product classes that yields the maximum NPV as calculated in the NES analysis, assuming a seven-percent discount rate and only considering non-condensing technologies. TSL A is comparable to TSL 2 except DOE modified the efficiency levels for non-weatherized gas furnaces and gas boilers. As discussed in section IV.A, DOE determined there are safety concerns related to potential venting failure due to condensation for non-weatherized gas furnaces at 81-percent AFUE and for gas boilers at 84-percent AFUE. Therefore, TSL A includes efficiency levels at which DOE initially determined that there are no safety concerns for these two products (i.e., 80-percent AFUE for non-weatherized gas furnaces and 82-percent AFUE for gas boilers). TSL 4 consists of efficiency levels that correspond to the maximum efficiency level with a positive NPV as calculated in the NES analysis, assuming a three-percent discount rate. TSL B is comparable to TSL 4 except DOE modified the efficiency levels for oil-fired furnaces and gas boilers. As discussed in section IV.A, DOE determined there are safety concerns related to potential venting failure due to condensation for oil furnaces at 84-percent AFUE and for gas boilers at 84-percent AFUE. Therefore, TSL B includes lower efficiency levels for these two products where there are no safety concerns (i.e., 82-percent AFUE for oil-fired furnaces and 82-percent AFUE for gas boilers). TSL B also includes the 84-percent AFUE level for oil-fired boilers as found in TSL 4, which is the same AFUE level as included in the Joint Stakeholder Recommendation for boilers discussed in section V.B.1, above. TSL 5 is the max-tech level. It represents condensing technologies for all classes except weatherized gas-fired furnaces. For the latter class, other technologies provide the maximum technical efficiency. As presented in the October 2006 NOPR, the only difference between TSL 3 and 2 was the efficiency levels for non-weatherized gas furnaces and mobile home furnaces, 81-percent AFUE as compared to 80-percent AFUE, respectively. In today's notice of final rulemaking, an 81-percent AFUE for non-weatherized gas furnaces is included in TSL 2. Further, an 81-percent AFUE for mobile home furnaces no longer yields the maximum NPV as calculated in the NES analysis, assuming a seven-percent discount rate. As such, DOE did not evaluate the proposed standard TSL 3 in this notice, as it would have been redundant for non-weatherized gas furnaces and inappropriate for mobile home furnaces. B. Significance of Energy Savings To estimate the energy savings through 2038 that would result from new standards, DOE compared the energy consumption of residential furnaces and boilers under the base case (no new standards) to the energy consumption of these products under amended standards. Table VI.2 shows DOE's NES estimates for each TSL. DOE reports both undiscounted and discounted values of energy savings. Discounted energy savings represent a policy perspective wherein energy savings farther in the future are less significant than energy savings closer to the present. Table VI.2.—Summary of Cumulative National Energy Savings for Residential Furnaces and Boilers [Energy savings for units sold from 2015 to 2038] Trial standard level National energy savings (quads) Not discounted 3% discounted 7% discounted 1 0.20 0.10 0.04 A 0.25 0.13 0.06 2 0.69 0.35 0.15 B 3.21 1.62 0.70 4 3.34 1.68 0.73 5 6.76 3.41 1.47 C. Economic Justification 1. Economic Impact on Consumers a. Life-Cycle Costs and Payback Period Consumers will be affected by the standards in that they will experience higher purchase prices and lower operating costs. Generally, these impacts are best captured by changes in LCC and by the PBP. Therefore, DOE calculated the LCC and PBP for the standard levels considered in this rulemaking. DOE's LCC and PBP analyses provided six key outputs for each TSL, which are reported in Tables VI.3 through VI.8 below. The first two outputs are the LCC and the average net life-cycle savings for a design that complies with each TSL, and the next three outputs are the proportion of purchases where the purchase of a complying unit would create a net life-cycle cost, no impact, or net life-cycle savings for the consumer. The final output is the average PBP for the consumer purchase of a design that complies with the TSL. The PBP is the number of years it would take for the consumer to recover, as a result of energy savings, the increased costs of higher-efficiency equipment, based on the operating cost savings from the first year of ownership. The PBP is an economic benefit-cost measure that uses benefits and costs without discounting. DOE's PBP analysis and its analysis under the rebuttable-presumption test both concern the payback period for a standard. However, DOE based the PBP analysis for residential furnaces and boilers on energy consumption under conditions of actual use of each product by consumers, whereas, as required by EPCA, it based the rebuttable presumption test on consumption as determined under conditions prescribed by the DOE test procedure. As indicated previously, while DOE examined the rebuttable-presumption criteria, it evaluated whether the standard levels in today's notice are economically justified through a more detailed analysis of the economic impacts of increased efficiency as directed under section 325(o)(2)(B)(i) of EPCA. (42 U.S.C. 6295(o)(2)(B)(i)) Detailed information on the LCC and PBP analyses can be found in TSD Chapter 8. Table VI.3.—Summary of LCC and Payback Period Results for Non-Weatherized Gas Furnaces Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 78 13,016 1 80 12,804 2 0 99 1 1.7 A 80 12,804 2 0 99 1 1.7 2 81 12,771 15 29 36 35 22 B 90 12,617 55 37 36 27 20 4 90 12,617 55 37 36 27 20 5 96 13,547
(865)89 2 9 76 Table VI.4.—Summary of LCC and Payback Period Results for Weatherized Gas Furnaces Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 78 10,491 1 80 10,383 19 0 82 18 1.6 A 81 10,337 62 3 7 91 3.4 2 81 10,337 62 3 7 91 3.4 B 81 10,337 62 3 7 91 3.4 4 81 10,337 62 3 7 91 3.4 5 83 10,419
(20)71 0 29 20 Table VI.5.—Summary of LCC and Payback Period Results for Mobile Home Gas Furnaces Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 75 11,271 1 80 10,529 111 1 85 14 3.7 A 80 10,529 111 1 85 14 3.7 2 80 10,529 111 1 85 14 3.7 B 90 10,187 434 30 5 65 18 4 90 10,187 434 30 5 65 18 5 90 10,187 434 30 5 65 18 Table VI.6.—Summary of LCC and Payback Period Results for Oil-Fired Furnaces Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 78 16,248 1 80 15,971 10 0 96 4 0.3 A 82 15,716 177 0 30 70 0.7 2 82 15,716 177 0 30 70 0.7 B 82 15,716 177 0 30 70 0.7 4 84 15,815 96 38 15 47 14 5 85 15,876 40 51 7 42 16 Table VI.7.—Summary of LCC and Payback Period Results for Gas Boilers Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 80 20,472 1 82 19,898 208 11 44 46 12 A 82 19,898 208 11 44 46 12 2 82 19,898 208 11 44 46 12 B 82 19,898 208 11 44 46 12 4 84 19,802 300 18 15 67 12 5 99 21,042
(881)75 3 22 35 Table VI.8.—Summary of LCC and Payback Period Results for Oil-Fired Boilers Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period Years 80 24,594 1 83 23,952 69 0 84 16 0.9 A 83 23,952 69 0 84 16 0.9 2 83 23,952 69 0 84 16 0.9 B 84 23,987 56 17 61 22 19 4 84 23,987 56 17 61 22 19 5 95 24,551
(456)72 0 28 27 b. Consumer Subgroup Analysis DOE estimated consumer subgroup impacts by analyzing the potential effects of standards for non-weatherized gas furnaces on low-income households, households occupied only by seniors, and southern and northern households. DOE defined northern households as those in States with average HDD over 6,000, and it defined southern households as those in States with average HDD below 5,000. DOE's analysis indicates that today's standard for non-weatherized gas furnaces would have an impact on low-income households and senior-only households that would be similar to its impact on all households. Tables VI.9 and VI.10 show for each TSL the summary of LCC and PBP results for northern and southern households. Today's standard for non-weatherized gas furnaces (80 percent AFUE) would result in similar LCC savings in northern and southern households, with a shorter PBP for northern households. Table VI.9.—Summary of LCC and Payback Period Results for Non-Weatherized Gas Furnaces in Northern Households [>6000 HDD] Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period years 78 15,492 1 80 15,222 3 0 98 2 0.7 A 80 15,222 3 0 98 2 0.7 2 81 15,161 32 47 47 34 14 B 90 14,779 212 22 47 31 13 4 90 14,779 212 22 47 31 13 5 96 15,582
(598)84 2.4 13 61 Table VI.10.—Summary of LCC and Payback Period Results for Non-Weatherized Gas Furnaces in Southern Households [<5000 HDD] Trial standard level Efficiency level
(AFUE)(percent) LCC LCC 2006$ LCC savings 2006$ Net cost % No impact % Net benefit % Payback period years 78 10,439 1 80 10,285 2 0 98 2 2.2 A 80 10,285 2 0 98 2 2.2 2 81 10,280 1 40 23 37 29 B 90 10,345
(82)55 21 23 26 4 90 10,345
(82)55 21 23 26 5 96 11,389 (1,108) 92 1.4 7 101 Chapter 11 of the TSD explains DOE's method for conducting the consumer subgroup analysis and presents the detailed results of that analysis. 2. Economic Impact on Manufacturers DOE determined the economic impacts on manufacturers of more stringent standards for residential furnaces and boilers, as described in the October 2006 NOPR. 71 FR 59212, 59228-59232, 59240-59245. The only modifications DOE made to the MIA for this final rule were the inclusion of the revised manufacturing costs from the engineering analysis, the conversion of the capital and product conversion cost to 2006$, and the revised shipments from the NES analysis. DOE fully describes this analysis in Chapter 12 of the final rule TSD. a. Industry Cash-Flow Analysis Results Using four different markup scenarios and two shipments forecasts, 71 FR 59230-59232, 59240, DOE estimated the impact of amended standards for residential furnaces and boilers on the INPV of the furnace and boiler industry. The impact of new standards on INPV consists of the difference between the INPV in the base case (no new standards) and the INPV in the standards case (with amended standards). INPV is the primary metric used in the MIA, and provides one measure of the fair value of the industry in today's dollars. DOE calculated the INPV by summing all of the net cash flows, discounted at the industry's cost of capital, or discount rate. Tables VI.11 through VI.16 show the estimated changes in INPV that would result from the TSLs DOE considered in this rulemaking, using both the shipments estimates calculated in the NES analysis, and the shipments data that manufacturers provided. Each table shows the changes attributable to one of the product classes DOE evaluated. The figures in these tables reflect and are affected by the product conversion expenses and capital investments that the industry would incur at each TSL, but the tables do not display these expenses and investments. Table VI.11.—Changes in Industry Net Present Value for Non-Weatherized Gas Furnaces [2006$] TSL NES shipments Flat markup INPV $MM Change in INPV from base $MM % change Two-tier markup INPV $MM Change in INPV from base $MM % change Base case 1,197 1,161 1 1,197 0 0 1,162 1 0 A 1,197 0 0 1,162 1 0 2 1,125
(72)−6 1,084
(78)−7 B 1,217 20 2 881
(280)−24 4 1,217 20 2 881
(280)−24 5 1,505 307 26 937
(224)−19 Manufacturers' shipments Base case 1,227 1,235 1 1,227 0 0 1,235 0 0 A 1,227 0 0 1,235 0 0 2 1,152
(74)−6 1,155
(79)−6 B 1,110
(117)−10 839
(396)−32 4 1,110
(117)−10 839
(396)−32 5 902
(324)−26 595
(640)−52 Table VI.12.—Changes in Industry Net Present Value for Weatherized Gas Furnaces [2006$] TSL NES shipments Flat markup INPV $MM Change in INPV from base $MM % change Constant price markup INPV $MM Change in INPV from base $MM % change Base case 272 272 1 239
(32)−12 235
(37)−14 A 232
(40)−15 218
(54)−20 2 232
(40)−15 218
(54)−20 B 232
(40)−15 218
(54)−20 4 232
(40)−15 218
(54)−20 5 223
(48)−18 181
(91)−33 Table VI.13.—Changes in Industry Net Present Value for Mobile Home Gas Furnaces [2006$] TSL Flat markup NES shipments INPV $MM Change in INPV from base $MM % change Manufacturers' shipments INPV $MM Change in INPV from base $MM % change Base case 23 23 1 23 0 0 23 0 0 A 23 0 0 23 0 0 2 23 0 0 23 0 0 B 11
(11)−50 11
(13)−56 4 11
(11)−50 11
(13)−56 5 11
(11)−50 11
(13)−56 Table VI.14.—Changes in Industry Net Present Value for Oil-Fired Furnaces [2006$] TSL NES Shipments Flat markup INPV $MM Change in INPV from base $MM % change Constant price markup INPV $MM Change in INPV from base $MM % change Base case 36 36 1 35
(2)-5 35
(2)-5 A 33
(4)-10 31
(5)-14 2 33
(4)-10 31
(5)-14 B 33
(4)-10 31
(5)-14 4 29
(8)-21 25
(12)-32 5 28
(8)-23 22
(15)-40 Table VI.15.—Changes in Industry Net Present Value for Gas Boilers [2006$] TSL Manufacturers' Shipments Flat markup INPV $MM Change in INPV from base $MM % change Three-tier markup INPV $MM Change in INPV from base $MM % change Base case 201 201 1 200
(1)-1 196
(5)-3 A 200
(1)-1 196
(5)-3 2 184
(17)-8 174
(27)-13 B 200
(1)-1 196
(5)-3 4 184
(17)-8 174
(27)-13 5 171
(30)-15 100
(101)-50 Table VI.16.—Changes in Industry Net Present Value for Oil-Fired Boilers [2006$] TSL Manufacturers' Shipments Flat markup INPV $MM Change in INPV from base $MM % change Three-tier markup INPV $MM Change in INPV from base $MM % change Base case 78 78 1 74
(4)-5 63
(14)-18 A 74
(4)-5 63
(14)-18 2 74
(4)-5 63
(14)-18 B 74
(4)-5 62
(15)-20 4 74
(4)-5 62
(15)-20 5 59
(18)-23 32
(45)-58 The October 2006 NOPR provides a detailed discussion of the estimated impact of amended furnace and boiler standards on INPV for each product class. 71 FR 59240-59244. b. Impacts on Manufacturing Capacity and Subgroups of Manufacturers As discussed in the October 2006 NOPR, to the extent that more stringent energy conservation standards increase the size of the heat exchanger, they could reduce plant throughput, particularly for those plants that are limited in available space used for fabricating heat exchangers. The standards, thus, could necessitate that manufacturers add floor space to their existing plants and warehouses. In addition, assembly and fabrication times could increase for the larger equipment. In an attempt to recoup capacity, manufacturers might need to invest in productivity, or equipment, or consider outsourcing some heat exchanger production. 71 FR 59244. It is not clear that all new capacity would be added in the United States. During the MIA interviews, several manufacturers stated that there has been a trend in the industry to move production facilities to overseas locations where labor markets offer cost savings. Some of these companies commented that new standards could speed up this trend. However, DOE does not expect the standards being adopted in today's final rule to significantly reduce plant throughput. As discussed in the October 2006 NOPR, using average cost assumptions to develop an industry-cash-flow estimate is not adequate for assessing differential impacts among subgroups of manufacturers. 71 FR 59244. Small manufacturers, niche players, or manufacturers exhibiting a cost structure that differs largely from the industry average could be affected differently. DOE used the results of the industry characterization to group manufacturers exhibiting similar characteristics. As discussed in the October 2006 NOPR, DOE expects the standard levels being adopted in today's final rule to have a relatively minor differential impact on small manufacturers of residential furnaces and boilers. 71 FR 59244. c. Cumulative Regulatory Burden As discussed in the October 2006 NOPR, one aspect of the assessment of manufacturer burden is the cumulative impact of multiple DOE standards and other regulatory actions that affect the manufacture of the same covered products. 71 FR 59244-59245. Manufacturers of residential furnaces and boilers also manufacture approximately 82 percent of the residential central air conditioners and heat pumps. New, higher Federal efficiency standards became applicable to residential central air conditioners manufactured after January 23, 2006, and new, higher Federal standards will apply to commercial air conditioning equipment manufactured after January 1, 2010. In addition, the EPA has mandated the phaseout, by January 1, 2010, of certain refrigerants used in these products. The furnace and boiler manufacturers who also produce residential and commercial air conditioning products have been and will be devoting substantial resources to complying with these requirements. Manufacturers have been working to redesign all of the product lines and have allocated most of their capital resources for redesigning and retooling their production lines to meet the new minimum efficiency standards. Manufacturers are also now re-designing their product offerings and will need to retool to meet the EPA standards. Chapter 12 of the final rule TSD addresses in greater detail the issue of cumulative regulatory burden. 3. National Net Present Value and Net National Employment The NPV analysis estimates the cumulative benefits or costs to the Nation that would result from particular standard levels. While the NES analysis estimates the energy savings from a proposed energy efficiency standard, the NPV analysis provides estimates of the national economic impacts of a proposed standard relative to a base case of no new standard. Table VI.17 provides an overview of the NPV results, using both a seven-percent and a three-percent real discount rate. See TSD Chapter 10 for more detailed NPV results. Table VI.17.—Summary of Cumulative Net Present Value for Residential Furnaces and Boilers [Impacts for units sold from 2015 to 2038] Trial standard level NPV (billion 2006$) 7% discount rate 3% discount rate 1 0.51 1.69 A 0.69 2.18 2 0.89 4.02 B 0.98 11.07 4 0.98 11.53 5 −21.38 −26.03 DOE also estimated the national employment impacts due to each of the TSLs. As discussed in the October 2006 NOPR, 71 FR 59232-59233, 59247, DOE expects the net monetary savings from standards to be redirected to other forms of economic activity. As shown in Table VI.18, DOE estimates net indirect employment impacts—changes in employment in the larger economy (other than in the manufacturing sector being regulated)—from furnace and boiler energy efficiency standards to be positive but relatively small. Although DOE's analysis suggests that today's furnace and boiler standards would result in a very small increase in the net demand for labor in the economy, relative to total national employment, this increase would be sufficient to offset fully any adverse impacts on employment that might occur in the furnace and boiler industry. For details on the employment impact analysis methods and results, see TSD Chapter 14. Table VI.18.—Net National Change in Indirect Employment [Thousands of jobs in 2038] Trial Standard Level (Thousands of Jobs) TSL1 TSLA TSL2 TSLB TSL4 TSL5 0.74 0.94 2.55 11.71 12.96 26.07 4. Impact on Utility or Performance of Equipment As indicated in section V.B.4 of the October 2006 NOPR, DOE believes that the new standards it is adopting today will not lessen the utility or performance of any residential furnaces and boilers. 71 FR 59247. 5. Impact of Any Lessening of Competition As previously discussed in the October 2006 NOPR, 71 FR 59213, 59247, and in section II.F.1.e of this preamble, DOE considers any lessening of competition that is likely to result from standards and the Attorney General determines the impact, if any, of any such lessening of competition. To assist the Attorney General in making such a determination, DOE provided DOJ with copies of the October 2006 proposed rule and the NOPR TSD for review. In comment on the October 2006 proposed rule, DOJ expressed concern that the proposed standards for weatherized gas furnaces at 83 percent AFUE and gas boilers at 84 percent AFUE could adversely affect competition, and that manufacturers would have difficulty designing products that safely meet the proposed standards. (DOJ at No. 144, p. 2) DOJ noted that, for weatherized gas furnaces, meeting the standard would likely result in increased condensation, potentially resulting in significant deterioration that would jeopardize the safety of the product, and, for gas-fired water boilers, meeting the standard would make effective CO <sup>2</sup> venting more difficult. DOJ further noted that any resulting costs incurred to solve these issues could adversely affect the competitiveness of these products in relation to electric heat pumps and water heaters. DOJ urged DOE to carefully consider its proposed standards in light of these concerns. As described in section V.D of this preamble, DOE is adopting lower efficiency levels for the standards for weatherized gas furnaces and gas boilers than the levels proposed in the October 2006 proposed rule. DOE expects that the lower efficiency levels avoid the problems that DOJ mentioned for weatherized gas furnaces and gas boilers. Manufacturers would not incur costs to solve these issues and, therefore, the standards established in today's rule would not adversely affect the competitiveness of these products in relation to electric heat pumps and water heaters. 6. Need of the Nation To Conserve Energy The Secretary recognizes the need of the Nation to save energy. Enhanced energy efficiency, where economically justified, improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts or costs of energy production. The energy savings from residential furnace and boiler standards is projected to result in
(1)reduced power sector emissions of CO <sup>2</sup> ,
(2)either reduced power sector emissions of NO <sup>X</sup> or an economic benefit in the form of emission allowance credits for this pollutant, and
(3)reduced household emissions (i.e., emissions at the sites where appliances are used) of CO <sup>2</sup> , NO <sup>X</sup> , and SO <sup>2</sup> . DOE expects the standards to have negligible impact on electricity generating capacity. Table VI.19 provides DOE's estimate of the emissions reductions projected to result from adoption of the TSLs considered in this rulemaking. Table VI.19.—Summary of Emissions Reductions for Residential Furnaces and Boilers [Cumulative reductions for units sold from 2015 to 2038] Emission TSL 1 TSL A TSL 2 TSL B TSL 4 TSL 5 CO 2
(Mt)−6.1 −7.8 −20.0 −137.1 −141.3 −322.0 NO X
(kt)−7.3 −9.2 −23.9 −164.6 −169.2 −373.1 SO 2
(kt)0.0 −1.8 −2.0 −6.2 −10.5 −63.9 DOE also calculated discounted values for future emissions, using the same seven-percent and three-percent real discount rates that it used in calculating the NPV. Table VI .20 shows the discounted cumulative emissions impacts for residential furnaces and boilers. Table VI.20.—Summary of Discounted Emissions Reductions for Residential Furnaces and Boilers [Cumulative reductions for units sold from 2015 to 2038] Emission TSL 1 TSL A TSL 2 TSL B TSL 4 TSL 5 7% Discount Rate CO 2
(Mt)−1.6 −2.1 −5.3 −36.2 −37.3 −83.9 NO X
(kt)−1.7 −2.1 −5.4 −37.3 −38.3 −84.4 SO 2
(kt)0.0 −0.4 −0.5 −1.4 −2.4 −14.7 3% Discount Rate CO 2
(Mt)−3.4 −4.3 −10.9 −74.8 −77.1 −174.9 NO X
(kt)−3.8 −4.7 −12.3 −84.5 −86.9 −191.5 SO 2
(kt)0.0 −0.9 −1.0 −3.2 −5.4 −33.0 For further details on the environmental impacts of today's standards, see the “Environmental Assessment for Proposed Energy Conservation Standards for Residential Furnaces and Boilers,” a separate report in the TSD for today's rule. 7. Other Factors EPCA provides that, in deciding whether a standard is economically justified, DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)) In developing today's standard, the Secretary took into consideration safety concerns related to carbon monoxide exposure resulting from potential failures of venting systems (and heat exchangers), stemming from extraneous condensate production in furnaces and boilers. D. Conclusion EPCA contains criteria for DOE to consider in prescribing new or amended energy conservation standards. It states that any such standard for any type (or class) of covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) As stated above, in determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standards exceed its burdens considering:
(1)The economic impact of the standard on the manufacturers and on the consumers of the products subject to such standard;
(2)The savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered products which are likely to result from the imposition of the standard;
(3)The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard;
(4)Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard;
(5)The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;
(6)The need for national energy and water conservation; and
(7)Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)) A determination of whether a standard level is economically justified is not made based on any one of these factors in isolation. The Secretary must weigh each of these seven factors in total in determining whether a standard is economically justified. Further, the Secretary may not establish an amended standard if such standard would not result in “significant conservation of energy,” or “is not technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B)) In selecting energy conservation standards for residential furnaces and boilers for consideration in the October 2006 proposed rule as well as this final rule, DOE started by examining the maximum technologically feasible levels, and determined whether those levels were economically justified. Upon finding the maximum technologically feasible levels not to be justified, DOE analyzed the next lower TSL to determine whether that level was economically justified. DOE repeated this procedure until it identified a TSL that was economically justified. Table VI.21 summarizes DOE's quantitative analysis results for all of the TSLs it considered. This table presents the results or, in some cases, a range of results, for each TSL, and will aid the reader in the discussion of costs and benefits of each TSL. The range of values reported in this table for industry impacts represents the results for the different markup scenarios and shipments forecasts that DOE used to estimate manufacturer impacts. Table VI.21.—Summary of Results TSL 1 TSL A TSL 2 TSL B TSL 4 TSL 5 Primary energy saved (quads) 0.20 0.25 0.69 3.21 3.34 6.76 7% Discount rate 0.04 0.06 0.15 0.70 0.73 1.47 3% Discount rate 0.10 0.13 0.35 1.62 1.68 3.41 Generation capacity change
(GW)** 0.4 0.5 1.2 8.2 8.4 17.8 NPV (2006$billion): 7% Discount rate 0.51 0.69 0.89 0.98 0.98 −21.38 3% Discount rate 1.69 2.18 4.02 11.07 11.53 −26.03 Industry impacts: Industry NPV (2006$million) −38 to −58 −48 to −74 −136 to −179 −39 to −483 −59 to −519 192 to −904 Industry NPV (% Change) −2 to −3 −3 to −4 −8 to −10 −2 to −26 −3 to −28 11 to −49 Cumulative emissions impacts: *** CO <sup>2</sup>
(Mt)−6.1 −7.8 −20.0 −137.1 −141.3 −322.0 NO <sup>X</sup>
(kt)−7.3 −9.2 −23.9 −164.6 −169.2 −373.1 SO <sup>2</sup>
(kt)0.0 −1.8 −2.0 −6.2 −10.5 −63.9 Mean life-cycle cost savings (2006$): Non-Weatherized Gas Furnaces $2 $2 $15 $55 $55 ($865) Weatherized Gas Furnaces $19 $62 $62 $62 $62 ($20) Oil-Fired Furnaces $10 $177 $177 $177 $96 $40 Gas Boilers $208 $208 $208 $208 $300 ($881) Oil-Fired Boilers $69 $69 $69 $56 $56 ($456) Mobile Home Gas Furnaces $111 $111 $111 $434 $434 $434 Mean Payback Period (years): Non-Weatherized Gas Furnaces 1.7 1.7 22 20 20 76 Weatherized Gas Furnaces 1.6 3.4 3.4 3.4 3.4 20 Oil-Fired Furnaces 0.3 0.7 0.7 0.7 14 16 Gas Boilers 12 12 12 12 12 35 Oil-Fired Boilers 0.9 0.9 0.9 19 19 27 Mobile Home Gas Furnaces 3.7 3.7 3.7 18 18 18 * Parentheses indicate negative (−) values. ** Change in installed generation capacity by the year 2038 based on *AEO2007* Reference Case. *** CO <sup>2</sup> emissions impacts include physical reductions at power plants and households. NO <sup>X</sup> emissions impacts include physical reductions at power plants and households as well as production of emissions allowance credits where NO <sup>X</sup> emissions are subject to emissions caps. SO <sup>2</sup> emissions impacts include physical reductions at households only. In addition to the quantitative results, DOE also considered other burdens and benefits that affect economic justification. DOE took into consideration safety concerns arising from the potential failure of venting systems or heat exchangers used for residential furnaces and boilers. These concerns affect non-weatherized gas furnaces at 81 percent, weatherized gas furnaces at 83 percent and 82 percent, oil furnaces at 84 percent, and gas boilers at 84 percent AFUE. See section IV.A of this preamble and final rule TSD Chapter 6 for further discussion. First, DOE considered TSL 5, the maximum technologically feasible level, for each product class. TSL 5 would likely save 6.76 quads of energy through 2038, an amount DOE considers significant. Discounted at seven percent, the energy savings through 2038 would be 1.47 quads. For the Nation as a whole, TSL 5 would result in a net cost of $21.4 billion in NPV, discounted at seven percent. Although DOE did not quantify the potential benefits from reductions in natural gas prices as a result of TSL 5, DOE has determined that the overall impact on the economy would still be overwhelmingly negative because the decline in NPV at TSL 5 is very large. The emissions reductions are projected at 322 Mt of CO <sup>2</sup> , 17 373 kt of NO <sup>X</sup> , and 64 kt of SO <sup>2</sup> . Total generating capacity in 2030 is estimated to increase 17.8 gigawatts
(GW)under TSL 5, due to projected switching from gas furnaces to electric heating equipment. 17 For all of the TSLs, CO <sup>2</sup> emissions impacts include physical reductions at power plants and households. NO <sup>X</sup> emissions impacts include physical reductions at power plants and households as well as production of emissions allowance credits where NO <sup>X</sup> emissions are subject to emissions caps. SO <sup>2</sup> emissions impacts include physical reductions at households only. At TSL 5, the average consumer is projected to experience a significant increase in LCC for most product classes. Purchasers of non-weatherized gas furnaces are projected to lose on average $865 over the life of the product in present value terms and purchasers of gas-fired boilers would lose on average $881 in present value terms. 18 The LCC savings are estimated to be negative for 89 percent of households in the Nation that purchase non-weatherized gas furnaces, and for 92 percent of all non-weatherized gas furnace consumers in the southern region. The mean payback period of all product classes, except for oil-fired gas furnaces, is estimated to be substantially longer than the mean lifetime. 18 Non-weatherized gas furnaces are the most prominent class of residential furnaces and boilers, accounting for approximately 72 percent of the total industry sales and approximately 81 percent of residential furnace sales. Gas-fired boilers are the most prominent class of residential boilers, accounting for 6 percent of the total industry sales and 61 percent of residential boiler sales. The projected change in industry value
(INPV)ranges from an increase of $192 million to a decrease of $904 million. The magnitude of the impacts is largely determined by the cashflow results for non-weatherized gas furnaces. For this product class, the impacts are driven primarily by the assumptions regarding future product shipments and the ability of manufacturers to offer differentiated products that command a premium markup. DOE recognizes the significant difference between the shipments forecasted by the NES analysis and those anticipated by manufacturers. DOE is concerned about the projected increase in total installed cost of $1,859, or 82 percent, for non-weatherized gas furnaces. With an increase of this size, there is a significant risk of consumers switching to other heating systems, including heat pumps and electric resistance heating. DOE also recognizes that maintaining a full product line is more difficult for manufacturers at higher standard levels. Therefore, DOE places more weight on the two-tiered markup scenario for non-weatherized gas furnaces at TSL 5. In particular, if the high range of impacts is reached as DOE expects, TSL 5 could result in a net loss of $640 million to the non-weatherized gas furnace industry. After carefully considering the analysis, comments on the proposed rule, and weighing the benefits and burdens, the Secretary reached a similar conclusion as set forth in the NOPR: At TSL 5 the benefits of energy savings and emissions reduction are expected to be outweighed by the potential multi-billion dollar negative net economic cost to the Nation, the economic burden on consumers, and the large capital-conversion costs that could result in a reduction in INPV for manufacturers. Consequently, the Secretary has concluded that TSL 5, the maximum technologically feasible level, is not economically justified. Next, DOE considered TSL 4. Primary energy savings is estimated at 3.34 quads of energy through 2038, which DOE considers significant. Discounted at seven percent, the energy savings through 2038 would be 0.73 quads. For the Nation as a whole, TSL 4 is projected to result in net savings of $0.98 billion in NPV, discounted at seven percent. The emissions reductions are projected to be 141 Mt of CO 2 , 169 kt of NO X , and 10.5 kt of SO 2 . Total generating capacity in 2030 under TSL 4 is estimated to increase by 8.4 GW due to the projected switching from gas furnaces to electric heating equipment. At TSL 4, consumers are projected to experience a decrease in LCC for all of the product classes. Purchasers of non-weatherized gas furnaces are projected to save, on average, $55 over the life of the product in present value terms, and purchasers of gas-fired boilers are projected to save, on average, $300 over the life of the boiler in present value terms. DOE found that 37 percent of households with non-weatherized gas furnaces would be expected to experience a net cost, and 27 percent of households with non-weatherized gas furnaces would be expected to experience a net gain. TSL 4 requires the use of condensing technology for non-weatherized gas furnaces. A majority of the affected consumers in the south would be expected to experience a significant increase in total installed cost. Since the operating cost savings of condensing technology are less of a factor in warmer climates, the substantial increase in total installed cost leads to increased life-cycle costs. DOE found that 55 percent of households in the south purchasing a non-weatherized gas furnace would experience a life-cycle net cost. The average LCC increase to the southern consumer purchasing a non-weatherized gas furnace is $82. The mean payback period of non-weatherized gas furnaces in the south would be substantially longer than the mean lifetime of these furnaces. At TSL 4, the projected change in INPV ranges from a loss of $59 million to a loss of $519 million, which could potentially cause up to a 42 percent drop in total industry value. The magnitude of projected impacts is still largely determined by the cashflow results for the non-weatherized gas furnaces. For this product class, the projected impacts continue to be driven primarily by the assumptions regarding future product shipments and the ability to offer differentiated products. Although the projected impacts will not be as severe as expected for TSL 5 for the non-weatherized gas furnace industry, the magnitude of the projected impacts would still be determined primarily by the assumptions regarding future product shipments and the ability to offer differentiated products that command a premium markup. Although the range of possible impacts is not as large as for TSL 5, DOE still recognizes the significant differences between the shipments forecast by the NES analysis and those anticipated by manufacturers. DOE believes that with an increase in total installed cost of $701 for non-weatherized gas furnaces, or 31 percent, some consumers are likely to switch to other heating systems, including heat pumps and electric resistance heating. The low-end estimate of losses in INPV is based on DOE's estimate of the fuel switching that is most likely to occur, while the high end estimate of losses is based largely on manufacturer estimates of fuel switching. Additionally, some product classes would likely require large product-conversion costs because the products would require new heat-exchanger designs to meet the efficiency requirements prescribed in TSL 4. Even though the ability of manufacturers to differentiate products is greater at TSL 4 than at TSL 5, it will still be harder for manufacturers to differentiate products because all of the products offered in TSL 4 for non-weatherized gas furnaces use condensing technology. In particular, if the high range of impacts is reached, TSL 4 could result in a net loss of $396 million to the non-weatherized gas furnace industry. After carefully considering the results of the analysis, comments on the proposed rule, and the benefits versus burdens, the Secretary reached a similar conclusion as set forth in the NOPR: At TSL 4, the benefits of energy and cost savings and emissions impacts would be outweighed by the economic burden on southern households and the capital conversion costs that are likely to result in a significant reduction in INPV for manufacturers. In addition, DOE determined that there are safety concerns related to potential venting failure due to condensation with oil-fired furnaces at 84 percent AFUE and with gas boilers at 84 percent AFUE. DOE received numerous comments reaffirming these safety concerns, and the Secretary has concluded upon consideration of the factors to determine whether a standard is economically justified that TSL 4 is not economically justified and contains two efficiency levels that could pose a safety or health risk to consumers. Next, DOE considered TSL B. TSL B is the same as TSL 4 except for oil-fired furnaces and gas boilers, for which there are safety concerns as described above. Therefore, for these two products TSL B includes lower efficiency levels at which these safety concerns are not present (i.e., 82 percent AFUE for oil furnaces and 82 percent for gas boilers). TSL B is projected to save 3.21 quads of energy through 2038, an amount DOE considers significant. Discounted at seven percent, the projected energy savings through 2038 would be 0.70 quads. For the Nation as a whole, TSL B would result in net savings in NPV of $0.98 billion, discounted at seven percent. The emissions reductions are projected at 137 Mt of CO 2 , 165 kt of NO X , and 6.2 kt of SO 2 . Total generating capacity in 2030 under TSL B is projected to increase by 8.2 GW due to the projected switching from gas furnaces to electric heating equipment. At TSL B, DOE estimates that purchasers of non-weatherized gas furnaces would save, on average, $55 over the life of the product and purchasers of gas-fired boilers would save, on average, $208. As with TSL 4, DOE estimates that 37 percent of households with non-weatherized gas furnaces would experience a net cost, and 27 percent of households with non-weatherized gas furnaces would experience a net gain, with the remaining 36 percent being unaffected. DOE estimated that 55 percent of households in the south with a non-weatherized gas furnace would experience a net life-cycle cost. The estimated average LCC increase to the southern consumer purchasing a non-weatherized gas furnace is $82. The mean payback period of non-weatherized gas furnaces in the south is projected to be substantially longer than the mean lifetime of these furnaces. The projected change in INPV ranges between a loss of $39 million and a loss of $483 million. Just as with TSL 4, the projected impacts continue to be driven primarily by the assumptions regarding future product shipments and the ability to offer differentiated products. More specifically, most of these differences are attributable to the significant differences between the shipments forecast by the NES analysis and those anticipated by manufacturers. Furthermore, some manufacturers stated they would likely use a de-rating strategy to reduce the increased capital costs associated with TSL B. If manufacturers use such a strategy, it is anticipated that the variety of products offered by the manufacturers would be reduced by eliminating some of the higher-capacity models to reduce the negative impacts. At TSL B, consumers would experience an average increase in total installed cost of $700 for non-weatherized gas furnaces (compared to an 80-percent AFUE furnace). There is a potential risk at this level of consumers switching to electric heating systems, as further detailed in the shipments forecast discussion in Chapter 12 of the TSD. For the furnace industry alone, the industry value would decrease from 2.1 percent to 26.2 percent. After carefully considering the analysis, comments on the October 2006 proposed rule, and the benefits versus burdens, the Secretary concludes after weighing the statutory criteria in total that TSL B would not be economically justifiable. In particular, the benefits of energy and cost savings and emissions impacts are likely to be outweighed by the economic burden on southern households and the capital conversion costs that are likely to result in a significant reduction in INPV for manufacturers. Next, DOE considered TSL 2. Primary energy savings at this level would likely be 0.69 quad of energy through 2038, which DOE considers significant. Discounted at seven percent, the energy savings through 2038 is projected to be 0.15 quads. For the Nation as a whole, TSL 2 is projected to result in a net savings of $0.89 billion in NPV, discounted at seven percent. The emissions reductions are projected at 20 Mt of CO 2 , 24 kt of NO X , and 2 kt of SO 2 . Total generating capacity in 2030 under TSL 2 would likely increase by 1.2 GW due to the projected switching from gas furnaces to electric heating equipment. At TSL 2, purchasers of non-weatherized gas furnaces would save, on average, an estimated $15 over the life of the product and purchasers of gas-fired boilers would save, on average, an estimated $208. The mean payback period for non-weatherized gas furnaces at TSL 2 is estimated to be 22 years, which is longer than the mean lifetime. TSL 2 includes a standard for non-weatherized gas furnaces at 81-percent AFUE. DOE is concerned that, at this level, there is likely an increased risk of safety concerns with this equipment due to venting issues. Most manufacturers and DOJ commented that the margin of safety is diminished in many instances at 81-percent AFUE. Some manufacturers commented that they would not be willing to accept the risk and/or cost involved in producing a full line or family of products at 81-percent AFUE. This potential safety concern is a factor that the Secretary considers relevant. Based on DOE's evaluation of all the information considered during the rulemaking, DOE believes that a standard at 81-percent AFUE for non-weatherized gas furnaces could pose a potential for safety problems for some consumers. The projected change in industry value ranges from a loss of INPV of $136 to a loss of $179 million. TSL 2 potentially could result in up to a nine-percent loss in INPV for the furnace industry and up to a 15-percent loss in INPV for the boiler industry. However, DOE anticipates that manufacturers of non-weatherized gas furnaces would still be able to differentiate their premium products and retain profitability margins. After carefully considering the results of the analysis, comments on the NOPR, and the benefits versus burdens, the Secretary concluded that at TSL 2, the benefits of energy savings and emissions impacts would be outweighed by the reduction in industry value for manufacturers and the safety concerns related to potential venting failure due to condensation with non-weatherized gas furnaces at 81 percent AFUE. Consequently, the Secretary has concluded that TSL 2 is not economically justified. Next, DOE considered TSL A. Primary energy savings at this level is projected to be 0.25 quad of energy through 2038, which DOE considers significant. Discounted at seven percent, the energy savings through 2038 is calculated to be 0.06 quads. For the Nation as a whole, TSL A would likely result in a net savings of $0.69 billion in NPV, discounted at seven percent. The emissions reductions are projected at 7.8 Mt of CO 2 , 9.2 kt of NO X , and 1.8 kt of SO 2 . Total generating capacity in 2030 under TSL A would likely increase by 0.5 GW due to the projected switching from gas furnaces to electric heating equipment. At TSL A, purchasers of non-weatherized gas furnaces would save, on average, an estimated $2 over the life of the product and purchasers of gas-fired boilers would save, on average, an estimated $208. DOE's analysis indicates that no households purchasing non-weatherized gas furnaces would experience an increase in LCC at TSL A, including southern households. The calculated mean payback periods are less than the average equipment lifetime for all product classes at TSL A. For example, the mean payback period for non-weatherized gas furnaces at TSL A is calculated to be 1.7 years. The projected change in industry value ranges from a loss of INPV of $48 million to a loss of $74 million. TSL A potentially could result in up to a four-percent loss in INPV for the furnace industry and up to a five-percent loss in INPV for the boiler industry. Furthermore, DOE anticipates that manufacturers of non-weatherized gas furnaces would still be able to differentiate their premium products and retain profitability margins. TSL A includes an 83-percent AFUE standard level for oil-fired boilers. DOE notes that the joint stakeholder recommendation for boilers suggested an 84-percent AFUE standard level (in combination with a temperature reset design requirement) for oil-fired boilers, which is estimated to result in greater energy savings than the 83-percent level proposed in the NOPR and included in TSL A. DOE concluded that the 84-percent AFUE for oil-fired boilers was inconsistent with the other standard levels included in TSL A. TSL A was derived from TSL 2, which was described in the NOPR. As discussed in the NOPR, TSL 2 represents the set of efficiency levels, which yield the maximum NPV, and an 83-percent AFUE for oil boilers is consistent with this grouping of standard levels for analysis. 71 FR 59203. After carefully considering the analysis, comments on the NOPR, and the benefits and burdens, the Secretary concludes that this standard saves a significant amount of energy and is technologically feasible and economically justified. DOE also believes the efficiency levels contained in TSL A do not pose a safety or health risk to consumers. Therefore, DOE is adopting the energy conservation standards for residential furnaces and boilers at TSL A. VII. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 This regulatory action has been determined to be a “significant regulatory action” under section 3(f)(1) of Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993). The Executive Order requires that each agency identify in writing the specific market failure or other specific problem that it intends to address that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted. Executive Order 12866, § 1(b)(1). In the context of furnaces and boilers, problems are expected to arise due to:
(1)Lack of consumer information and/or information processing capability about energy efficiency opportunities;
(2)misplaced incentives, which separate responsibility for buying new appliances and for paying their operating costs;
(3)transactions costs, which prevent access to capital to finance energy efficiency investment; and
(4)imperfect competition, which may prevent energy efficient appliances from reaching the market place. Furthermore, for renters in particular, there are split incentives for more energy efficient equipment. The owner of the home (landlord) may not invest in efficient equipment because the landlord does not pay the energy bill, and the renter does not want to invest so as not to risk losing the capital investment if the renter moves. Furthermore, imperfect competition may prevent many efficient technologies from reaching the market. In this case, individual manufacturers may be limited by capital rationing or more concerned with competing under existing market conditions, than with offering a full range of energy efficient products to consumers. Today's action also required a regulatory impact analysis
(RIA)and, under the Executive Order, was subject to review by the Office of Information and Regulatory Affairs
(OIRA)in OMB. DOE presented to OIRA for review the draft final rule and other documents prepared for this rulemaking, including the RIA, and has included these documents in the rulemaking record. They are available for public review in the Resource Room of the Building Technologies Program at 950 L'Enfant Plaza Drive, SW., Washington, DC 20024,
(202)586-9127, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The RIA calculates the effects of feasible policy alternatives to residential furnace and boiler standards, and provides a quantitative comparison of the impacts of the alternatives. DOE evaluated each alternative in terms of its ability to achieve significant energy savings at reasonable costs, and compared it to the effectiveness of the proposed rule. DOE analyzed these alternatives using a series of regulatory scenarios as input to the NES/Shipments Model for furnaces and boilers, which it modified to allow inputs for these measures. 71 FR 59253-59255. The complete RIA, “Regulatory Impact Analysis for Proposed Energy Conservation Standards for Residential Furnaces and Boilers,” is contained in the TSD prepared for today's rule. The RIA consists of:
(1)A statement of the problem addressed by this regulation, and the mandate for government action;
(2)a description and analysis of the feasible policy alternatives to this regulation;
(3)a quantitative comparison of the impacts of the alternatives; and
(4)the national economic impacts of the proposed standards. As explained in the NOPR, DOE determined that, with the exception of regional performance standards, which DOE has determined it lacks authority to adopt, none of the alternatives it examined would save as much energy or have an NPV as high as the proposed standards. 71 FR 59253. The same conclusions apply to the standards in this final rule. In addition, several of the alternatives would require new enabling legislation, since authority to carry out those alternatives does not presently exist. Additional detail on the regulatory alternatives is found in the RIA report in the final rule TSD. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires preparation of an initial regulatory flexibility analysis
(IRFA)for any rule that by law must be proposed for public comment, and a final regulatory flexibility analysis
(FRFA)for any such rule that an agency adopts as a final rule, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis examines the impact of the rule on small entities and considers alternative ways of reducing negative impacts. Also, as required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of General Counsel's Web site: *http:// www.gc.doe.gov.* Small businesses, as defined by the Small Business Administration
(SBA)for both furnace manufacturers and boiler manufacturers, are manufacturing enterprises with 750 employees or fewer. Prior to issuing the proposed rule in this rulemaking, DOE interviewed five such small businesses affected by the rulemaking. As explained in the NOPR, DOE reviewed the proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. 71 FR 59255-59256. On the basis of this review, DOE certified that the proposed rule, if promulgated, would “have no significant economic impact on a substantial number of small entities.” 71 FR 59256. Therefore, DOE did not prepare an initial regulatory flexibility analysis for the proposed rule. DOE transmitted its certification and a supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review. DOE received no comments on the certification in response to the NOPR, and reaffirms the certification. Therefore, DOE has not prepared a final regulatory flexibility analysis for this rule. C. Review Under the Paperwork Reduction Act DOE stated in the NOPR that this rulemaking would impose no new information and recordkeeping requirements, and that, therefore, OMB clearance is not required under the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). 71 FR 59256. DOE received no comments on this in response to the NOPR, and, as with the proposed rule, today's rule imposes no information and recordkeeping requirements. Therefore, DOE has taken no further action in this rulemaking with respect to the Paperwork Reduction Act. D. Review Under the National Environmental Policy Act DOE prepared an environmental assessment of the impacts of today's standards (DOE/EA-1530), which it published as a separate report within the TSD for this rule. DOE found the environmental effects associated with various standard efficiency levels for residential furnaces and boilers to be not significant, and therefore it is issuing a Finding of No Significant Impact (FONSI) pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance with the National Environmental Policy Act (10 CFR part 1021). The FONSI is available in the docket for this rulemaking. E. Review Under Executive Order 13132 DOE reviewed this rule pursuant to Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), which imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. In accordance with DOE's statement of policy describing the intergovernmental consultation process it will follow in the development of regulations that have federalism implications, 65 FR 13735 (March 14, 2000), DOE examined the proposed rule and determined that the rule 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. 71 FR 59256. DOE received no comments on this issue in response to the NOPR, and its conclusions on this issue are the same for the final rule as they were for the proposed rule. Therefore DOE is taking no further action in today's final rule with respect to Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform” 61 FR 4729 (February 7, 1996) imposes on Federal agencies the general duty to adhere to the following requirements:
(1)Eliminate drafting errors and ambiguity;
(2)write regulations to minimize litigation; and
(3)provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation:
(1)Clearly specifies the preemptive effect, if any;
(2)clearly specifies any effect on existing Federal law or regulation;
(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;
(4)specifies the retroactive effect, if any;
(5)adequately defines key terms; and
(6)addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the final regulations meet the relevant standards of Executive Order 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 As described in the NOPR, Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4)
(UMRA)imposes requirements on Federal agencies when their regulatory actions will have certain types of impacts on State, local, and Tribal governments and the private sector. 71 FR 59256-59257. DOE concluded that, because the proposed rule would contain neither an intergovernmental mandate nor a mandate that would likely result in expenditures in the residential furnace and boiler industry of $100 million or more in any year, the requirements of UMRA do not apply to the rule. 71 FR 59257. DOE received no comments concerning the UMRA in response to the NOPR, and its conclusions on this issue are the same for the final rule as they were for the proposed rule. Therefore, DOE is taking no further action in today's final rule with respect to the UMRA. H. Review Under the Treasury and General Government Appropriations Act, 1999 DOE determined that, for this rulemaking, it need not prepare a Family Policymaking Assessment under section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277). 71 FR 59257. DOE received no comments concerning section 654 in response to the NOPR, and, therefore, is taking no further action in today's final rule with respect to this provision. I. Review Under Executive Order 12630 DOE determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), that today's rule would not result in any takings which might require compensation under the Fifth Amendment to the United States Constitution. 71 FR 59257. DOE received no comments concerning Executive Order 12630 in response to the NOPR, and, therefore, is taking no further action in today's final rule with respect to this Executive Order. J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. The OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs of the OMB a Statement of Energy Effects for any significant energy action. DOE determined that the proposed rule was not a “significant energy action” within the meaning of Executive Order 13211. 71 FR 59257. Accordingly, it did not prepare a Statement of Energy Effects on the proposed rule. DOE received no comments on this issue in response to the NOPR. As with the proposed rule, DOE has concluded that today's final rule is not a significant energy action within the meaning of Executive Order 13211, and has not prepared a Statement of Energy Effects on the rule. L. Review Under the Information Quality Bulletin for Peer Review On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (OSTP), issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664, January 14, 2005. The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal government, including influential scientific information related to agency regulatory actions. The purpose of the Bulletin is to enhance the quality and credibility of the Government's scientific information. DOE's Office of Energy Efficiency and Renewable Energy, Building Technologies Program, held formal in-progress peer reviews covering the analyses (e.g., screening/engineering analysis, LCC analysis, MIA, and utility impact analysis) used in conducting the energy efficiency standards development process on June 28-29, 2005. The in-progress review is a rigorous, formal, and documented evaluation process using objective criteria and qualified and independent reviewers to make a judgment of the technical/scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. The Building Technologies Program staff is preparing a peer review report which, upon completion, will be disseminated on the Office of Energy Efficiency and Renewable Energy's Web site and included in the administrative record for this rulemaking. M. Review Under Executive Order 12898 DOE considers environmental justice under Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations.” 59 FR 7629 (February 16, 1994). The Executive Order requires Federal agencies to assess whether a proposed Federal action causes any disproportionately high and adverse human health or environmental effects on low-income or minority populations. DOE evaluated the socioeconomic effects of standards on low-income households and found that they are similar to the impacts on the rest of the population. N. Congressional Notification As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the issuance of today's final rule prior to the effective date set forth at the outset of this notice. The report will state that it has been determined that the rule is a “major rule” as defined by 5 U.S.C. 804(2). DOE also will submit the supporting analyses to the Comptroller General in the U.S. Government Accountability Office
(GAO)and make them available to each House of Congress. VIII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this final rule. List of Subjects in 10 CFR Part 430 Administrative practice and procedure, Energy conservation, Household appliances. Issued in Washington, DC, on November 8, 2007. Alexander A. Karsner, Assistant Secretary, Energy Efficiency and Renewable Energy. For the reasons set forth in the preamble, part 430 of Title 10, Code of Federal Regulations, is amended to read as set forth below. PART 430—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS 1. The authority citation for part 430 continues to read as follows: Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note. 2. Section 430.32 is amended by revising the section heading and paragraph
(e)to read as follows: § 430.32 Energy and water conservation standards and their effective dates.
(e)*Furnaces.*
(1)Non-weatherized and weatherized gas furnaces, mobile home gas furnaces, oil-fired furnaces, and gas- and oil-fired boilers, manufactured before November 19, 2015 and all other types of furnaces, shall have an efficiency no less than: Product class AFUE 1 (percent) Effective date
(i)Furnaces (excluding classes noted below) (percent) 78 01/01/92
(ii)Mobile Home Furnaces 75 09/01/90
(iii)Small furnaces (other than furnaces designed solely for installation in mobile homes) having an input rate of less than 45,000 Btu/hr:
(A)Weatherized (outdoor) 78 01/01/92
(B)Non-weatherized (indoor) 78 01/01/92
(iv)Boilers (excluding gas steam) (percent) 80 01/01/92
(v)Gas steam boilers (percent) 75 01/01/92 1 Annual Fuel Utilization Efficiency, as determined in § 430.22(n)(2) of this part.
(2)Non-weatherized and weatherized gas furnaces, mobile home gas furnaces, oil-fired furnaces, and gas- and oil-fired boilers, manufactured on or after November 19, 2015, shall have an efficiency no less than: Product class AFUE 1 (percent)
(i)Non-weatherized gas furnaces 80
(ii)Weatherized gas furnaces 81
(iii)Mobile home gas furnaces 80
(iv)Oil-fired furnaces 82
(v)Gas hot-water boilers 82
(vi)Oil-fired hot-water boilers 83 1 Annual Fuel Utilization Efficiency, as determined in § 430.22(n)(2) of this part. Appendix [The following letter from the Department of Justice will not appear in the Code of Federal Regulations.] Department of Justice Antitrust Division, Main Justice Building, 950 Pennsylvania Avenue, N.W., Washington, DC 20530-0001,
(202)514-2401/(202) 616-2645 (Fax), E-mail: *antitrust@usdoj.gov,* Web site: *http://www.usdoj.gov/atr.* January 16, 2007. Warren Belmar, Esq., Deputy General Counsel for Energy Policy, U.S. Department of Energy, Washington, DC 20585. Dear Deputy General Counsel Belmar: I am responding to your November 14, 2006 letters seeking the views of the Attorney General about the potential impact on competition of proposed energy efficiency standards relating to
(1)liquid-immersed and medium-voltage, dry-type distribution transformers (“distribution transformers”), and
(2)residential furnaces and boilers (“furnaces and boilers”). The Energy Policy and Conservation Act (“EPCA”) authorizes the Department of Energy (“DOE”) to establish energy conservation standards for a number of appliances where DOE determines that those standards would be technologically feasible, economically justified, and result in significant energy savings. Your requests were submitted pursuant to Section 325(o)(2)(B)(I) of the Energy Policy and Conservation Act, 42 U.S.C. 6291, 6295 (“EPCA”), which states that, before the Secretary of Energy may prescribe a new or amended energy conservation standard, the Secretary shall ask the Attorney General to make a determination of “the impact of any lessening of competition * * * that is likely to result from the imposition of the standard.” The Attorney General's responsibility for responding to requests from other departments about the effect of a program on competition has been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR 0.40(g). In conducting its analysis the Antitrust Division examines whether a standard may lessen competition, for example, by placing certain manufacturers of a product at an unjustified competitive disadvantage compared to other manufacturers, or by inducing avoidable inefficiencies in production or distribution of particular products. In addition to harming consumers directly through higher prices, these effects could undercut the ultimate goals of the legislation. Your requests included the Notices of Proposed Rulemaking (“NOPR”) that were published in the **Federal Register** and transcripts of public hearings relating to the proposed standards. The NOPR relating to distribution transformers proposed Trial Standard Level 2 and explained why DOE had decided not to propose higher trial standard levels. The NOPR relating to furnaces and boilers proposed the following standards: 80% annual fuel utilization efficiency (“AFUE”) for non-weatherized gas furnaces and mobile home gas furnaces; 82% AFUE for oil-fired furnaces; 83% AFUE for weatherized gas furnaces and oil-fired boilers; and 84% AFUE for gas boilers. Our review regarding distribution transformers and furnaces and boilers has focused upon the standards DOE has proposed adopting; we have not determined the impact on competition of more stringent standards than those set forth in the NOPRs. In addition to the NOPRs and transcripts, your staff provided us comments that had been submitted to DOE regarding the proposed standards. (We understand that the docket has not closed with respect to furnaces and that more comments may be forthcoming.) We have reviewed these materials and additionally conducted interviews with members of the industries. Based on this inquiry, the Division is concerned that the distribution transformer Trial Standard Level 2 may adversely affect competition with respect to distribution transformers used in industries, such as underground coal mining, where physical conditions limit the size of equipment that can be effectively utilized. We understand manufacturers would not be able to satisfy the proposed standard without increasing the size (or decreasing the power) of each class of distribution transformer. Firms facing space constraints would incur significantly increased costs due to enlarging the required installation space (which, for example, could involve removal of solid rock around coal seams in underground mines) or reconfiguring the size and number of each class of distribution transformers at each site. The resulting cost increases could constitute production inefficiencies that could make certain products less competitive. For example, the rule could, by raising the costs of certain coal mines, adversely affect production decisions at those mines and potentially result in increased use of less efficient energy alternatives. We urge the DOE to consider these concerns carefully in its analysis, and to consider creating an exception for distribution transformers used in industries with space constraints. The Division is also concerned that the standards for weatherized gas furnaces and gas boilers could adversely affect competition. We understand that manufacturers would have difficulty designing products that safely meet the proposed standards. For weatherized gas furnaces, meeting the standard would likely result in increased condensation, potentially resulting in significant deterioration that would jeopardize the safety of the product, and, for weatherized gas-fired water boilers, meeting the standard would make effective carbon dioxide venting more difficult. Any resulting costs incurred to solve these issues could adversely affect the competitiveness of these products in relation to electric heat pumps and water heaters. We urge the DOE to carefully consider its proposed standards in light of these concerns. Aside from the discussion above, the Division does not otherwise believe the proposed standards would adversely impact competition. Yours sincerely, J. Bruce McDonald, *Acting Assistant Attorney General* . [FR Doc. E7-22216 Filed 11-16-07; 8:45 am] BILLING CODE 6450-01-P 72 222 Monday, November 19, 2007 Rules and Regulations Part III Department of Agriculture Animal and Plant Health Inspection Service 7 CFR Parts 301 and 305 Citrus Canker; Movement of Fruit From Quarantined Areas; Final Rule DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Parts 301 and 305 [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: Final rule. SUMMARY: We are amending the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. We are eliminating the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead are requiring that every lot of fruit produced in the quarantined area be inspected by the Animal and Plant Health Inspection Service at a packinghouse operating under a compliance agreement and found to be free of visible symptoms of citrus canker. We are retaining the requirement that the fruit be treated with a surface disinfectant and the prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These changes will relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that will help prevent the artificial spread of citrus canker. DATES: *Effective Date:* November 19, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Stephen Poe, Senior Operations Officer, Emergency and 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 §§ 301.75-1 through 301.75-14 of “Subpart—Citrus Canker” (7 CFR 301.75-1 through 301.75-17, 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.* ). On June 21, 2007, we published in the **Federal Register** (72 FR 34180-34191, Docket No. APHIS-2007-0022) a proposal 1 to amend the citrus canker regulations by modifying the conditions under which fruit may be moved interstate from quarantined areas. We proposed to eliminate the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead proposed to require that every lot of fruit produced in the quarantined area be inspected by the Animal and Plant Health Inspection Service (APHIS) at a packinghouse operating under a compliance agreement and found to be free of visible symptoms of citrus canker. We proposed to retain the requirement that the fruit be treated with a surface disinfectant and the prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. 1 To view the proposed rule, the supporting analyses, and the comments we received, go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2007-0022* . We solicited comments concerning our proposal for 30 days ending July 23, 2007. We subsequently reopened and extended the deadline for comments until August 7, 2007, in a document published in the **Federal Register** on July 27, 2007 (Docket No. APHIS-2007-0022, 72 FR 41239). We received 72 comments by the close of the comment period. They were from producers, exporters, researchers, and representatives of State governments. They are discussed below by topic. Pest Risk Assessment and Risk Management Analysis To inform the deliberations that led to the proposed rule, we prepared two documents that addressed the risk associated with the interstate movement of citrus fruit from a quarantined area: A pest risk assessment
(PRA)and a risk management analysis (RMA). The PRA, which was titled “Evaluation of asymptomatic citrus fruit ( *Citrus* spp.) as a pathway for the introduction of citrus canker disease ( *Xanthomonas axonopodis pv.* *citri* ),” 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 surface disinfectant and subject to other mitigations is not epidemiologically significant 2 as a pathway for the introduction and spread of citrus canker. We first made this document available for comment on April 6, 2006, when we published a notice in the **Federal Register** (71 FR 17434-17435, Docket No. APHIS-2006-0045), announcing its availability for comment for 60 days; the comment period was subsequently extended to 90 days. We also submitted it for peer review in accordance with the U.S. Department of Agriculture
(USDA)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. 3 We carefully considered the comments of the public and peer reviewers, and made revisions to the analysis based on concerns they raised. The revisions did not change the conclusions of the PRA; the revised version of the PRA was provided with the proposed rule. 2 We use the term “epidemiologically significant” to refer to minimum conditions required for disease transmission. 3 The original PRA and the comments we received on it can be viewed at *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0045* . 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 apply the conclusions of the PRA, we needed to extend its application to evaluate methods by which fruit 4 could be produced, 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.) 4 Given the practical difficulties in ensuring that only asymptomatic fruit enters interstate commerce under any regulatory strategy, we refer here to host fruit in general. To address the considerations described above, APHIS prepared the RMA, which was titled “Movement of commercially packed fresh citrus fruit ( *Citrus* spp.) from citrus canker ( *Xanthomonas axonopodis* pv. *citri* ) disease quarantine areas, March 2007.” We made the RMA available for comment along with the proposed rule. 5 The RMA was also submitted for peer review, which occurred concurrently with the public comment period for the proposed rule. 6 The RMA analyzed 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 identified and evaluated options for regulating the interstate movement of citrus fruit from quarantined areas with the goal of reducing the potential for citrus canker introduction and spread. The recommendations in the RMA served as the basis for the proposed rule. 5 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 . 6 The peer review materials for the RMA may be viewed at *http://www.aphis.usda.gov/peer_review/peer_review_agenda.shtml* . To develop the RMA, we reviewed available evidence regarding the biology and epidemiology of *Xac* and the management of citrus canker disease. The RMA concluded that the introduction and spread of *Xac* into other commercial citrus-producing States through the movement of commercially packed fresh citrus fruit from quarantined areas 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 for epiphytic contamination; • For a successful *Xac* infection that results in disease outbreaks to occur, an unlikely sequence of 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 RMA concluded that the evidence is not currently sufficient to support a determination that fresh citrus fruit produced in a *Xac* -infested grove cannot serve as a pathway for the introduction of *Xac* into new areas. Therefore, the RMA evaluated 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. These packinghouse-centered risk management options were evaluated to determine whether they provide an appropriate level of phytosanitary protection without the resource constraints and other practical considerations that make it difficult to maintain the grove-centered regulatory approach in Florida. The risk management options evaluated were: • *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 culling, washing, disinfection, and grading 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. We proposed to implement Option 4. This option would have limited distribution of all types and varieties of citrus fruit to States other than commercial citrus-producing States, with mitigations conducted at packinghouses operating under compliance agreements. Those mitigations are the use of an approved disinfectant for all fruit and APHIS phytosanitary inspection. We received several comments on the overall level of risk associated with the movement of commercially packed citrus from a citrus canker quarantined area, as well as our selection of Option 4. These comments have not led us to change our determination that Option 4 is the most appropriate option to implement. The RMA that we are making available with this final rule contains revisions based on the comments we received on the proposed rule and the comments we received through the peer review process, but its overall conclusion is the same. Accordingly, this final rule implements Option 4. (We are making some changes to the regulatory requirements associated with the implementation of Option 4. These changes are discussed later in this document.) Some commenters believed that the evidence presented in the RMA warranted the selection of Option 2, which would have allowed the distribution of citrus fruit to all States, subject to packinghouse treatment with APHIS-approved disinfectant and APHIS inspection of finished fruit. These commenters stated that it was extremely unlikely that the circumstances necessary for the movement of commercially packed fresh citrus fruit to result in the introduction and spread of *Xac* into other commercial citrus-producing States would ever occur. One commenter stated that the decision to allow the movement of regulated fruit from a citrus canker quarantined area only into States other than commercial citrus-producing States, rather than into all States, was based on politics rather than on science. One commenter stated that no Florida citrus fruit infected with citrus canker has ever been found in a commercial citrus-producing State under the current regulations and that, at the commenter's packinghouse, not a single piece of fruit with citrus canker had been found by any inspectors or employees during the last growing season. One commenter noted more generally that citrus canker has not been found outside Florida since the disease was first detected there, and stated that more certainty than uncertainty exists regarding the risk of commercially packed citrus fruit as a viable pathway for citrus canker. Another commenter noted that the PRA stated the following in its executive summary: “The combination of conditions necessary for introduction are so difficult to achieve that the likelihood of such occurrence is greater than the baseline exposure represented by unregulated pathways. The conclusions of the evaluation are reinforced by a strong record of empirical data from experience and interceptions.” We acknowledge the efforts of the Florida citrus industry to put safeguards in place against citrus canker infestation. The proposed rule recognized the effectiveness of those safeguards by providing for the interstate movement to States other than commercial citrus-producing States of any lot of citrus fruit that is commercially packed, treated with APHIS-approved disinfectant, and inspected by APHIS and found to be free of visible canker lesions. The RMA concludes that commercially packed fresh citrus fruit is an unlikely pathway for the introduction and spread of *Xac* and that a phytosanitary inspection ensures, with high confidence, that few shipped fruit would have symptoms of citrus canker disease. However, the model in Appendix 1 to the RMA indicates the potential for some commercially packed fruit with visible canker lesions to be shipped to commercial citrus-producing States. That potential for such fruit to reach commercial citrus-producing States, coupled with the aforementioned uncertainty regarding fruit as a pathway, led to the determination that the additional mitigation of prohibiting distribution to commercial citrus-producing States was required. If, in the future, evidence is developed to support a determination that commercially packed citrus fruit (both symptomatic and asymptomatic) is not an epidemiologically significant pathway for the introduction and spread of citrus canker, we would undertake rulemaking to amend our regulations accordingly. Under section 412(a) of the Plant Protection Act (7 U.S.C. 7712(a)), 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 the PRA and RMA, we have determined that it is not necessary to prohibit the interstate movement of citrus fruit from a quarantined area into States other than commercial citrus-producing States under the conditions described in the 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 level of risk associated with the movement of citrus fruit from a quarantined area has led us to maintain the prohibition on the movement of citrus fruit into commercial citrus-producing States. One commenter supplied a report that provided initial data demonstrating that transmission of *Xac* from infected fruit placed directly under highly susceptible grapefruit seedlings does not occur. The research (which can be viewed at *http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&d=APHIS-2007-0022-0053* ) is suggestive; when it is completed, it will help better determine whether citrus fruit can serve as a pathway for the introduction of citrus canker to commercial citrus-producing States outside the quarantined area. We encourage interested parties to make research on this issue available to us. Two commenters stated that APHIS' treatment of the risk associated with citrus canker was inconsistent with its treatment of the risk associated with other plant pests. For example, one of the commenters stated, the evidence is clear that the interstate movement of nursery stock is a pathway for the long-distance spread of *P. ramorum* , but APHIS' regulations continue to allow high-risk nursery stock to move to all States, under specified conditions. The commenter cited APHIS' actions with respect to the light brown apple moth as another example. The provisions governing the movement of regulated articles for each pest for which APHIS maintains quarantine requirements are the result of separate considerations of the available science and the risk posed by the plant pest in question. We make our determinations of risk based on, among other things, the likelihood that a pest will follow a specific pathway, the economic and environmental value of resources that could be damaged by the pest, and the likelihood of introduction of the pest into an unaffected area. Our choice of regulatory approach is based on, among other things, the likelihood that the mitigations available to us will be sufficient to prevent the introduction or spread of a plant pest. We have determined that the level of protection against the interstate spread of citrus canker that will be provided by the regulations as amended by this final rule is appropriate. One commenter asked why APHIS allows fruit to be exported from the quarantined area into the citrus-producing areas of Europe, given that we proposed to prohibit the distribution of fruit from quarantined areas into commercial citrus-producing States. Other commenters asked that we allow the interstate movement of fruit from quarantined areas into commercial citrus-producing States under conditions similar to those required by the European Union
(EU)for the importation of citrus fruit into the EU. APHIS certifies U.S. plant products for export according to the conditions set by the importing country for the exportation of those products from the United States. The EU's requirements for the importation of citrus fruit apply to all areas where citrus canker is present, not just in the United States but in other countries whose citrus production areas are affected by citrus canker. The EU import requirements involve certification of grove freedom from citrus canker and are similar to, but less restrictive than, the requirements that were in the regulations before the publication of this final rule. For reasons discussed in the RMA, we do not consider these requirements to be sufficient to allow the movement of fruit from citrus canker quarantined areas into commercial citrus-producing States at this time. We will continue to review the available science and will update the regulations if necessary. Two commenters stated that Option 3, which would have allowed the unlimited distribution of tangerines subject to treatment and APHIS inspection, should be implemented. One commenter stated that canker finds have been few and far between, if the disease has been found at all, on some varieties of tangerine. Another stated that mandarin varieties are the least susceptible to citrus canker, and that the commercial citrus-producing States of California and Texas are important markets for producers of this fruit. 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 nontangerine citrus variety. Sufficient evidence does not exist to exclude tangerines from regulations applicable to other Florida citrus varieties. We are making no changes to the proposed rule in response to these comments. Several commenters supported Option 4 but asked APHIS to continue to examine the scientific evidence with a view toward allowing unlimited distribution of fruit moved interstate from areas quarantined for citrus canker at some future time. We will continue to examine scientific evidence regarding whether commercially packed citrus fruit (both with and without visible canker lesions) is an epidemiologically significant pathway for the introduction and spread of citrus canker. If, in the future, evidence is developed to support a determination that commercially packed citrus fruit is not an epidemiologically significant pathway for the introduction and spread of citrus canker, we would undertake rulemaking to amend our regulations accordingly. Some commenters proposed other options to allow the movement of fruit from quarantined areas. One commenter stated that fruit from groves that are free of citrus canker and that are 1,500 feet or farther from an affected grove should be allowed to move fruit to commercial citrus-producing States. It has been our experience in the State of Florida that citrus canker can spread more than 1,500 feet in stormy conditions. We recognize that citrus canker-free areas may exist adjacent to infected areas, but implementing the commenter's suggestion would require grove certification programs similar to those in place prior to the publication of this final rule. We have determined that certification of fruit for interstate movement at the packinghouse level rather than at the grove level will ensure an appropriate level of phytosanitary security; would be more reliable and less easily circumvented than the preharvest grove survey required by Option 5; would be consistent with the risk associated with citrus canker and commercially packed fruit from Florida; and would be easier and potentially less costly to implement and enforce than a grove-centered system of mitigations. Some commenters disagreed with our determination that prohibiting the distribution of citrus fruit from a quarantined area into commercial citrus-producing States would be an effective mitigation. Commenters holding this view stated that the illegal movement of citrus fruit harboring citrus canker from a quarantined area to a commercial citrus-producing State may be expected through current commercial channels; they cited the movement of Spanish clementines from Georgia to Florida through retailer distribution when such movement was prohibited as one example of the potential for incorrect distribution. Another commenter cited the discovery of Florida fruit in commercial citrus-producing States as a result of distribution mistakes. These commenters also stated that the potential for the movement of Florida citrus by tourists and visitors from nearby States into commercial citrus-producing States should also be taken into account, and that excluding shipments to buffer States would reduce the risk that this movement poses to commercial citrus-producing States. One commenter stated that the history of citrus disease movement such as citrus canker and citrus greening into Florida shows the high risk of movement by plant or by fruit from other citrus-growing countries. In these cases the initial infections were in urban areas, but movement to production areas was undetected until an epidemic was finally observed. One commenter also stated that we had not addressed mail-order shipment or gift-pack movement of citrus from Florida. These commenters proposed that we limit the distribution of fruit from citrus canker quarantined areas to other States in addition to the commercial citrus-producing States, thus creating a “buffer zone” around the commercial citrus-producing States. The buffer zones proposed by the commenters varied: • One commenter suggested that only States east of the Mississippi River should be eligible to receive fruit moved interstate from quarantined areas. • Two commenters suggested that only States in the northern tier of the United States and east of the Mississippi River should be eligible to receive such fruit. • Two others suggested a buffer zone of all the States surrounding the commercial citrus-producing States. We do not agree that a buffer zone, such as these commenters suggest, is appropriate or necessary. Due to the geographic separation between Florida and other commercial citrus-producing States, citrus canker is not likely to spread through natural means (such as through storms) from Florida to a State that is not a commercial citrus-producing State and then to a commercial citrus-producing State. While it is correct that the movement of plants for planting presents a high risk of spreading citrus canker from a quarantined area, the regulations already contain a prohibition on the movement of plants for planting; currently, only calamondin and kumquat plants are allowed to move interstate from the quarantined area, and those plants must be produced under conditions designed to prevent their infection with citrus canker. As mentioned earlier, we have determined that it is unlikely that the movement of commercially packed citrus fruit is an epidemiologically significant pathway for the spread of citrus canker. The proposed rule included requirements that boxes or other containers of fruit moving interstate from a quarantined area include a limited permit mark as well as the statement indicating that the fruit is not to be distributed into a commercial citrus-producing State. This requirement (which applies to mail-order and gift-pack shipments as well as truck shipments) will help to prevent inadvertent movement of citrus from quarantined areas into a commercial citrus-producing State. To strengthen the protection provided by the limited permit requirement, we are also adding a requirement in this final rule that the limited permit mark and the distribution statement appear on any shipping documents accompanying boxes or other containers in which fruit is moved interstate. To ensure that regulated parties comply with distribution restrictions, APHIS routinely monitors wholesalers and fresh fruit markets in commercial citrus-producing States and monitors distribution routes that are bound for commercial citrus-producing States to ensure that Florida citrus fruit does not unlawfully enter those States. This monitoring is conducted primarily by APHIS' Smuggling, Interdiction, and Trade Compliance program. If we find Florida citrus in a commercial citrus-producing State, we will trace the product back to its distributor and its origin in Florida. We will investigate violations (through APHIS' Investigative and Enforcement Services) and may seek penalties against any distributor that moves Florida citrus to commercial citrus-producing States. We may seize the prohibited products and destroy them or ensure they are moved from the area of concern. We will conduct surveillance on other methods of sale such as Internet sales and gift-pack shipments to ensure that the fruit is not advertised as being available for delivery to commercial citrus-producing States. We will also provide outreach to retailers and wholesalers who are moving products to help prevent any inadvertent movement of citrus from a quarantined area into a commercial citrus-producing State. The packinghouse measures of disinfection and APHIS inspection ensure that even if a given shipment were illegally moved to a commercial citrus-producing State, the shipment would have a low likelihood of containing fruit with the potential to cause an outbreak of citrus canker disease. As mentioned earlier, the RMA examined four options for allowing the interstate movement of citrus fruit from a citrus canker quarantined area under a packinghouse-centered approach. Of those four options, we determined that Option 4 was most appropriate, based on the available scientific evidence, which indicates that fruit subject to commercial packing, treatment, and APHIS inspection will be unlikely to serve as a pathway for the introduction or spread of citrus canker. We recognize that individual consumers may move fruit from Florida into States other than commercial citrus-producing States and then subsequently move that fruit into commercial citrus-producing States. However, such movement could have occurred under the regulations in place before the publication of this final rule as well; APHIS does not have the regulatory infrastructure to monitor interstate movement of fruit by individual consumers. Additionally, even with a buffer zone in place, tourists and visitors would often travel across multiple States to reach their destinations, meaning that a buffer zone would not be highly effective at eliminating this consumer movement. For tourists and visitors, as well as for local residents who routinely move between commercial citrus-producing States and other States, the distance between the borders of commercial citrus-producing States and the citrus-producing areas within those States acts as a buffer as well, further decreasing the risk associated with such movement. Finally, the volume of such movement is extremely low when compared with the volume of commercial movement of fruit, making the risk of citrus canker establishment in commercial citrus-producing States through this scenario highly unlikely. These factors, combined with our determination that the introduction and spread of *Xac* into other commercial citrus-producing States through the movement of commercially packed fresh citrus fruit is unlikely and that the mitigations of treatment and APHIS inspection are highly effective, have led us to determine that a buffer zone to address such movement is unnecessary. *Scientific Evidence Used in the PRA and RMA* We received several general comments on the scientific evidence we used to make our determinations in the PRA and RMA. One commenter stated that the conclusion reached by the RMA is in part based on the lack of evidence that citrus fruit could play a role in the introduction of citrus canker in new areas, but that this lack of evidence is a consequence of the lack of scientific studies and is not based on scientific data; this commenter suggested that we evaluate the risks further using fruit produced subject to the regulations that were in place before the publication of this final rule. Another commenter suggested an extensive list of experimental data that the commenter believed were necessary to prove that the introduction and spread of *Xac* into other commercial citrus-producing States through the interstate movement of commercially packed fresh citrus fruit from a quarantined area is unlikely. One commenter stated that this program, which the commenter characterized as precedent-setting, requires a much more solid foundation of science and process affirmation than has been developed to date. Other commenters stated that not enough of the evidence we used in developing the RMA had been published in peer-reviewed scientific journals and that we had relied too much on preliminary research in making our determinations. We used the best scientific evidence available to develop the PRA and the RMA, and we have detailed extensively how this evidence supports the conclusions we present in those documents. It is important to note that, based on the available evidence, we did not conclude that commercially packed citrus fruit could not serve as a pathway for the introduction and spread of *Xac* , but rather that it was unlikely that commercially packed citrus fruit serves as an epidemiologically significant pathway. That is why this final rule prohibits the distribution of such fruit to commercial citrus-producing States. The Plant Protection Act charges us with ensuring that our decisions affecting imports, exports, and interstate movement of plants and plant products that we regulate under the Act are based on sound science. To fulfill this mission, we use all the scientific evidence that may be brought to bear on an issue, not just studies published in peer-reviewed journals. Observations based on APHIS' experience, survey and pest detection data, and preliminary experimental results can all provide valuable information to inform a regulatory decision, and we have used them in the PRA and RMA when appropriate. Having said that, the vast majority of the sources cited in the PRA and RMA have been peer-reviewed, as have both the PRA and RMA themselves. Comments on specific studies we cited in the RMA and PRA are discussed later in this document. The peer review for the RMA was conducted concurrently with the comment period for the proposed rule. One commenter stated that stakeholders should have the opportunity to review the peer reviewers' comments when submitting their own comments on this document. We appreciate the commenter's concerns. APHIS had already provided for peer review of and public comment on the PRA, which informed the development of the RMA. In accordance with the Office of Management and Budget's bulletin on peer review, we are also making all the materials associated with the peer review, including the peer reviewers' comments, available at *http://www.aphis.usda.gov/peer_review/peer_review_agenda.shtml* . The conclusion of the RMA did not change as a result of the peer review, which was generally favorable. One commenter included a late comment on the PRA as a reference, stating that APHIS had not made appropriate changes to the PRA based on the comment. We reviewed the comment that the commenter included when we developed the revised version of the PRA. We addressed all the substantive points raised by that comment in the revised version of the PRA published with the proposed rule. Many of the points raised by that comment had been previously raised in other comments submitted on the PRA during the comment period. As discussed earlier, the PRA concluded that asymptomatic, commercially produced citrus fruit treated with a surface disinfectant and subject to other mitigations is not epidemiologically significant as a pathway for the introduction and spread of citrus canker. However, in order to apply the conclusions of the PRA, we determined that we needed to extend its application to evaluate methods by which fruit could be produced, treated, inspected, packaged, and shipped without resulting in the spread of citrus canker to commercial citrus-producing areas. Accordingly, the RMA addresses the risk associated with all commercially packed fruit; the RMA's recommendations have served as the basis for the Secretary's determination that it is not necessary to prohibit the interstate movement of citrus fruit from a quarantined area into States other than commercial citrus-producing States under the conditions described in the proposed rule. Therefore, specifically addressing comments on the PRA is unnecessary for the purposes of this rulemaking. *The Packinghouse-Centered Approach and the Current Regulations* In evaluating the risk associated with asymptomatic fruit, the PRA assumed that the citrus fruit in question was commercially produced under a specific set of pest management measures. The RMA, while recognizing that effective pest management measures for *Xac* are available to private and commercial growers and are normal production practices for many of these growers, does not assume that measures in the grove are mandatory. Instead, the RMA focuses on treatment with an APHIS-approved disinfectant at the packinghouse and APHIS inspection of fruit to be moved interstate. The recommendations in the RMA served as the basis for the proposed rule. The regulations in place at the time the proposed rule was published required that fruit moved interstate originate in a grove that was found by an inspector to be free of citrus canker no more than 30 days before harvest (with additional requirements for limes), in addition to treatment of vehicles, equipment, and other articles that are used on the grove and treatment of the fruit itself. Several commenters objected to APHIS moving away from the grove inspection approach and to the fact that we did not propose to require the use of the commercial production practices described in both the PRA and the RMA. These commenters stated that, under the proposed rule, measures such as copper sprays, designation and exclusion of infected trees, field culling of fruit, and packinghouse culling of fruit were all voluntary, and their effectiveness was unknown. The commenters expressed concern that not requiring these measures would increase the risk associated with citrus fruit moved interstate from a quarantined area. One commenter stated that in other countries such as Argentina that ship fruit to citrus-producing countries in Europe, strict guidelines are followed that include field inspections and the planting of wind breaks between orchards that minimize wind velocity and subsequent dispersal of inoculum. The commenter stated that these countries realize that inspection of “finished” fruit in the packinghouse alone is not enough to guarantee the shipment of disease-free fruit. One commenter stated that the objective of a rule addressing Florida's situation should be to prevent citrus canker from being introduced into disease-free areas in the United States; such a rule should not be designed with the primary objective of allowing shipments of fresh fruit from canker-affected areas. This commenter stated that the building blocks of premises and assumptions set forth in the proposed rule and the RMA create risk rather than develop protective barriers. The regulations promulgated in this final rule include protective barriers against the introduction of citrus canker into other citrus-producing areas: Treatment with a surface disinfectant, APHIS inspection, and a prohibition of the movement of citrus fruit from a quarantined area into commercial citrus-producing States. We have determined that these barriers provide an appropriate level of protection with regard to the movement of citrus fruit from areas quarantined for citrus canker. The grove certification requirement in place prior to the publication of this final rule and the APHIS packinghouse inspection required under this final rule are not dissimilar in their approach to preventing the interstate movement of fruit with visible canker lesions. Under the regulations in place before the publication of this final rule, none of the grove-centered measures cited by the commenters (copper sprays, designation and exclusion of infected trees, and field culling of fruit) were required. Rather, growers were required to demonstrate that their groves were free from citrus canker, on the basis of an inspection. In order to be found free from citrus canker, and thus have fruit from their groves be eligible for the interstate market, growers had incentives to employ the grove-centered measures described in the PRA and RMA and mentioned by the commenters. Instead of a grove inspection, this final rule requires an inspection of the finished fruit at the packinghouse, which must operate under a compliance agreement and treat fruit with an approved surface disinfectant. Every lot of fruit must be inspected by an APHIS inspector for visible canker lesions. While growers are not required to practice measures that would reduce the prevalence of citrus canker in their fruit, and packinghouses are not required to perform their own culling process to remove fruit with visible canker lesions, the regulations promulgated in this final rule still provide them with a strong incentive to do so, since lots of fruit that fail APHIS inspection will not be eligible for interstate movement. Additionally, packinghouse culling for blemished fruit of any kind is already a standard business practice, and field management programs that include the use of copper sprays and field sanitation are already available to producers. The purpose of the APHIS inspection at the packinghouses is to ensure that fruit moved interstate is free of visible canker lesions, and to prohibit the interstate movement of fruit that is not free of those lesions. From each lot of fruit intended for interstate movement, APHIS will inspect a quantity that is sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. Lots of fruit that fail inspection will not be allowed to enter interstate commerce. A packinghouse-based inspection can ensure an appropriate level of phytosanitary security and will be easier to implement and enforce than the grove certification system in place before the publication of this final rule. Because it focuses on the end product, a packinghouse-based inspection will be more reliable and less easily circumvented than the preharvest grove survey that has been required in the regulations. A packinghouse-based inspection is also consistent with the risk associated with citrus canker and commercially packed fruit from Florida. 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 compliant product. Our choice of a packinghouse-based APHIS inspection as a means to prevent fruit with visible canker lesions from being moved interstate, rather than requiring specific grove and packinghouse practices to ensure the production of fruit free of visible canker lesions, is consistent with the recommendations of the 1997 Presidential/Congressional Commission on Risk Assessment and Risk Management. The commission recommended that agencies use alternatives to command-and-control measures that dictate the use of specific technologies, where applicable (CRARM 1997), in order to encourage flexibility in the choice of risk management alternatives. One commenter characterized the approach of the proposed rule as a control point approach, and stated that in the past APHIS has applied control point approaches only to quarantine treatments that are able to demonstrate a probit 9 level of effectiveness. The probit 9 standard (99.997 percent mortality) applies to treatments for insect pests such as fruit flies, not to treatment of pathogens. In any case, the probit 9 standard is not applicable for the surface disinfectant treatment and packinghouse-based APHIS inspection that we are requiring. Scientific evidence indicates that both of these measures are highly effective. One commenter stated that the PRA and RMA appeared to imply that packinghouse studies conducted to date were based upon fruit with known levels of contamination with *Xac.* The commenter asked how the packinghouse inspection process would achieve the results described in the RMA without grove inspections and without the ability to determine the infection pressure. The commenter also asked how the proposed measures can be effective without knowing the magnitude of the hazard, as expressed by the proportion of infected fruit. Both of the packinghouse measures that we are requiring in this final rule are effective regardless of infection pressure. The surface disinfectant treatments approved by APHIS reduce numbers of *Xac* cells to low or undetectable levels. The APHIS packinghouse-based inspection is sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. In other words, if the infection pressure is higher than 0.38 percent of the fruit, it is 95 percent likely that the lot will be rejected from interstate commerce. Two commenters cited findings of canker symptoms on fruit exported from Argentina and Uruguay to Spain in stating that symptomatic fruit will often pass through the packinghouse process. These commenters stated that the price growers and packers are receiving for citrus is what drives the quality of the citrus shipped, and that with low prices, low-quality fruit, such as those with canker, are more likely to be introduced into distribution channels. We agree that, in general, price helps to determine the quality of fruit supplied. However, under the regulations established by this final rule, the fruit will be subject to an additional APHIS inspection separate from any field inspection and culling or packinghouse culling that may occur. Any lot that fails APHIS inspection will not be approved to move for interstate commerce. Given that, if there is a financial advantage to being able to supply fresh citrus to the interstate market, producers and packinghouses in quarantined areas are likely to employ measures and processes that will allow them to supply fruit free of visible canker lesions for APHIS inspection. Treatments and Surface Contamination With *Xac* The regulations require all fruit moved interstate from an area quarantined for citrus canker to be treated in accordance with § 301.75-11(a). This paragraph has included two treatments: Thorough wetting for at least 2 minutes with a solution containing 200 parts per million
(ppm)sodium hypochlorite, with the solution maintained at a pH of 6.0 to 7.5; or thorough wetting with a solution containing sodium-o-phenyl phenate
(SOPP)at a concentration of 1.86 to 2.0 percent of the total solution, for 45 seconds if the solution has sufficient soap or detergent to cause a visible foaming action or for 1 minute if the solution does not contain sufficient soap to cause a visible foaming action. One commenter noted that disinfectants are only effective if the active ingredient is not degraded. The commenter gave the example that sodium hypochlorite is degraded by sunlight and organic matter. We agree with the commenter's point that it is important to ensure that the treatment is conducted properly. APHIS regularly monitors the treatment of fruit to ensure that the disinfectant agent is at the proper concentration and, in the case of sodium hypochlorite, pH, thus ensuring the effectiveness of the treatment. Under this final rule, we will conduct monitoring under conditions specified in the compliance agreements with packinghouses. In this final rule, we are amending the treatment regulations to require fruit to be treated at a commercial packinghouse whose owner operates under a compliance agreement. Previously, the regulations had required that treatment be performed either in the presence of an inspector or at a facility whose owner operates under a compliance agreement under § 301.75-7(a)(2); this change will reflect the fact that all fruit intended for interstate movement must be treated at a commercial packinghouse under this final rule. Several commenters stated that these surface disinfectant treatments may not be 100 percent effective, citing various reports that indicated that bacteria could be recovered from citrus fruit that had been treated with sodium hypochlorite or SOPP, including reports by Verdier
(2006)and Golmohammadi
(2007)and a newspaper article reporting on a lecture by Gottwald in which he presented unpublished preliminary results. With regard to the last of these, two commenters requested that we provide information about the followup studies mentioned in the article. As stated in the RMA, the surface disinfectant treatments approved by APHIS reduce numbers of *Xac* cells to low or undetectable levels, but do not necessarily provide complete eradication. The evidence cited by the RMA does demonstrate that the treatments allowed under the rule substantially reduce bacterial populations, including *Xac* , found on the surface of citrus fruit to the extent practicable using surface disinfectant treatments currently registered for use in the United States on raw fruits and vegetables. Recovery of *Xac* from fruit after surface disinfectant treatment does not demonstrate that the treatment is ineffective. Microbial detection or recovery tests simply measure the presence or absence of the organism in a sample and do not enumerate or measure the difference between the pre- and post-treatment bacteria population levels or infectivity. The treatments in the regulations are consistently reported as dramatically reducing *Xac* populations on the surface of fruit, if not eliminating them entirely. For example, Verdier (2006), cited by the commenters, measured the pre- and post-treatment levels in the wash solution and found that the bacteria population level was reduced 99.8 percent from an average of 39.4 colony-forming units (cfu)/mL on untreated controls to an average of 0.06 cfu/mL on treated fruit. The information from Gottwald
(2006)the commenters cite has not been published, and the followup studies referred to in news reports are currently being completed. We are not able to obtain the unpublished data that have been collected to this point. We will review the Gottwald information when it becomes available in final form. It is important to note again that the recovery of some bacteria after treatment is not inconsistent with treatment being highly effective at reducing *Xac* population levels, as described earlier. Another commenter, referring to a study by Brown and Schubert
(1987)that the RMA cited, stated that the study's use of *Xanthomonas campestris* pv. *vesicatoria* as a proxy for *X. axonopodis* pv. *citri* in assessing the efficacy of SOPP was not appropriate, because the behavior of closely related bacteria may be very different. The use of a proxy in efficacy testing is not unusual; for example, the Environmental Protection Agency
(EPA)requirements for testing the efficacy of disinfectants allow the use of a proxy. A proxy organism was used in this study because the study was conducted in a model packinghouse. It is difficult to experiment with quarantine plant pathogens in the field because of the need to provide safeguards against their spread. While the bacteria in question are not identical, SOPP has a broad range of efficacy; there is no reason to believe that some feature of *Xac* would defeat the mechanism of SOPP. In addition, the RMA cited other studies establishing the efficacy of SOPP as a treatment against *Xac* itself. The PRA contained the following statement regarding treatment effectiveness: “Studies performed in Argentina on the effectiveness of sodium hypochlorite on mature symptomless fruit artificially contaminated with *Xac* showed that sodium hypochlorite levels as low as 8 ppm were effective in eliminating epiphytic or surface bacteria from the fruit (Canteros, undated).” One commenter stated that there were no references about the viability of the bacteria, which is an important factor for risk assessment. This particular study was one of many studies cited in the PRA and RMA establishing the effectiveness of sodium hypochlorite as a treatment. Other studies we cited included references about the viability of the bacteria. Related to the presence of bacteria on the surface of treated fruit (also referred to as epiphytic bacteria or contamination), several commenters stated that fruit with such populations pose a risk of spreading citrus canker that was not addressed by the measures recommended in the RMA. While surface populations of *Xac* undoubtedly exist on some citrus fruit that is packed in a quarantined area, and commenters cited scientific evidence establishing this point, substantial evidence indicates that surface bacterial populations do not infect mature fruit or survive on mature fruit long enough to infect other hosts. The evidence cited in the RMA regarding epiphytic survival indicates that epiphytic populations on harvested, mature fruit decline rapidly. For example, researchers in Brazil sprayed asymptomatic fruit, picked from trees, with a bacterial suspension of 10 6 cfu/mL; no bacteria were recovered after 5 days at room temperature under laboratory conditions (Belasque and Rodriguez Neto 2000). Epiphytic bacteria do not multiply in water on leaf surfaces or on dry leaves (Timmer *et al.* 1996). Graham *et al.*
(2000)found that *Xac* survived for 48 to 72 hours on a variety of inanimate surfaces in sun or shade, respectively. Additionally, there is no authenticated record of movement of diseased fruit as the origin for a citrus canker disease outbreak, which is especially suggestive given the brisk global trade in such fruit and the likely presence of some level of epiphytic bacteria on many fruit that is exported from citrus canker-affected areas. Commenting on the PRA, one commenter noted that a low concentration of 8 cfu/mL (cited as a result of treatment by one study) may mean very high numbers of bacteria in tons of fruit. The commenter's assertion is correct. However, shipments of fruit are commercially packed in boxes or other approved containers and are dispersed through market channels all over the United States, greatly diluting the concentration of bacteria which are at the same time experiencing rapid mortality. Therefore, such bacterial concentrations would not occur in the real world. In any case, for the reasons stated above, we have determined that fruit with epiphytic bacterial populations is not an epidemiologically significant pathway for the spread of citrus canker. Some commenters were also concerned about the possible presence of *Xac* on other materials, citing reports of *Xac* survival for various periods on media like clean microscopic slides; leaf surfaces, plastic, wood, and other materials; cloth, sawdust and shavings, dried herbarium tissue, and sterile soil; and non-host weeds. While *Xac* undoubtedly persists on a number of surfaces, it does not multiply outside of hosts. Under the regulations, the interstate movement of any regulated article other than fruit, calamondin and kumquat plants, and seed is prohibited. Regulated articles include leaves and grass clippings. In addition, under paragraph
(c)of § 301.75-3, an inspector may designate any other product, article, or means of conveyance, of any character whatsoever as a regulated article when it is determined by an inspector that it presents a risk of spread of citrus canker and the person in possession thereof has actual notice that the product, article, or means of conveyance is subject to the provisions of this subpart. We do not typically regulate the movement of the other articles cited by the commenters under the current regulations because populations of *Xac* on such articles are very unlikely to infect mature citrus fruit. Two commenters were concerned about the possibility that canker-infected fruit could contaminate packinghouse equipment with *Xac.* One commenter stated that packinghouse equipment needs to be disinfected if citrus canker is found in a lot run on that equipment. The other expressed a specific concern about contamination of existing wounds in fruit and stated that surface disinfestation cannot be continuously done during the commercial packing of fruit where both diseased and healthy fruit are being packed. This commenter suggested that we amend the regulations to exclude fruit from being packed from orchards or harvested fruit lots with an incidence of citrus canker above some established threshold, in order to minimize contamination of packing lines. We acknowledge that infected fruit in a lot could contaminate the packing line with *Xac,* but, as stated above, substantial evidence indicates that the epiphytic bacterial populations that could be transferred from the packing line to the fruit do not infect mature fruit or survive on mature fruit long enough to infect other hosts. For that reason, we have determined that grove inspections are not necessary to mitigate the risk associated with such contamination, nor is disinfection of the packing line equipment necessary if canker is found during the inspection of a lot of fruit. The RMA stated that “Bacteria within lesions may be more protected from the detrimental effects of washing, disinfection and drying. Viable *Xac* has been recovered by APHIS pathologists from citrus canker lesions on fruit culled from packinghouse lines after postharvest treatments (Riley 2007).” A few commenters expressed concern relating to this statement. One stated that chlorine is well known as a surface sanitizer but has no ability to penetrate beyond the surface—for example, into lesions. Another commenter noted that none of the experiments mentioned in the PRA or RMA evaluate the effect of disinfectants on *Xac* within the fruit, either in visible lesions (of any size) or in circumstances where the effects of *Xac* are not visible to the naked eye. The third, reacting to the statement about recovery of viable *Xac* by APHIS pathologists after postharvest treatments, asked what treatment had been performed, what level of recovery had occurred, what preharvest management the fruits were subject to, why the fruits were not culled on the packing line before treatment, and whether the postharvest treatment included wax. As stated earlier, the surface disinfectant treatments required in this final rule reduce numbers of *Xac* cells to low or undetectable levels. The RMA acknowledges that treatment with surface disinfectants is not effective on canker lesions, which is why this final rule also requires an APHIS inspection of each lot of fruit for canker lesions. The canker lesions referred to in Riley
(2007)occurred in fruit produced under the regulations that were in place before the publication of this final rule, i.e., with certification of grove freedom and with surface disinfectant treatment. As the regulations in place before the publication of this final rule did not require specific canker management measures, we do not have records of what canker management measures the fruit may have been subject to beyond the measures required by the regulations. Addition of Peroxyacetic Acid Treatment We proposed to add a new surface disinfectant treatment using peroxyacetic acid (PAA). The proposed rule would have required the regulated fruit to be thoroughly wetted for at least 1 minute with a solution containing 85 ppm peroxyacetic acid. At the request of growers in Florida, we evaluated the efficacy of this treatment and determined that the disinfectant is at least as efficacious as a surface disinfectant treatment as the currently approved disinfectants listed in the regulations. In the RMA, we described the tests that had been performed to confirm the efficacy of PAA. These tests were conducted on *X. axonopodis* pv. *citrumelo* ( *Xa citrumelo)* , which was used as a surrogate for *X* . *axonopodis* pv. *citri* (i.e., *Xac* ). Two commenters stated that PAA should be tested on *Xac* itself rather than on a surrogate. One stated that *Xa citrumelo* does not infect fruit and does not survive in orchards, making it a poor surrogate, and asked that we make the data referred to in the RMA publicly available. Another stated that, while it seems highly likely that PAA may be effective against *Xac* , to allow its use without any testing against the particular organism of concern appears to be unnecessarily optimistic. The commenter recommended testing in field conditions for this application or at least to demand post-introduction testing to demonstrate efficacy in the field. We are making the data on PAA testing available on the Regulations.gov Web site with this final rule (see footnote 1 at the beginning of this final rule) or from the person listed under FOR FURTHER INFORMATION CONTACT . As noted earlier in this document, the use of a proxy or surrogate is not unusual when testing a treatment's efficacy on a quarantine pathogen. The EPA label for PAA, which states the approved instructions for use and applicability of the disinfectant, acknowledges that it was tested on *Xa citrumelo* as a surrogate for *Xac* . *X. axonopodis* pv. *citrumelo* and *X. axonopodis* pv. *citri* differ primarily in the hosts they infect. (“pv.” stands for “pathovar,” which distinguishes strains or subspecies of the same bacteria based on their ability to only infect specific hosts.) *X. axonopodis* pv. *citrumelo* is generally considered to be more resistant to disinfection than *X. axonopodis* pv. *citri* , making the former a suitable surrogate for the latter. In addition, PAA is an oxidizing agent whose mode of action has been shown to be effective on many bacteria, including *Bacillus cereus, B. subtilis, B. stearothermophilus, Clostridium botulinum, C. butyricum, C. sporogenes, Ditylenchus dipsaci, Enterococcus faecium, Escherichia coli* (including *E. coli* O157:H7), *Fusarium oxysporum, Gluconobacter oxydans, Lactobacillus plantarum, L. thermophilus, Leuconostoc mesenteroides, Listeria monocytogenes, Pseudomonas aeruginosa, P. fluorescens, Saccharomyces cerevisiae, Salmonella typhimurium, Staphylococcus aureus, Streptococcus delbreuckii* subsp. *bulgaricus* , and *Yersinia enterocolitica* . Based on PAA's characteristics as a general disinfectant and the results of the testing on *Xa citrumelo* , we have determined that PAA will be effective on *Xac* as well, and we are adding PAA as a surface disinfectant treatment for fruit in this final rule. We are making three other changes related to PAA. While paragraph
(a)of § 301.75-11 sets out treatments for fruit, paragraph
(d)of that section sets out requirements for treatment of vehicles, equipment, and other articles. A solution of 85 ppm of PAA is also effective when used on vehicles, equipment, and other articles, and the availability of PAA as a treatment for packing line equipment would be useful for packinghouses in the quarantined area to fulfill the requirements in § 301.75-7(c)(2)(iv) for disinfection of packing equipment between packing lots of regulated fruit produced in a quarantined area and packing lots of fruit not produced in a quarantined area. Therefore, this final rule also adds PAA, when used indoors, as an approved treatment for vehicles, equipment, and other articles in paragraph
(d)of § 301.75-11. We may decide to add PAA as a treatment for outdoor use in a separate rulemaking if we receive requests to do so. The proposed rule would have added PAA as a fruit treatment in a new paragraph (a)(4) in § 301.75-11. Paragraphs (a)(1) and (a)(2) authorize the use of sodium hypochlorite and SOPP, respectively, as treatments for fruit; paragraph (a)(3) requires that these two surface disinfectants be applied in accordance with label directions. Instead of adding PAA in a new paragraph (a)(4), we have redesignated paragraph (a)(3) as (a)(4), added PAA in paragraph (a)(3), and amended paragraph (a)(4) to indicate that PAA must be applied in accordance with label directions as well. The regulations in 7 CFR part 305 set out the requirements for phytosanitary treatments. Section 305.11 contains the two treatments that have been authorized for citrus fruit moved from a citrus canker quarantined area. Accordingly, in this final rule, we are amending that section to add PAA as a treatment for fruit. Inspection and Potential for Mature Fruit Without Visible Lesions To Serve as Pathway for Infection As mentioned earlier in this document, the PRA examined the risks associated with asymptomatic fruit. The PRA used the term “asymptomatic” to refer to the lack of visible signs or symptoms of citrus canker. The RMA examined the risks associated with all fruit that has been commercially packed, regardless of its disease status. We also 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. In the qualitative model, we defined “symptomatic” as meaning that the fruit have visible *Xac* lesions 1 millimeter
(mm)in diameter and greater. One commenter pointed out that these terms were used inconsistently in the PRA and the RMA. We appreciate the comment. In the version of the RMA that accompanies this final rule, Appendix 1 refers to fruit that have visible canker lesions and fruit that do not, rather than to symptomatic and asymptomatic fruit. This commenter further stated that the proposed APHIS inspections of fruit target only relatively large symptoms readily visible to the naked eye, not whether any bacteria are present on the fruit. While the APHIS inspection is probably fairly effective at limiting the occurrence of larger *Xac* lesions in marketed fruit, the commenter stated, inspection is totally ineffective at detecting and limiting lesions smaller than 1 mm or at detecting *Xac* -infected fruit that have no visible lesions at the time of inspection. This commenter and other commenters also addressed surface populations of bacteria, stating that focusing inspection efforts on visible lesions ignores risk associated with bacteria. We addressed the risk associated with epiphytic bacterial populations earlier in this document. We have determined that the other situations described by these commenters are unlikely to occur outside of an experimental setting. The reasoning behind this determination is discussed below. *Small lesions (less than 1 mm).* Commenters cited Koizumi (1972), in which Satsuma mandarin were either prick inoculated with *Xac* or naturally infected. The experimenter found that, in addition to lesions greater than 1 mm, lesions referred to as “late detection (small)” of a size of 0.1 to 0.15 mm also occurred. This would be below what we have determined to be the size threshold for a detectable lesion, as defined in Appendix 1 to the RMA. Besides stating that the existence of such lesions indicates that fresh fruit could be a pathway for the introduction or spread of citrus canker, the commenter also stated that it is possible that disinfecting the surface of the fruit might exacerbate the subsequent infectivity of *Xac* exuding from small lesions, by removing other (e.g., rot-provoking) organisms that might directly or indirectly accelerate the decline of *Xac* after harvesting. As discussed in the RMA, in the field, immature citrus is most susceptible to infection with *Xac* and lesion development. Mature citrus fruit have natural wax layers on their surface, decreasing susceptibility by reducing access to natural openings, such as stomata. In addition, mature (not expanding) asymptomatic fruit without injuries or blemishes are not known to develop symptoms in the field. In the Koizumi
(1972)study, mature fruit were experimentally inoculated while the fruit was still attached to the tree; equivalent conditions are extremely unlikely to occur naturally. The lesions Koizumi observed resulted from a combination of artificial (prick) inoculations and natural infections and therefore provide little information about how the ratio of typical to atypical lesions on fruit varies under natural conditions. Koizumi's results varied greatly over the several years he conducted these experiments; the commenters cite results from the year with the highest incidence of infection, which coincided with unusually high temperatures and two typhoons (hurricanes). Koizumi speculated that the atypical lesions were the result of restricted expansion brought on by physiological changes in the maturing fruit and lower ambient temperatures. As noted by Graham *et al.* (1992b), the small late season lesions were characterized by a “lack of bacterial proliferation.” Lesions without proliferation would not provide an epidemiologically significant source of inoculum for *Xac* infections. While other studies have conducted similar inoculation tests on fruit before (Fulton and Bowman 1929) and after (Graham *et al.* 1992b; Verniere *et al.* 2003), Koizumi
(1972)remains the only paper to describe this type of lesion. Fulton and Bowman noted that if one was not careful to avoid oil glands when making puncture inoculations, the released oils cause injuries to the adjacent tissue. One could speculate that at least some of Koizumi's atypical lesions might, in fact, be injuries. We have no evidence that the lesions described by Koizumi
(1972)occur in nature and therefore cannot agree that they would occur at the rates cited by the commenters. Nevertheless, conditions could exist in which small *Xac* lesions occur. However, as noted above, immature fruit are most susceptible to *Xac* infection, and *Xac* lesions grow as the fruit matures; the growth of the lesions slows as the fruit reaches maturity. Picking mature fruit from the tree causes senescence of the fruit and further inhibits lesion development. Therefore, while small lesions might occur on immature fruit, they would typically grow into larger lesions as the fruit matures; if there were small lesions present on such fruit, it would be likely that lesions larger than 1 mm would be present as well. In general, APHIS inspectors do not see fruit with only lesions smaller than 1 mm; small lesions occur in association with larger lesions (Riley 2007). The packinghouse culling and grading procedures are designed to remove fruit with visible lesions and would result in removal of the fruits likely to harbor the highest pathogen loads, and therefore present the greatest risk of disease transmission. The APHIS inspection after the packing process is completed will result in the rejection of any lot of fruit that has visible canker lesions and will prevent that lot from moving in interstate commerce. *Wounded fruit.* One commenter cited Fulton and Bowman (1929), who inoculated a mature grapefruit from the market and 75 days later tested the grapefruit. The test indicated that there were “something like 32,000 bacteria per puncture,” although the fruit had not developed external lesions. Another commenter stated that a general principle of postharvest pathology is that surface disinfestation of fruit with standard oxidizing chlorine washes will inactivate most microorganisms from the surface of non-wounded fruit, but not from fruit wounds. The grapefruit described in Fulton and Bowman
(1929)was one of a number of market fruit that were inoculated in this way, the rest of which either rotted after inoculation or supported bacterial populations that did not multiply. All these fruits were kept in moist laboratory conditions designed to facilitate the development of *Xac* bacteria. Regarding the grapefruit, Fulton and Bowman stated the following in their 1929 study: “There is apparently a very marked difference in the behavior of the canker organism following inoculations in the peel of mature fruit after removal from the tree as compared with its behavior in the peel of mature fruit still on the tree. Possibly changes in the physiological condition of the fruit resulting from its removal from the tree are responsible for the difference * * * senescent changes in the peel favor the development of fungi having saprophytic tendencies; it is not inconsistent to presume these changes would in equal degree hinder the development of an organism having definitely parasitic habits like *Pseudomonas citri* [ *Xac* ].” This is consistent with a determination that infected wounds would occur extremely rarely in real-world conditions. Fulton and Bowman also reported that infection only occurred if the wound stayed moist until the time of inoculation. Wounds that were allowed to dry and were inoculated after 26 hours did not result in infection. That is, infections occurred only when oil glands were avoided and inoculum was applied within 26 hours of wounding (Fulton and Bowman 1929). Verniere *et al.*
(2003)reported a disease incidence of zero when inoculating mature fruit either by pin prick or spray inoculation. As noted above, the conditions that would allow citrus canker to develop in wounds in the field are unlikely to occur. In addition, any fruit with wounds would likely be culled in the field or by the packinghouse before it could be submitted for APHIS inspection. Based on this evidence, we have determined that fruit with small lesions or infected wounds would occur extremely rarely and are not likely to be epidemiologically significant when they do appear. Therefore, it is appropriate to focus our inspection efforts on detecting lesions 1 mm or greater. The RMA stated that APHIS plant pathologists have intercepted fruit in final packed cartons with lesions in the 2-3 mm range and have observed that the majority of the symptomatic fruit that APHIS inspectors intercepted after passing through the packing line undetected by graders have only one lesion (Riley 2007). Two commenters addressed this statement. Both asked for data on interceptions in Florida fruit, with one asking for information on how many fruit were detected and what varieties were found to be infected. These data are available from the person listed under FOR FURTHER INFORMATION CONTACT . One commenter stated that the fact that APHIS inspectors intercepted fruit with lesions did not substantiate the statement made later in the RMA that grading and inspection procedures are effective in removing fruit with visible lesions. Another commenter stated that all canker infections cannot be detected in packinghouses without knowing whether the fruit originates from a canker-free grove, or at least a grove with a very low level of canker infection. The commenter stated that it is very difficult, if not impossible, to distinguish canker blemishes from numerous other blemishes, especially in the growing conditions that prevail in Florida, where many blemishes appear on fruit. One commenter cited the example of citrus affected by septoria, a fungus, that are exported to Korea. This commenter stated that the California citrus industry conducts vigorous training programs for line employees to identify and eliminate fruit with distinguishable symptoms and that this culling is then augmented by laboratory analysis. The commenter stated that lab analysis has always detected symptoms on a small percentage of fruit missed by highly trained employees. We appreciate the opportunity to clarify this point. Various evidence, as cited in the RMA, indicates that packinghouse grading and inspection procedures are effective in removing fruit with visible lesions. Packinghouse graders and inspectors in Florida also receive training provided by the State in identifying canker lesions. The phytosanitary inspection that will be performed by APHIS in this final rule will provide another layer of inspection protection. We provided evidence supporting these points in the RMA, including detailed evidence about the efficacy of APHIS' inspection process. Scientific evidence indicates that these measures are highly effective, but since uncertainty remains about the epidemiological significance of symptomatic fruit, we are prohibiting the distribution of fruit moved interstate to commercial citrus-producing States. As discussed earlier in this document, the APHIS packinghouse-based inspection is sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. In other words, if the infection pressure is higher than 0.38 percent of the fruit, it is extremely likely that the lot will be rejected from interstate commerce. APHIS inspection is thus effective regardless of infection pressure. One commenter, responding to both the evidence presented for APHIS inspectors' detection efficacy in the qualitative portion of the RMA and in the model in Appendix 1, stated that none of the evidence provided for APHIS inspectors' detection efficacy corresponds to field conditions for detection of lesions. The commenter noted that the cited figures for refresher training correspond to identification within 40 seconds of a lesion presented to the inspector, which the commenter stated was inconsistent with location of a rare lesion on a fruit in a continuous search of 1,000 fruit samples within an average of 5 seconds, an estimate we presented in the Regulatory Impact Analysis for the proposed rule in the context of describing the proposal's potential impact on packinghouse operations. The commenter stated that evaluation of enzyme-linked immunosorbent assay (ELISA) Dip Stick tools and the evaluation of a diagnostic tool (if that is a separate exercise from the ELISA Dip Stick tool) also corresponded to classification of already-detected lesions. We appreciate the opportunity to clarify the evidence presented in the RMA on the APHIS phytosanitary inspection. The evidence provided in the RMA is consistent with the proposed rule's approach of using inspection to detect lesions in the packinghouse. The training for phytosanitary inspectors was done in packinghouse conditions, using culled fruit for the test sample. Both in training and testing and in the packinghouse, inspection is performed on fruit that has been removed from the packing line. Under packinghouse conditions, there is no time limit for fruit inspection once the fruit is randomly sampled. This can be accomplished because the fruit is inspected individually, away from the packing line. The 40-second time limit during training is a performance requirement for training, not a packinghouse inspection requirement. The estimate that the packinghouse inspection would require 5 seconds per fruit is also not an APHIS packinghouse inspection requirement; rather, this figure was cited in the context of the potential economic impact of the lot inspection on the packinghouse, and specifically in discussing possible delays associated with inspection. Inspectors who see questionable lesions will be able to take whatever time is necessary to determine whether those lesions are canker lesions. The ELISA Dip Stick test did correspond to already detected lesions. The results of the ELISA Dip Stick test were cited in the RMA to provide empirical data on the size of lesions that can be detected by inspectors. The ELISA Dip Stick test is not part of the detection system that will be used in commercial packinghouses under this final rule; it will be used only for confirmation of lesions found by inspectors. One commenter disagreed with the idea that only “finished” fruit would be inspected for citrus canker in the packinghouse. The commenter stated that citrus canker is more easily detected on fruit that has not been through the packing process. Brushing of fruit on the packing line may remove diseased tissue, the commenter stated, and waxing of the fruit will make the disease harder to diagnose. Inspection of fruit before they go through the packing process would not allow the packinghouses themselves to cull canker-infected fruit prior to packing. In the RMA, we described in detail the efficacy of inspection of finished fruit for citrus canker, as discussed earlier. Our experience indicates that washing fruit will make it easier to detect citrus canker lesions. Citrus fruit that comes directly from the field is often covered in dirt, sooty mold, and other debris and material that could obscure citrus canker lesions. Washing the fruit removes some of this material. Because citrus canker lesions occur within the peel of the fruit, they would not be brushed off during finishing. Additionally, the wax used on fruit is transparent, which means it would not impede disease detection. Potential Pathways for Spread of Citrus Canker Through Movement of Fruit As mentioned earlier, the RMA that was made available with the proposed rule concluded 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 for epiphytic contamination; • For a successful *Xac* infection that results in disease outbreaks to occur an unlikely sequence of 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. One commenter stated that we did not enumerate any complete pathways for transmission and so did not evaluate the scientific evidence in such a way as to evaluate the possibility or likelihood for transmission along such pathways. The commenter also stated that there are pathways (including illegal diversion of fruit and perfectly legal amateur grower activities) from every part of the country that may lead to infection of commercial citrus areas and that have not been evaluated. This commenter and another commenter suggested several potential pathways that we had not addressed in the RMA. In general, it is difficult to examine quantitatively the pathways by which infected fruit could theoretically spread citrus canker. Those pathways are dependent on consumer behaviors and biological events for which we lack data that we could use to quantify them, and no such data were provided by the commenters. This lack of data is one reason we have determined that it is appropriate to prohibit distribution of fruit moved interstate from a quarantined area to commercial citrus-producing States. As discussed earlier, such a prohibition, combined with the monitoring and enforcement efforts APHIS will use to ensure that the prohibition is adhered to, is effective at preventing the illegal movement of fruit. We discuss the specific pathways brought up by the commenters below. One commenter suggested that citrus canker could be spread through long-distance movement due to storm or cyclone activity. The available evidence indicates that the maximum range for spread of citrus canker through storm activity would not be sufficient to spread citrus canker from Florida to another commercial citrus-producing State. One commenter suggested that citrus canker could be spread through movement on workers' clothes and picking bags. As discussed earlier, while *Xac* can persist on a number of surfaces, its infectivity outside lesions is unknown. We do not agree that it is likely that workers will move between Florida and other commercial citrus-producing States without laundering their clothes and while carrying their own picking bags. The commenter provides no evidence that could be used to empirically estimate the frequency of such behavior, and APHIS is unaware of any such evidence. Two commenters suggested that citrus canker could be spread if fruit or peel from citrus fruit infected with *Xac* is placed in or around susceptible host plants, after which a water event moves the bacterium from the fruit or peel to the host plant. One commenter cited Koizumi
(1972)as evidence that *Xac* could be recovered from fruit peel for months if the peel was placed in physiological solution for 2 hours. This commenter stated that only one bacterium is required to cause infection. Another commenter cited fruit with live *Xac* cells that are thrown into a compost pile or bin under a backyard citrus tree, after which a splash or water movement occurs. Once a backyard citrus plant was infected, these commenters stated, rain or storm events could spread the bacterium to commercial citrus groves. The Koizumi
(1972)study recovered bacteria using physiological solution, a buffered saline solution that ensures optimal conditions for bacterial recovery. Analogous conditions do not occur in nature. Additionally, for this scenario to occur, citrus fruit that is infected would have to have been moved from a quarantined area into a commercial citrus-producing State—movement that is prohibited by the regulations. As discussed earlier, we are increasing monitoring and disease surveillance activities and making changes to the regulations in order to help prevent the illegal or inadvertent movement of fruit from quarantined areas into commercial citrus-producing States. If an infected fruit was illegally moved into a commercial citrus-producing State, it would have to be exposed to susceptible plants under very specific physical and environmental conditions for infection to occur. While it is true that one bacterium is sufficient to cause infection, that one bacterium would have to encounter conditions that were appropriate for infection. There is a very low likelihood that any one bacterium will encounter conditions sufficient to cause infection; it is difficult to create these conditions even in a laboratory setting. Under natural conditions, it would require thousands if not millions of tries for one bacterium to cause infection. Gottwald and Graham
(1992)estimated that as few as 2.4 *Xac* bacteria forced into a water congested stomatal cavity of a susceptible plant were sufficient to cause a lesion. However, they also determined that the minimum concentration of bacteria in the inoculum needed to produce an infection, and presumably to place the estimated 2.4 bacteria in a stomatal cavity, was 10 5 cfu/mL. Thus, although it may take only 2.4 infective bacteria in the right place to cause infection, it takes exponentially greater numbers of bacteria in the inoculum for those 2.4 bacteria to occur in the right place at the right time. The data submitted by one commenter (see *http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&d=APHIS-2007-0022-0053* ), in which infected fruit were placed next to grapefruit seedlings in natural conditions for 2 months without infection of the seedlings, suggests that the likelihood of such an occurrence may be low. Finally, for this pathway to occur, rain or storm conditions would have to prevail that could spread the bacterium over long distances, but Borchert *et al.*
(2007)concluded that such conditions are unlikely to prevail outside Florida, the State that is currently quarantined for citrus canker. We acknowledge that it is possible that all of these circumstances could prevail, but such a “perfect risk” scenario would be an extremely rare event. The commenter provides no evidence that could be used to empirically estimate the frequency of this behavior, and APHIS is unaware of any such evidence. One commenter suggested a fruit-to-human-to-plant pathway for the introduction of citrus canker into a commercial citrus-producing State. A hobbyist who cultivates citrus in a State other than a commercial citrus-producing State could handle infective citrus from the quarantined area, then infect the plants the hobbyist is cultivating. The hobbyist might not notice the canker infection and could subsequently move the infected plants into a commercial citrus-producing State. We acknowledge that such an occurrence is possible, but such a “perfect risk” scenario would be an extremely rare event. The commenter provides no evidence that could be used to empirically estimate the frequency of such amateur citrus grower behavior, and APHIS is unaware of any such evidence. None of the pathway scenarios suggested by the commenters have changed the RMA's conclusion that an unlikely sequence of epidemiological events would have to occur for a successful *Xac* infection that results in disease outbreaks to occur as a result of the movement of commercially packed, treated, and APHIS-inspected fruit to States other than commercial citrus-producing States. Potential for Citrus Canker Establishment in Commercial Citrus-Producing Areas The RMA included a discussion of the susceptibility of commercial citrus-producing areas that are not currently quarantined for citrus canker to the spread of the disease. This discussion included a reference to a study by Borchert *et al.*
(2007)that developed a citrus canker spread model using the North Carolina State University APHIS Plant Pest Forecast System to identify areas where citrus canker could become established in the major citrus-producing regions of the United States. Two commenters stated that modeling of pathogen establishment, infection, and disease severity should be an essential component of the risk assessment for each citrus-producing State and region within the State, adding that the Borchert project results should be made publicly available. We disagree that modeling of pathogen establishment, infection, and disease severity in commercial citrus-producing States is a necessary component of the risk assessment. The RMA concluded that the introduction and spread of *Xac* into other commercial citrus-producing States through the movement of commercially packed fresh citrus fruit from quarantined areas is unlikely. Nevertheless, because the RMA concluded that the evidence is not currently sufficient to support a determination that fresh citrus fruit produced in a *Xac* -infested grove cannot serve as a pathway for the introduction of *Xac* into new areas, we are prohibiting the interstate movement of fruit from a quarantined area into commercial citrus-producing States. This measure makes modeling of pathogen establishment, infection, and disease severity in commercial citrus-producing States unnecessary. The Borchert *et al.*
(2007)study is an internal APHIS document. We made the study available to commenters who requested it during the comment period, and it is available from the person listed under FOR FURTHER INFORMATION CONTACT . The Borchert *et al.*
(2007)study provides the modeling requested by the commenters. Some commenters addressed the risk citrus canker posed to specific States. One commenter stated that California is a fresh citrus State with more than 200,000 acres dedicated to the fresh market production of oranges, lemons, grapefruit, mandarins, and other citrus varieties. Although the majority of the oranges are grown in arid areas, many of the lemons and some of the grapefruit are produced in climates with higher humidity and rainfall. The commenter stated that the survival of canker in these areas would be expected; the survival of canker in the more arid areas is less certain, but canker's potential impact cannot be ignored based on survival reports from other arid lands. Another commenter, addressing the suitability of California's climate for development of citrus canker, stated that Dalla Pria *et al.*
(2006)stated that the greatest severity of canker occurred at 24 hours of leaf wetness, with 4 hours of wetness being the minimum duration sufficient to cause 100 percent incidence at optimal temperatures of 25 °C to 35 °C. Another commenter stated that when Texas had citrus canker, it was in southeast Texas, which has higher rainfall than the Rio Grande Valley. The Rio Grande Valley generally has high relative humidity, although the commenter stated that there is tremendous variability in Texas' weather patterns; for example, July 2007 has been very wet. The commenter stated that canker would be able to thrive in the conditions present in the commercial growing area of South Texas. Surveys for citrus greening, the commenter stated, have revealed that Texas has substantial amounts of citrus in an area approximately 100 miles north of the Gulf of Mexico from Brownsville to Houston. The commenter noted that the challenges of eradicating canker in the urban areas of Florida contributed to the failure of the eradication program and anticipated that many of those same difficulties would be experienced in Texas if citrus canker appeared in urban areas. We agree with these commenters that citrus canker could be introduced to California and Texas. The RMA cited Peltier and Frederich
(1926)as indicating that the disease “could develop in all of the citrus regions of the world *sometime* over the growing season.” These facts do not change our conclusions that
(1)only a small portion of each commercial citrus-producing State actually produces citrus, and an even smaller portion has a climate suitable for canker disease development; and
(2)the climate in Florida is the most favorable of any State for the development of citrus canker, and it would be more difficult for citrus canker to be introduced into and subsequently become established in any other State. Regardless, the remaining uncertainty about the 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 citrus fruit into commercial citrus-producing States. Two commenters urged APHIS to address the risk of spreading citrus canker to other potential host areas, which may not be areas where citrus is commercially produced. One commenter stated that citrus (not just fruit-bearing trees) can be and is grown in other areas of the United States, and those areas are also at risk of citrus canker. The commenter noted that during the initial outbreak of citrus canker in the mainland United States, disease outbreaks were also recorded in Alabama, Mississippi, South Carolina, and Georgia. The commenter also noted that Borchert *et al.*
(2007)were tasked “to identify areas where citrus canker could become established in the major citrus producing regions of the United States,” rather than all the areas in the United States in which citrus canker could become established. These commenters recommended that the RMA and the proposed rule take account not only of current commercial citrus-producing areas, but also areas where citrus currently grows (even if it is not commercially grown) and areas where citrus could grow, but does not currently. These commenters stated that establishment of citrus canker in any such area might subsequently lead to establishment in commercial areas, since many of these areas are contiguous with commercial areas, and long-distance transport now appears to be more likely than historically, presumably due to the presence of the Asian leafminer ( *Phyllocnistis citrella* Stainton) in Florida. These commenters also stated that citrus canker establishment in areas where citrus is not commercially produced would lead to other pathways for establishment in areas where it is. The focus of the citrus canker program has been on commercial citrus-producing States because these States present the highest likelihood for introduction of the disease, due to the density of citrus plantings in those States. Prohibiting the movement of fruit from areas quarantined for citrus canker to States other than commercial citrus-producing States would be overly restrictive. We acknowledge that dooryard plantings of citrus exist outside of commercial citrus-producing States. However, while canker infection in a State other than a commercial citrus-producing State could serve as a pathway for introduction into a commercial citrus-producing State, as discussed earlier under the heading “Potential Pathways for Spread of Citrus Canker Through Movement of Fruit,” an unlikely sequence of epidemiological events would have to occur in order for citrus canker to be introduced and established through the movement of citrus fruit from a quarantined area. If, in the future, commercial quantities of citrus are planted in a State that is not currently designated as a commercial citrus-producing State, we will designate that State as a commercial citrus-producing State in § 301.75-5. As discussed in the RMA, injuries caused by the Asian leafminer can produce wounds that serve as infection courts in leaves and, to a lesser extent, fruit, but the leafminer itself is not a vector for the spread of citrus canker. Potential Application of the Packinghouse-Based APHIS Inspection System to Imported Citrus The regulations in 7 CFR 319.28 prohibit the importation of citrus fruit from areas where citrus canker is present, except for Unshu oranges from Japan and Cheju Island, Republic of Korea, that are produced in accordance with the systems approach described in paragraph
(b)of that section. The systems approach for Unshu oranges from Japan and Korea requires measures to ensure that the oranges are produced in an area free from citrus canker; for Unshu oranges from Japan, the systems approach requirements also address the citrus fruit fly. Several commenters expressed concern that the proposed regulations, if implemented, could lead to requests from other citrus-producing countries to export citrus fruit under conditions similar to those we proposed for the interstate movement of fruit from citrus canker quarantined areas. The commenters noted that, under international trade agreements, APHIS has agreed not to impose conditions on the importation of commodities that are more restrictive than those we impose on the domestic movement of similar commodities. These commenters stated that the RMA should consider the risk associated not only with the interstate movement of citrus fruit from domestic quarantined areas but also the risk associated with potential imports from foreign citrus-producing areas affected with citrus canker. One commenter who had expressed concern about illegal movement of Florida citrus into commercial citrus-producing States stated that this potential problem would only increase if citrus fruit was allowed to be imported from foreign areas affected with citrus canker. Our analysis of the risk associated with the importation of citrus fruit from other countries where citrus canker exists under conditions similar to those in this final rule would be conducted separately from the analysis we conducted for this rulemaking. Before we would consider using an approach similar to that promulgated in this final rule to allow the importation of citrus fruit from canker-affected areas in another country, the national plant protection organization of such a country would need to submit a request that we do so. A country requesting to be able to use this framework to export citrus to us would have to demonstrate the ability to perform the required treatments and phytosanitary inspections; it would also be required to have a bilateral workplan in place with APHIS. Depending on the circumstances, we may allow imports only through a preclearance program staffed by APHIS inspectors whose salaries are funded by the exporting country. In addition, there may be other citrus pests in foreign citrus production areas whose risk would need to be mitigated separately from the risk posed by citrus canker. For these reasons, we have not amended the RMA that accompanies this final rule to discuss potential imports from other countries. One commenter specifically noted that the requirements for Unshu oranges from Japan are not in harmony with the proposed rule. The proposed rule and the risk management analysis are based on the most recent science and our determination of the appropriate level of protection for the citrus canker pathogen. We may reassess the risk associated with the importation of Unshu oranges from Japan in the future if Japan requests that we do so. If we reassess the risk associated with Unshu oranges from Japan, as discussed earlier, the assessment will take into account all relevant local conditions and all pests that are present in Japanese citrus production areas. It is important to note that Unshu oranges from Japan, if they are fumigated for arthropod pests, are allowed to be imported into commercial citrus-producing States, because they are produced under a systems approach. Fruit moved interstate from citrus canker quarantined areas is not allowed to be moved into those States under this final rule. One commenter noted that the term “commercially packed” can be interpreted in different ways. In South Korea, the commenter stated, one group of growers used a “commercial” packing shed that was no more than 75 meters by 50 meters and in which the post-harvest treatment with sodium hypochlorite was performed in a small bath. The commenter stated that it is important to recognize that different circumstances prevail in different countries when harmonizing domestic regulations with import regulations. We fully agree with the commenter that the circumstances in a country would need to be assessed before we could allow the importation of citrus from a citrus canker-affected area under conditions similar to those under which we are allowing the movement of citrus from a citrus canker quarantined area. With regard to the specific circumstance cited by the commenter, we have determined that it is necessary to define the term “commercial packinghouse” in this final rule, given that the PRA and RMA analyzed the risk associated with the interstate movement of commercially packed fruit. In this final rule, we are adding a definition of *commercial packinghouse* to the regulations. This definition reads: “An establishment in which space and equipment are maintained for the primary purpose of packing citrus fruit for commercial sale. A commercial packinghouse must be registered as a packinghouse with the State in which it operates or hold a business license for treating and packing fruit.” This definition will help to ensure that the packinghouses that pack fruit for interstate movement under this final rule have equipment and operating procedures that are consistent with those described in the PRA and RMA. Because the PRA and RMA referred specifically to the risks associated with commercially packed fruit, we are amending the proposed regulations in § 301.75-7 to refer specifically to commercial packinghouses. One commenter stated that implementation of the proposed rule may also result in foreign countries requesting APHIS to consider a similar approach for fresh commodities other than citrus. The commenter stated that the approach described in the proposed rule could be applied in any number of other situations in which a systems approach is not operationally or financially feasible. It is important to note in response to this comment that we determine what phytosanitary mitigations are appropriate for the importation or interstate movement of commodities based on our assessment of the risk their importation or interstate movement poses and the appropriate level of phytosanitary protection against that risk. If we determined that a set of mitigations was necessary to provide the appropriate level of protection for a commodity proposed for importation, but that set of mitigations was determined not to be operationally or financially feasible by the national plant protection organization of the exporting country, we would not allow the importation of that commodity. We would only allow the importation of a commodity under an approach similar to the approach used in this final rule if we determined that this approach could provide the appropriate level of phytosanitary protection. In past cases where we have determined that inspection, treatment, and limited distribution mitigations similar to those implemented in this final rule can provide an appropriate level of protection against the introduction of plant pests by imported commodities, we have employed such mitigations. For example, litchi imported from Thailand are inspected for a fungal pathogen, irradiated for arthropod pests, and prohibited from being imported or moved into Florida due to the litchi rust mite. In order for us to determine that a packinghouse-centered approach provided an appropriate level of phytosanitary protection, we would have to determine that the biology of the pest supported such an approach and that the pest in question could be effectively detected by inspection of the commodity. In addition, other considerations may apply based on the level of risk we determine importation of the commodity to pose. Miscellaneous Comments on the RMA One commenter noted that, since viable *Xac* have been found in fruits with canker lesions that are imported into Europe, it is clear that the importation of symptomless fruits from canker-infected areas has a risk of introducing the disease if all the control steps, carried out by many people at different times, are not always perfectly implemented. The RMA concluded that the introduction and spread of *Xac* into other commercial citrus-producing States through the movement of commercially packed fresh citrus fruit from quarantined areas is unlikely. While fruit with visible canker lesions has likely been imported into the EU, the importation of citrus fruit from areas where citrus canker is present has not resulted in the introduction of the disease in the EU, despite the fact that all fruit imported into the EU is allowed to move to citrus-producing areas within the EU. (This is discussed in more detail in the RMA in Section 5.6.2, “International and Interstate Movement of Citrus Fruit.”) In addition, treatment and inspection will both serve as effective mitigations against the potential of fruit moved interstate to introduce citrus canker to other States. Nevertheless, the RMA concluded that the evidence is not currently sufficient to support a determination that fresh citrus fruit produced in a *Xac* -infested grove cannot serve as a pathway for the introduction of *Xac* into new areas. That is why this final rule prohibits the distribution of fruit moved interstate from quarantined areas to commercial citrus-producing States. In the RMA, we stated that there is no authenticated record of the movement of fresh fruit infected with *Xac* being related to the epidemiology of citrus canker disease. One commenter stated that pest-free areas are now established on the basis of a pest being “known (as demonstrated by scientific evidence) not to occur” rather than “not known to occur,” and the same standard of evidence should apply to this statement; research should be conducted to establish this statement as fact. We agree with the commenter's characterization of the process by which pest-free areas are established. Our statement was not meant to imply that we had positively established that fresh fruit infected with *Xac* has never served as a pathway for the transmission of citrus canker. Rather, it reflects the fact that no outbreaks of citrus canker have ever been attributed to the movement of infected fruit, despite the brisk global trade in such fruit. (The majority of outbreaks of citrus canker whose cause is known were caused by the movement of infected citrus nursery stock, rather than fruit.) The RMA noted the Asian leafminer interacts with *Xac* by providing wounds that serve as infection courts in leaves and, to a lesser extent, fruit. Leafminer wounds create suitable microclimates for *Xac* development, and leafminer-damaged leaves have more and larger lesions. One commenter asked whether injuries from the peel miner, an insect present in California, could result in higher infection of fruits. Injuries from the peel miner would be likely to increase the susceptibility of fruit to infection, and increase the severity of the infection if they became infected. In terms of overall spread of citrus canker, the peel miner would not likely be as epidemiologically significant as the Asian leafminer, since leaves of citrus trees and plants are more susceptible to citrus canker infection than the peels of citrus fruit. One section of the RMA discussed the effect of shipping and storage temperatures on *Xac* populations, concluding that typical shipping and storage temperatures reduce such populations. One commenter noted that pathologists are able to keep *Xac* -infected samples in refrigerators at 2 °C to 4 °C and still isolate the bacterium. The commenter stated that the emphasis of this section should be on the survival of the bacterium. We agree with the commenter that cool temperatures do not necessarily cause mortality for *Xac* , and the RMA noted accordingly that such temperatures influence survival rather than stating that they inactivate the bacteria. However, in the context of an analysis of the likelihood of citrus fruit serving as a pathway for the introduction or spread of citrus canker, it is important to note that shipping and storage temperatures reduce *Xac* populations. In addition, commercial refrigeration is also quite dry, and *Xac* is highly influenced by humidity, so the dryness of refrigeration is more likely to have mortality effects than the cold. The RMA stated that fruit are susceptible to citrus canker infection from petal fall until they are around 6 cm in diameter, and are most susceptible at a fruit diameter of about 2-4 cm. One commenter stated that fruit size cannot be related to susceptibility unless the variety is indicated, as some varieties (such as grapefruit) are bigger than others (such as mandarins). We agree with the commenter, and we have amended the discussion in the RMA to state that fruit are susceptible to natural (stomatal) infection from petal fall until they are fully expanded (around 6 cm in diameter for some varieties), and are most susceptible after stomata form and fruit is in a stage of rapid expansion, a period of about 90 to 120 days (at a fruit diameter of about 2-6 cm for some varieties). In discussing the international and interstate movement of citrus fruit, the RMA noted that in 2004, India (where *Xac* is reported) shipped 8 metric tons of citrus to Ghana and 2 metric tons to South Africa, and that no outbreaks of *Xac* have been reported in any of the recipient countries. One commenter stated that the shipment of citrus from India to South Africa seems a dubious record. These data were drawn from the Food and Agriculture Organization's “World trade and crop production statistics” database at *http://faostat.fao.org* . The commenter provided no further information establishing these records as dubious. We also discussed the movement of fresh citrus from Florida during *Xac* outbreaks. One commenter asked whether the earlier shipments of Florida fruit were from canker-free areas, or at least canker-free areas of production under official control. We noted in the RMA that these shipments of Florida citrus may have originated in areas of low prevalence or free of *Xac* . These shipments were required to originate in groves that had been certified to be free of *Xac* based on an inspection. Comments on the Model in Appendix 1 to the RMA As mentioned earlier, to assist in evaluating the options we identified for packinghouse-centered risk management, 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 fruit with visible canker lesions does not enter commercial citrus-producing States. The three inspection levels were determined by preliminary estimates of the Plant Protection and Quarantine program'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, randomized inspection of 500, 1,000 fruit, or 2,000 fruit per lot will ensure, with 95 percent confidence, that the proportion of undetected fruit with visible canker lesions 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 5 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 5 States in a single shipping season would be 633,152 or less at the 1,000 randomly sampled fruit inspection level. 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 4,270 or less) at the 500 fruit inspectional level, and about half that number (approximately 1,067 or less) at the 2,000 fruit inspectional level. (As discussed in Section 9.3.3.4 of Appendix 1 to the RMA, the actual acreage on which citrus is produced within a citrus-producing State is a small fraction of the total acreage of that State.) The base level inspection of 1,000 randomly sampled fruit per lot was adopted because it is operationally feasible with small adjustments to the current phytosanitary inspection process in Florida. The potential for fruit with visible canker lesions to reach commercial citrus-producing States, coupled with the aforementioned uncertainty regarding fruit as a pathway, led to the determination that additional mitigations were required. We received several comments from one commenter addressing the model in Appendix 1 to the RMA. The commenter stated that the model failed to take into account the increased numbers of fruit that would be moved interstate from Florida and imported from citrus canker-affected areas in other countries, and thus underestimated the number of potentially infected fruit that could reach commercial citrus-producing States. The commenter cited another comment that estimated that the spread of canker has resulted in an additional 20 percent of Florida's total fresh citrus groves becoming ineligible for interstate movement under the regulations that were in place before the publication of this final rule. That 20 percent, that commenter stated, represents approximately 8 million 4/5-bushel cartons or an approximately $80 million potential business opportunity under the proposal. The comment estimating the potential increase in fruit moved interstate under this final rule is dealt with in more detail under the heading “Comments on the Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis” later in this document. We have concluded that the increase in the number of fruit that will be moved interstate under this final rule is likely much less than the commenter estimates, although we have been unable to quantify the probable increase. This final rule does not change our requirements for the importation of citrus fruit from areas in other countries where citrus canker is present. Therefore, this final rule will not increase the amount of fruit imported from such areas. As stated earlier in this document under the heading “Potential Application of the Packinghouse-Based APHIS Inspection System to Imported Citrus,” our analysis of the risk associated with the importation of citrus fruit from other countries where citrus canker exists under conditions similar to those in this final rule would be conducted separately from the analysis we conducted for the proposal and this final rule. In Section 9.3.3.1 of Appendix 1, we determined probability distributions for the number of 4/5 -bushel cartons shipped per growing season for each commercial citrus-producing State destination and variety of fruit. To determine the probability distributions, we used the minimum, average, and maximum values of the last 4 years (2003 through 2006) of historical data on citrus fruit shipping from Florida to other commercial citrus-producing States. One commenter stated that the last 4 seasons of data have been strongly affected by both natural events (damage caused by hurricanes, tree destruction in an attempt to eradicate the canker outbreak) and imposed movement restrictions (due to the canker outbreak). The commenter noted that over the 10 years preceding the 2003 through 2006 data, the average domestic shipping quantity was 1.6 times higher than it was during those years. The commenter stated that the uncertainty in the expected average number of fruit that will be shipped from Florida is therefore considerably higher than would be expected from examination of just the last four seasons, unless APHIS considers that the decline in numbers is a permanent feature of the Florida industry and the last four seasons are typical. The amount of citrus moved interstate has declined steadily since the 1996-97 season, with a larger decline in 2004-05, when fruit production was affected by hurricanes. (See figure 1.) ER19NO07.000 The trends and changes occurring in the Florida citrus industry suggest that the last four seasons are typical. The 2006 Commercial Citrus Inventory for Florida (USDA-NASS 2007) states the following about the 2-year trend for Florida citrus fruit production: “Florida's citrus acreage peaked again at 857,687 in 1996 but has been declining ever since. The 2006 total is 621,373, down 17.0 percent in a 2-year period noted for hurricanes, diseases, and urban development. The net change, a loss of 127,182 acres, is the greatest in any non-freeze period and 2nd overall. The Indian River District bore one-third of this loss. Removals out-numbered new plantings by a ratio of more than 5:1. The 23,623 acres of new plantings are the least recorded in any two-year period since 1970-71.” The last two sentences are especially germane to this discussion, as any rebound in Florida fresh citrus production would depend on new plantings. The Commercial Citrus Inventory also states that acreage decreases were reported for all 30 counties included in the survey, and that “only 197,027 acres (28.2 percent) remain from the 697,929 reported in the 1988 census.” This evidence indicates a continued trend toward a decline in Florida citrus production. Therefore, we are making no changes in response to this comment. However, as shipping data for the 2006-07 season are now available, we use those data in Appendix 1 of the RMA that accompanies this final rule. In Section 9.3.3.2 of Appendix 1 of the RMA, we presented a determination of the number of fruit shipped per 4/5 -bushel carton. We used USDA-National Agricultural Statistics Service
(NASS)forecasts of fruit sizes to determine percentage distributions for the number of fruit that would be contained in each 4/5 -bushel carton, and then used the minimum, mean, and maximum from each of these distributions as parameters in a Pert distribution to define the number of fruit of each variety per 4/5 -bushel carton. The commenter made several comments about this technique, stating that: • The USDA-NASS forecasts of fruit sizes are properly represented by a discrete, rather than a continuous, distribution; • No basis was given for the use of Pert distributions to account for the uncertainties in annual shipments; • The Pert distributions generated have mean values that differ from the mean values of the data, because the mean values of the data were improperly used as the modes for the Pert distributions; • The actual use of Pert distributions, which is accomplished by fitting the discrete data to a Pert distribution and then finding the mean and standard deviation of the Pert distribution, is inefficient, not well defined, and has an unknown error rate; and • The Florida Department of Citrus has data on the actual average numbers of fruit per 4/5 -bushel carton, which we should have used. The commenter stated that these flaws had an impact on a later section of the analysis as well, Section 9.3.4, in which our evaluation of the uncertainty associated with the number of fruit that will move interstate from Florida relies on the uncertainty in the Pert distributions that the commenter stated were incorrectly employed. We agree that the analysis would have been improved by the use of the actual average numbers of fruit per 4/5 -bushel carton. To improve the model in Appendix 1 for this final rule, we have obtained from the Florida Department of Citrus the total number of 4/5 -bushel cartons of fruit for each type and size of fruit that was shipped to commercial citrus-producing States and the average number of fruit per bushel for each fruit size. Our use of these data makes using the USDA-NASS fruit size forecasts and the resulting Pert distributions unnecessary, thus addressing the commenter's concerns. For some varieties, using real data increases the number of fruit moved interstate; for other varieties, using real data decreases that number. A summary is provided in Table 1. Table 1.—Q1: Annual Amount of Florida Citrus by Variety Shipped to Commercial Citrus-Producing States Variety June 2007 approach Current approach Percentage change Grapefruit: 5th percentile 4.523,165 3,137,949 −31 Mean 6,169,582 5,386,794 −13 95th percentile 7,893,953 7,637,299 −3 Oranges: 5th percentile 20,948,908 13,525,400 −35 Mean 25,081,498 19,351,870 −23 95th percentile 29,425,176 25,158,470 −15 Temples: 5th percentile 91,786 103,295 13 Mean 242,332 438,078 81 95th percentile 392,884 773,018 97 Tangelos: 5th percentile 241,718 395,323 64 Mean 406,334 804,408 98 95th percentile 575,434 1,210,151 110 Honey tangerines: 5th percentile 78,052,912 58,535,060 −25 Mean 88,549,976 68,711,030 −22 95th percentile 99,601,208 78,917,320 −21 Other tangerines: 5th percentile 43,050,856 34,651,600 −20 Mean 47,975,284 42,753,630 −11 95th percentile 52,948,348 50,701,440 −4 Taken together, these changes do not result in significant changes in the outputs of the model. In Section 9.3.3.3 of Appendix 1 to the RMA, we estimated the true prevalence of symptomatic fruit in lots that are inspected, found to be free of visible canker lesions, and approved to enter interstate commerce. The true prevalence was based on the apparent prevalence (papparent), which was adjusted to account for inspection sensitivity. We used the beta distribution to estimate the apparent prevalence assuming a sample size of n fruit that are examined by inspectors. Since we are estimating the true prevalence in the lots of fruit that have been inspected and found to be free of visible canker lesions, x = 0, which means that the equation for the beta distribution we used was: p apparent = Beta(x+1, n−x+1) = Beta(1, n+1) One commenter stated that such an estimate applies only to an isolated single lot, with no further information available, and does not apply to the system we proposed, in which many lots would be evaluated. The commenter stated that what is required is the average over many lots, where lots are either accepted or rejected, and takes no account of the known fact of infected fruit being present. The commenter suggested considering the issue in the following way: Suppose that the fruit entering the inspection process is infected at an incidence rate r, and this rate is the same for all fruit lots inspected. The inspection of n fruit will then fail to detect any infected fruit with probability (1-r) n , and detect at least one infected fruit with probability 1-(1-r) n . The lot rejection rate for such fruit will thus be 1-(1-r) n , independent of the size of the lot. Accepted lots will be passed to market (still with infection rate r), and rejected lots will be dealt with in some other way. The commenter stated that this meant that any infection rate whatever can occur in the accepted lots; the controlling factor is likely to be the economically acceptable rejection rate. The commenter also raised issues related to the disposition of lots that are not approved to enter interstate commerce. The approach suggested by the commenter provides results that are equivalent to the procedure that we used. Under the assumption used by the commenter, the Beta distribution method we used indicates that while any prevalence can theoretically occur in accepted lots, 97 percent of lots approved for shipment would have a true prevalence of fruit with visible canker lesions of less than 0.004 (0.4 percent). The method presented by the commenter indicates that a lot with a true prevalence of fruit with visible canker lesions of 0.004 has a 97 percent probability of being rejected. We do not consider the prevalence of fruit with visible canker lesions in rejected lots because those fruit are not approved for shipment outside the quarantined area; this final rule explicitly prohibits reconditioning and resubmitting fruit for inspection (see the discussion under the heading “Reconditioning” later in this document). Furthermore, it is not necessary to know the prevalence of symptomatic fruit produced in the quarantined area in order for APHIS inspection to ensure that fruit shipped outside the quarantined area has a high probability of containing a low prevalence of symptomatic fruit. If the prevalence were to increase (or decrease), APHIS inspection would result in a higher (or lower) rate of lot rejection. The commenter stated that the analysis was flawed because it did not address fruit contaminated with surface bacteria, fruit with wounds that could be infected with citrus canker, and fruit with lesions smaller than 1 mm. For the reasons we discussed earlier in this document under the headings “Treatments and Surface Contamination With *Xac* ” and “Inspection and Potential for Mature Fruit Without Visible Lesions to Serve as Pathway for Infection,” we have determined that these fruit are not likely to be an epidemiologically significant pathway for the introduction or spread of citrus canker; in the case of wounded fruit or fruit with lesions smaller than 1 mm, we have also determined that such fruit are unlikely to occur in real-world conditions. Therefore, we do not consider them in the model in Appendix 1 to the RMA that accompanies this final rule. In Section 9.3.3.4 of Appendix 1 to the RMA, we used a model to determine the proportion of fruit with visible canker lesions shipped to citrus-growing areas within commercial citrus-growing States, based on the amount of citrus-bearing acreage (including acreage for backyard trees) in each citrus-producing county, the human population in each citrus-producing county and commercial citrus-producing State, and the area of each citrus-producing county. The commenter stated that we had only considered in our analysis those counties for which the production acreage is reported in the NASS statistics, and that those counties or parishes with commercial production that are listed in the NASS statistics, but for which production acreage is not reported to prevent inferences about individual farms, should have been included in the model. We agree with the commenter. While acreage is not available for these counties, NASS does report the number of farms in the counties. We have multiplied the number of farms by the mean farm size in the State in each of the counties in which farms were reported to estimate the citrus-producing acreage within each of those counties. We then added that acreage to the model. This results in an approximately 10 percent increase in the total citrus-producing acreage included in the model. We attempted to model backyard citrus acreage in order to determine what proportion of fruit is consumed in reasonably close proximity to *Xac* host trees outside of commercial citrus production areas. Having estimated the backyard citrus acreage, we added it to commercial citrus production acreage data in order to determine the total citrus-bearing acreage in the county. We then used the proportion of citrus-bearing acreage in a county to the total acreage in a county to estimate how much of the citrus that is moved to a county is consumed in the citrus-bearing acreage. The commenter stated that, rather than using acreage to determine how much citrus is consumed in reasonably close proximity to *Xac* host trees, we should use population. The commenter stated that consumption of citrus is definitely not uniform over the area of the county, but rather is concentrated where the population is. The commenter stated that the approach of prorating consumption by area fails entirely to account for the proximity of a large fraction of the population to citrus plant material (including backyard trees). The commenter suggested using data from the RMA and data on average household size for owner-occupied houses to estimate the fraction of the population living in owner-occupied houses with backyard citrus trees within counties containing commercial citrus groves. The model used in the RMA makes a simplifying assumption that fruit consumption occurs randomly throughout the area of each county in which citrus is produced. Admittedly, this is an imperfect estimate. However, the alternate simplifying assumptions presented by the commenter—that all fruit consumed by residents of households where citrus trees are present is consumed in residential dooryards—would result in a great overestimate of the proportion of citrus consumed in reasonably close proximity to *Xac* host trees. Such an assumption would imply that residents of households in citrus-producing counties do not consume fruit indoors (at work, at school, in restaurants, or inside their homes), and that they do not discard the peel of the consumed fruit in a trash can. For example, the commenter's assumption results in an estimate that 13.6 percent of fruit consumed in Arizona would be consumed and disposed in reasonably close proximity to *Xac* host trees. The commenter's suggested methodology thus assumes the maximum possible exposure. The Presidential/Congressional Commission on Risk Assessment and Risk Management observed that the use of unrealistic maximum exposure scenarios impairs the scientific credibility of risk assessment (CRARM 1997b). We are making no changes to the model in Appendix 1 of the RMA in response to this comment. We believe the assumptions we used are reasonable, if imperfect. However, it is important to note that the model was used to evaluate Option 2, which would have provided for unlimited distribution of fruit from the quarantined are, subject to treatment and APHIS inspection. If we were able to determine that the assumption we used to determine how much fruit is consumed in reasonably close proximity to *Xac* host trees resulted in an underestimate, the conclusions drawn from the model would not change: Some fruit with visible canker lesions would be consumed in reasonably close proximity to *Xac* host trees. With the modifications described here, the model in Appendix 1 of the RMA that accompanies this final rule has determined, with 95 percent confidence, that the total number of citrus fruit shipped from Florida to 5 citrus-producing States (Arizona, California, Hawaii, Louisiana and Texas) over a single shipping season would be 152,358,900 or less if unlimited distribution is permitted. The model determined, with 95 percent confidence, that the number of fruit with visible *Xac* lesions reaching those 5 States in a single shipping season would be 514,229 or less at the 1,000 fruit inspectional level. The model further determined with 95 percent confidence that the number of fruit with visible *Xac* lesions reaching citrus-producing areas within those States in a single shipping season would be 1,747 or less at the 1,000 fruit inspectional level. As the original model did, the revised model indicates that, under unlimited distribution, fruit with visible canker lesions would be moved interstate from Florida into citrus-producing areas within commercial citrus-producing States. Given that the evidence is not currently sufficient to support a determination that fresh citrus fruit produced in a *Xac* -infested grove cannot serve as a pathway for the introduction of *Xac* into new areas, the model in Appendix 1 to the RMA continues to support our selection of Option 4. Comments on the Proposed Regulatory Provisions and Other Comments *Program Monitoring and Review* Four commenters requested that APHIS put in place some type of program review if the provisions of the proposed rule were implemented. Three requested that the program allowing the interstate movement of fruit from a quarantined area under the conditions described in the proposal be a pilot program that would last for 2 years, after which a comprehensive performance review could be conducted to determine whether to extend the program. One commenter requested that a program review be conducted after each of the first two shipping seasons under the program. APHIS recognizes the value of periodic program reviews to assess performance and effectiveness. As discussed earlier, although the safeguards we proposed will be highly effective at preventing the interstate spread of citrus canker, we are planning monitoring and disease surveillance activities to ensure that the program is indeed effective. If we determine that part or all of the program is not meeting our expectations, we have the option to amend the regulations accordingly. Given this, we do not agree that it is necessary to limit the amount of time the program will be in place through the regulations. One commenter recommended that APHIS provide funding for additional surveys for citrus canker in commercial citrus-producing States to provide those States with evidence allowing them to declare freedom from citrus canker and to quickly detect the disease if it spreads. The commenter stated that, in the event that citrus canker spreads to other States, there will be a need for similar regulations to protect those States where the disease is not present. We are providing funding for citrus canker surveys in susceptible States. We have also worked with commercial citrus-producing States to develop emergency response guidelines should citrus canker be found in those States, and we will continue to review and refine those guidelines to ensure that they will be effective in the event of a detection. The regulations presently in place provide standards and requirements sufficient to prevent the spread of citrus canker from any area in the United States that might be quarantined for citrus canker, not just for the State of Florida. One commenter stated that, before implementing the packinghouse-centered approach for regulating fruit described in the proposed rule, APHIS should propose and seek review for the approach through the North American Plant Protection Organization (NAPPO) and the International Plant Protection Convention (IPPC). NAPPO facilitates cooperation and the development of standards among the national plant protection organizations of Canada, the United States, and Mexico, and the IPPC performs a similar function for the wider international community. Neither body has the authority to set regulatory policy for the United States. We conducted our risk analyses and developed the proposed rule on the basis of the available science and the conditions prevailing in areas quarantined for citrus canker within the United States. *Reconditioning* In the proposed rule, we asked for comments on reconditioning (i.e., treating and culling fruit again after its initial treatment and culling). The proposed regulations left open the issue of allowing a lot of fruit that was initially found to be ineligible for interstate movement to be reconditioned and resubmitted for inspection. Because we had not thoroughly examined all operational aspects of the reconditioning of fruit, we invited comments on this topic. We received five comments on the issue, all of which supported allowing the reconditioning of fruit. None of the commenters provided guidance on any specific circumstances in which reconditioning should be allowed. After careful consideration of the issues involved in reconditioning, we have decided not to provide for reconditioning of rejected fruit in this final rule. One of the purposes of the APHIS inspection requirement is to give growers and commercial packinghouses an incentive to supply fruit free of visible canker lesions for interstate movement. If we allow a lot of fruit that has been rejected to be reconditioned and resubmitted for inspection, the incentive to provide fruit free of visible canker lesions substantially diminishes. Reconditioning could also provide the packinghouse with a greater incentive to “take its chances” in submitting a lot of fruit that may contain visible canker lesions for inspection. Therefore, allowing reconditioning could weaken the protection provided by the APHIS inspection. Additionally, if fruit undergo surface disinfectant treatment multiple times, residues of the disinfectant may exceed EPA tolerances; it would be difficult to control how many times fruit came into contact with surface disinfectants if we allowed reconditioning. For these reasons, we are not allowing reconditioning in this final rule. Definition of Lot We proposed to define the term *lot* 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 workday (i.e., a run started one day and completed the next is considered two lots).” One commenter asked that the rule allow commercial packinghouses flexibility and discretion in working with APHIS to define specific lot and sample sizes and define the inspection process, as different operational issues exist in each packinghouse. We appreciate this commenter's concern. The compliance agreement under which a commercial packinghouse must operate in order to be eligible to pack fruit for interstate movement under this final rule will provide a great deal of flexibility in defining lot size and meeting the inspection requirements. One commenter asked whether the definition would mean that fruit from several growers will be considered one lot by APHIS if the fruit is of the same variety and packed on the same day. The commenter also asked whether the definition would mean that, if symptomatic fruit is found packed in a lot, then fruit from all the growers for that variety packed on that day will be ineligible for interstate commerce, even if the fruit from the groves of some growers did not have detectable lesions. Packinghouses are free to define their lots as less than the amount of each variety of fruit that is packed in 1 day if they wish. Under the compliance agreement that packinghouses will be required to have in place, packinghouses must provide notice to APHIS about the estimated sizes of the lots they are running; APHIS will not set lot sizes itself. Regardless of the size of a lot, APHIS will inspect the lot at a rate sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. If any symptomatic fruit are found in a lot, as the lot has been defined by the packinghouse in accordance with the definition of *lot* in § 301.75-1 and the provisions of the compliance agreement, then all fruit in that lot will be ineligible for interstate commerce, regardless of whether the lot is composed of fruit from one or from several sources. This provides an incentive for growers and packinghouses to ensure that each lot contains no fruit with detectable lesions. One commenter stated that the proposed definition of *lot* is vague and not consistent with the definition of lot in the IPPC's Glossary of Phytosanitary Terms. 7 The commenter recommended that the definition be clarified, by variety, in the final rule. 7 See the International Glossary of Phytosanitary Terms (2007), which is International Standard for Phytosanitary Measures
(ISPM)Number 5. To view this ISPM on the Internet, go to *http://www.ippc.int/IPP/En/default.jsp* and click on the “Approved standards” link under the “Standards (ISPMs)” heading. While APHIS always considers the IPPC Glossary when determining how to define a term, our use of the term “lot” in the proposal is consistent with U.S. citrus industry practices; using another term would likely provoke unnecessary confusion. There is no phytosanitary or statistical reason to set lot sizes by variety. We stated in the proposal that we intend to inspect fruit at a rate of inspection sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. This is equivalent to randomly sampling 1,000 fruit per lot. One commenter stated that it is essential that APHIS establish the maximum lot size that could be run with only 1,000 fruit inspected. The commenter stated that leaving the establishment of a lot size to packinghouse discretion creates the potential for a wide variation in the number of fruit actually cleared by APHIS inspectors. The commenters stated that it is obvious that a lot size of 200,000 pieces of fruit is considerably different than one of 50,000, because the potential for infected pieces of fruit to slip through the treatment and inspection steps is four times as great in the latter case. It may seem counterintuitive that randomly sampling the same number of fruit for a lot composed of 50,000 fruit and a lot composed of 200,000 pieces of fruit provides the same confidence of detecting fruit with visible canker lesions at the 0.38 percent prevalence level. However, as discussed in Section 9.3.3.3 of Appendix 1 to the RMA, the hypergeometric sampling algorithm (which assumes that the fruit is sampled without being returned to the lot, thus ensuring that the same piece of fruit is not inspected twice) indicates that randomly sampling 1,000 fruit is adequate to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions for any lot of 100,000 fruit or more. For lot sizes less than 100,000 fruit, randomly sampling 1,000 fruit actually gives better than 95 percent confidence of detecting the prevalence of 0.38 percent. The reason this is true can be seen by imagining a large barrel and a small keg, both of which are filled with marbles. The barrel holds a million marbles, while the keg only holds 10,000 marbles. In both the barrel and the keg, though, 99.9 percent of the marbles are white and 0.1 percent are black. If one randomly samples the same number of marbles from both the barrel and the keg, one has the same chance of drawing a black marble from either the barrel or the keg. Even though there are 100 times more total marbles in the barrel, the proportion of white marbles to black marbles is the same in both the barrel and the keg. Similarly, we have designed the sampling procedure to detect fruit with visible canker lesions at a targeted prevalence of 0.38 percent; while we do not know the prevalence of fruit with visible canker lesions in any lot, the prevalence at which our sampling protocol will detect fruit with visible canker lesions is fixed. Thus, randomly sampling 1,000 fruit from a lot is appropriate for both lots composed of 50,000 fruit and lots composed of 200,000 fruit, because the targeted prevalence of 0.38 percent or more fruit with visible canker lesions is the same for each lot. It should be noted that, in cases where fruit cannot be randomly sampled (for example, when fruit has already been packed in boxes for shipping), inspection of more than 1,000 pieces of fruit may be necessary in order to inspect the lot at a rate sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. We will communicate inspection requirements to packinghouses as part of the implementation of the compliance agreements. One commenter stated that the statistical sampling procedure described in the proposed rule was not appropriate for lots packed by gift fruit packers, as such lots are very different from large-scale commercial lots. We intend to inspect fruit at a rate of inspection sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. This is equivalent to randomly sampling 1,000 fruit per lot for most lots. However, for smaller lots, the number of fruit that must be randomly sampled to detect, with a 95 percent level of confidence, a lot of fruit containing 0.38 percent or more fruit with visible canker lesions could be less than 1,000, as discussed in Section 9.3.3.3 of Appendix 1 to the RMA. This principle may be applicable to gift fruit lots, which are sometimes smaller than 1,000 fruit. For lots larger than 1,000 fruit, the statistical principles behind determination of how many fruit must be inspected to achieve this detection level apply regardless of whether the fruit is from a gift packer or a larger packinghouse. We are making one change to clarify the requirement for the inspection level. The proposed rule stated that we would require the number of fruit to be inspected to be the quantity that is sufficient to detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. This is the level of inspection that we will be conducting as of the publication of this final rule. However, we also included provisions allowing the inspection of another quantity that gives a statistically significant confidence of detecting the disease at a level of infection to be determined by the Administrator. In the preamble to the proposed rule, we stated that “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** .” To make our process for changing the inspection level clear in the regulations, this final rule adds a footnote to the regulations that includes the information regarding the other sampling level and the information that appeared in the preamble to the proposed rule. Dooryard Fruit We stated in the proposal that our proposed provisions would allow any Florida citrus growers, including commercial, gift fruit, and dooryard growers, to move their fruit interstate to States other than commercial citrus-producing States provided they comply with the conditions discussed in the proposed rule. Dooryard growers are typically homeowners who have citrus trees in their yards and wish to ship the fruit from those trees interstate to friends or family. The regulations in place before the publication of this final rule required fruit moved interstate to originate from a grove that had been inspected and found to be free of citrus canker and required vehicles, equipment, and other articles used in the grove to be treated upon leaving the grove. Since dooryard growers could not comply with these requirements, the interstate movement of dooryard fruit was effectively halted. One commenter submitted comments on the regulations in place before the publication of this final rule, stating that dooryard growers should be allowed to ship fruit interstate under these conditions: • Inspectors could certify dooryard trees as free of citrus canker upon request. • Surface disinfectant treatment would not be required if the tree was certified as free of citrus canker. • Dooryard fruit would be permitted to be moved only to States other than commercial citrus-producing States. • The number of boxes a dooryard grower could ship in a season would be restricted to 20. The regulations promulgated in this final rule do not distinguish between dooryard growers and commercial growers for the purposes of moving fruit interstate. Anyone can move fruit interstate if he or she has the fruit packed at a commercial packinghouse and treated and inspected as described in the amended regulations. The approved disinfectants listed in the regulations in § 301.75-11(a) reduce numbers of *Xac* cells to low or undetectable levels on citrus fruit moving interstate from citrus canker quarantined areas. The APHIS inspection can detect, with a 95 percent level of confidence, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. These restrictions are necessary to address the risk associated with the interstate movement of fresh citrus fruit from a quarantined area. We expect that some commercial packinghouses will establish processes under which dooryard fruit can be treated and inspected to allow it to move interstate. Two commenters objected to allowing dooryard fruit to be moved interstate from a quarantined area. One noted that the RMA considered the risk associated with commercially packed fruit, but we proposed to allow the movement of dooryard fruit under the same conditions. The other commenter stated that there is nothing in the proposed rule that provides any degree of confidence that dooryard fruit will not be shipped from Florida and that in all likelihood dooryard fruit will not be treated with an approved surface disinfectant in a packinghouse. The RMA addressed the risks associated with commercially packed fruit; accordingly, we are only allowing the movement of dooryard fruit if it is commercially packed, treated, and inspected by APHIS. Like commercial fruit growers, dooryard fruit growers have an incentive to supply fruit that is free of visible canker lesions, as any lot of fruit that is found through inspection to contain fruit with visible canker lesions will be ineligible for interstate movement. We will conduct outreach efforts to ensure that dooryard growers are aware of the new requirements. Gift Fruit Packers and Compliance Agreements One commenter, a gift fruit packer, stated that the proposed regulations were written primarily for the 50 large citrus packing operations registered with the State of Florida rather than the 92 small citrus packinghouses that are also registered with the State. The commenter specifically stated that several of the provisions of the compliance agreement described in the proposal would pose difficulties for smaller packinghouses, including the requirements for: • Notice of estimated lot size 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; • 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 commenter noted that packages of gift fruit often incorporate citrus of multiple varieties, and that random sampling of packed boxes is not an option at gift fruit packinghouses, since once the fruit is boxed, the boxes are glued and labeled for shipping. The commenter expressed specific concerns about the sporadic nature of operations for many smaller packinghouses, which run fruit when there are orders to be filled for most of the year and then run constantly during the busy season in December. Since we proposed to require that an APHIS inspector would have to be present whenever a packinghouse was operating, the commenter was concerned that the gift fruit packinghouses might not be able to provide notice of the need for an inspector during the slow times and then might be left without the services of an inspector during busy times. Another commenter also expressed general concerns about the availability of inspectors. We appreciate the commenter bringing these issues to our attention. It has always been our intention to design a system suitable for both large and small commercial packinghouses. We are aware of the packing patterns of the smaller packinghouses and are planning our inspection staffing accordingly. We can address all the issues raised by the commenter in the context of the compliance agreement, which will provide a great deal of flexibility in how an individual operation can fulfill this final rule's treatment and inspection requirements. As discussed in the proposed rule, 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 will 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 treatment 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. Using the compliance agreement to provide conditions for implementing the regulations will give APHIS some flexibility to accommodate packinghouse procedures. For example, in the compliance agreement, we will allow commercial packinghouses to work with APHIS to determine methods for sampling the fruit. For gift fruit packers, we would sample each lot of fruit before it is packed into boxes. Once a lot is inspected by APHIS and approved to enter interstate commerce, fruit from the lot can be combined with fruit from other lots that have been inspected and approved, in any way that is convenient for the packer; all that is required is that all the fruit so combined be from lots that have been inspected by APHIS and approved to enter interstate commerce. Boxes or Other Containers We proposed that, in order to be moved interstate, 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. One commenter, a gift fruit packer, was concerned that the boxes used by such packers are not similar to the boxes used by large packinghouses. The commenter recommended that the issue be worked out somehow, perhaps by exempting gift fruit from the requirement. APHIS has the option to approve any boxes or containers. We are not aware of any boxes used by gift fruit packers that would not be approved. The use of the limited permit statement on boxes or other containers will indicate that the container has been approved by APHIS. Limited Permits and Marking of Boxes or Other Containers We proposed to require that the boxes or other containers in which regulated fruit is packaged for interstate movement 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.” (The regulations in place before the publication of this final rule did not include the “Limited Permit: USDA-APHIS-PPQ” portion of that statement.) The proposed provisions also stated 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. We proposed these additional provisions in order to help ensure that only fruit that has been handled in accordance with all of the requirements described in § 301.75-7 would be packaged in boxes or other containers bearing the limited permit statement. One commenter stated that the use of the term “Limited Permit” on shipments of gift fruit would be unnecessarily legalistic in the context of gift fruit shipments, which are addressed to specific people in States other than commercial citrus-producing States. The commenter suggested that we either retain the language that had been in place at the time the proposed rule was published or allow gift fruit shipments to use language like “Please don't take any of your fruit to citrus-producing areas in the United States, which are AZ, CA, HI, LA, TX, American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.” We appreciate the commenter's concerns and agree that the risk of gift fruit shipments being sent to a commercial citrus-producing State is likely to be extremely low. However, adding the “Limited Permit: USDA-APHIS-PPQ” statement to the boxes or other containers in which regulated fruit is moved interstate allows us to ensure that the statement appears only on boxes or other containers filled with fruit that is eligible for interstate movement. Therefore, we consider this statement to be an essential part of our efforts to ensure that fruit that is moved interstate meets all the requirements in the regulations. Nine commenters did not object to the labeling change, but stated that the fact that their current inventory of boxes and other containers does not include the “Limited Permit: USDA-APHIS-PPQ” statement would pose a problem for them in complying with the new regulations. One of the commenters, a representative of Florida commercial packinghouses, stated that the current inventory of boxes and other containers with the old markings is worth $2 to $2.5 million. These commenters requested that we allow them to use up their current inventory of containers while box and container manufacturers retool their equipment to produce containers with the new statement. We appreciate the concerns of these commenters as well. We note that this final rule requires only that the boxes or other containers approved by APHIS be marked with the statement, not that the statement be printed directly on the boxes or other containers; if commercial packinghouses have inventories of boxes or other containers without the “Limited Permit: USDA-APHIS-PPQ” statement, they can add that statement through means such as a sticker or stamp, as long as the statement is clearly marked. However, it is not practical to modify bags of fruit in this manner, as the distribution statement printed on bags is often small or attached to the bag, and the limited permit statement often cannot be added to it. For this reason, we are temporarily allowing fruit to be packed for interstate movement in bags if those bags are clearly marked with the distribution statement and if those bags are then packed in a box that is marked with both the limited permit statement and the distribution statement. Fruit will only be allowed to be packed in bags that are marked with the distribution statement if that fruit is eligible for interstate movement. Because the bags must be packed in boxes that are marked with both the limited permit and the distribution statements, and because bagged fruit is not unloaded from the boxes in which it is shipped until it reaches the point of sale, we believe that this requirement will provide the same level of protection against illegal movement of fruit from the quarantined area as the requirement in the proposed rule, while allowing some flexibility for regulated parties. As the commenters requested, this exemption is temporary; it will expire on August 1, 2008. After that date, all fruit intended for interstate movement will be required to be packed in boxes or other containers that are clearly marked with both the limited permit and distribution statements. In this final rule, we are also providing that fruit that is not eligible for a limited permit may not be packed in boxes that are marked with only the distribution statement. This means that either fruit are eligible for a limited permit, in which case they must be packed in boxes that are marked with the limited permit and distribution statements, or ineligible, in which case neither of these statements may appear on the boxes. Fruit that is not eligible for a limited permit and is moved for intrastate sale or for export can be packed in the same boxes or other containers, including bags, as fruit that is eligible for interstate movement, as long as the limited permit and distribution statements are removed or obscured (through means such as opaque ink or a sticker) before the fruit is shipped. As mentioned earlier in this document under the heading “Pest Risk Assessment and Risk Management Analysis,” this final rule also requires the limited permit and distribution statements to be printed on any shipping documents accompanying the fruit. Movement of Regulated Fruit Through Commercial Citrus-Producing States The regulations do not currently provide for the movement of regulated fruit through commercial citrus-producing States for ultimate shipment to other States (i.e., transshipments). We did not propose to provide for such movement in the proposed rule. One commenter requested that the final rule provide for such movement. The commenter stated that, while the concerns of commercial citrus-producing States should be addressed through safeguards, the commenter believed allowing transshipments with suitable safeguards is consistent with the National Plant Board's Principles of Plant Quarantine. Another commenter stated that the proposal and RMA did not address transshipments via consumer modes. We did not consider the risk associated with transshipment in the proposed rule. We would need to determine the risk associated with transshipment and how it could be mitigated before adding provisions for transshipment to the regulations. Therefore, it is not appropriate to provide for transshipment in this final rule. We plan to examine the risks associated with transshipment and, if our examination indicates that transshipment can be accomplished safely under certain conditions, propose to provide for it in a future rulemaking. Kumquats With Foliage The regulations require regulated fruit moved interstate from a quarantined area to be free of leaves, twigs, and other plant parts, except for stems that are less than one inch long and attached to the fruit. We did not propose to change this requirement. One commenter requested that the final rule allow the interstate movement of kumquat fruit with decorative foliage to States other than commercial citrus-producing States under a limited permit and with product inspection. The commenter stated that such movement would pose no appreciable risk, as this foliage is resistant to citrus canker and not used for propagation. Foliage is subject to infection by citrus canker, and thus the risk posed by foliage would need to be evaluated before we could determine whether to allow its movement from the quarantined area. We did not address the risk posed by citrus foliage in any of the documentation accompanying this proposed rule. Therefore, it would be inappropriate to provide for the movement of citrus foliage in this final rule. In response to the comment, we plan to examine the risks associated with the interstate movement of citrus foliage from quarantined areas. If we decide that the movement of citrus foliage can be accomplished safely under certain conditions, we would propose to provide for it in a future rulemaking. Citrus Greening One commenter stated that we should not put in place any rule allowing the interstate movement of fruit from Florida until we have a program in place to address the risk posed by citrus greening. Restrictions on the movement of certain articles due to the presence of citrus greening have been put in place under separate Federal orders; the initial order was issued on September 16, 2005, and was updated on May 3, 2006. We further updated our restrictions relating to citrus greening through a Federal order issued on November 2, 2007, to expand the areas under quarantine due to the presence of citrus greening and the areas under quarantine due to the presence of the Asian citrus psyllid, a vector for the spread of citrus greening. We have received reports of preliminary scientific evidence indicating that, when seedlings are generated from seed that is taken from plants infected with citrus greening, a small percentage of those seedlings are themselves infected with citrus greening. In response to this evidence, we have also amended the Federal order to prohibit the movement of seed for planting from areas quarantined for citrus greening. We are currently evaluating the preliminary evidence to determine whether seed contained in fruit may serve as a pathway for the transmission of citrus greening disease, and, if so, what restrictions may be appropriate for the movement of fruit from areas quarantined for citrus greening. Any regulatory action we may take in response to this evidence would be taken separately from this rulemaking, which addresses the risk posed by the interstate movement of citrus fruit from areas quarantined for citrus canker. Miscellaneous Change The regulations in § 301.75-7(a)(5) have required that all vehicles, equipment, and other articles used in providing inspection, maintenance, harvesting, or related services in a grove in which regulated fruit are produced for interstate movement must be treated in accordance with § 301.75-11(d) upon leaving the grove. This paragraph has also provided that all personnel who enter the grove or premises to provide these services must be treated in accordance with § 301.75-11(c) upon leaving the grove. We did not propose to change these requirements in the proposal. However, these requirements are inappropriate for the packinghouse-centered approach that we are adopting in this final rule. Accordingly, this final rule removes paragraph (a)(5) from § 301.75-7. It should be noted that growers will still have an incentive to perform such treatments, as they would help ensure that fruit produced in the grove remains free of visible canker lesions and thus eligible for interstate movement. Comments on the Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis In accordance with the requirements of Executive Order 12866 and the Regulatory Flexibility Act, we prepared a preliminary regulatory impact analysis and initial regulatory flexibility act analysis for the proposed rule. Two commenters stated that this analysis was incomplete as it did not analyze the potential effects of the introduction of citrus canker into commercial citrus-producing States other than Florida. One commenter stated that costs involved with copper sprays, isolation fencing, and spraying for disinfection could take away the current narrow margins that citrus producers enjoy, and that monitoring and surveying utilizing very high-cost labor would be very expensive. One commenter stated that the current canker-free status of California gives that State an advantage in the fresh citrus marketplace for exports. We do not expect that the conditions in this final rule will result in the introduction of citrus canker into other commercial citrus-producing States, as the final rule retains the prohibition of the shipment of regulated fruit from a quarantined area to other commercial citrus-producing States. For that reason, we have not analyzed the possible effects of a citrus canker introduction on California citrus, including on California citrus producers' ability to export their fruit. The use of copper sprays is already an industry practice to control other pests of citrus fruit. Further, copper sprays, isolation fences, and spraying for disinfection, while not required by APHIS, are considered to be best industry practices that help to prevent infestation by other pests. Incorporating best management practices into production practices benefits both the individual producer and the industry as a whole. Grove surveys should be conducted regardless of the citrus canker status of any grove because early detection of any disease (such as citrus canker, citrus greening, citrus variegated chlorosis, and other diseases) is key to successful eradication of the disease. One commenter, from Florida, estimated that the spread of canker has resulted in an additional 20 percent of Florida's total fresh citrus groves being declared ineligible to ship fruit interstate under the regulations that were in place before the publication of this final rule. That 20 percent, the commenter stated, represents approximately 8 million 4/5 -bushel cartons or an approximately $80 million potential business opportunity under the proposal. Another commenter cited this figure and compared it to what the commenter stated was the billion-dollar California fresh citrus industry, indicating that the latter should not be risked for the benefit of the former. This commenter also noted that we characterized as small the changes to the supply of Florida fresh citrus in States other than commercial citrus-producing States resulting from additional shipments that would be newly eligible to move interstate under the proposed rule. The commenter asked why the rule was being rushed into place given the precedent the rule sets and the fact that stakeholders would not be able to review the peer review comments before the publication of the final rule. While the change from grove inspections to APHIS packinghouse inspections of finished fruit will allow Florida growers to maintain the quantity of fresh citrus that is eligible for interstate movement, and may result in an increase in that quantity, we do not expect that interstate shipments of fresh citrus will increase by a proportion equivalent to the potential production for the fresh market from groves previously prohibited from shipping interstate due to citrus canker. Rather, APHIS expects the quantities of fresh citrus shipped interstate from Florida to reflect historic demand for Florida fresh citrus. Over the last decade, the proportions of Florida fresh citrus shipped within Florida, to other States, and internationally have remained fairly constant. Based on historical data from 1997-98 to 2006-07, an average of 10 percent of Florida's commercially packed fresh citrus was shipped intrastate (within Florida) each season, 52 percent was shipped to other States each season, and 39 percent was exported to other countries each season. Based on the commenter's estimation of an additional 20 percent of Florida's fresh citrus groves regaining interstate shipment eligibility under this final rule, and given historic distribution patterns, we project as an upper bound that the shipment of fresh citrus to States other than commercial citrus-producing States is likely to be closer to 4.3 million 4/5 -bushel cartons per season. Additionally, groves that have been ineligible to produce fruit for interstate movement under the regulations in place before the publication of this final rule have been ineligible due to the presence of citrus canker. It is reasonable to assume that some proportion of the fruit produced in those groves will have visible canker lesions and thus be ineligible for interstate movement, further lowering the potential increase in interstate shipments. Florida fresh citrus shipments are also still subject to the market demand for fresh citrus in States other than commercial citrus-producing States. The commenter also suggests that the potential increase in revenues could be $80 million. However, the $80 million figure assumes that fruit produced from these same groves during past seasons were considered to be unmarketable. Some of that fruit would have been diverted to the processing sector or shipped both intrastate and internationally. The increase in revenue would have to take the revenue gained by these means into account. With regard to the second commenter's point, the comparison given is between the incremental benefit to the Florida fresh citrus industry and the total value of the California fresh citrus industry. The commenter did not quantify what costs the commenter expected the California fresh citrus industry to incur as a result of the proposed rule, which is the salient point. We do not expect the regulations promulgated in this final rule to allow the spread of citrus canker to California, and thus we expect the final rule's effect on the California fresh citrus industry to be small as well. In addition, while the benefits to Florida growers and packers are expected to be small in the short term, the RMA indicates that it will be very hard to certify citrus groves as canker-free in Florida in the future. In the long run, promulgating this rule may be expected to provide additional benefits over the existing regulations, while continuing to prevent the interstate spread of citrus canker. One commenter, noting that we stated that currently underutilized packing equipment may be utilized for dooryard fruit under the proposed rule, stated that no data are given regarding how much idle capacity exists. As the volume of fruit moved interstate has declined, approximately 21 citrus packinghouses have shut down in Florida since the 2001-02 season; we do not have data on how many of them could still be used for packing citrus fruit. Our reference to underutilized packing equipment refers mainly to smaller operations, such as gift packers, which are better suited to treating and packing small quantities of citrus. Growers of dooryard fruit who wish to ship their fruit interstate are required to have this citrus treated and inspected under the same provisions required by commercial citrus producers. As such, these growers will turn to facilities equipped to comply with the regulations, such as gift packers. While the cost of shipping citrus under these provisions could be substantial, evidence indicates that dooryard shipments are made purely for the intrinsic value of sharing the fruit with family and friends. As noted earlier in this document, the interstate movement of dooryard citrus from a quarantined area was effectively prohibited under the regulations in place before the publication of this final rule. Environmental Assessment We prepared an environmental assessment
(EA)documenting the proposed rule's potential effects on the human environment. One commenter stated that the EA should examine the potential environmental impacts of the introduction of citrus canker into another commercial citrus-producing State, should APHIS be incorrect in its assessment of the potential for canker to be established in citrus-producing States outside of Florida under the proposed regulations. Because this final rule prohibits the interstate movement of regulated fruit to commercial citrus-producing States, we do not expect the final rule to result in the introduction or establishment of citrus canker in those States. Therefore, we did not assess the environmental impact that would be associated with such an introduction. Effective Date This is a substantive rule that relieves restrictions and, pursuant to the provisions of 5 U.S.C. 553, may be made effective less than 30 days after publication in the **Federal Register** . Immediate implementation of this rule is necessary to provide relief to those persons who are adversely affected by restrictions we no longer find warranted. The shipping season for Florida citrus fruit is in progress. Making this rule effective immediately will allow interested producers and others in the marketing chain to benefit during this year's shipping season. Therefore, the Administrator of the Animal and Plant Health Inspection Service has determined that this rule should be effective upon publication in the **Federal Register** . Executive Order 12866 and Regulatory Flexibility Act This 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 amending the citrus canker regulations to modify the conditions under which fruit may be moved interstate from a quarantined area. We are eliminating the requirement that the groves in which the fruit is produced be inspected and found free of citrus canker, and instead requiring that every lot of fruit produced in the quarantined area be inspected by APHIS at a packinghouse operating under a compliance agreement and found to be free of visible symptoms of citrus canker. We are retaining the requirement that the fruit be treated with a surface disinfectant and the prohibition on the movement of fruit from a quarantined area into commercial citrus-producing States. These changes will relieve some restrictions on the interstate movement of fresh citrus fruit from Florida while maintaining conditions that will help prevent the artificial spread of citrus canker. For this final 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 on the Regulations.gov Web site (see footnote 1 at the beginning of this final rule). 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 6 States received fresh citrus interstate shipments from Florida during the 2004-05 and 2005-06 seasons: Arizona, California, Louisiana, Puerto Rico, the U.S. Virgin Islands, and Texas. As of August 1, 2006, these 6 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 final 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 final rule, the citrus fruit will be treated and inspected at the packinghouse prior to interstate movement. Based on the qualitative findings of this economic analysis, we expect the net economic impact of the final rule to 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. Approximately 89 percent of Florida citrus production is produced for the juice market, which is not regulated by the final rule. In contrast, fresh utilization in California accounts for 73 percent of total citrus production. In Texas and Arizona, fresh utilization accounts for approximately 66 and 58 percent of total production, respectively. It is assumed that nearly all Louisiana citrus production is primarily utilized on the fresh market. This final rule continues to prohibit the movement of fresh citrus fruit from Florida to other commercial citrus-producing States. The measures in this final rule 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 increased by 16 percent during the 2005-06 season over the previous season from $2.3 billion to nearly $2.7 billion. 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 tumultuous hurricane season of 2004, which included four 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. Total value of production in Florida citrus fruits showed signs of improvement during the 2005-06 season with a 30 percent increase over the previous season; the increase was largely attributable to higher on-tree prices for both processed and fresh utilization rather than an increase in production. Evidence suggests a continued trend toward a decline in Florida citrus production. The recent 2006 Commercial Citrus Inventory for Florida reported a 17 percent decline in 2006 over the previous year with the total commercial citrus acreage in Florida at 621,373; the decline is largely attributable to hurricanes, diseases, and urban development. With removals of citrus trees outnumbering new plantings by a ratio of more than 5:1, there is little indication that production will rebound within the next few years. The major citrus varieties produced in Florida are early-, mid-, and late-season orange varieties, red and white seedless grapefruit, 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 proportion of Florida grapefruit utilized on the fresh market 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 rate for fresh market share during 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 demonstrated a discernible improvement during the 2006-07 seasons with shipments increasing by 26 percent and 7 percent, respectively, over the previous season. 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. Florida total and domestic fresh citrus shipments are 30 percent and 24 percent less, respectively, than they were prior to the 2004-05 season. While fresh grapefruit continues to have the largest share of total shipments of fresh Florida citrus including exports, oranges still account for the State's largest share of domestic shipments. During the 2006-07 season, Florida domestic shipments marginally increased to most geographical U.S. regions, with the noted exception of a 4 percent decline in shipments to the western U.S. region, which was chiefly attributable to the loss of market access to other citrus-producing States. Expected Costs and Benefits The changes in the regulations 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 changes will 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 final 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 samples at the packinghouse will likely result in increased shipments of fresh citrus to States other than commercial citrus-producing States. As such, the marketing effects of increased quantities of fresh citrus fruit on the domestic market may include changes in fresh market prices, processed market prices, and increased competition. Under this final rule, Florida citrus is still prohibited from distribution to other commercial citrus-producing States. APHIS expects the quantities of fresh citrus shipped interstate from Florida to reflect historic demand for Florida fresh citrus. We do not expect that interstate shipments of fresh citrus will increase by a proportion equivalent to the potential production for the fresh market from groves previously prohibited from shipping interstate due to citrus canker. Over the last decade, the proportions of Florida fresh citrus shipped within Florida, to other States, and internationally have remained fairly constant. Based on historical data from 1997-98 to 2006-07, an average of 10 percent of Florida's commercially packed fresh citrus was shipped intrastate (within Florida) each season, 52 percent was shipped to other States each season, and 39 percent was exported to other countries each season. The average proportion of Florida fresh citrus shipments to the domestic market (intrastate and interstate) over the last decade was approximately 61 percent of total shipments. The average deviation in the proportion of fruit shipped to the domestic market was approximately 3 percent (or approximately 982,000 4/5 -bushel cartons). 8 The proportion of Florida fresh citrus shipments to the domestic market over the last 5 seasons was approximately 62 percent of total shipments, with an average deviation of approximately 5 percent (or roughly 1.2 million 4/5 -bushel cartons). 8 The average deviation is a measure of variability. It is computed for a series of data points by finding the absolute difference between each point and the average
(mean)for the series, summing these differences, and dividing by the total number of data points. Citrus production in Florida has been in decline in recent years due in part to declining citrus tree inventories and harsh weather conditions. Although the total quantity of Florida fresh citrus shipped has declined in recent years, the allocation between the various markets (e.g. interstate, intrastate, and export) has remained fairly consistent despite this downward trend in production. The proportion of Florida fresh citrus shipments to the domestic market prior to the 2004 hurricane season was approximately 60 percent of total shipments, with an average deviation of approximately 2 percent (or approximately 663,000 4/5 -bushel cartons each season). The proportion of Florida fresh citrus shipments to the domestic market for the past three seasons was approximately 65 percent of total shipments, with an average deviation of approximately 4 percent (or approximately 841,000 4/5 -bushel cartons each season) The increased variability in the proportion of Florida fresh citrus shipped to the domestic market over the last three seasons is reflective of an industry recovering in the wake of the 2004 and 2005 hurricane seasons. The average quantity of Florida fresh citrus shipped on the domestic market prior to 2004 was approximately 34.1 million 4/5 -bushel cartons each season compared to an average of 20.8 million 4/5 -bushel cartons over the last three seasons. The Florida Citrus Packers, a nonprofit cooperative association, commented during the public comment period that the spread of citrus canker had resulted in an estimated additional 20 percent of total fresh citrus groves in Florida declared ineligible for interstate shipment under the regulations in place before this final rule because of the presence of citrus canker. The commenter did not report a baseline for this “additional 20 percent.” The Florida Citrus Packers further estimated that the fresh citrus fruit produced in these groves represents approximately 8 million cartons of potential business opportunity under the revised regulations. Based on the commenter's estimation of an additional 20 percent of Florida's fresh citrus groves regaining interstate shipment eligibility under this final rule, and given historic distribution patterns, we project as an upper bound that the shipment of fresh citrus to States other than commercial citrus-producing States is likely to be closer to 4.3 million 4/5 -bushel cartons per season. However, based on the preceding discussion of the small variability in the proportion of fruit shipped to various markets, it is not likely that interstate shipments will increase by this projected upper bound. We also note that a portion of fruit from these groves is expected to fail to meet quality standards for the fresh market and will be diverted to other channels, including the processed market. This issue is discussed in more detail earlier in this document under the heading “Comments on the Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis.” In addition, while any benefits to Florida growers and packers are expected to be small in the short term, the RMA indicates that it will be very hard to certify citrus groves as canker-free in Florida in the future. In the long run, this rule is expected to provide increased benefits in comparison to the regulations in place before the publication of this final rule, while continuing to prevent the interstate spread of citrus canker. Effects on Consumers Consumers in States other than commercial citrus-producing States will benefit from any increases in shipments of Florida fresh citrus. The increase in interstate shipments may lead to lower prices, depending on the magnitude of the change and the price elasticity of demand. If the regulations in place before the publication of this final rule had been maintained, Florida fresh citrus shipments to the domestic market would have been expected to decline, because the number of groves eligible for certification as free of citrus canker would decline as a result of the spread of citrus canker. In the long run, under this final rule, these consumers will benefit from a sustained supply of Florida fresh citrus. In the short run, consumers within Florida may experience increased supplies associated with rejected lots that have been diverted intrastate. Florida consumers may benefit from near-term price declines, again, depending on the quantities diverted to the fresh market within Florida and the price elasticity of demand. However, in the long run, any increase in intrastate shipments is expected to be less than would occur under the regulations that had been in place before the publication of this final rule. Under those regulations, the number of groves eligible for certification as free of citrus canker would have declined, along with the quantity of fresh citrus approved for interstate movement. Effects on Florida Packinghouses and Citrus Growers In terms of operational adjustments, Florida packinghouses are the segment of the citrus industry likely to be the most affected by the change in regulations since the focus of the new protocol for treatments and APHIS inspections will be shifted away from the citrus groves to the packinghouse facilities. The final rule will require citrus packinghouses that move regulated citrus fruit interstate to operate under an APHIS compliance agreement wherein the packinghouse operator agrees to meet all requirements of the regulations. The provisions in § 301.75-7 pertaining to the inspection of groves for citrus canker as a prerequisite for the interstate movement of citrus are being removed. Citrus producers, however, will still retain the same incentives that currently exist to employ best management practices when producing citrus for the fresh market. 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. With quality standards in place for fresh citrus, as outlined as part of the U.S. Standards in the Agricultural Marketing Service's regulations in 7 CFR part 51, growers already employ the practice of surveying for fresh citrus fruit that are not considered of fresh market quality. The high cost of inputs and production practices employed in producing citrus fruit intended for the fresh market yields a relatively low return to citrus growers if the fruit is diverted to the processed market because it is determined to be unsuitable for the fresh market. Production costs associated with citrus fruit intended for the processed market are less than costs associated with citrus fruit produced for the fresh market because the physical appearance of the fruit produced for the processed market is not important; consequently, the value of citrus on the processed market is relatively low compared to the value of citrus sold on the fresh market. In the long run, citrus growers will maintain self-surveys and best management practices as long as the costs of these practices are less than the elimination charges and the price discount that is incurred when their fruit diverted from the fresh to the processed market. Table 2 outlines the average packinghouse charges for Florida fresh citrus during the 2005-06 season. Table 2.—Estimated Average Total Packing Charges Paid by Growers, and Elimination Charges Paid by Growers for Lots That Do Not Meet Quality Requirements, 2005-06 a Domestic grapefruit Export grapefruit Oranges Temples/tangelos Tangerines $/Carton c Total packing charge b $4.016 $4.395 $4.347 $4.614 $5.469 $/Box c 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-Institute of Food and Agricultural Sciences, Citrus Research and Education Center, Lake Alfred, FL, August 2006. a 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. b 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* ). c 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 a more economically efficient means of ensuring a high level of confidence that even a small percentage of infected fruit will be detected than the system in place before the publication of this final rule. Both packinghouses operating under compliance agreements with APHIS and growers seeking to minimize elimination charges and price discounts have incentives to ensure that only fruit free of visible canker lesions enter a packing facility. Packinghouse operations with fully integrated groves also seek to minimize the costs associated with fruit rejected due to low quality in general, especially since these operations have more control over production practices. (The purpose of the APHIS inspection is to ensure that fruit is free from visible canker lesions. Packinghouses are responsible for all other quality inspections.) Minimizing the charges back to the grower associated the drenching, elimination, and 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 and price discounts, growers will apply the additional resources needed to conduct these self-surveys as long as the benefits outweigh the costs. The inspection process will be largely dependent on the physical layout of each particular packinghouse. Conditions that must be met in order for APHIS inspectors to successfully conduct the required inspections would translate into additional costs to the packinghouse. Inspections will either occur at the roll board prior to the fruit being packed or after the fruit is packed. In either case, adequate lighting will be a necessary component for the fruit inspection process. If the inspection occurs after fruit is packed, the packinghouse will be required to provide a table and personnel to repack the boxes after inspection. The APHIS inspection process will be designed with every effort to maintain the efficiency of the packinghouse operation. If a lot is rejected due to citrus canker detection, the lot will not be approved for interstate movement. Alternative markets for this fruit are the intrastate market, some international markets, or the processed market. The grower or packinghouse will divert the fruit to the market that yields the maximum return. Assuming the fruit is diverted to the intrastate or an international market, the grower may incur repacking charges associated with fruit that was packed before the lot was rejected in boxes or other containers approved only for interstate movement. These charges will likely be in addition to drenching and elimination charges. Since the average price that growers receive on the processed market is less than prices received on the fresh market, growers will likely suffer a loss by diverting rejected lots to the processed market. Growers are more likely to maximize returns by diverting the fruit to available fresh markets, either intrastate or international, depending on demand, even though they will likely incur repacking charges into cartons approved for intrastate or international movement. Lot size is 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. Additionally, packinghouses generally identify each lot run through the packinghouse with a lot number that can be traced back to the origin of the lot. APHIS field personnel estimate that under ideal circumstances, the inspection of 1,000 pieces of fruit will 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 base inspection level of 1,000 pieces of fruit may delay a lot that would require less time than 1 hour and 23 minutes to run the line. Packing would essentially have to halt while the inspection is completed before the next lot can be run. In addition, if an inspector finds a suspect lesion on a piece of fruit and the packer does not wish to immediately divert to an alternative market (such as the intrastate or foreign market), the movement of that lot will be delayed while APHIS makes a final determination on whether the lesion is a citrus canker lesion. The time it takes 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 treatment of fruit with a surface disinfectant, 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/Division of Plant Industry
(DPI)compliance agreement with packers. Therefore, there is no additional cost associated with the change in regulations. The APHIS compliance agreements are not expected to present an entirely new situation for the packinghouses. Current compliance agreements with the State of Florida issued by the FDACS/DPI 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 III.A 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. (As stated earlier in this document, we intend to provide for sampling of fruit before it is packed into boxes in our compliance agreements with gift packing operations.) Effects on Public Sector Resources According to APHIS, 10 additional inspectors will be needed to implement the final 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 will be reduced to only those required for phytosanitary certification to certain countries. The FDACS anticipates a reduction in field staff by 65 percent from 340 to 120 field staff members, for a cost savings of approximately $38,000 per inspector (or $8.4 million). Florida appropriates funds to the FDACS from the Citrus Inspection Trust Fund to pay the costs associated with the salary and benefits of employees of the Bureau of Citrus Inspection. 9 9 Title XXXV Section 601.28 of the Florida Statutes. The State of Florida allocated approximately $10 million in funds from the Agricultural Emergency Eradication Trust Fund to the Citrus Health Plan line item for the 2007-08 fiscal year to be utilized for grove inspections (generally pre-harvest surveys), regulatory oversight, and nursery surveys. Approximately $11.3 million in funds from the Agricultural Emergency Eradication Trust Fund were allocated to the Citrus Canker Eradication line item the previous fiscal year, thus reducing emergency eradication program activities by approximately $1.3 million and allowing for the management of other citrus diseases and pests. Trust funds may be made available upon certification by the Commissioner that an agricultural emergency exists and that funds specifically appropriated for the emergency's purpose are exhausted or insufficient to eliminate the agricultural emergency. 10 10 Title XXXV Section 570.191 of the Florida Statutes. The final rule will ensure resource savings associated with inspectors and equipment for the State of Florida of approximately $9.7 million per annum. Concluding Statement on Benefits and Costs Before the publication of this final rule, the regulations for the interstate movement for regulated fruit from quarantined areas placed 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, pre-harvest inspections, treatments, and movement under limited permit. The new regulations replace the existing protocol for the movement of citrus fruit from citrus canker quarantined areas. A packinghouse that ships fresh citrus interstate is required to operate under an APHIS compliance agreement wherein the packinghouse operator agrees to meet the requirements of the regulations. APHIS inspections of fresh citrus will occur at the packinghouse level. This final rule also specifies treatment requirements for all commercially packed fresh citrus. The required treatment, however, is already performed at the 50 largest commercial packinghouses, as well as at any smaller packinghouses that pack fruit for interstate movement under the regulations in place before the publication of this final rule. We believe packinghouses will adjust to the new regulations with little to no economic hardship in the long run. Packinghouses currently face similar regulations as required by the Florida compliance agreements for packinghouses. Although the final rule adds a definition of *commercial packinghouse* for the purposes of implementing the rule, all currently operating Florida packinghouses qualify as commercial packinghouses under this definition; APHIS thus does not anticipate that commercial citrus packinghouses will incur any costs as a result of adding this new definition. 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 will self-survey groves as long as the benefits outweigh the cost of the procedure. The provisions will provide the added benefit to growers of being able to ship symptom-free fresh citrus from groves previously prohibited from interstate movement due to the presence of citrus canker in the grove. The final rule will also provide opportunities for commercial packinghouses to treat and pack interstate shipments of dooryard plantings of citrus fruit. Such shipments will also be inspected by APHIS. Benefits of this final rule may include the possibility of gains from a larger volume of Florida shipments to consumers in States other than commercial 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 will be eligible for shipment to States other than commercial citrus-producing States. Growers with citrus groves in which citrus canker has been detected will have an additional marketing option for their fruit. Consumers on the domestic market may benefit from increased market quantities and lower prices of fresh citrus if a greater market demand exists than is met by the current supply. We expect that Florida packinghouses that wish to ship interstate will continue to do so as long as the financial benefits to them of operating under these provisions exceed their costs. Finally, the costs to the public sector associated with the final regulations are expected to be marginal in comparison to the benefits of a more efficient system for fresh citrus fruit movement. 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. Need for and Objective of the Rule 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 regulations that were in place before the publication of this final rule required groves to be free of citrus canker in order for fruit to be eligible for interstate movement, the changes in this final rule are necessary in order for the packinghouse-based treatment and inspection protocol to be implemented. Summary of Significant Issues Raised During Comment Period on the Initial Regulatory Flexibility Analysis There were no significant issues raised in public comment on the initial regulatory flexibility analysis
(IRFA)for this rulemaking. One commenter from California, however, expressed concerns that the impact of citrus canker on the production costs in other citrus-producing States would be devastating should the disease spread as a result of this rule. The commenter further defined these costs as the costs involved with copper sprays, isolation fencing, and spraying for disinfection. The commenter went on to declare that monitoring and surveying would be very expensive given the high cost of labor. The majority of citrus producers in California would be considered small entities according to the Small Business Administration
(SBA)guidelines. We have addressed this comment earlier in this document under the heading “Comments on the Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis.” 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 final rule. The small business size standards for citrus fruit packing, as identified by the 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. 11 While the classification of these establishments by sales volume is not available, it is estimated that approximately 50 of the 142 registered commercial packinghouses are large citrus packinghouses with the remainder being small establishments, many 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. 12 At least 98 percent of Florida fresh citrus shipments are packed through the top 40 to 50 packinghouses in the State. 13 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, are considered small according to the SBA size standards. 11 Florida Department of Agriculture and Consumer Services, Division of Fruit & Vegetable Inspection. *http://www.doacs.state.fl.us/fruits.* 12 “Fresh Shippers Report: 2005-06 Season Through July 31, 2006,” Citrus Administrative Committee, August 18, 2006. *http://www.citrusadministrativecommittee.org/.* 13 Ibid. The final rule will implement a new protocol for inspections and treatments that will likely result in additional costs to packinghouses. Examples of additional costs include providing adequate lighting and space for fruit inspection and labor to repack boxes which have been unpacked during inspection. Essentially, the inspection and treatment process is an additional quality control measure. In the short run, it is likely that commercial packinghouses will increase packing charges to cover any additional costs associated with the final rule, passing some of the cost of the rule onto the growers. However, packinghouse average costs may rise with the imposition of this quality control measure due to increases in the average variable costs associated with maintaining a consistent level of output. Examples of expected increases in average variable costs include higher labor costs associated with repacking of 4/5-bushel cartons or an inspection process that slows or shuts down the packing line for any period of time. The inspection process will add one more layer to the production process. As the base level for inspection increases, so does inspection time. Therefore, as inspection sample size increases, the efficiency and productivity of the packinghouse, especially the smaller packinghouses and gift packers, could become hindered. Overall, the industry will benefit; inspection for citrus canker lesions at the packinghouse will maintain sales to interstate markets more efficiently than would be possible under the current grove inspections. The final rule will also affect producers of fresh citrus in Florida. Most, if not all, of the Florida citrus producers that will be affected by the final 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. 14 While it is likely this final rule will result in higher packinghouse charges to the grower, costs associated with the final rule are expected to be minimal. Citrus growers previously prohibited from interstate shipment of fresh citrus due to citrus canker detection in their groves will have an additional marketing opportunity for their fruit provided the fruit meets the requirements to pass APHIS inspection. 14 Source: SBA and *2002 Census of Agriculture.* Description and Estimate of Compliance Requirements Florida's packinghouses that ship fresh citrus interstate would be subject to compliance agreements with APHIS, as described in section IV of the full final regulatory impact analysis. Description of Steps Taken To Minimize Significant Economic Impacts on Small Entities APHIS does not believe small entities will suffer significant economic losses as a result of this final rule. APHIS intends to devise a compliance agreement that is suitable for both large and small commercial packinghouses, especially with respect to the inspection process. Citrus growers will continue to have the same incentives to employ best management practices that will yield citrus fruit meeting the quality standards required at the packinghouse. 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 final 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. 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 interstate movement of citrus fruit 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 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 and finding of no significant impact may be viewed on the Regulations.gov Web site. 15 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 . 15 Go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2007-0022.* 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 0579-0325. 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. References Belasque, J. and J. Rodriguez Neto (2000). “Survival of the citrus canker bacterium in non-infected orange fruits.” Summa Phytopathologica 26(1): 128 (Resumo 153). Borchert, D., C. Thayer, L. Brown, N. Jones and R. Magarey (2007). Citrus Canker Ad Hoc Project, USDA-APHIS-PPQ-CPHST-PERAL (internal document). Brown, G.E. and T.S. Schubert (1987). “Use of *Xanthomonas campestris* pv. *vesicatoria* to evaluate surface disinfectants for canker quarantine treatment of citrus fruit.” Plant Disease 71(4): 319-323. Canteros, B. I. (undated). Effect of low concentrations of sodium hypochlorite in external disinfection of organic fruits as quarantine treatment for citrus canker. INTA Final Report. CRARM (Presidential/Congressional Commission on Risk Assessment and Risk Management). 1997a. Framework for Environmental Health Risk Assessment, Final Report, Volume 1. Washington, DC: The Presidential/Congressional Commission on Risk Assessment and Risk Management. CRARM (Presidential/Congressional Commission on Risk Assessment and Risk Management). 1997b. Risk Assessment and Risk Management in Regulatory Decisionmaking, Final Report, Volume 2. Washington, DC: The Presidential/Congressional Commission on Risk Assessment and Risk Management. Dalla Pria, M., R.C.S. Christiano, E.L. Furtado, L. Amorim and A. Bergamin Filho (2006). “Effect of temperature and leaf wetness duration on infection of sweet oranges by Asiatic citrus canker.” Plant Pathology 55: 657-663. Fulton, H.R. and J.J. Bowman (1929). “Infection of fruits by *Pseudomonas citri.* ” J. Agric. Res. 39: 403-426. Golmohammadi, M., J. Cubero, J. Peñalver, J.M. Quesada, M.M. Lopez, and P. Llop (2007). “Diagnosis of Xanthomonas axonopodis pv. citri, causal agent of citrus canker, in commercial fruits by isolation and PCR-based methods.” *Journal of Applied Microbiology* ISSN 1364-5072. Gottwald, Timothy. Report of lecture given on Citrus Packinghouse Day at Citrus Research and Education Center. Cited in *www.theledger.com.* 08/19/06. Gottwald, T.R. and J.H. Graham (1992). “A device for precise and nondisruptive stomatal inoculation of leaf tissue with bacterial pathogens.” *Phytopathology* 82: 930-935. Graham, J.H., T.R. Gottwald, T.D. Riley and M.A. Bruce (1992b). “Susceptibility of citrus fruit to bacterial spot and citrus canker.” Phytopathology 82(4): 452-457. Graham, J.H., T.R. Gottwald, T.D. Riley, J. Cubero and D.L. Drouillard (2000). Survival of *Xanthomonas campestris* pv. *citri* ( *Xcc* ) on various surfaces and chemical control of Asiatic citrus canker (ACC). International Citrus Canker Research Workshop, Ft. Pierce, FL. Koizumi, M. (1972). “Studies on the symptoms of citrus canker formed on Satsuma mandarin fruit and existence of causal bacteria in the affected tissues.” Bull. Hort. Res. Sta., Japan, Ser. B 12: 229-244. Peltier, G.L. and W.J. Frederich (1926). “Effects of weather on the world distribution and prevalence of citrus canker and citrus scab.” Journal of Agricultural Research 32(2): 147-164. Riley, T. (2007). E-mail dated 1/24/2007 from T. Riley, Lead Plant Pathologist, APHIS Citrus Health Response Program to L.M. Ferguson Re: Citrus Canker lesion sizes/Xac viability. Timmer, L.W., S.E. Zitko and T.R. Gottwald (1996). “Population dynamics of Xanthomonas campestris pv. citri on symptomatic and asymptomatic citrus leaves under various environmental conditions.” Proceedings of the International Society of Citriculture 1: 448-451. USDA-National Agricultural Statistics Service (2007). *Commercial Citrus Inventory 2006* . Prepared with Florida Department of Agriculture and Consumer Services. Verdier, E., E. Zefferino and S. Mendez (2006). “ *Xanthomonas axonopodis* pv. *citri* survival in Citrus fruit submitted to post harvest treatment using detecting by semi-selective culture media and bioassay.” Unpublished (submitted with public comments to 2006 citrus canker interim rule). Verniere, C.J., T.R. Gottwald and O. Pruvost (2003). “Disease development and symptom expression of *Xanthomonas axonopodis* pv. *citri* in various citrus plant tissues.” Phytopathology 93: 832-843. List of Subjects 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. 7 CFR Part 305 Irradiation, Phytosanitary treatment, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements. Accordingly, we are amending 7 CFR parts 301 and 305 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. Section 301.75-1 is amended as follows: a. In the definitions for “ *certificate* ” and “ *limited permit* ”, by adding the words “stamp, form, or other” after the words “An official”. b. By adding new definitions of “ *commercial packinghouse* ” and “ *lot* ” to read as set forth below. § 301.75-1 Definitions. *Commercial packinghouse.* An establishment in which space and equipment are maintained for the primary purpose of packing citrus fruit for commercial sale. A commercial packinghouse must be registered as a packinghouse with the State in which it operates or hold a business license for treating and packing fruit. *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 workday (i.e., a run started one day and completed the next is considered two lots). 3. Section 301.75-7 is amended as follows: a. Paragraphs (a)(1), (a)(2), (a)(5), and (a)(6) are revised to read as set forth below. b. An OMB citation is added at the end of the section to read as set forth below. § 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 a commercial 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, any lot of fruit containing 0.38 percent or more fruit with visible canker lesions. 1 1 If conditions warrant changing the number of fruit to a quantity that gives a statistically significant level of confidence of detecting lots containing a different percentage, determined by the Administrator, of fruit with visible canker lesions, APHIS will provide for public participation in that process through the publication of a notice in the **Federal Register** .
(2)The owner or operator of any commercial 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. (5)(i) 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, and any shipping documents accompanying the boxes or other containers, 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;
(ii)*Provided,* that until August 1, 2008, fruit that meets all the requirements of this section may be packed in bags that are clearly marked with the statement “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,” as long as the bags of fruit are packed in boxes that are marked as required by paragraph (a)(5)(i) of this section. Fruit that does not meet all the requirements of this section may not be packed in either bags or boxes that are marked with this statement.
(6)A lot of fruit that is determined to be ineligible for interstate movement under paragraph (a)(1) of this section may not be reconditioned and submitted for reinspection. (Approved by the Office of Management and Budget under control number 0579-0325) 4. Section 301.75-11 is amended as follows: a. In paragraph (a), by revising the introductory text to read as set forth below. b. By redesignating paragraph (a)(3) as paragraph (a)(4) and adding a new paragraph (a)(3) to read as set out below. c. In newly redesignated paragraph (a)(4) by adding the words “, peroxyacetic acid,” after the word “hypochlorite”. d. In paragraph (d)(3), by removing the word “or”. e. In paragraph (d)(4), by removing the period at the end of the paragraph and adding the word “; or” in its place. f. By adding a new paragraph (d)(5) to read as set forth below. § 301.75-11 Treatments.
(a)*Regulated fruit.* Regulated fruit for which treatment is required by this subpart must be treated in at least one of the following ways at a commercial packinghouse whose owner operates under a compliance agreement under § 301.75-7(a)(2):
(3)*Peroxyacetic acid.* The regulated fruit must be thoroughly wetted for at least 1 minute with a solution containing 85 parts per million peroxyacetic acid.
(d)* * *
(5)A solution containing 85 parts per million peroxyacetic acid (indoor use only). PART 305—PHYTOSANITARY TREATMENTS 5. 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. 6. Section 305.11 is amended by adding a new paragraph
(c)to read as follows: § 305.11 Miscellaneous chemical treatments.
(c)*CC3 for citrus canker.* The 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 14th day of November 2007. J. Burton Eller, Acting Under Secretary for Marketing and Regulatory Programs. [FR Doc. E7-22549 Filed 11-16-07; 8:45 am] BILLING CODE 3410-34-P 72 222 Monday, November 19, 2007 Rules and Regulations Part IV Department of Housing and Urban Development 24 CFR Part 983 Project-Based Voucher Rents for Units Receiving Low-Income Housing Tax Credits; Final Rule DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Part 983 [Docket No. FR-5034-F-02] RIN 2577-AC62 Project-Based Voucher Rents for Units Receiving Low-Income Housing Tax Credits AGENCY: Office of the Assistant Secretary for Public and Indian Housing, HUD. ACTION: Final rule. SUMMARY: This rule revises the low-income housing tax credit (LIHTC) rent provisions of HUD's Project-Based Voucher
(PBV)program regulations. This rule reinstates the regulatory provision where the LIHTC rent does not serve as a cap on rents in PBV projects receiving LIHTCs. The rule also re-emphasizes that public housing authorities
(PHAs)may not enter into assistance contracts until HUD or an independent entity approved by HUD has conducted the required subsidy layering review and determined that the assistance is in accordance with HUD requirements. This final rule follows a May 1, 2007, proposed rule and takes into consideration public comments received on the proposed rule. HUD carefully considered the public comments, but adopts the proposed rule without change. DATES: *Effective Date:* December 19, 2007. FOR FURTHER INFORMATION CONTACT: David Vargas, Director, Office of Voucher Programs, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4210, Washington, DC 20410; telephone number
(202)708-2815 (this is not a toll-free number). Persons with hearing or speech impairments may access these numbers via TTY by calling the Federal Information Relay Service at
(800)877-8339. SUPPLEMENTARY INFORMATION: I. Background On May 1, 2007, HUD published a proposed rule titled “Project-Based Voucher Rents for Units Receiving Low-Income Housing Tax Credits” (72 FR 24080-24081). This publication proposed to remove a regulatory cap on rents in PBV projects with units receiving LIHTCs. The regulatory cap limited the rent to owners on all units in projects receiving LIHTCs to the allowed LIHTC rent, which, in high fair market rent areas, could be less than the allowed project-based Section 8 program rents. This cap had been instituted in a comprehensive revision of the project-based Section 8 program regulations by a final rule published on October 13, 2005 (70 FR 59892 *et seq.* ). Once the cap was established by the October 2005 final rule, HUD received additional comments from PHAs and housing industry representatives expressing concern that this change would impede rather than promote HUD's goal of increasing and preserving affordable housing (see 72 FR 24080). HUD determined, therefore, that the cap would reduce the supply of needed low-income housing and issued the May 1, 2007, proposed rule to remedy the situation. II. Public Comments The public comment period for the proposed rule closed on July 2, 2007. HUD received 13 public comments from individuals, industry trade groups, PHAs, and low-income tenant interest groups. All of the comments supported the change that the May 2007 rule proposed to make to the PBV program regulations. A few commenters made suggestions for additional provisions to be added to the rule or for clarification to the regulatory text proposed by HUD in the May 2007 rule. *Comment:* One commenter expressed concern that merely removing the reference to LIHTC from the list of program rent caps in § 983.304(c)(1) would still leave open the possibility, which the commenter thought remote, to restore the cap at some future time through application of § 983.304(c)(1)(v). Therefore, the commenter suggested that § 983.304(c)(1)(v) be revised to read “Any other type of federally subsidized project specified by HUD, except for projects receiving low-income housing tax credits.” *Response:* HUD has considered this suggestion, but declines to adopt it because, while HUD does not plan to re-institute the LIHTC program caps in the foreseeable future, the suggested language would excessively limit HUD's discretion to respond to changing economic and programmatic conditions in the future. *Comment:* Some commenters suggested that HUD delegate subsidy layering review to local government agencies. *Response:* While changes to subsidy layering review, which extends to programs beyond LIHTC and Section 8 housing, are beyond the scope of this rulemaking, HUD will consider this suggestion for a future issuance. III. This Final Rule For the reasons provided in Section I of this preamble, this final rule adopts the proposed rule without change. This final rule revises § 983.304(c) to eliminate the requirement that the PBV rent to owner is capped at the tax-credit rent in projects receiving LIHTCs. The rule re-emphasizes that these projects are subject to HUD's subsidy layering review requirements, which ensure that excess subsidy is not provided. IV. Findings and Certifications Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule, as with the prior rulemaking that led to the October 13, 2005, final rule, remains exclusively concerned with PHAs that have chosen to “project-base” 20 percent of their Housing Choice Voucher program assistance. Under the definition of “Small governmental jurisdiction” in section 601(5) of the RFA, the provisions of the RFA are applicable only to those few PHAs that are part of a political jurisdiction with a population of under 50,000 persons. There are very few small PHAs in that category. In addition, this rule would cover only an even smaller category of PHAs—those with PBV Housing Assistance Payments contracts for units also receiving LIHTCs. The number of entities potentially affected by this rule is, therefore, not substantial. Environmental Impact This final rule involves establishment of external administrative or fiscal requirements related to a rate or cost determination, which does not constitute a development decision affecting the physical condition of specific project areas or building sites. Accordingly, under 24 CFR 50.19(c)(6), this final rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ). Executive Order 13132, Federalism Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of section 6 of the Executive Order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; approved March 22, 1995)
(UMRA)establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This rule does not impose any federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of the UMRA. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance number applicable to the program affected by this proposed rule is 14.871. List of Subjects in 24 CFR Part 983 Grant programs—housing and community development, Housing, Low- and moderate-income housing, Rent subsidies, Reporting and recordkeeping requirements. For the reasons stated in the preamble, HUD amends 24 CFR part 983 as follows. PART 983—PROJECT-BASED VOUCHER
(PBV)PROGRAM 1. The authority citation for part 983 continues to read as follows: Authority: 42 U.S.C. 1437f and 3535(d). 2. Revise § 983.304(c) to read as follows: § 983.304 Other subsidy: effect on rent to owner.
(c)*Subsidized projects.*
(1)This paragraph
(c)applies to any contract units in any of the following types of federally subsidized project:
(i)An insured or non-insured Section 236 project;
(ii)A formerly insured or non-insured Section 236 project that continues to receive Interest Reduction Payment following a decoupling action;
(iii)A Section 221(d)(3) below market interest rate
(BMIR)project;
(iv)A Section 515 project of the Rural Housing Service;
(v)Any other type of federally subsidized project specified by HUD.
(2)The rent to owner may not exceed the subsidized rent (basic rent) as determined in accordance with requirements for the applicable federal program listed in paragraph (c)(1) of this section. Dated: November 6, 2007. Orlando J. Cabrera, Assistant Secretary for Public and Indian Housing. [FR Doc. E7-22526 Filed 11-16-07; 8:45 am] BILLING CODE 4210-67-P 72 222 Monday, November 19, 2007 Presidential Documents Part V The President Proclamation 8203—America Recycles Day, 2007 Proclamation 8204—Thanksgiving Day, 2007 Title 3— The President Proclamation 8203 of November 15, 2007 America Recycles Day, 2007 By the President of the United States of America A Proclamation As citizens of this great Nation, we have a responsibility to practice good environmental stewardship. On America Recycles Day, we underscore our commitment to conserving our resources by recycling. Through curbside collections and drop-off facilities, we are turning waste materials—including plastic, glass, aluminum cans, paper, tires, batteries, and building materials—into valuable resources. Recycling is one of our Nation's most successful environmental initiatives, and my Administration is working to increase opportunities for our citizens, communities, and businesses to recycle. The Resource Conservation Challenge, created by the Environmental Protection Agency, encourages public and private partnerships to promote recycling. Through Plug-In To eCycling, we are helping reduce waste by providing consumers with information on how and where they can donate or safely recycle old electronics. Working together, we can conserve valuable resources and energy by managing materials more efficiently. On America Recycles Day and throughout the year, I encourage all Americans to recycle appropriate materials and products. By recycling, reducing greenhouse gas emissions, and conserving energy, we can help build a healthier environment for everyone. NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim November 15, 2007, as America Recycles Day. I call upon the people of the United States to observe this day with appropriate programs and activities. IN WITNESS WHEREOF, I have hereunto set my hand this fifteenth day of November, in the year of our Lord two thousand seven, and of the Independence of the United States of America the two hundred and thirty-second. GWBOLD.EPS [FR Doc. 07-5768 Filed 11-16-07; 9:54 am]
Connectionstraces to 46
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U.S. Code
51 references not yet in our index
  • 42 USC 4321-4351
  • 42 USC 7401-7671(q)
  • 16 USC 1531-1544
  • 16 USC 661-667(d)
  • 16 USC 469-469(c)
  • 25 USC 3001-3013
  • 42 USC 2000(d)
  • 7 USC 4201-4209
  • 33 USC 1251-1377
  • 16 USC 1451-1465
  • 16 USC 4601-4604
  • 33 USC 401-406
  • 42 USC 4001-4128
  • 42 USC 9601-9675
  • 42 USC 6901-6992(k)
  • Pub. L. 104-13
  • 109 Stat. 163
  • 44 USC 3501-3520
  • 5 CFR 1320
  • 5 CFR 1320.8(d)(1)
  • 5 CFR 1320.8(d)(1)(i)
  • 49 CFR 231
  • 5 CFR 1320.5(b)
  • 49 CFR 1.66
  • Pub. L. 102-318
  • T.D. 8455
  • 50 USC 1701-06
  • 10 CFR 430
  • 42 USC 6291-6309
  • 42 USC 3294
  • 42 USC 3295(o)(3)(A)
  • 768 F.2d 1355
  • Pub. L. 95-619
  • 16 CFR 305
  • 10 CFR 1021
  • Pub. L. 104-4
  • Pub. L. 105-277
  • 7 CFR 301.75-1
  • 7 CFR 305
  • 7 CFR 319.28
+ 11 more
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Notices
Notice of Limitation on Claims for Judicial Review of Actions by FHWA
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U.S.C.§ 109
U.S.C.§ 303
U.S.C.§ 319
U.S.C.§ 757
U.S.C.§ 1801
U.S.C.§ 470
U.S.C.§ 1996
F. App'x768 F.2d 1355
Cite42 USC 4321-4351
Cite42 USC 7401-7671(q)
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