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Code · REGISTER · 2008-07-24 · Federal Aviation Administration (FAA), DOT · Rules and Regulations

Rules and Regulations. Final rule

84,226 words·~383 min read·/register/2008/07/24/08-1461

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

BILLING CODE 3410-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 61, 65, 67, and 183 [Docket No.: FAA-2007-27812; Amdt. Nos. 61-121, 65-52, 67-20, and 183-13] RIN 2120-AI91 Modification of Certain Medical Standards and Procedures and Duration of Certain Medical Certificates AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This rule extends the duration of first- and third-class medical certificates for certain individuals.
A first-class medical certificate is required when exercising airline transport pilot privileges and at least a third-class medical certificate when exercising private pilot privileges. Certain conforming amendments to medical certification procedures and some general editorial amendments are also adopted. The intent of this action is to improve the efficiency of the medical certification program and service provided to medical certificate applicants. DATES: These amendments become effective August 25, 2008 except for the amendments to § 61.23(d) which become effective on July 24, 2008.
FOR FURTHER INFORMATION CONTACT: Judi Citrenbaum, Office of the Federal Air Surgeon, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone
(202)267-9689; e-mail; *Judi.M.Citrenbaum@faa.gov.* SUPPLEMENTARY INFORMATION: Authority for This Rulemaking The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator, including the authority to issue, rescind, and revise regulations. Subtitle VII, Aviation Programs, describes, in more detail, the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart III, Chapter 447, Sections 44701, 44702 and 44703. Under Section 44701 the Administrator has the authority to prescribe regulations and minimum standards for practices, methods and procedures necessary for safety in air commerce and national security. Under Section 44702 the Administrator has the authority to issue certificates. More specifically, under Section 44703(b)(C) the Administrator has the authority to decide terms necessary to ensure safety in air commerce, including terms on the duration of certificates and tests of physical fitness. This rule extends the duration of first- and third-class medical certificates for certain individuals in order to improve the efficiency of the medical certification program and service provided to medical certificate applicants, without compromising the safety of air commerce. For this reason, the proposed change is within the scope of our authority and is a reasonable and necessary exercise of our statutory obligations. Background Summary of the Notice of Proposed Rulemaking Currently, the maximum duration on a first-class medical certificate is 6 months regardless of age and, on a third-class medical certificate, 36 months for individuals under age 40. On April 10, 2007 [72 FR 18092], the FAA proposed to amend § 61.23(d) to extend the duration of first- and third-class medical certificates for individuals under the age of 40. First-class medical certificates for individuals under age 40 would be extended from 6 months to 1 year and third-class medical certificates for individuals under the age of 40 would be extended from 3 years to 5 years. The FAA developed this proposal through review of relevant medical literature, its own aeromedical certification data, and accident data. Additionally, the FAA considered the long-standing International Civil Aviation Organization
(ICAO)standards requiring annual medical certification for airline transport and commercial pilots in multi-crew settings and also the ICAO standards adopted in November 2005 extending medical duration for private pilots from 2 years to 5 years under the age of 40. These ages and examination periods were selected based on current ICAO standards, in effect since 2005, which have not had an adverse impact on safety, and based on trends with younger applicants indicating no significant increase in undetected pathology between required examinations. Those individuals manifesting conditions that represent a risk to safety will continue to be denied certification or, after individual evaluation, will continue to be restricted in their flying activities, or examined more thoroughly and frequently, or both. Further, this rule will continue, and not affect, the long-standing regulatory prohibition in § 61.53 against exercising privileges during periods of medical deficiency. In addition to extending the duration of first- and third-class medical certificates, the FAA also proposed the following minor, mostly editorial, changes: Add New Section § 67.4 • To provide more specific direction to applicants applying for a medical certificate, including how to locate an Aviation Medical Examiner (AME). • To codify that applicants must fill out a form to apply for a medical certificate and thereby conform part 67 with existing language under § 61.13 that requires pilot certificate applicants to make application “on a form and in a manner acceptable to the Administrator.” • To codify that applicants must present proof of age and identity for airman medical certification. Amend § 183.15 • To remove a specific time limit for the duration of the designation of AMEs. The FAA had done this previously under rulemaking effective in November 2005 but it was made applicable only for designees of the Flight Standards and Aircraft Certification Services. This action will make a consistent standard for all FAA designees, including AMEs, by having duration set at the discretion of the FAA. Edit §§ 61.29, 65.16, 67.3, 67.401, 67.405, 67.411, 67.413, and 183.11 • *§§ 61.29 and 65.16:* To provide a new P.O. Box for applicants to use when they need a replacement medical certificate or when they need to change their name on a medical certificate. While the current P.O. Box listing is valid, the FAA finds that requests sent to this alternate P.O. Box are received more expeditiously thus allowing the FAA to provide better service to applicants. In the proposal the FAA inadvertently amended § 65.16(b) with the new P.O. Box when we intended to amend § 65.16(c). The final rule correctly amends § 65.16(c). • *§ 67.405:* To move certain provisions of this paragraph under new § 67.4. • *§ 67.411:* To delete this section that addresses military flight surgeons on a specific military base being designated as AMEs. Because the FAA has ceased designating AMEs at particular military installations in favor of designating individual military personnel as AMEs (just as it does civilian AMEs) the distinction made in this provision is no longer needed. • *§ 67.413:* To re-format this section to make it easier to read and understand. • *§ 183.11:* To make an editorial change (revising “his” to “his or her”) to be consistent with a conforming amendment in § 67.407(d) that says “his or her.” Summary of Comments The FAA received 36 comments to the April 10, 2007 proposal. Commenters generally supported the proposed changes. The National Transportation Safety Board
(NTSB)commented as did eight aviation associations including the Aerospace Medical Association, the National Air Transport Association, the Air Line Pilots Association International, the Aircraft Owners and Pilots Association, the Experimental Aircraft Association, the Civil Aerospace Medical Association (CAMA), the Helicopter Association International, and the National Business Aviation Association. One manufacturer, Cessna Aircraft Company, indicated that it appreciated the opportunity to comment but had no specific comment at this time. The remaining comments were from individuals. Among these commenters, a few opposed it, including an AME, who indicated that under-age-40 individuals should be examined as frequently as over-age-40 individuals. More commenters indicated, however, that the proposed action is appropriate but should be further amended, for example, to extend the duration of medical certificates for over-age-40 individuals. Commenters requested specifically that the FAA consider the following for the final rule: • Extend the duration of medical certificates for individuals over age 40. (4 comments) • Extend the duration of student pilot certificates to 60 months. (1 comment) • Extend the duration of second-class medical certificates beyond 12 months. (1 comment) • Allow a U.S. driver's license as medical qualification in lieu of an FAA medical certificate to exercise recreational pilot privileges. (4 comments) • Develop policy to address the impact (at the third-class level) of the 3-year limit on the National Driver Registry
(NDR)search once the interval between medical applications is extended to 5 years. (2 comments) • Require pilots to report in a timely fashion to the FAA any medical conditions that may develop between examinations. (2 comments) • Develop a more efficient method for medical certificate holders to report changes in medical conditions, rather than relying on self-assessment policies during periods of medical deficiency. (2 comments) • Clarify the intent of § 61.23(d) regulatory language with regard to how the proposed duration periods will be implemented. (3 comments) Discussion of Final Rule Analysis of Comments As noted above, some commenters requested that the FAA provide relief beyond what was proposed, while others requested that the FAA adopt more rigid policies, even reporting requirements, to more closely monitor any changes in medical qualification status that a medical certificate holder may experience. We have considered the comments and provide our analysis below. Specific Reporting Requirement The NTSB suggested that pilots be required to report potentially disqualifying medical conditions to the FAA in a timely fashion if such conditions develop between examinations. The NTSB referenced international reporting requirement practices, including the ICAO Recommended Practice 1.2.6.1.1, which states the following: *1.2.6.1.1 Recommendation.* —License holders should inform the Licensing Authority of confirmed pregnancy or any decrease in medical fitness of a duration of more than 20 days or which requires continued treatment with prescribed medication or which has required hospital treatment. It also referenced a requirement of the European Joint Aviation Authorities, JAR FCL 3.040 which states the following: JAR-FCL 3.040 Decrease in Medical Fitness
(c)Holders of medical certificates shall, without undue delay, seek the advice of the AMS, an AMC or an AME when becoming aware of:
(1)Hospital or clinic admission for more than 12 hours; or
(2)surgical operation or invasive procedure; or
(3)the regular use of medication; or
(4)the need for regular use of correcting lenses. The CAMA also suggested that the FAA develop a more sophisticated system for pilots to report medical conditions. The FAA disagrees that a specific reporting requirement is warranted and believes that FAA policy and existing regulation meet the intent of the international standard. Long-standing FAA regulation (§ 61.53) requires that before every flight a pilot should evaluate fitness to fly, not just when the decrease in medical fitness would last more than 20 days or when it requires continued treatment. Existing § 61.53 also specifies that medical certificate holders may not exercise pilot privileges if they are “taking medication or receiving other treatment for a medical condition that results in the person being unable to meet the requirements for the medical certificate necessary for the pilot operation.” Individuals with a medical certificate who choose to exercise pilot privileges are bound by the FAA's disqualifying medical conditions set forth under part 67 as they are by any decrease in general medical condition as set forth under § 61.53. The provisions of § 61.53 are referenced on the reverse side of the medical certificate which pilots are required to carry with them at all times when they exercise flight privileges. The ability to certify no known medical conditions in order to ensure the safe operation of aircraft is a required, critical component of a pilot's flight planning procedures. Pilot safety brochures, widely disseminated to the pilot community on our Web site and by our system of approximately 4,000 AMEs across the country, emphasize the importance of good decision-making before flying. We have many brochures that provide guidance about issues such as medications, fatigue, vision, and spatial disorientation among many others. We always advise pilots to check with the FAA or their AME if they have any concerns, and to have their private physicians and pharmacists check with their AME if there is any uncertainty about medical status before flying. By way of example, our pilot safety brochure entitled “Medications and Flying” emphasizes the importance of fully understanding an existing or underlying medical condition and the potential for adverse reactions or side effects of medications. This brochure advises pilots of the following: • If you must take over-the-counter medications: • Read and follow the label directions • If the label warns of significant side effects, do not fly after taking the medication until at least two dosing intervals have passed. For example, if the directions say to take the medication every 6 hours, wait until at least 12 hours after the last dose to fly. • Remember that you should not fly if the underlying condition that you are treating would make you unsafe if the medication fails to work. • Never fly after taking a new medication for the first time. • As with alcohol, medications may impair your ability to fly—even though you feel fine. • If you have questions about a medication, ask your aviation medical examiner. • When in doubt don't fly. Adding a specific reporting requirement for our system of approximately a half million pilots would be difficult to implement and hard to enforce. There are no apparent adverse trends that would indicate a need for a specific reporting requirement. Adding a specific reporting requirement would require further rulemaking, new forms, increased paperwork and recordkeeping requirements, and further guidance to pilots and to AMEs. The FAA also notes that a modification for current ICAO Recommended Practice 1.2.6.1.1 (referenced above) is in the planning stages that would remove language that indicates a decrease in medical fitness of more than 20 days should be reported. National Driver Registry Access At the time of application for FAA medical certification, individuals must provide express consent to grant the FAA the right to review their NDR records. This information allows the FAA to check applicants' driving records for any instances of substance abuse and dependence disorders which may provide cause for denying a medical certificate. The NTSB commented that “an unintended effect of extending the time interval between examinations might be to increase the interval between NDR inquiries.” The CAMA stated that “if the examination frequency is extended to a 60-month period, it would be possible for an airman to receive a DWI and have it dropped from the NDR database before presenting for their next required examination.” The NTSB indicated that the FAA should “require policy changes as necessary to ensure an appropriate frequency of NDR database evaluations that is no less than currently performed.” Currently, on Item 20 of FAA Form 8500-8, Application for Airman Medical Certificate, an applicant gives express consent for FAA to access his or her NDR records as part of the evaluation for a medical certificate. Such consent is required by the National Driver Registry Act, which provides that the FAA's access to the NDR records be made upon an express request from the medical certificate applicant to search his or her driving records. With the applicant's consent, the FAA is authorized to obtain a single, 3-year look-back of the applicant's driving records. As some commenters noted, adoption of the proposal to extend the duration of certain medical certificates from 3 to 5 years would result in a situation where the FAA would not obtain the applicant's NDR records for the first 2 years of the 5-year period prior to the next application for a medical certificate. This reality, however, is not sufficiently problematic to justify abandoning the proposal for a number of reasons. First and most importantly, the medical certification process, including the duration of a medical certificate to engage in specific aviation activities, should be based on appropriate medical information and judgment, not on the availability of a particular compliance tool to cross-match information. Second, even as a compliance tool, NDR access does not cover all piloting activities. Glider and balloon piloting, as well as operation of an ultralight vehicle under 14 CFR Part 103, do not require medical certification, and thus there is no NDR access undertaken. Similarly, sport piloting does not require a medical certificate if an individual chooses to use a U.S. driver's license as a medical qualification. Third, current regulations obligate pilots to provide the FAA with a written report of any motor vehicle action within 60 days of the action. This includes any conviction related to the operation of a motor vehicle while intoxicated or impaired by alcohol or a drug, as well as any action taken by the State to cancel, suspend, or revoke a license to operate a motor vehicle based on intoxication or impairment. As required under long-standing § 61.15(e) reporting requirements, all medical certificate holders must provide “a written report of each motor vehicle action to the FAA.” The intent of this requirement is explained in detail to pilots under “Frequently Asked Questions” on the FAA Web site. All pilots must send a Notification Letter to the FAA's Security and Investigations Division within 60 calendar days of the effective date of an alcohol-related conviction or administrative action. Each event, conviction, or administrative action, requires a separate Notification Letter. The inability to reach back to the fourth and fifth year of the prior 5-year period through the NDR would have an impact only if the individual had violated the reporting requirements. The failure to have reported the information to the FAA would itself be a violation that could lead to the suspension or revocation of the individual's pilot certificate. Thus, there are substantial incentives to provide the information. Fourth, the FAA is considering seeking a statutory change to permit a 5-year access period through the NDR. At the time of the original statute in the late 1980s that gave the FAA a 3-year period of access to the NDR, the period authorized exceeded the duration of all classes of medical certificates issued by the FAA. Later legislative action under the Pilot Records Improvement Act of 1996 authorized a 5-year access to the NDR in the context of air carrier operations. In light of the change to the duration of certain medical certificates made by this final rule, the FAA believes a corresponding change to NDR access would receive substantial support by the Congress. Unintended Effects of Amending § 61.23(d): Medical Certificates: Requirement and Duration Some commenters requested clarification regarding the intent of the regulatory language in the proposed § 61.23(d) table. The National Air Transport Association
(NATA)commented that the proposal indicates the specified period of duration on a medical certificate is applied “from the date of examination.” According to NATA, however, in some cases the medical certificate is not issued on the same day as the examination. The medical certificate may be issued at a later date after further review is conducted. NATA stated that duration should be calculated from the date of issuance, not the date of examination. “This is currently how expiration dates are typically determined, although it is not specified in the regulations.” According to another commenter: “for some pilots around age 40, the proposed rules actually reduce the duration of some medical certificates and increase the burden of compliance.” The commenter indicated that, under existing § 61.23(d), the age at examination sets duration while under proposed § 61.23(d), the age at operation sets duration. The commenter interpreted this to mean that “a medical used for third-class operations that is obtained shortly before the 40th birthday will expire in 24 months under the proposed rules instead of 36 months under the existing rules.” He stated: “For example, a pilot born June 1, 1965, gets a third-class medical on May 15, 2005. Under the current rule, this expires on May 31, 2008, but under the proposed rule, the expiration date will be May 31, 2007.” One commenter indicated that the second column of the proposed table for § 61.23(d) is confusing and suggested that it be modified to read “And you are at the date of the examination” rather than “And you are.” The FAA's intent on the duration of medical certificates has not changed. As specified in the preamble to the proposal, these standards are applied “according to the date of examination placed on the medical certificate and in accordance with duration periods specified under § 61.23(d).” An FAA medical certificate lists only a “Date of Examination,” not a date of issuance and duration standards are applied according to the date of examination placed on the medical certificate unless otherwise limited, as indicated under the section of the certificate entitled “Limitations.” Each medical certificate must bear the same date as the date of medical examination regardless of the date the certificate is actually issued. To respond to commenters, the FAA has revised the § 61.23(d) table to better clarify its intent. The new duration periods will be effective the day this rule is published and will affect current medical certificates holders. First- and third-class medical certificate holders, who were under age 40 on the date of the application of their medical certificate, will be covered by the new, longer durations established under § 61.23(d). To determine the duration of one's medical certificate, one should examine two pertinent dates displayed on each medical certificate: The date of the applicant's birth, which determines the applicant's age at the time of the application, and the date of the applicant's medical examination. This means, for example, if you were under age 40 at the time of the application and you hold a first-class medical certificate with a date of examination dating back 5 months prior to the adoption of this provision of the final rule, then your medical certificate for airline transport pilot operations will expire according to the new annual standard and not the current 6-month standard. Using another example, if you were under age 40 at the time of the application and you hold a third-class medical certificate, then your medical certificate for private or recreational operations will expire according to the new 5-year standard and not the current 3-year standard. Affected first- and third-class medical certificate holders must look at the date of examination on their existing medical certificate and recalculate duration as set forth under new § 61.23(d). In addition, it should be noted that the “Conditions of Issue” on the reverse side of the existing medical certificate (FAA Form 8500-9) for affected first- and third-class medical certificate holders no longer will be accurate for certain medical certificate holders once this rule becomes effective because existing § 61.23 duration standards are referenced. The FAA will be using new medical certificates with updated “Conditions of Issue” on the reverse side of the medical certificate following rule issuance. Until such time as you renew your medical certificate, therefore, you should be aware of these outdated “Conditions of Issue” on the reverse side of your existing medical certificate. You should carry a copy of the new duration standards with you when you fly, especially if you fly internationally, in order to demonstrate that the duration of your existing medical certificate is in compliance with new FAA medical certificate duration standards. Duration of a Medical Certificate When Exercising Sport Pilot Privileges (When You Choose To Medically Qualify With an FAA Medical Certificate Rather Than a U.S. Driver's License) A commenter indicated that proposed and existing § 61.23(d) do not address individuals who may choose to hold a medical certificate rather than use their U.S. driver's license to medically qualify to exercise sport pilot privileges. This commenter holds a first-class medical certificate and will soon stop flying professionally. He plans to maintain a current FAA first-class medical certificate but will be exercising sport pilot privileges only. This commenter requested that the FAA clarify in the final rule the intended duration period of a medical certificate when used as medical qualification to exercise sport pilot privileges rather than a U.S. driver's license. The FAA believes that the comment has merit and has adjusted § 61.23(d) accordingly. Comments Beyond the Scope of the Notice The FAA received comments requesting changes beyond what was proposed. One commenter requested extended duration on a second-class medical certificate and others suggested extended duration for individuals over, as well as under, age 40. Further, some commenters asked that recreational pilots be allowed to medically qualify using a U.S. driver's license in lieu of an FAA medical certificate. All these proposed changes are beyond the scope of the proposal. Existing U.S. medical certificate duration standards for commercial pilots under age 40 in a multi-crew setting currently are the same as the ICAO standards; therefore, the FAA did not propose a change to FAA second-class medical certificate duration standards. Proposing or adopting such a change would create a difference with existing international standard. The FAA proposed to extend duration and limit it to under-age-40 individuals for the same reason. Extending the duration any further would put the United States out of compliance with international standards, and we have no experience or basis to support doing so at this time. Today's action is based, in part, on international experience and on 10 years of FAA experience with extended duration on third-class medical certificates (from 2 years to 3 years) for individuals under age 40. The FAA proposal did not address, or propose to amend, standards for recreational pilots other than, for certain pilots, the duration of a third-class medical certificate, required when exercising recreational pilot privileges. The only pilots currently allowed to medically qualify using a U.S. driver's license are sport pilots. The FAA did not find cause during sport pilot rulemaking deliberations, and at this time does not have sufficient experience certificating sport pilots, to reconsider the third-class medical certificate standard for the exercise of recreational pilot privileges. Related Activity Student Pilot Certificate Duration On February 7, 2007, the FAA issued a proposal that would amend, in part, existing § 61.19(b) to extend the duration of a student pilot certificate from 24 months to 36 months for individuals under age 40 [72 FR 5806]. Subsequently this proposed action was issued to extend the duration of medical certificates. The FAA received comments to both proposals that support extending the duration of a student pilot certificate. The FAA will take these comments into consideration and dispose of them in the final rule that will address the February 7, 2007 proposal. ICAO Audit ICAO, the aviation wing of the United Nations, audited the United States Government's civil aviation safety oversight system from November 5-19, 2007, as part of the Universal Safety Oversight Audit Program (USOAP). The ICAO USOAP teams assess whether a signatory state meets international aviation standards. The audit is very comprehensive and part of the focus is on licensing systems and keeping them aligned with international aviation standards. ICAO findings for many signatory states, including the United States, have revealed a need to revise licensing systems to ensure conformance with ICAO Standards and Recommended Practices. Specifically, ICAO recommends endorsements on licenses for any person holding a license who does not satisfy in full the conditions set forth in international standards. These individuals must have endorsed on or attached to their license a complete enumeration of the particulars in which they do not satisfy such conditions. In order to comply with our international obligations to ICAO, the FAA has determined that affected persons, those who have been granted an Authorization for Special Issuance of a Medical Certificate (Authorization) or a Statement of Demonstrated Ability
(SODA)must carry their Authorization or SODA with them when exercising pilot privileges. In order to satisfy this ICAO obligation, the FAA has amended existing § 67.401(j) accordingly. Paperwork Reduction Act As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA submitted a copy of the amended information collection requirements in this final rule to the Office of Management and Budget for its review. The paperwork burdens and cost impact associated with revising, reprinting, and re-distributing this form, as described in the proposal, have been addressed and no longer apply as a cost of the rule. OMB approved the collection of this information and assigned OMB Control Number 2120-0034. International Compatibility In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to comply with ICAO Standards and Recommended Practices to the maximum extent practicable. The intent of this final rule, in part, is to come into compliance with existing ICAO medical assessment duration standards. Therefore, this final rule will not create any differences with ICAO. Regulatory Evaluation, Regulatory Flexibility Determination, International Trade Impact Assessment, and Unfunded Mandates Assessment Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L.104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule. We suggest readers seeking greater detail read the full regulatory evaluation, a copy of which we have placed in the docket for this rulemaking. In conducting these analyses, FAA has determined that this final rule:
(1)Has benefits that justify its costs,
(2)is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866,
(3)is not “significant” as defined in DOT's Regulatory Policies and Procedures;
(4)will not have a significant economic impact on a substantial number of small entities;
(5)will not create unnecessary obstacles to the foreign commerce of the United States; and
(6)will not impose an unfunded mandate on State, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below. This rule extends the duration of first- and third-class medical certificates for certain individuals. A first-class medical certificate is required when exercising airline transport pilot privileges and at least a third-class medical certificate when exercising private pilot privileges. Certain conforming amendments to medical certification procedures and some general editorial amendments also are adopted. The intent of this action is to improve the efficiency of the medical certification program and service provided to medical certificate applicants. Over 10 years, this final rule is estimated to generate $91.7 million ($68.9 million, discounted) of cost-savings. Regulatory Flexibility Determination The Regulatory Flexibility Act of 1980
(RFA)(Pub. L. 96-354) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear. This final rule will not impact small entities. It will impact primarily first- and third-class medical certificate holders who are expected to save about $300.00 each time that they do not have to renew their medical certificates. Consequently, as the Acting Administrator of the Federal Aviation Administration, I certify that the rule will not have a significant economic impact on a substantial number of small entities. International Trade Impact Assessment The Trade Agreements Act of 1979 (Pub. L. 96-39) prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this final rule and has determined that it will have only a domestic impact and therefore no effect on international trade. Unfunded Mandates Assessment Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $136.1 million in lieu of $100 million. This final rule does not contain such a mandate. The requirements of title II do not apply. Executive Order 13132, Federalism The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action will not have a substantial direct effect on the States, or the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have federalism implications. Small Business Regulatory Enforcement Fairness Act The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. If you are a small entity and you have a question regarding this document, you may contact your local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. You can find out more about SBREFA on the Internet at *http://www.faa.gov/regulations_policies/rulemaking/sbre_act/* . Good Cause for Immediate Adoption of § 61.23(d) Section 553(d) of the Administrative Procedures Act requires that rules become effective no less than 30 days after their issuance. Paragraph (d)(1) allows an agency to make a rule effective immediately, however, if the agency provides good cause for immediate adoption. The FAA finds that good cause exists for immediate adoption of the provisions of § 61.23(d) of this final rule. Adopting § 61.23(d) immediately—on the date of publication, rather than 30 days after issuance—prevents individuals whose medical certificate might expire within that 30-day interim from having to renew a medical certificate that otherwise may have remained valid if not for the 30-day effective date requirement. List of Subjects 14 CFR Part 61 Aircraft, Airmen, Aviation Safety, and Reporting and recordkeeping requirements. 14 CFR Part 65 Airmen other than flight crewmembers. 14 CFR Part 67 Aircraft, Airmen, Alcohol abuse, Drug abuse, Recreation and recreation areas, Reporting and recordkeeping requirements. 14 CFR Part 183 Aircraft, Airmen, Authority delegations (Government agencies), Reporting and recordkeeping requirements. The Amendment In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations as follows: PART 61—CERTIFICATION: PILOTS, FLIGHT INSTRUCTORS, AND GROUND INSTRUCTORS 1. The authority citation for part 61 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701-44703, 44707, 44709-44711, 45102-45103, 45301-45302. 2. Amend § 61.23 by revising paragraph (d)(1) to read as follows: § 61.23 Medical certificates: Requirement and duration.
(d)*Duration of a medical certificate.*
(1)Use the following table to determine duration for each class of medical certificate: If you hold And on the date of examination for your most recent medical certificate you were And you are conducting an operation requiring Then your medical certificate expires, for that operation, at the end of the last day of the
(i)A first-class medical certificate
(A)Under age 40 an airline transport pilot certificate 12th month after the month of the date of examination shown on the medical certificate.
(B)Age 40 or older an airline transport pilot certificate 6th month after the month of the date of examination shown on the medical certificate.
(C)Any age a commercial pilot certificate or an air traffic control tower operator certificate 12th month after the month of the date of examination shown on the medical certificate.
(D)Under age 40 a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 60th month after the month of the date of examination shown on the medical certificate.
(E)Age 40 or older a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 24th month after the month of the date of examination shown on the medical certificate.
(ii)A second-class medical certificate
(A)Any age a commercial pilot certificate or an air traffic control tower operator certificate 12th month after the month of the date of examination shown on the medical certificate.
(B)Under age 40 a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 60th month after the month of the date of examination shown on the medical certificate.
(C)Age 40 or older a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 24th month after the month of the date of examination shown on the medical certificate.
(iii)A third-class medical certificate
(A)Under age 40 a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 60th month after the month of the date of examination shown on the medical certificate.
(B)Age 40 or older a recreational pilot certificate, a private pilot certificate, a flight instructor certificate (when acting as pilot in command or a required pilot flight crewmember in operations other than glider or balloon), a student pilot certificate, or a sport pilot certificate (when not using a U.S. driver's license as medical qualification) 24th month after the month of the date of examination shown on the medical certificate. 3. Amend § 61.29 by revising paragraph
(b)to read as follows: § 61.29 Replacement of a lost or destroyed airman or medical certificate or knowledge test report.
(b)A request for the replacement of a lost or destroyed medical certificate must be made by letter to the Department of Transportation, FAA, Aerospace Medical Certification Division, P.O. Box 26200, Oklahoma City, OK 73125, and must be accompanied by a check or money order for the appropriate fee payable to the FAA. PART 65—CERTIFICATION: AIRMEN OTHER THAN FLIGHT CREWMEMBERS 4. The authority citation for part 65 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701-44703, 44707, 44709-44711, 45102-45103, 45301-45302. 5. Amend § 65.16 by revising paragraph
(c)introductory text to read as follows: § 65.16 Change of name: Replacement of lost or destroyed certificate.
(c)An application for a replacement of a lost or destroyed medical certificate is made by letter to the Department of Transportation, Federal Aviation Administration, Aerospace Medical Certification Division, Post Office Box 26200, Oklahoma City, OK 73125, accompanied by a check or money order for $2.00. PART 67—MEDICAL STANDARDS AND CERTIFICATION 6. The authority citation for part 67 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701-44703, 44707, 44709-44711, 45102-45103, 45301-45302. 7. Revise § 67.3 to read as follows: § 67.3 Issue. A person who meets the medical standards prescribed in this part, based on medical examination and evaluation of the person's history and condition, is entitled to an appropriate medical certificate. 8. Add § 67.4 to read as follows: § 67.4 Application. An applicant for first-, second- and third-class medical certification must:
(a)Apply on a form and in a manner prescribed by the Administrator;
(b)Be examined by an aviation medical examiner designated in accordance with part 183 of this chapter. An applicant may obtain a list of aviation medical examiners from the FAA Office of Aerospace Medicine homepage on the FAA Web site, from any FAA Regional Flight Surgeon, or by contacting the Manager of the Aerospace Medical Education Division, P.O. Box 26200, Oklahoma City, Oklahoma 73125.
(c)Show proof of age and identity by presenting a government-issued photo identification (such as a valid U.S. driver's license, identification card issued by a driver's license authority, military identification, or passport). If an applicant does not have government-issued identification, he or she may use non-photo, government-issued identification (such as a birth certificate or voter registration card) in conjunction with photo identification (such as a work identification card or a student identification card). 9. Amend § 67.401 by revising paragraph
(j)to read as follows: § 67.401 Special issuance of medical certificates.
(j)An Authorization or SODA granted under the provisions of this section to a person who does not meet the applicable provisions of subparts B, C, or D of this part must be in that person's physical possession or readily accessible in the aircraft. 10. Revise § 67.405 to read as follows: § 67.405 Medical examinations: Who may perform?
(a)*First-class.* Any aviation medical examiner who is specifically designated for the purpose may perform examinations for the first-class medical certificate.
(b)*Second- and third-class.* Any aviation medical examiner may perform examinations for the second-or third-class medical certificate. § 67.411 [Removed and Reserved] 11. Remove and reserve § 67.411. 12. Revise § 67.413 to read as follows: § 67.413 Medical records.
(a)Whenever the Administrator finds that additional medical information or history is necessary to determine whether you meet the medical standards required to hold a medical certificate, you must:
(1)Furnish that information to the FAA; or
(2)Authorize any clinic, hospital, physician, or other person to release to the FAA all available information or records concerning that history.
(b)If you fail to provide the requested medical information or history or to authorize its release, the FAA may suspend, modify, or revoke your medical certificate or, in the case of an applicant, deny the application for a medical certificate.
(c)If your medical certificate is suspended, modified, or revoked under paragraph
(b)of this section, that suspension or modification remains in effect until you provide the requested information, history, or authorization to the FAA and until the FAA determines that you meet the medical standards set forth in this part. PART 183—REPRESENTATIVES OF THE ADMINISTRATOR 13. The authority citation for part 183 continues to read as follows: Authority: 31 U.S.C. 9701; 49 U.S.C. 106(g), 40113, 44702, 44721, 45303. 14. Amend § 183.11 by revising paragraph
(a)to read as follows: § 183.11 Selection.
(a)The Federal Air Surgeon, or his or her authorized representatives within the FAA, may select Aviation Medical Examiners from qualified physicians who apply. In addition, the Federal Air Surgeon may designate qualified forensic pathologists to assist in the medical investigation of aircraft accidents. 15. Revise § 183.15 to read as follows: § 183.15 Duration of certificates.
(a)Unless sooner terminated under paragraph
(b)of this section, a designation as an Aviation Medical Examiner or as a Flight Standards or Aircraft Certification Service Designated Representative as described in §§ 183.21, 183.23, 183.25, 183.27, 183.29, 183.31, or 183.33 is effective until the expiration date shown on the document granting the authorization.
(b)A designation made under this subpart terminates:
(1)Upon the written request of the representative;
(2)Upon the written request of the employer in any case in which the recommendation of the employer is required for the designation;
(3)Upon the representative being separated from the employment of the employer who recommended him or her for certification;
(4)Upon a finding by the Administrator that the representative has not properly performed his or her duties under the designation;
(5)Upon the assistance of the representative being no longer needed by the Administrator; or
(6)For any reason the Administrator considers appropriate. Issued in Washington, DC, on July 10, 2008. Robert A. Sturgell, Acting Administrator. [FR Doc. E8-16911 Filed 7-23-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 33 [Docket No. RM07-21-001; Order No. 708-A] Blanket Authorization Under FPA Section 203 Issued July 17, 2008. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Final rule; order on rehearing. SUMMARY: In this order on rehearing, the Federal Energy Regulatory Commission (Commission) affirms its determinations in part and grants rehearing in part of Order No. 708. Order No. 708 amended the Commission's regulations to establish blanket authorizations under section 203 of the Federal Power Act to facilitate investment in the electric industry and, at the same time, ensure that public utility customers are adequately protected from any adverse effects of such transactions. EFFECTIVE DATES: This final rule; order on rehearing will become effective August 25, 2008. FOR FURTHER INFORMATION CONTACT: Carla Urquhart (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8496. Mosby Perrow (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-6498. Andrew Mosier (Technical Information), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-6274. Ronald Lafferty (Technical Information), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8026. SUPPLEMENTARY INFORMATION: *Before Commissioners:* Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. Blanket Authorization Under FPA Section 203; Docket No. RM07-21-001: Order On Rehearing; Order No. 708-A Issued July 17, 2008. 1. This order addresses requests for rehearing and clarification of Order No. 708. 1 That order amended Commission regulations pursuant to section 203 of the Federal Power Act
(FPA)to provide for additional blanket authorizations under FPA section 203(a)(1). 2 This order on rehearing affirms the five categories of blanket authorizations set forth in Order No. 708 with certain modifications, and, as discussed below, grants, in part, and denies, in part, the requests for rehearing. 1 *Blanket Authorization Under FPA Section 203,* Order No. 708, 73 FR 11003 (Feb. 29, 2008), FERC Stats. & Regs. ¶31,265 (2008). 2 16 U.S.C. 824b(a)(1). I. Background 2. Based on comments to the Blanket Authorization Notice of Proposed Rulemaking, 3 the Commission in Order No. 708 established five blanket authorizations to facilitate investment in the electric utility industry and, at the same time, ensure that public utility customers are adequately protected from any adverse effects of such transactions. First, a public utility was granted a blanket authorization under FPA section 203(a)(1) to transfer its outstanding voting securities to any holding company granted blanket authorization under 18 CFR 33.1(c)(2)(ii) if, after the transfer, the holding company and any of its associate or affiliate companies in aggregate will own less than 10 percent of the outstanding voting interests of such public utility. 4 Second, a public utility was granted a blanket authorization under FPA section 203(a)(1) to transfer its outstanding voting securities to any holding company granted blanket authorization under 18 CFR 33.1(c)(8) 5 if, after the transfer, the holding company and any of its associate or affiliate companies, in the aggregate, will own less than 10 percent of the outstanding voting interests of such public utility. 6 Third, a public utility was granted a blanket authorization under FPA section 203(a)(1) to transfer its outstanding voting securities to any holding company granted blanket authorization in 18 CFR 33.1(c)(9). 7 Fourth, a public utility was granted blanket authorization under FPA section 203(a)(1) to transfer its outstanding voting securities to any holding company granted a blanket authorization in 18 CFR 33.1(c)(10). 8 3 *Blanket Authorization Under FPA Section 203* , 72 FR 41640 (July 31, 2007), FERC Stats. & Regs. ¶ 32,619
(2007)(Blanket Authorization NOPR). 4 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 19 and 18 CFR 33.1(c)(12). 5 These holding companies' ownership of utilities includes only exempt wholesale generators (EWGs), foreign utility companies (FUCOs), and qualifying facilities (QFs). 6 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 40. 7 *Id.* P 43. These holding companies are regulated by the Board of Governors of the Federal Reserve Bank or by the Comptroller of the Currency. 8 *Id.* P 45. This authorization applies, in certain circumstances, to holding companies conducting underwriting activities or engaging in hedging transactions, generally limited to a 10 percent voting interest. 3. Fifth, a public utility was granted a blanket authorization under FPA section 203(a)(1) for the acquisition or disposition of a jurisdictional contract where neither the acquirer nor transferor has captive customers or owns or provides transmission service over jurisdictional transmission facilities, the contract does not convey control over the operation of a generation or transmission facility, the parties to the transaction are neither affiliates nor associate companies, and the acquirer is a public utility. 9 In addition, Order No. 708 clarified certain aspects of existing blanket authorizations and clarified the terms “affiliate” and “captive customers.” 9 *Id.* P 51-53 and 18 CFR 33.1(c)(16). II. Requests for Rehearing 4. Order No. 708 was published in the **Federal Register** on February 29, 2008. 10 Timely requests for rehearing were filed by the American Public Power Association and the National Rural Electric Cooperative Association (APPA/NRECA), the Financial Institutions Energy Group (Financial Group), and the Electric Power Supply Association (EPSA). The Edison Electric Institute
(EEI)filed a timely request for rehearing and clarification. 10 *Supra* note 1. 5. As discussed below, parties seek rehearing and/or clarification with respect to:
(1)Extending the blanket authorization under 18 CFR 33.1(c)(12) to cover public utility dispositions, not just to certain holding companies but also to non-holding companies;
(2)the blanket authorization in 18 CFR 33.1(c)(16) pertaining to the transfer of jurisdictional contracts;
(3)the definition and/or scope of hedging activities permitted under 18 CFR 33.1(c)(10);
(4)the determination in Order No. 708 not to impose additional reporting requirements related to the new blanket authorizations; and
(5)clarification of the existing blanket authorization under 18 CFR 33.1(6) (authorization of internal reorganization not affecting a traditional public utility) identified in the Supplemental Policy Statement. 11 11 *FPA Section 203 Supplemental Policy Statement,* 72 FR 42277 (August 2, 2007), FERC Stats. & Regs. ¶ 31,253 (2007), *order on clarification and reconsideration,* 122 FERC ¶ 61,157
(2008)(Supplemental Policy Statement). III. Discussion A. Whether To Extend the Blanket Authorization in 18 CFR 33.1(c)(12) to Non-Holding Companies 6. In Order No. 708, the Commission adopted the proposed blanket authorization from the Blanket Authorization NOPR without modification. 12 In order to prevent public utilities from transferring less than 10 percent of their voting securities in successive transfers, the Commission retained the “in aggregate” limitation contained in 18 CFR 33.1(c)(12). In addition, the Commission rejected requests to extend the blanket authorization to “any person.” The Commission stated that these requests would expand the blanket authorization proposed in the Blanket Authorization NOPR beyond its original intent. The Commission also noted that if it were to expand the blanket authorization to “any person,” it would need to establish appropriate reporting requirements so that the Commission could monitor transfers to non-holding companies. 13 12 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 19. 18 CFR 33.1(c)(12) states that a public utility will be granted a blanket authorization under section 203(a)(1) of the Federal Power Act to transfer its outstanding voting securities to any holding company granted blanket authorizations in 18 CFR 33.1(c)(2)(ii) of this section if, after the transfer, the holding company and any of its associate or affiliate companies in aggregate will own less than 10 percent of the outstanding voting interests of the public utility. 13 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 20. Requests for Rehearing 7. Financial Group requests rehearing of the Commission's decision declining to extend the blanket certificate to cover public utility dispositions to non-holding companies under 18 CFR 33.1(c)(12), subject to the same “in aggregate” limitations imposed on transfers to holding companies. Financial Group argues that the distinction between holding companies and non-holding companies is immaterial since the same benefits of reducing regulatory burdens and encouraging investment that accrue when applying this blanket to distributions to a holding company also will occur if the blanket is applied to distributions to a non-holding company. Financial Group reasons that it is the nature of the interest being disposed—less than 10 percent of the voting securities being held in the aggregate—and not whether the acquirer is a holding company that determines whether the disposition conveys control. 8. Financial Group argues that the concern underlying the Commission's refusal to extend the blanket certificate to cover public utility dispositions to non-holding companies could be addressed without the need for issuing such blanket authorizations on a case-by-case basis. Financial Group proposes reporting requirements for transactions involving non-holding companies that it says should be at least as helpful to the Commission as the preexisting reporting requirements applicable to holding companies. 14 In addition, Financial Group argues that this expansion of the blanket certificate is not beyond the scope of the Blanket Authorization NOPR. 14 Financial Group proposes that within a specified time following consummation of the transaction ( *e.g.* , 30 days), the following information be reported:
(1)Names of all parties to the transaction;
(2)identification of both the pre-transaction and post-transaction voting security holdings (and the percentage ownership) in the public utility held by the acquirer and its associates or affiliate companies;
(3)the date the transaction was consummated;
(4)identification of any public utility or holding company affiliates of the parties to the transaction; and
(5)(if the Commission has particular concerns as to whether such a transaction would result in cross-subsidization) the same type of statement currently required under 18 CFR 33.2(j)(1), which describes Exhibit M to an FPA section 203 filing. Commission Determination 9. As a preliminary matter, and upon further consideration, we do not consider Financial Group's request to be beyond the scope of the Blanket Authorization NOPR. In general, the Commission is permitted to learn from comments submitted during its rulemaking process. 15 In the Blanket Authorization NOPR, the Commission sought comments on proposals to reduce regulatory burdens and encourage investment under FPA section 203 while simultaneously protecting the public interest. Financial Group's proposal to extend the proposed blanket authorization under 18 CFR 33.1(c)(12) to cover “any person” rather than just certain holding companies is a variation of the originally proposed regulation, and therefore, is a logical outgrowth of the Blanket Authorization NOPR. 16 Interested parties have had sufficient notice of the type of regulation that the Commission might adopt, and reasonably could have anticipated that other commenters might seek to expand the proposal. Moreover, commenters will have the opportunity for rehearing with respect to any modifications to the originally proposed section 33.1(c)(12). 15 *Daniel Int'l Corp.* v. *OSHA,* 656 F.2d 925, 932 (4th Cir. 1981) (The requirement of submission of a proposed rule for comment does not automatically generate a new opportunity for comment merely because the rule promulgated differs from the rule proposed, partly at least in response to submission). 16 *See Owner-Operator Independent Drivers Assoc., Inc.* v. *Federal Motor Carrier Safety Administration,* 494 F.3d 188, 209 (DC Cir. 2007) (the object of the logical outgrowth test is one of fair notice). 10. Substantively, the distinction in 18 CFR 33.1(c)(12) between holding companies and non-holding companies is not determinative as to whether a particular transaction is consistent with the public interest, particularly if the “in aggregate” 10 percent limitation is in place to ensure that there is no likely opportunity for a transfer of control of a public utility. Moreover, expanding the 18 CFR 33.1(c)(12) blanket authorization to include non-holding companies would reduce regulatory burdens and encourage investment without causing harm to competition or captive customers. With such an expansion, however, it is important for the Commission and the public to monitor these activities. As the Commission stated in Order No. 708, although there is a presumption that less than 10 percent of a utility's shares will not result in a change of control, this presumption is rebuttable. 17 In some instances, the transfer of less than 10 percent of voting shares may constitute a transfer of control. Accordingly, we will extend the blanket authorization to “any person,” but we will require additional reporting for non-holding companies such as the requirements proposed by Financial Group. 17 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 20. 11. Specifically, the Commission will amend its regulations in 18 CFR 33.1(c)(12) to also authorize a public utility to transfer its outstanding voting securities to any person other than a holding company if, after the transfer, such person and any of its associate or affiliate companies will own less than 10 percent of the outstanding voting interests of such public utility. In addition, the Commission will adopt a reporting requirement for entities that transact under this blanket authorization. In order to properly tailor additional reporting requirements, however, we will issue concurrently with this order a request for supplemental comments that will seek comments on the narrow issue of the scope and form of the reporting requirements under the expanded blanket authorization. The expanded blanket authorization under 18 CFR 33.1(c)(12) will not become effective until a Commission decision on reporting requirements becomes effective. We further note that the Commission retains its jurisdiction under section 203(b) of the FPA to issue further orders as appropriate with respect to transactions authorized under blanket authority. 18 18 16 U.S.C. 824b(b). B. Blanket Authorization for the Transfer of Jurisdictional Contracts Under 18 CFR 33.1(c)(16) 1. Order No. 708 12. Order No. 708 extended a blanket authorization under FPA section 203(a)(1) for the acquisition and disposition of jurisdictional contracts where neither the acquirer nor the transferor has captive customers or owns or provides transmission service over jurisdictional transmission facilities, the contract does not convey control over the operation of a generation or transmission facility, the parties to the transaction are neither associate nor affiliate companies, and the acquirer is a public utility. 19 Based, in part, on the Commission's experience with intra-corporate transfers of jurisdictional contracts and concerns raised in the Blanket Authorization NOPR, Order No. 708 narrowed this blanket authorization somewhat from the proposal in the Blanket Authorization NOPR, to include the phrase “the parties to the transaction are neither associate nor affiliate companies, and the acquirer is a public utility.” 20 The Commission also stated that this added condition (that parties to the transaction are neither affiliated nor associated companies) helps ensure that the transfer of such contracts would be consistent with the public interest. 21 19 18 CFR 33.1(c)(16). 20 Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 51. 21 *Id.* P 52. Requests for Rehearing 13. APPA/NRECA argues that the Commission has not shown how this blanket authorization is consistent with the public interest. If the blanket authorization is not retracted, APPA/NRECA asks the Commission to narrow its scope by excluding contracts in which a load-serving entity
(LSE)is the purchaser and does not consent to the subject transfer. It contends that the existing authorization creates a situation in which public power utilities, cooperatives and other LSEs might have their contract sold without their consent and without specific Commission approval. It claims that these LSEs rely on these contracts for reliable power and the blanket authorization would allow for the transfer of the contract from a well-established marketer or generator with whom the LSE originally contracted to an entity with less assurance of its ability to perform. In addition, APPA/NRECA argues that the Commission's reasoning in dismissing the same argument in Order No. 708 is flawed. 14. Further, APPA/NRECA claims that this blanket authorization itself could undermine LSEs' bargaining power and their ability to enforce their contractual rights. It notes that many standard power contracts contain “boilerplate” language that requires a buyer's consent for the transfer of a contract not to be “unreasonably withheld.” It argues that if the Commission grants this blanket authorization on the basis that it is consistent with the public interest, sellers could then argue that it is unreasonable for a buyer to withhold its consent for a given transfer. Thus, APPA/NRECA claims that this blanket authorization could force LSEs to bargain for stronger prohibitions limiting assignment in their contracts at the likely expense of other contract features and to enforce such language by litigation when necessary. 15. EPSA and EEI request the removal of the clause “the parties to the transaction are neither associate nor affiliate companies” from the blanket authorization granted in 18 CFR 33.1(c)(16). EPSA and EEI state that the clause was added in Order No. 708 without being previously proposed in the Blanket Authorization NOPR or sought by any commenter. In addition, both EPSA and EEI argue that the clause conflicts with the blanket orders that the Commission granted in Order No. 669-A. 22 EPSA argues that the clause limits blanket certificate availability to transactions involving only non-affiliated entities, and, therefore, it reverses the blanket certificate for internal reorganizations granted in 18 CFR 33.1(c)(6)§ 23 without making a finding that Order No. 669-A is no longer valid. EEI argues that the clause undercuts the blanket certificate authorizing the transfer of wholesale market-based contracts to other affiliates in 18 CFR 33.1(c)(11). 24 22 *Transactions Subject to FPA Section 203* , Order No. 669, 71 FR 1348 (January 6, 2006), FERC Stats. & Regs. ¶ 31,200 (2005), *order on reh'g* , Order No. 669-A, 71 FR 28422 (May 16, 2006), FERC Stats. & Regs. ¶ 31,214 (2006), *order on reh'g* , Order No. 669-B, 71 FR 42579 (July 27, 2006), FERC Stats. & Regs. ¶ 31,225 (2006). 23 18 CFR 33.1(c)(6) states that any public utility or any holding company in a holding company system that includes a transmitting utility or an electric utility will be granted a blanket authorization under sections 203(a)(1) or 203(a)(2) of the FPA, as relevant, for internal corporate reorganizations that do not result in the reorganization of a traditional public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, and that do not present cross-subsidization issues. 24 18 CFR 33.1(c)(11) states any public utility will be granted a blanket authorization under section 203(a)(1) of the FPA to transfer a wholesale market-based rate contract to any other public utility affiliate that has the same ultimate upstream ownership, provided that neither affiliate is affiliated with a traditional public utility with captive customers. 16. EPSA also argues that the clause “and the acquirer is a public utility” should be removed. EPSA argues that there is no concern regarding competition or cross-subsidization when one affiliate transfers a wholesale contract to another affiliate, as long as the affiliates involved are not themselves traditional public utilities with captive customers. EPSA also maintains that the clause creates an unnecessary burden on the Commission and unnecessary delay and costs for the applicants. 17. EEI requests that if rehearing is not granted, the Commission specify that 18 CFR 33.1(c)(16) does not override other blanket authorizations or require approval of a transaction if another blanket authorization such as 18 CFR 33.1(c)(11) (authorizing the transfers of wholesale market-based rate contracts to other affiliates) applies. Commission Determination 18. APPA/NRECA raised no new arguments on rehearing, and its request that the blanket authorization in 18 CFR 33.1(c)(16) be retracted or modified is denied. 19. We found in Order No. 708 that the transfer of a wholesale power contract which does not provide for the transfer of control of generation or transmission cannot affect horizontal or vertical market power. In addition, we note that Order No. 708 added a condition to address, in part, the concerns raised by APPA/NRECA. 25 We also found that, with the modification proposed by APPA/NRECA, the transfer of a wholesale power contract from one party that does not have captive customers or own or provide transmission service over jurisdictional transmission facilities, to another party that also does not have captive customers or own or provide transmission service over jurisdictional transmission facilities, cannot affect the rates of captive customers or transmission customers (and therefore has no rate or cross-subsidization impacts). As we reasoned in Order No. 708, in response to the same arguments that APPA/NRECA raises again on rehearing, purchasers can protect their interests by exercising contractual provisions, and, if necessary, by filing an FPA section 206 complaint. 26 We note that the issuance of this blanket authorization should not be construed as an expression of opinion by the Commission as to whether it is (or is not) reasonable for an entity to withhold consent as to a particular proposed transfer. Moreover, as we noted in Order No. 708, APPA/NRECA's concerns regarding the potential effect of the blanket on the bargaining power of LSEs is a speculative matter. 25 APPA/NRECA's comments led to adding to the blanket authorization the condition that “* * *neither the acquirer nor transferor has captive customers or owns or provides transmission service over jurisdictional transmission facilities* * *” *See* Order No. 708, FERC Stats. & Regs. ¶ 31,265 at P 48, 51. 26 *Id.* P 52. 20. The Commission grants EPSA's and EEI's requests to remove the clause “the parties to the transaction are neither associate nor affiliate companies” from 18 CFR 33.1(c)(16). EPSA and EEI have convincingly explained why the clause is inappropriate. In particular, where neither the acquirer nor the transferor has captive customers or owns or provides transmission service over jurisdictional transmission facilities, and the contract does not convey control over the operation of a generation or transmission facility, the price of the jurisdictional contract's transfer does not affect the rates of captive customers or transmission customers and therefore has no rate or cross-subsidization impact affecting captive generation customers or transmission customers. 21. EPSA's request to remove from 18 CFR 33.1(c)(16) the clause “and the acquirer is a public utility” is denied. Order No. 708 added this clause because of the possibility of a jurisdictional contract being transferred to a non-jurisdictional entity, in which case the Commission would lose the ability to regulate the contract and parties involved. 27 EPSA has presented no reason why the clause is not necessary to prevent that possibility. 27 *Id.* P 51. C. Hedging 1. Order No. 708 22. In Order No. 708, the Commission extended to public utilities a blanket authorization to transfer securities to holding companies that have blanket authorizations to acquire public utility securities under FPA section 203(a)(2) for certain underwriting or hedging purposes. 28 In doing so, the Commission observed that the condition for the parallel blanket authorization under FPA section 203(a)(2), limiting the acquiring entity to a voting right of less than 10 percent of the relevant class of securities, should ensure that any disposing entity facilitating such transactions does not affect a disposition or change in control of the issuer of the public utility securities. 29 28 18 CFR 33.1(c)(15) states that a public utility is granted a blanket authorization under section 203(a)(1) of the FPA to transfer its outstanding voting securities to any holding company granted blanket authorization in 18 CFR 33.1(c)(10). 18 CFR 33.1(c)(10) states that any holding company, or a subsidiary of that company, is granted a blanket authorization under section 203(a)(2) of the FPA to acquire any security of a public utility or a holding company that includes a public utility:
(i)for purposes of conducting underwriting activities, subject to the condition that holdings that the holding company or its subsidiary are unable to sell or otherwise dispose of within 45 days are to be treated as holdings as principal and thus subject to a limitation of 10 percent of the stock of any class unless the holding company or its subsidiary has within that period filed an application under section 203 of the FPA to retain the securities and has undertaken not to vote the securities during the pendency of such application; and the parent holding company files with the Commission on a public basis and within 45 days of the close of each calendar quarter, both its total holdings and its holdings as principal, each by class, unless the holdings within a class are less than one percent of outstanding shares, irrespective of the capacity in which they were held;
(ii)for purposes of engaging in hedging transactions, subject to the condition that if such holdings are 10 percent or more of the voting securities of a given class, the holding company or its subsidiary shall not vote such holdings to the extent that they are 10 percent or more. 29 Order No. 708, FERC Stats & Regs. ¶ 31,265 at P 45 (citing Order No. 669 at P 132). Requests for Rehearing 23. APPA/NRECA argues that this blanket authorization is contrary to the law and that the Commission should only allow such transactions on a case-by-case basis, with full disclosure of the specific business arrangements being contemplated. Because the Commission did not define “hedging transaction(s),” APPA/NRECA contends that the Commission cannot reasonably determine that the authorization is consistent with the public interest. It further argues that this blanket authorization, like the parallel blanket authorization under FPA section 203(a)(2), does not assure that the hedging transaction is only incidental to the acquirer's main business, since the blanket authorization does not require that the hedging transaction relate to the utility, power or energy business. APPA/NRECA believes that ratepayers should not be exposed to the complex and risky transactions sometimes undertaken by financial market participants to the harm of innocent third parties. Commission Determination 24. While the Commission agrees with APPA/NRECA's general proposition that electric ratepayers should not be exposed to unnecessary harm caused by risky transactions of financial market participants, we disagree that the blanket authorizations previously granted to holding companies in Order No. 669-A (18 CFR 33.1(c)(10)), or the parallel authorization granted to public utilities in Order No. 708 (18 CFR 33.1(c)(15)), will cause such harm. 25. Nor do we believe that the authorization in Order No. 708 is contrary to law. These authorizations are limited, and any hedging in public utility securities that is within the scope of section 203 is allowed only to the extent that it falls under one of the Commission's blanket authorizations or a specific authorization granted by the Commission on a case-by-case basis. Specifically, an existing condition in 18 CFR 33.1(c)(10)(ii) limits the voting ability of the entity acquiring securities for hedging purposes, so transactions under the new blanket authorizations should not result in a change in control of a public utility. Furthermore, the first part of the blanket authorization, 18 CFR 33.1(c)(10)(i), concerns underwriting and is directed at financial entities such as a bank, investment bank, or broker/dealer that engages in underwriting activities that may involve public utilities, but this authorization also has a 10 percent limitation and is subject to a reporting requirement. It is unlikely that the acquirers in the hedging transactions authorized would be public utilities because most holding companies are not also public utilities as most do not operate jurisdictional facilities. In fact, we are unaware of any public utility with captive customers that engages in hedging transactions involving the securities of other public utilities. 30 Therefore, we believe that the potential for harm to ratepayers of public utilities as a result of the blanket authorization is minimal. 30 We note that it was the investment firm Morgan Stanley Capital Group, Inc., not a franchised public utility, that requested rehearing of Order No. 669 to request the blanket authorization regarding hedging for a non-bank holding company. *See* Order No. 669-A, FERC Stats. & Regs. ¶ 31,214 at P 119-120. 26. In addition, it should be noted that states oversee cost recovery associated with their franchised public utilities' hedging activities involving purchases of power or fuel as part of an overall purchasing strategy in the interests of ratepayers. We think it would be unlikely that a state regulatory body would authorize the recovery from ratepayers of the costs incurred by one public utility to engage in hedging activities concerning the securities of another public utility. We further note that the Commission is not making any finding as to whether the costs associated with such hedging are appropriately recovered in rates. 27. We reject APPA/NRECA's request to deny any blanket authority for hedging transactions. APPA/NRECA's arguments, in large part, are a collateral attack of Order No. 669-A. Order No. 669-A determined that a blanket authorization under FPA section 203(a)(2), involving hedging for holding companies was in the public interest because such a blanket authorization would not give the acquiring entity additional market power or enable it to undermine competition or disadvantage captive customers. The Commission agreed that the blanket authority would promote the public interest by bringing more capital investment to the utility industry. The Commission also found that the condition removing the holder's power to vote the securities held for hedging purposes to the extent they are 10 percent or more of the securities in the class outstanding, even though the amount held for hedging is not limited, would address its concerns regarding control. 31 Subject to certain limitations, Order No. 708 merely granted the mirror image of this blanket for public utilities under FPA section 203(a)(1), in part, because the Commission had already determined in Order No. 669-A that there were adequate controls on these transactions. 31 Order No. 669-A, FERC Stats. & Regs. ¶ 31,214 at P 121, 132. 28. Further, the Commission will not codify a definition of “hedging” in this proceeding. This decision is based in part on our observation that hedging activities may be accomplished in a variety of ways and defining hedging may inappropriately limit it or may create situations that are inconsistent with usage by other government agencies. In general, hedging is an approach to risk management that uses financial instruments to manage identified risk. We note that various regulators have defined “hedging” and have promulgated rules and policies concerning such activities. 32 We will generally follow those principles with respect to the blanket authorizations granted under our rules. 32 For example, the Commodities Futures Trading Commission, defines bona fide hedging transactions in its regulations. 17 CFR 1.3(z). The Internal Revenue Service defines a qualified hedging transaction in its regulations. 26 CFR 1.988-5. The Financial Accounting Standards Board, the New York Mercantile Exchange, and the Chicago Mercantile Exchange all have policies concerning and defining hedging. D. Other 1. Reporting Requirements Requests for Rehearing 29. In Order No. 708, the Commission declined to impose additional reporting requirements in connection with the new blanket authorizations. 33 Although the Commission agreed with APPA/NRECA's argument in its comments on the Blanket Authorization NOPR that additional reporting requirements could provide greater efficiency, on balance, the Commission determined that the potential burdens would outweigh any efficiency gains. 34 In its comments on rehearing, APPA/NRECA reasserts its request that the Commission require public utilities to report all dispositions of securities undertaken pursuant to a blanket authorization on the ground that the Commission failed to explain why it dismissed its request in Order No. 708. 33 Order No. 708, FERC Stats & Regs. ¶ 31,265 at P 33. 34 *Id.* 30. It also asks the Commission to impose a requirement that public utilities certify their continued compliance with any “in aggregate” limitation in light of each new transaction. APPA/NRECA argues that, since the only reporting requirement is under 18 CFR 33.1(c)(2), a transfer of control in a public utility could occur over a series of transactions without the Commission's knowledge. Accordingly, APPA/NRECA asserts that the Commission cannot be sure that it is being provided with all the information necessary to ensure that a transfer of control does not occur. Commission Determination 31. APPA/NRECA has not presented any convincing reason to impose additional reporting requirements at this time and therefore its request for rehearing is denied. We first point out that APPA/NRECA is incorrect that there are no reporting requirements under 18 CFR 33.1(c)(9) (authorization of certain activities by a company regulated by the Board of Governors of the Federal Reserve Bank or by the Comptroller of the Currency) and 18 CFR 33.1(c)(10) (authorization for a holding company to engage in certain underwriting and hedging activities). 35 Further, the Commission does not believe that reports by a company regulated by the Board of Governors of the Federal Reserve Bank or by the Comptroller of the Currency are necessary when securities are held as a fiduciary or as principal for derivatives hedging purposes, since such activities by the holding company are overseen and closely monitored by the Board of Governors of the Federal Reserve Bank or by the Office of the Comptroller of the Currency as described in 18 CFR 33.1(c)(9). In addition, holding of shares as collateral for a loan does not change control of a public utility. Although 18 CFR 33.1(c)(10)(ii) does not have an explicit reporting requirement when securities are held for purposes of engaging in hedging transactions, this authorization does limit voting ability of the company acquiring the securities, eliminating the concern over transfer of control over a public utility. The transfer of wholesale contracts under 18 CFR 33.1(c)(16) is subject to section 205 filing requirements, which include, among other things, designation of the jurisdictional entity that will be the supplier under the contract. 36 35 The reporting requirements under 18 CFR 33.1(c)(9)(iv) and 18 CFR 33.1(c)(10)(i) require the parent holding company to file within 45 days of the close of each calendar quarter, both its total holdings and its holdings as principal, each by class, unless the holdings within a class are less than one percent of outstanding share, irrespective of the capacity in which they were held. 36 Order No. 669-A at P 83. 32. APPA/NRECA was correct in stating that 18 CFR 33.1(c)(8) (authorization for a person being a holding company solely with respect to EWGs, FUCOs, or QFs to acquire the securities of additional EWGs, FUCOs, or QFs) does not include a reporting requirement. The parallel authorization to public utilities under 18 CFR 33.1(c)(13), however, limits the acquiring holding company and its affiliates to less than 10 percent of the outstanding voting securities of the public utility. As we stated in Order No. 708, we believe this protection ensures that this blanket authorization is in the public interest. 33. The Commission does not, however, foreclose the possibility of imposing additional reporting requirements in the future, should circumstances change and it become apparent that additional reporting requirements would help us better monitor industry transactions that could adversely affect public utilities or their captive customers or transmission customers. We also note that, as discussed above, the Commission is concurrently issuing a supplemental request for comments on the narrow issue of reporting requirements for the extension of 18 CFR 33.1(c)(12) to cover public utility dispositions to non-holding companies. 2. Clarification of the Supplemental Policy Statement Request for Clarification 34. In the Supplemental Policy Statement, 37 the Commission declined to grant a generic blanket authorization for internal corporate reorganizations for the “transfer of assets” from one non-traditional utility subsidiary (for example, power marketer, EWG, or qualifying facility) to another non-traditional utility subsidiary, because the Commission cannot be certain in every situation of the impact of such transactions on utility affiliates. 37 Supplemental Policy Statement at P 38. 35. EEI requests that the Commission clarify that the internal corporate reorganization of non-traditional public utilities, such as a merger or consolidation, in which a single entity survives the transaction does not constitute the “transfer of assets” that the Commission has excluded from the blanket authorization. It argues that the Commission made clear in Order No. 669-A that the blanket authorization covers internal corporate reorganizations of non-traditional utilities whether they are accomplished through the acquisition of securities or through a merger or consolidation. It also argues that internal corporate reorganizations of non-traditional utilities in the form of mergers and consolidations will not cause an anticompetitive effect or present cross-subsidization issues because, in such transactions, ownership control over the assets will simply go from indirect to direct. EEI also notes that in reorganizations in which only one of the transacting entities survives the transaction, such as a merger or consolidation, ownership of jurisdictional assets by the surviving entity is assumed by law. 36. EEI maintains that the Commission's concern over the transfer of assets in a reorganization applies not to internal corporate reorganizations of non-traditional utilities in the form of mergers and consolidations, but to the contrasting type of reorganization where assets are transferred from one affiliate to another and both legal entities survive the transfer. EEI argues that if 18 CFR 33.1(c)(6) (authorization of internal reorganization not affecting a traditional public utility) were not interpreted so as to authorize the mergers of EWGs and other public utilities that do not have franchised territories simply because jurisdictional assets were transferred by operation of law in such mergers, there would be no practical distinction in the way the two types of reorganizations are treated under the 18 CFR 33.1(c)(6) blanket authorization. Commission Determination 37. We grant EEI's request for clarification that the blanket authorization in 18 CFR 33.1(c)(6) applies to transactions involving the transfer of assets from one non-traditional utility subsidiary ( *i.e.* , a public utility that does not have captive customers and does not own or control transmission facilities) to another non-traditional utility subsidiary when only one of the two non-traditional utility subsidiaries survives the transaction. We find that such a transaction will be consistent with the public interest and not entail cross-subsidization issues. Such a transaction would have no adverse effect on competition because market power is analyzed by the corporate family on an aggregate basis rather than on an individual corporate subsidiary basis ( *e.g.* , the transfer of the ownership of a generator between wholly-owned subsidiaries has no effect on the potential market power of the parent corporation). Such a transaction would also have no adverse effect on rates, regulation, or inappropriate cross-subsidization because the participants in the transaction neither have captive customers nor own or control transmission facilities. IV. Information Collection Statement 38. The Office of Management and Budget
(OMB)regulations require that OMB approve certain information collection requirements imposed by an agency. 38 The Final Rule's information collections were approved under OMB control no. 1902-0082. While this rule clarifies aspects of the existing information collection requirements, it does not add to these requirements. Accordingly, a copy of this Final Rule will be sent to OMB for informational purposes only. 38 5 CFR 1320.12. V. Document Availability 39. In addition to publishing the full text of this document in the **Federal Register** , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( *http://www.ferc.gov* ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426. 40. From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field. 41. User assistance is available for eLibrary and FERC's Web site during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or e-mail at *ferconlinesupport@ferc.gov,* or the Public Reference Room at
(202)502-8371, TTY 202-502-8659. E-mail the Public Reference Room at *public.referenceroom@ferc.gov.* VI. Effective Date 42. These revisions in this order on rehearing are effective August 25, 2008. List of Subjects in 18 CFR Part 33 Electric utilities, Reporting and recordkeeping requirements, Securities. By the Commission. Kimberly D. Bose, Secretary. In consideration of the foregoing, the Commission amends Part 33, Chapter I, Title 18, *Code of Federal Regulations,* to read as follows: PART 33-APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203 1. The authority citation for part 33 continues to read as follows: Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352; Pub. L. 109-58, 119 Stat. 594. 2. In 33.1, paragraph (c)(12) is revised and paragraph (c)(16) is added to read as follows: § 33.1 Applicability, definitions, and blanket authorizations.
(c)* * *
(12)A public utility is granted a blanket authorization under section 203(a)(1) of the Federal Power Act to transfer its outstanding voting securities to:
(i)any holding company granted blanket authorizations in paragraph (c)(2)(ii) of this section if, after the transfer, the holding company and any of its associate or affiliate companies in aggregate will own less than 10 percent of the outstanding voting interests of such public utility; or
(ii)any person other than a holding company if, after the transfer, such person and any of its associate or affiliate companies in aggregate will own less than 10 percent of the outstanding voting interests of such public utility.
(16)A public utility is granted a blanket authorization under section 203(a)(1) of the Federal Power Act for the acquisition or disposition of a jurisdictional contract where neither the acquirer nor transferor has captive customers or owns or provides transmission service over jurisdictional transmission facilities, the contract does not convey control over the operation of a generation or transmission facility, and the acquirer is a public utility. [FR Doc. E8-16869 Filed 7-23-08; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 35 [Docket No. RM07-15-001; Order No. 707-A] Cross-Subsidization Restrictions on Affiliate Transactions Issued July 17, 2008. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Final rule; order on rehearing. SUMMARY: The Federal Energy Regulatory Commission is granting rehearing and clarification, in part, of a final rule amending its regulations to codify restrictions on affiliate transactions between franchised public utilities that have captive customers, or that own or provide transmission service over jurisdictional transmission facilities, and their market-regulated power sales affiliates or non-utility affiliates. DATES: *Effective Date:* This Final Rule; order on rehearing will become effective August 25, 2008. FOR FURTHER INFORMATION CONTACT: Carla Urquhart (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8496, Paul Silverman (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8683, Mosby Perrow (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-6498, Valerie Gill (Technical Information), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8527, Stuart Fischer (Technical Information), Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
(202)502-8517. SUPPLEMENTARY INFORMATION: *Before Commissioners:* Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. Cross-Subsidization Restrictions on Affiliate; Docket No. Transactions RM07-15-001: Order on Rehearing Order No. 707-A Issued July 17, 2008. 1. Order No. 707 1 amended the Federal Energy Regulatory Commission's (Commission) regulations to codify restrictions on affiliate transactions between franchised public utilities that have captive customers or that own or provide transmission service over jurisdictional transmission facilities, and their market-regulated power sales affiliates or non-utility affiliates. These restrictions supplemented other restrictions the Commission has in place that apply to public utilities with market-based rates and to public utilities seeking merger approvals. In this order, we deny, in part, and grant, in part, the various requests for rehearing received by the Commission, and amend part 35 of our regulations accordingly. 1 *Cross-Subsidization Restrictions on Affiliate Transactions* , Order No. 707, 73 FR 11013 (Feb. 29, 2008), FERC Stats. & Regs. ¶ 31,264, *granting extension of time* , 122 FERC ¶ 61,280 (2008). I. Background 2. In the Affiliate Transactions Notice of Proposed Rulemaking, the Commission proposed to implement uniform affiliate restrictions that would be applicable to all franchised public utilities with captive customers and their market-regulated and non-utility affiliates and would address both power and non-power goods and services transactions between the utility and its affiliates. 2 The proposed restrictions were based on those already imposed by the Commission in the context of certain section 203 and 205 approvals, but expanded the transactions and entities to which they apply. 2 *Cross-Subsidization Restrictions on Affiliate Transactions* , Notice of Proposed Rulemaking, 72 FR 41644 (July 31, 2007), FERC Stats. & Regs. ¶ 32,618 (2007). 3. *Specifically, the Commission proposed to:*
(1)Require the Commission's approval of all wholesale power sales between a franchised public utility with captive customers and a market-regulated power sales affiliate;
(2)require a franchised public utility with captive customers to provide non-power goods and services to a market-regulated power sales affiliate or a non-utility affiliate at a price that is the higher of cost or market price;
(3)prohibit a franchised public utility with captive customers from purchasing non-power goods or services from a market-regulated power sales affiliate or a non-utility affiliate at a price above market price (with the exception of (4)); and
(4)prohibit a franchised public utility with captive customers from receiving non-power goods and services from a centralized service company at a price above cost. 4. The Commission stated that the restrictions would help it to meet the requirement of amended section 203(a)(4) of the Federal Power Act
(FPA)3 that a transaction not result in the inappropriate cross-subsidization of a non-utility associate company. The Commission further stated that the restrictions would help assure just and reasonable rates and the protection of captive customers for all public utilities pursuant to sections 205 and 206 of the FPA, 4 irrespective of whether they needed approval of a section 203 transaction. 3 16 U.S.C. 824b(a)(4). 4 16 U.S.C. 824d, 824e. 5. As the Commission stated in Order No. 707, its obligation to ensure that the rates, terms, and conditions of jurisdictional service are just, reasonable and not unduly discriminatory or preferential requires that it ensure that wholesale rates do not reflect costs that result from undue preferences granted to affiliates or that are imprudent or unreasonable as a result of affiliate transactions. The Commission described its long history of scrutinizing affiliate transactions for potential cross-subsidization and how in recent rulemakings and orders it has codified and expanded affiliate restrictions, both under its FPA section 205 and 206 rate authority (in the context of market-based rates) and under its FPA section 203 merger authority. The Commission then extended similar restrictions to all franchised public utilities that have captive customers, or that own or provide transmission service over jurisdictional transmission facilities. In particular, the Commission articulated restrictions on affiliate sales of electric energy by prohibiting wholesale sales of electric energy between a franchised public utility with captive customers and a market-regulated power sales affiliate without prior Commission authorization for the transaction under section 205 of the Federal Power Act. 5 The Commission also promulgated three pricing restrictions on the sale of non-power goods and services. 5 18 CFR 35.44(a). 6. First, the Commission provided that unless otherwise permitted by Commission rule or order, sales of any non-power goods or services by a franchised public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, including sales made to or through its affiliated exempt wholesale generators or qualifying facilities, to a market-regulated power sales affiliate or non-utility affiliate must be at the higher of cost or market price. 7. Second, the Commission provided that unless otherwise permitted by Commission rule or order, a franchised public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, may not purchase or receive non-power goods and services from a market-regulated power sales affiliate or a non-utility affiliate at a price above market. 8. Third, and as an exception to the restriction set forth immediately above, the Commission provided that a franchised public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, may only purchase or receive non-power goods and services from a centralized service company at cost. 6 6 *Id.* 9. The Commission also stated in Order No. 707 that the pricing rules would be prospective and would apply to any contracts, agreements or arrangements entered into on or after the effective date of the rule. The Commission explained that to the extent different pricing was in effect for any contract, agreement, or arrangement entered into prior to the effective date of Order No. 707, that pricing may remain in effect, but the Commission may on its own motion, or upon complaint, institute a section 206 proceeding to determine whether the costs incurred by a public utility under pre-existing contracts, agreements or arrangements are just, reasonable and not unduly discriminatory or preferential. II. Discussion A. Affiliate Transaction Pricing Standards 10. In Order No. 707, the Commission denied requests to permit franchised public utilities with captive customers to make sales of non-power goods and services at cost to market-regulated power sales affiliates or non-utility affiliates and instead required these sales to be at the higher of cost or market price. It reasoned that to adopt an at-cost pricing structure for these types of non-power transactions “would require a franchised public utility to sell to an affiliate at cost even when market prices are higher, thereby foregoing profits that the utility otherwise could have obtained by selling to a non-affiliate at a market price.” 7 7 Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 70. 11. The Commission also prohibited a franchised public utility with captive customers from purchasing non-power goods or services from a market-regulated power sales affiliate or a non-utility affiliate at a price above market price, with the exception of purchases from centralized service companies. In doing so, the Commission denied the New York State Public Service Commission's (New York Commission) request for a lower of cost or market standard for these types of transactions, finding that captive customers are not harmed by the franchised public utility paying above-cost charges if those charges are no higher than what they would pay non-affiliates for the same non-power goods and services. In this regard, the Commission noted that nothing in the standard requiring that these purchases not be above market prevents the franchised public utility from paying less than the market price. 8 The Commission further rejected requests that it defer to state utility commissions that apply different standards to intra-system transactions to avoid inconsistent standards. 9 8 *Id.* P 71. 9 *Id.* P 74. 1. Shared Corporate General Management and Administrative Services Requests for Rehearing or Clarification 12. Florida Power & Light Company and FPL Energy, LLC (FPL), Pacific Gas & Electric Company (PG&E), and Southern California Edison Company (SoCal Edison) each argue that Order No. 707 does not adequately address pricing for shared corporate general management and administrative services that a utility provides to other companies in a single-state holding company system without a centralized service company but that it does not offer to non-affiliates. The services in question are those akin to the services that a centralized service company provides in multi-state systems. PG&E identifies them as accounting, appraisal, call center, claims, computer, construction, communications, equipment, fleet, janitorial, legal, legislative, maintenance, payroll, personnel, realty, regulatory, supply, and technical services. FPL notes that the services in question are similar to those provided by a centralized service company, which the Commission has defined as one “that provides services such as administrative, managerial, financial, accounting, recordkeeping, legal or engineering services, which are sold, furnished, or otherwise provided (typically for a charge) to other companies in the same holding company system.” 10 FPL states that in its system, the services in question are information technology and management; corporate communications systems; engineering and construction; 11 finance and accounting; legal; human resources; auditing; environmental services; risk management; technical nuclear and power generation support services; and federal government affairs. FPL, PG&E and SoCal Edison maintain that intra-system sales of these services at cost should be permitted even when the system has no centralized service company. 10 The language cited is drawn from the definition of a centralized service company found in 18 CFR 367.1(a)(7). 11 FPL notes that in its case “engineering and construction” services do not refer to the intra-corporate provision of parts or labor. It refers rather to oversight and planning functions effectively as an owner's representative. Actual engineering and construction services with respect to new plants are provided by third-party engineering and construction companies at negotiated rates. 13. FPL, PG&E and SoCal Edison first note that they do not make sales of these services to non-affiliates, and as a result market prices do not exist for them. SoCal Edison notes that the Commission acknowledged in Order No. 707 that it has recognized that defining a market price for these services is a “speculative task” when dealing with a centralized service company, but the Commission fails to recognize that the task is no less speculative where the system does not have a centralized service company. FPL states that many of the services at issue vary from location to location and provider to provider. In a system like its own, these services have been provided in-house for years, and the nature of the services as well as the manner in which they are provided reflect both the culture and technology choices made by the utility providing these services. Because the nature of a service is driven and structured primarily to meet the needs of the franchised public utility, it is virtually impossible to establish a market or a market price for it. 14. SoCal Edison challenges the reasoning underlying the Commission's denial of at-cost pricing for general administrative services a franchised public utility provides to system companies, *i.e.* , that this pricing standard would require a franchised public utility to sell to an affiliate at cost even when market prices are higher, thereby foregoing profits that the utility otherwise could have obtained by selling to a non-affiliate at a market price. SoCal Edison argues that where the utility is not making any market-based sales of these services, it is not “foregoing” any profits. It suggests that there is no evidence in the record for the Commission's assumption that utilities would forego profits if the Commission did not adopt a higher of cost or market standard, and thus, no basis for the Commission's rejection of an at-cost pricing structure. SoCal Edison contends that the Commission should acknowledge the distinction between goods and services developed for sale on the open market (for which affiliates should be charged the higher of cost or market price) and those services that are not intended for sale and can be provided to affiliates at their fully-loaded cost. 12 12 SoCal Edison states that fully-loaded costs include the direct cost of each employee's time plus adders to cover indirect costs such as employee benefits and other overhead items. 15. FPL, PG&E and SoCal Edison argue that at-cost pricing in these circumstances ( *i.e.* , where the franchised public utility is a member of a single-state holding company and provides services only to affiliates, but not on the open market, and operates in a single-state context) leads to significant economies of scale. SoCal Edison states that while Order No. 707 recognizes the efficiencies and economies of scale that benefit captive customers when general administrative services are provided across an enterprise, instead of being duplicated by each separate entity within a holding company structure, the order fails to recognize similar efficiencies and economies of scale in a single-state context where the corporate structure does not include a formal centralized services company, but where a franchised utility often may provide similar in-house corporate administrative services to the rest of the corporate enterprise. 16. PG&E argues that at-cost provision of goods and services promotes economies of scale, and as long as the non-utility companies within a family are not charging more than the cost of the services, and the utilities involved are recovering their costs of providing any services they provide to others within the family, utility ratepayers will receive the cost advantages of the economies of scale from in-house services and will be insulated from cross subsidizing other companies and their customers. 17. FPL argues that customers will lose the benefit of established efficiencies, expertise, and economies of scale, with no real countervailing benefit if at-cost pricing cannot be used in these circumstances. FP&L asks the Commission to clarify that when companies in a holding company system supply to each other non-power goods or services comparable to those provided by a centralized service company, then those non-power goods and services may be provided at fully-loaded cost as a reasonable proxy for market price. FPL argues that a fully-loaded cost standard has avoided the time and expense of formal requests for proposal procedures to “market test” in theory every provision of regularized and ongoing support services. An at-cost standard allows immediate use of shared corporate technical expertise in the most efficient and cost-effective manner. 18. These commenters also argue that customers of franchised public utilities are protected from affiliate abuse when general administrative services are shared at their fully-loaded costs, *i.e.* , costs designed to reflect the total corporate costs of providing a service. FP&L states that fully-loaded cost reflects the total cost to provide a particular service, including corporate overhead and other general expenses. 13 Edison Electric Institute
(EEI)argues that there should at least be a strong presumption that the at-cost standard is appropriate when dealing with services of this type, barring a Commission or ratepayer concern, which can be explored on a case-by-case basis. It states that otherwise the new rules could be read to preclude even utility-to-centralized service company provision of such services at cost, requiring the services to be priced higher than at cost by one utility to the detriment of the customers of another utility that is a client of the centralized service company. 13 FPL states that these expenses include
(1)salaries, incentives, commissions, bonuses, rewards;
(2)insurance;
(3)paid time off such as vacation, etc.,
(4)FICA and miscellaneous taxes;
(5)retirement planning/401k;
(6)office infrastructure (office space, furniture, utilities);
(7)office equipment (computer, software, FAX, Printer, UPS, Copier, etc.);
(8)telecom & internet;
(9)operational/functional management and oversight;
(10)human resources and administration;
(11)finance and payroll;
(12)miscellaneous fringe and welfare benefits;
(13)training and education; and
(14)travel expenses. FP&L states that it organizes costs into three categories:
(a)“direct costs,” *i.e.* , costs of resources used exclusively to provide services that are readily identifiable to an activity and used to indicate work that directly benefits a business unit other than the provider;
(b)“assigned costs” or the costs of resources used jointly to provide both regulated and non-regulated activities that are apportioned using direct measures of cost causation; and
(c)“unattributable” costs or costs of resources shared by both regulated and non-regulated activities for which no causal relationship exists. The costs in this final category are accumulated and allocated to both regulated and non-regulated activities using an affiliate management fee based on the “Massachusetts Formula,” which FPL says is a long-recognized regulatory methodology of cost allocation. 19. SoCal Edison states that when affiliates are charged fully-loaded cost for such services, the ability to leverage these services and gain economies of scale ultimately benefits the utility's customers. 20. EEI states that there is an array of services that companies within the family can provide to one another at a substantial savings because of economies of scale and by keeping the services in-house rather than having to obtain the services in the market, where additional overhead and rates of return must be covered. EEI argues that the at-cost provisions of Order No. 707 should apply broadly to companies within a family of companies that provide services to each other of the type provided by centralized service companies, even where the system does not have a formal centralized service company. EEI states that there should be no distinction between utility and non-utility affiliates to this extent. It maintains that a market price standard should apply only in cases where the seller makes external sales of these non-power services. 21. EEI and PG&E also argue that the Commission has failed to address or to resolve the potential for conflict between the Commission's rules and state affiliate transaction and cross subsidy requirements that may apply to the same transactions. 14 EEI argues that many states already have affiliate transaction provisions in place, and those provisions are specifically aimed at protecting captive retail customers. It maintains that the Commission should more fully accommodate the state provisions in this instance, as the Commission's final rule is aimed at protecting the same customers that state requirements seek to protect. EEI and PG&E argue that the states have a special interest in, and responsibility for, overseeing costs affecting these customers, and states have been fulfilling that role for many years. 14 National Grid USA (National Grid) makes a similar argument which we discuss separately below. 22. PG&E argues that the Commission should defer to state reviews and approvals of affiliate transactions in order to avoid unnecessary conflict. It argues that the Commission's approach to affiliate transactions fails to address or to resolve the potential for conflict between Commission requirements and state affiliate transaction and cross subsidy requirements that may apply to the same transactions. PG&E argues that to avoid conflict, the Commission should grant a blanket waiver of the final rule's requirements applicable within any state that already oversees affiliate transactions to protect against cross-subsidization, and the waiver should apply to company operations covered by the state provisions. PG&E maintains that waivers of this type would be consistent with waivers the Commission has authorized for single-state utilities in Order No. 667. EEI supports these waivers also. National Grid argues that if the Commission does not defer to state regulation, it should provide a process for public utilities to get a waiver of the Commission's regulations' for certain transactions based on a showing that those transactions are already subject to adequate regulation at the state level. Commission Determination 23. As discussed further below, we find the arguments in favor of permitting companies within a single-state holding company system that does not have a centralized service company to provide each other general administrative and management services at cost to be persuasive, and we will therefore grant rehearing on this issue. Accordingly, we are revising our rules to permit affiliates within a single-state holding company system, as defined by our rules, 15 that does not have a centralized service company to provide “at cost” to other affiliates in the system the kinds of services typically provided by centralized service companies and the goods to support those services. 16 We stress that this permission applies only to internal general administrative and management services and only to services in that category that are not provided to unaffiliated third parties. While our grant of rehearing necessarily applies also to charges for a limited set of goods in the form of supplies and equipment acquired to support administrative and management functions, as well as office space and other general overhead items, we note in particular that it does not apply to inputs to utility operations such as fuel supply, construction, or real estate 17 that have a clearly identifiable market price, 18 nor does it apply to the implementation of major projects that are easily susceptible to competitive bidding, such as construction projects. 15 18 CFR 366.3(c)(1) (defining a single-state holding company as a holding company that derives no more than 13 percent of its public-utility company revenues from outside a single state). The definition exempts revenues derived from exempt wholesale generators, foreign utility companies, and qualifying facilities for these purposes. 16 Section 367.1(a)(7) of the Commission's regulations defines a centralized service company as “a service company that provides services such as administrative, managerial, financial, accounting, recordkeeping, legal or engineering services, which are sold, furnished, or otherwise provided (typically for a charge) to other companies in the same holding company system.” This definition also states that “[c]entralized service companies are different from other service companies that only provide a discrete good or service.” 17 *See* Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 62 n.57. 18 We discuss the issue of fuel adjustment clauses further below. 24. There are several reasons why the Commission has concluded that it is appropriate to expand the use of at-cost pricing beyond the context of centralized service companies to also allow at-cost pricing for the provision of general and administrative services and the goods to support those services between members of a single-state holding company system where those members do not sell such goods or services to non-affiliates. First, as we stated in Order No. 707 with respect to the same types of services being provided by centralized service companies in multi-state systems, defining a market price for general and administrative services is a speculative task. 19 The task is no more speculative in the context of a multi-state holding company with a centralized service company than in the context of a single-state holding company without a centralized service company. Thus, we agree that, when dealing with general administrative and management services, as a general matter the critical issue is the type of service involved, not whether it is supplied through a centralized service company or through a different type of system company. 19 Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 72. 25. Second, SoCal Edison points to our statement in Order No. 707 that at-cost pricing “would require a franchised public utility to sell to an affiliate at cost even when market prices are higher, thereby foregoing profits that the utility otherwise could have obtained by selling to a non-affiliate at a market price.” 20 We recognize that this statement concerning foregone profits does not apply where the utility does not provide those goods or services to non-affiliates. We therefore agree with SoCal Edison that where a utility is not making sales of a service to a non-affiliate, it cannot be said with certainty to be foregoing any profit. 20 *Id.* P 70. 26. Third, we recognize that efficiencies and economies of scale associated with providing these types of services and the goods to support those services between members within the single-state holding company system can benefit captive customers because the goods and services often can be provided less expensively, at cost, than if they were purchased from outside the system by individual system members. As a related matter, we do not believe it would serve the public interest to have rules that create an incentive for a single-state holding company to incur additional costs to set up a separate centralized service company (that would be allowed to use the at-cost pricing) to provide the very same services and the goods to support those services that could be provided more inexpensively, *e.g.* , through the investor-owned utility, without a centralized service company. While we believe that centralized service companies can facilitate regulatory oversight and generally favor their use, we also recognize that they may not be the most efficient or least-cost structure for some holding companies. 27. Finally, we give weight to the fact that where services are provided within a single-state holding company context, there may be greater state regulatory authority to oversee these types of services transactions and the goods to support those services than in the multi-state context, and this state oversight will serve to complement that of the Commission in protecting customers against inappropriate cross-subsidization. We recognize that one of the risks of at-cost pricing is the potential for prices to be imposed that are substantially higher than the market price. 21 As we stated in Order Nos. 667 and 707, the Commission will entertain complaints that at-cost pricing exceeds the market price. 21 See Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 73. 28. We recognize that many of the above considerations would also apply to general and administrative goods and services provided between members in multi-state holding companies that do not have centralized service companies. However, we are reluctant to grant a broad generic exception for those circumstances. The detailed accounting and reporting requirements applicable to centralized service companies greatly assists the Commission in regulating those entities in a multi-state context where individual states may have less authority to help oversee affiliate transactions. We are willing, however, to consider requests for waiver on a case-by-case basis for at-cost pricing in the multi-state context, under the same circumstances as for single state holding companies (i.e., only for general and administrative services and the goods to support those services and only where members of the holding company do not sell such goods and services outside the holding company). 22 This will allow the Commission to examine each situation to ensure that adequate regulatory oversight and protections are in place. The Commission acknowledges that many of the arrangements for the intrasystem sharing of administrative and management services under discussion here are long standing and, in part, have developed in response to state regulatory requirements. The Commission agrees with EEI, PG&E and others that the states have a special interest in these matters, and, as discussed above, that it is appropriate to take into account such state regulation in developing our policies in this area. Accordingly, the existence of state oversight and the desire to avoid conflict with state requirements is an important consideration in granting rehearing and revising our rules as described above and in our willingness to consider case-by-case exceptions involving general and administrative services and the goods to support those services provided in the multi-state context. We do not want to require significant changes to settled practices when these practices are already subject to state oversight and where there is no showing that suggests these practices are leading to improper cross-subsidization. We believe that our grant of rehearing eliminates the potential for conflict between the Commission's rules and state affiliate transaction and cross subsidy requirements that may apply to the same transactions involving general and administrative services and the goods to support those services in a single-state holding company system. However, to the extent that any conflicts do arise, companies or state regulatory authorities may bring this to our attention on a case-by-case basis, and we will determine whether case-specific waivers are appropriate. 22 We do not anticipate that there would be very many multi-state holding companies in this category since most, if not all, of the current multi-state holding companies are former registered holding companies under the Public Utility Holding Company Act of 1935 that had centralized services companies and still have them. 29. Commenters have described procedures they use to ensure that customers of franchised public utilities are protected from affiliate abuse when general administrative and management services are shared among system companies. Our grant of rehearing is premised on the assumption that the at-cost sharing of general administrative and management services in single-state holding company systems will be conducted using rigorous accounting and cost-allocation procedures. It is also premised on the assumption that the at-cost standard will be applied in conjunction with measures for the fair and reasonable allocation of costs across system companies. In granting rehearing, we note that when at-cost principles are applied (whether in the context of multi-state holding companies or in the context of single-state holding company systems), the Commission historically has acted, and will continue to act, under sections 205 and 206, whether on an application, a complaint, or on our own motion, to ensure that inappropriate costs are not flowed through in jurisdictional rates. 30. Accordingly, we will amend our regulations to provide that a company in a single-state holding company system, as defined in 18 CFR 366.3(c)(1), may provide general administrative and management non-power goods and services to, or receive such goods and services from, other companies in the same holding company system, at cost, provided that the only parties to transactions involving these non-power goods and services are affiliate or associate companies, as defined in 18 CFR 366.1, of a holding company in the holding company system. 31. We deny FPL's request for clarification that fully-loaded cost is a reasonable proxy for market price. First of all, we see no need to do so in light of our grant of rehearing above. Secondly, making fully-loaded cost a proxy for market price unnecessarily clouds the distinction between at-cost and market pricing embodied in our rules. 2. Pricing Standards for Particular Affiliate Arrangements Requests for Rehearing or Clarification 32. A number of requests for rehearing or clarification relate to the treatment of specific transactions or arrangements under our rules. 33. PG&E argues that a “no higher than the market price” standard is inoperable for certain types of entities. It refers specifically to bankruptcy-remote special-purpose entities used to raise funds through a securitized financing. PG&E states that these entities are structured to operate independently and at arm's length from their parent so that their assets and liabilities would not be consolidated with those of the parent in the event of the parent's or utility's bankruptcy. PG&E argues that this approach lowers the cost of utility financing, but that the special-purpose entities must be fully reimbursed for their costs in order to secure a legal opinion in support of their bankruptcy remote status. PG&E also believes that the use of special-purpose entities to obtain accounts receivable financing might be inconsistent with the Commission's rules. These entities also must be able to recover their costs fully. 34. Two holding companies with franchised public utility operations in more than one state seek clarification or rehearing on transactions specific to their individual operations. Xcel Energy Services Inc.
(Xcel)argues that Order No. 707 does not expressly deal with the pricing for transactions between franchised public utilities. It states that its franchised operating companies entered into an umbrella agreement in 2000 that allows for incidental transactions in goods and services between the operating companies, such as short-term leases of coal rail cars done at cost. Xcel states that this at-cost arrangement was consistent with that at-cost principle mandated by the Securities and Exchange Commission
(SEC)at the time. Xcel requests that its operating companies be allowed to continue these incidental transactions. 35. Xcel and National Grid each argue that certain transactions between their respective franchised public utilities that are accomplished through their respective centralized service companies should be subject to at-cost principles. Xcel notes that the Commission's regulations do not account for non-power goods and services that a utility operating company provides to its centralized service company and whose costs may then be re-allocated to other franchised public utility operating companies. Xcel states that its franchised public utilities share certain information system assets in this way at cost and were permitted to do so at cost by the SEC. Xcel seeks clarification that it and its operating companies may request a waiver from the Order No. 707 rules to continue at-cost arrangements like this that pre-date EPAct 2005 and Order No. 707. 36. National Grid argues that in Order No. 707 the Commission mischaracterized its comments as supporting at-cost pricing for all transactions among affiliates within a holding company system. National Grid states that it only proposed symmetrical pricing between franchised public utilities and centralized service companies—meaning all transactions involving centralized service companies would be priced at cost, no matter their direction. It contends that this pricing structure would comply with the affiliate rules included in the New York Commission's order on the merger between National Grid and Keyspan. 37. National Grid argues that the same rationale for justifying at-cost pricing for centralized service companies selling non-power goods and services to a franchised public utility should apply when a franchised public utility sells non-power goods and services to the centralized service company, *i.e.* , economies of scale, difficulty defining market value, and the Commission's authority to find at-cost pricing unreasonable in specific instances. National Grid states that the Commission's decision to treat centralized service companies like other non-utility affiliates when purchasing goods or services from a utility affiliate creates accounting requirements that are much more difficult to implement than symmetrical pricing. 38. National Grid maintains that while the Commission stated in Order No. 707 that “stricter” state standards would apply to affiliate transactions, the Commission's approach involves a narrow reading of that term that focuses entirely on price levels. 23 National Grid argues that a state's restrictions on affiliate transactions may be considered highly strict if they require all transactions involving regulated affiliates to be settled at fully-loaded cost. National Grid states that its operations currently are subject to strict at-cost requirements at the state level that apply to all companies deemed regulated, which includes service companies. It argues that inserting Commission price standards into this situation will upset arrangements made at the state level in merger proceedings and rate cases. National Grid thus maintains that applying the Commission's rules to transactions among regulated affiliates will depend on how the term “strict” is to be interpreted in this context. 23 In Order No. 707, the Commission stated that “to the extent a state has affiliate-pricing standards that are ‘stricter' than the Commission's then the stricter standard applies, as long as there is no conflict in complying with both the state's pricing standard and this Commission's pricing standard.” *Id.* P 74. 39. National Grid proposes that, because of the special status of centralized service companies, it may be preferable to distinguish between regulated and non-regulated companies rather than between utilities and non-utilities, in that centralized service companies are regulated at both the state and federal levels. National Grid maintains that this would be consistent with the Commission's position that its policies should not preempt state rules. 40. FirstEnergy Service Company (FirstEnergy) argues that the Commission should clarify that public utilities subject to regulation under Order No. 707 are free to request a waiver of one or more, but not all, of the Order No. 707 affiliate cross-subsidization restrictions. It maintains that this clarification will provide additional certainty when determining how best to comply with Commission regulation of affiliate cross-subsidization restrictions. Commission Determination 41. The Commission will defer responding to the issues raised by PG&E with respect to the implications of our affiliate pricing rules for special-purpose entities created for financing purposes, such as bankruptcy-remote entities. It appears from PG&E's brief discussion that this is a generic issue and that there may be a lack of clarity with respect to whether the Commission considers bankruptcy-remote entities to be providing “services” covered by the Order No. 707 pricing restrictions. Accordingly, consistent with our goals of trying to clarify areas of confusion with respect to our regulations and providing greater regulatory certainty to the regulated community where possible, the Commission intends to obtain additional input from industry and others regarding the activities of bankruptcy-remote entities and their relationship to franchised public utilities, and thereafter to issue a guidance order with respect to whether the Commission considers these entities to be providing services covered by the rule and any related issues. In the interest of finalizing this rule, however, we will undertake such inquiries outside the context of this particular rulemaking. 42. With respect to Xcel and National Grid's concerns, we will address on a case-by-case basis issues regarding transactions between affiliated franchised public utilities or between franchised public utilities that include intermediate transactions with centralized service companies. First, we will consider whether pricing or other restrictions need to be imposed on transactions between two or more franchised public utilities on a case-by-case basis. Such transactions are not covered by this rule, which applies only to transactions between franchised public utilities and either a market-regulated power sales affiliate or a non-utility affiliate. 24 Second, to the extent that the requirements of this rule may be implicated because transactions for goods and services between franchised public utilities include intermediate transactions with a centralized service company, we clarify in response to National Grid and Xcel that a holding company and its operating companies may seek a waiver of the requirements of this rule on a case-by-case basis. 24 Transactions involving only two or more franchised public utilities may raise a different type of cross-subsidization issue (involving whether the customers of one franchised public utility would be subsidized at the expense of the customers of the other franchised public utility). The Commission will address such issues on a case-by-case basis, as appropriate, in the context of a section 205 filing, a section 206 complaint, or a section 203 merger application. 43. In response to FirstEnergy, we clarify that public utilities subject to regulation under Order No. 707 are free to request a waiver of the Order No. 707 affiliate cross-subsidization restrictions. 3. Materiality Threshold Request for Rehearing or Clarification 44. EEI argues that, to avoid imposing an inappropriate burden while achieving the Commission's policy and regulatory goals, Order No. 707 should incorporate materiality thresholds per class of transactions per provider of either $1 million or 1 percent of utility gross revenues, whichever is less, before the affiliate transaction preapproval and pricing requirements apply. It notes that the Commission recently proposed using thresholds in its notice of proposed rulemaking on FERC Form 1, 1-F, and 3-Q, and their use here will allow companies to avoid scrutinizing thousands of relatively minor transactions. Commission Determination 45. We will deny EEI's request for a materiality threshold for the application of the Order No. 707 rules. While we agree in principle that a materiality threshold may be appropriate, EEI has not fully explained how its proposal would function when applied. In particular, EEI has not explained what it means by a “class” of transactions, and the degree to which the threshold would apply in practice appears to depend, in part, on how broadly or narrowly a category is drawn. However, it may be appropriate for the Commission to revisit this issue after gaining additional experience with these rules. B. Relationship of Pricing Restrictions to Other Commission Regulations 46. A number of commenters argue that the rules adopted in Order No. 707 may conflict with other Commission regulations. We address each potential conflict raised by commenters. 1. PURPA Regulations Request for Rehearing or Clarification 47. EEI argues that the power transaction restrictions implemented in Order No. 707 should not apply to mandatory purchase obligation sales from qualifying facilities
(QFs)under the Public Utility Regulatory Policies Act of 1978 (PURPA). 25 It maintains that prohibiting affiliate power sales that are not first approved under FPA section 205 26 could, if taken literally, require pre-authorization for energy sales made by a QF with market-based rate authority to an affiliated utility with captive customers. EEI asserts that this could be the case even where the utility has a mandatory obligation under PURPA to purchase the energy. EEI believes that the Commission did not intend this result because there is no reason for additional review of sales under a mandatory purchase agreement that is subject to Commission review. 25 16 U.S.C. 824a-3. 26 18 CFR 35.44(a) (“ *Restriction on affiliate sales of electric energy* . No wholesale sale of electric energy may be made between a franchised public utility with captive customers and a market-regulated power sales affiliate without first receiving Commission authorization for the transaction under section 205 of the Federal Power Act”). Commission Determination 48. The Commission agrees with EEI that it did not intend that the pre-authorization requirement in question would apply to QF sales under contracts based on a mandatory purchase obligation under PURPA where the QF has market-based rate authority. Accordingly, we clarify that the pre-authorization requirement does not apply to those sales. 2. Fuel Adjustment Clause Regulations Request for Rehearing or Clarification 49. EEI argues that to avoid conflicts, the non-power transaction provisions in the regulations implemented by Order No. 707 should be amended to exclude fuel purchases covered by the Commission's fuel adjustment clause regulations at 18 CFR 35.14(a)(7). It asserts that the new requirement could be read to apply to a purchase subject to the fuel adjustment clause regulations regardless of prior approval of the fuel price by a regulatory body. The new § 35.44(b) applies a “no higher than market” ceiling to purchases of goods and services that may differ from fuel prices already authorized by a regulatory body and currently allowed for use under § 35.14(a)(7). EEI argues that if § 35.44(b) controls in such circumstances, it could require utility fuel subsidiaries to accept a lower price even if a higher price has been approved by a state regulatory body. EEI also argues that determining the market price for a specific, delivered fuel can be very difficult because differences in quality and transportation costs affect the price. Commission Determination 50. The Commission clarifies that the regulations issued under Order No. 707 pertaining to sales of non-power goods and services do not apply to fuel purchases covered by the Commission's fuel adjustment clause regulations. Those regulations incorporate extensive oversight measures, including a provision that fuel charges by affiliated companies that do not appear to be reasonable may result in the suspension of the fuel adjustment clause or an investigation under FPA section 206. Accordingly, we will amend our regulations to exempt from our affiliate pricing restrictions transactions for fuel where the price of fuel from a company-owned or controlled source is found or presumed under 18 CFR 35.14 to be reasonable and includable in the adjustment clause. 3. Market-Based Rate Regulations Requests for Rehearing 51. FirstEnergy notes that under Order No. 707, a public utility that received a waiver of the market-based rate affiliate restrictions based on a finding that it had no captive customers can be exempted from the new affiliate cross-subsidization restrictions by making an informational filing referencing that finding. FirstEnergy argues that there is no need to impose on public utilities that have received waivers of the market-based rate affiliate restrictions the additional burden of making an informational filing in order to avoid the application of duplicative Order No. 707 affiliate cross-subsidization restrictions. 52. FirstEnergy also notes that while the Commission may have waived a public utility's market-based rate affiliate restrictions, the Commission may not have made an express “finding” as to whether the relevant public utility served captive customers, and it is thus unclear whether those public utilities will be entitled to rely on the Commission's waiver of market-based rate affiliate restrictions for purposes of the Order No. 707 affiliate restrictions. FirstEnergy maintains that the difficulty will be compounded by the unlikelihood of a Commission order in response to the informational filing or some other confirmation that the Commission has accepted or approved that filing. 53. FirstEnergy argues that to the extent that affiliate cross-subsidization compliance issues arise, it will be unclear whether the Commission's market-based rate affiliate restrictions, Order No. 707's affiliate cross-subsidization restrictions, or both, apply to a given transaction and to what effect. FirstEnergy argues that the Commission should delete the new restriction on affiliate sales of electric energy and rely instead on its existing market-based rate affiliate regulations to govern relevant wholesale sales of electric energy at market-based rates. In the alternative, FirstEnergy requests that the Commission clarify the relation between these two requirements. Commission Determination 54. We disagree with FirstEnergy that it is unnecessary to require public utilities that have received waivers of the market-based rate affiliate restrictions to make informational filings referencing that filing for purposes of the Order No. 707 regulations. The minimal burden this requirement might create does not outweigh the benefit in terms of administrative efficiency and transparency that would accrue to the industry and the Commission through this procedure. 55. FirstEnergy expresses general concerns about the effect a Commission waiver of a public utility's market-based rate affiliate restrictions would have for purposes of Order No. 707. As the Commission explained in Order No. 697, “where a seller demonstrates and the Commission agrees that it has no captive customers, the affiliate restrictions will not apply.” 27 We clarify that the informational filing with respect to Order No. 707 need only consist of a copy of, and a citation to, the Commission order finding that the public utility does not serve captive customers. 28 Further Commission action on the issue thus would be unnecessary, absent any change in the facts on which the Commission's finding was based. This clarification that the informational filing consists of a copy of, and a citation to, the Commission's finding should adequately address FirstEnergy's concern that there might be an instance in which the Commission has not made an express finding on whether the public utility serves captive customers. 27 *Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities* , Order No. 697, 72 FR 39,904 (July 20, 2007), FERC Stats. & Regs. ¶ 31,252, at P 552 (2007), *clarified* , 121 FERC ¶ 61,260 (2007), *order on reh'g* , Order No. 697-A, 73 Fed. Reg. 25,832 (May 7, 2008), FERC Stats. & Regs. ¶ 31,268. 28 The Commission does not intend to set these informational filings for notice and comment, or issue orders on them. 56. The Commission denies FirstEnergy's requests to delete the new regulations and rely on existing pricing restrictions under its market-based rate regulations. FirstEnergy has misinterpreted the scope and applicability of the regulations adopted in Order No. 707. As the Commission stated in Order No. 707, the restrictions imposed there are prophylactic and based on restrictions already imposed by the Commission in the context of certain section 203 and 205 approvals, but expand the transactions and entities to which they apply. The Commission recognized a regulatory gap and acted to expand the range of entities and transactions to which those restrictions apply to ensure that captive customers of franchised public utilities do not inappropriately cross-subsidize the activities of non-utility affiliates. 4. Order No. 667 Requirements Requests for Rehearing 57. FirstEnergy argues that Order No. 707 duplicates requirements set forth in the rules on Commission review of affiliate transactions and protection of captive customers implemented in Order No. 667, which promulgates the Commission's regulations under the Public Utility Holding Company Act of 2005 (PUHCA 2005). 29 It maintains that this could result in confusion and uncertainty. It will, for example, be unclear whether the new Order No. 707 regulations, the existing Order No. 667 pricing policy, or both will apply to issues arising in connection with centralized service companies. FirstEnergy also argues that it is unclear whether the Commission's grant of waiver of the Order No. 707 regulations, including the regulation pertaining to service companies, would affect the regulatory requirements set forth in Order No. 667. 29 Energy Policy Act of 2005, Public Law No. 109-58, secs. 1261 *et seq.* , 119 Stat. 594 (2005); *Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public Utility Holding Company Act of 2005* , Order No. 667, FERC Stats. & Regs. ¶ 31,197 (2005), *order on reh'g* , Order No. 667-A, FERC Stats. & Regs. ¶ 31,213, *order on reh'g* , Order No. 667-B, FERC Stats. & Regs. ¶ 31,224 (2006), *order on reh'g* , Order No. 667-C, 118 FERC ¶ 61,133 (2007). 58. FirstEnergy argues that to prevent confusion, the Commission should delete centralized service company at-cost requirements set forth in Order No. 707 and rely instead on its existing pricing policy set forth in Order No. 667 to regulate transactions with centralized service companies. Any codification of pricing policy for centralized service companies should be done in the Commission's regulations under PUHCA 2005. In the alternative, FirstEnergy requests that the Commission clarify the relation between the policies set forth in Order No. 667 and the regulations issued under Order No. 707 expressly applicable to centralized service companies. Commission Determination 59. We deny FirstEnergy's request that we delete centralized service company at-cost requirements set forth in Order No. 707 and rely instead on the existing pricing policy set forth in Order No. 667 to regulate transactions with centralized service companies. While the Commission discussed service company issues at length in Order No. 667 and Order No. 667-A, and stated that it would accept the use of an “at-cost” standard for centralized service company non-power goods and services, it did not codify the standard in the PUHCA 2005 requirements themselves. While the Commission's PUHCA 2005 regulations allow for Commission review of holding company system cost allocation for non-power goods and services, which is highly relevant to the general issue of cross-subsidization, those regulations do not codify affiliate pricing standards. Moreover, to the extent there is overlap between this rule and the pricing policy we announced in the preamble of Order No. 667 and Order No. 667-A, our regulations here are consistent because they apply the standard that was announced in Order No. 667. We therefore do not agree that Order No. 707 and Order No. 667 are inappropriately duplicative, and we do not see the potential for conflict to which FirstEnergy alludes. C. Captive Customers 60. The regulations issued in Order No. 707 apply to franchised public utilities that have captive customers or that own or provide transmission service over jurisdictional transmission facilities. These regulations define captive customers as any wholesale or retail electric energy customers served by a franchised public utility under cost-based regulation. Requests for Rehearing 61. EEI argues that Order No. 707 should not treat wholesale customers that purchase electricity under competitive conditions as “captive customers.” It states that the Commission's transmission open access rules generally provide competitive choice. EEI argues that given the widespread availability of choice at the wholesale level, it should be unusual for a wholesale customer to be captive and require the affiliate transaction pre-approval and pricing protections set out in Order No. 707. EEI states that while the Commission may want to allow individual wholesale customers to raise concerns in individual rate proceedings, it encourages the Commission not to treat all wholesale customers as presumptively captive, but instead to treat them as presumptively non-captive. Commission Determination 62. We do not agree with EEI's request in this regard. As stated in Order No. 707 and Order 697-A, wholesale customers may have choice, but the Commission will “err on the broad side of the definition of captive customers.” 30 As the Commission noted, although we are erring on the side of a broad definition of captive customers, we recognize that there may be circumstances where customers fall within our definition but nevertheless there are sufficient protections in place to protect such customers against any risk of harm from transactions between the franchised public utility and its affiliates. We noted that it is possible that wholesale customers with fixed rate contracts would be adequately protected, but we explained that we are not prepared at this time to generically exclude such customers from the definition of captive customers. Instead, we will allow franchised public utilities, on a case-by-case basis, to seek a waiver of the affiliate restrictions if they feel that adequate protections are in place to protect any customers that fall under the “captive customer” definition. We see no reason to change this approach. 30 Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 43; *see also* Order No. 697-A, FERC Stats. & Regs. ¶ 31,268 at P 199. D. Transmission Facilities 63. In Order No. 707, the Commission made its restrictions on non-power goods and services transactions applicable to franchised public utilities that own or provide transmission service over transmission facilities subject to the Commission's jurisdiction. Requests for Rehearing 64. National Grid and EEI argue Order No. 707 should not apply to franchised public utility companies that do not have captive customers simply because the utility companies own or provide service over jurisdictional transmission facilities. They argue that this issue did not receive proper notice and the Commission did not sufficiently explain what EEI claims is a dramatic expansion in the scope of the rule that was not discussed in the proposed rule. They also argue that the Commission already has oversight of such companies under FPA sections 205 and 206, and the expansion is therefore unnecessary. 65. EEI encourages the Commission to delete the provision that makes the new regulations applicable to public utilities that do not have captive customers but simply own or provide service over jurisdictional transmission facilities. EEI asserts that if the Commission does not do this, it should discuss the reasons for not doing so and invite further public comment. 66. Similarly, EEI argues that franchised public utilities that have received a waiver of the market-based rate affiliate restrictions because they have no captive customers but that own, or provide service over, jurisdictional transmission facilities should not have to seek a waiver or make an informational filing to avoid Order No. 707 pricing restrictions. EEI states if a further waiver or informational filing is required, the Commission should clarify the showing required to secure a waiver or what the informational filing must contain. Commission Determination 67. We deny EEI's request to delete the provision. As a preliminary matter, we disagree that there has been insufficient notice that these rules would apply to franchised public utility companies providing service over jurisdictional transmission facilities. While due process and the Administrative Procedure Act impose an obligation on agencies to provide adequate notice of issues to be considered, 31 that obligation is satisfied in this rulemaking by providing the terms or substance of the proposed rule and a description of the subjects and issues involved. 32 The coverage in Order No. 707 of franchised public utilities that provide service over jurisdictional transmission facilities was a logical outgrowth of the Affiliate Transactions Notice of Proposed Rulemaking and its purpose, *i.e.* , to expand the coverage of the affiliate restrictions established in the context of blanket market-based rate authorizations and our merger proceedings and to codify them in our regulations. Indeed, the American Public Power Association
(APPA)and the National Rural Electric Cooperative Association (NRECA) specifically raised the issue in response to the Affiliate Transactions Notice of Proposed Rulemaking, arguing that the Commission should clarify the regulatory text in the final rule to ensure that, consistent with existing Commission affiliate cross-subsidization policy and the Commission's existing FPA section 203 and PUHCA 2005 regulations, the new generic cross-subsidization regulation explicitly protects transmission customers. 33 The Administrative Procedure Act “does not require an agency to publish in advance every precise proposal which it may ultimately adopt as a rule,” and this is particularly true when proposals are adopted in response to comments from participants in the rulemaking proceeding. 34 Order No. 707 thus does not unduly change the scope of this proceeding. In any event, the parties' ability to seek rehearing resolves any due process issues. 31 *Public Service Commission of the Commonwealth of Kentucky* v. *FERC* , 397 F.3d 1004 (DC Cir. 2005), *citing Williston Basin Interstate Pipeline Co.* v. *FERC* , 165 F.3d 54 (DC Cir. 1999); *see* 5 U.S.C. 554(b)(3). 32 *See* 5 U.S.C. 553(b)(3). 33 APPA/NRECA Sept. 6, 2007 Comment at 5-7. 34 *Daniel Int'l Corp.* v. *OSHA* , 656 F.2d 925, 932 (4th Cir. 1981). 68. Regarding the substance of the commenters' arguments, as noted in Order No. 707, some franchised public utilities do not have captive customers, but own or provide transmission service over jurisdictional transmission facilities, 35 and customers of such franchised public utilities are entitled to the same customer protection as those that are considered captive customers. Transmission customers should not have to bear the costs of inappropriate cross-subsidization. This provision was added to the Exhibit M requirement in Order No. 669-A, protecting customers of such franchised public utilities from cross-subsidization in the merger context. The addition of the language here allows for the continued protection of these customers beyond the confines of our decisions under FPA section 203. Finally, while we recognize that the Commission oversees transmission rates under sections 205 and 206, the affiliate pricing rules are preventative in nature, allowing for greater protection of such customers. Thus, in order to grant waiver of the Order No. 707 regulations, the Commission would need to be assured that the transmission customers of these franchised public utilities that do not have captive customers do not bear the costs of inappropriate cross-subsidization. 35 Order No. 707, FERC Stats. & Regs. ¶ 31,264 at P 48. 69. In response to EEI's request that we specify what further action would be required to obtain a waiver, the public utility would need to demonstrate that the transmission customers of a franchised public utility that does not have captive customers do not bear the costs of inappropriate cross-subsidization. E. Reporting Requirements 70. In the Affiliate Transactions Notice of Proposed Rulemaking, the Commission asked whether it should adopt any after-the-fact reporting requirements for transactions covered by the proposed regulations. In Order No. 707, the Commission concluded that its current reporting regulations are adequate to ensure compliance with the new regulations. The Commission also noted that in addition to the information gathered through Form No. 1, it already collects affiliate power sales information from franchised public utilities through EQRs and market-based rate requirements. In addition, the Commission's existing record retention requirements in Parts 125 and 225 of its regulations already apply to transactions involving non-power goods and services. Request for Rehearing 71. APPA and NRECA maintain that Order No. 707 inappropriately relies on existing record-retention requirements that do not mandate any reporting. APPA and NRECA note that Order No. 667 requires centralized service companies in holding company systems to file annual reports on FERC Form No. 60 that contain certain information on affiliate transactions. But they contend that neither Order No. 667 nor new Order No. 707 requires filings by single-purpose service companies or other associate companies. They argue that this leaves the Commission, state regulators, wholesale and transmission customers, and the public with a significant information gap when it comes to evaluating whether cross-subsidization is in fact occurring. Commission Determination 72. The Commission continues to believe that no additional reporting requirements are necessary at this time. We note that the Commission's regulations already provide that, unless otherwise exempted or granted a waiver, every service company in a holding company system, including a special-purpose company ( *e.g.* , a fuel supply company or a construction company), that does not file a FERC Form No. 60 must instead file a narrative description of the service company's functions during the prior calendar year. 36 Moreover, the Commission has a longstanding practice of relying on its section 205 and 206 ratemaking reviews to disallow passing non-power goods and services costs through jurisdictional rates if those costs are not just and reasonable or are inappropriately allocated. It relies on section 205 rate reviews and on its audit function to deter inappropriate allocation of costs. This is the longstanding, traditional approach to this issue and the reason why record retention requirements are important. There is no evidence that existing practices are not effective. Finally, given the potential scope of the information in question, the Commission is not prepared to impose new reporting requirements without a demonstrated need for such reporting and a record to support a finding that a reporting system would not create unnecessary burdens. 36 18 CFR 366.23 (describing FERC-61). F. Grandfathered Agreements 73. The Commission clarified in Order No. 707 that the new pricing rules are prospective and will apply to any contracts, agreements or arrangements entered into on or after the effective date of the order. To the extent different pricing was in effect for any contract, agreement or arrangement entered into prior to the effective date, the Commission stated it may remain in effect. But the Commission also stated that it could on its own motion, or upon complaint, institute a section 206 proceeding to determine in specific instances whether costs incurred by a public utility under grandfathered contracts, agreements or arrangements are just, reasonable and not unduly discriminatory or preferential. Request for Rehearing 74. FPL asks the Commission to clarify that the Commission's position on this issue covers all existing arrangements where affiliates provide non-power goods and services equivalent to those that would be provided by a centralized service company. FPL argues that the Order No. 707 restrictions do not by their terms supersede the Order No. 697 restrictions on affiliate transactions, and the Commission should seek consistency in its regulations on these matters. FPL argues that the Commission should clarify that the grandfathering language in Order No. 707 also applies with respect to the requirements of Order No. 697 where existing inter-affiliate transactions involving non-power goods and services are comparable to those provided by a centralized service company. 75. APPA and NRECA contend that the new rules should be applied prospectively to all transactions occurring after the effective date of Order No. 707. They state that the Commission undermined the purpose and effect of Order No. 707 by generically exempting all affiliate transactions occurring under contracts, agreements, and arrangements made before the rule's effective date. They argue that this will permit transactions that violate the new regulations to continue for the entire term of a long-term affiliate contract, delaying the rule's effectiveness for years, in some cases. APPA and NRECA also maintain that a public utility otherwise covered by the new restrictions can move quickly to execute prior to the effective date a new long-term agreement with its affiliates that violates the new restrictions. 76. APPA and NRECA maintain that the Commission's sole justification for its action was that it would be unjust and detrimental to the financial integrity of holding companies to void pricing arrangements retroactively. APPA and NRECA argue that the Commission offered no evidence to support this claim, and this absence of evidence stands in contrast to the extensive and explicit justification of the need for pricing restrictions to protect the captive customers and transmission customers of public utilities. They thus argue that the Commission's action is arbitrary and capricious because the Commission failed to provide a rational connection between the facts found and the choice made. 77. APPA and NRECA maintain that grandfathering existing agreements violates the Commission's statutory mandate under section 206. They argue that, to the extent the Commission's position rests on a finding that pre-existing affiliate contacts are not “unjust, unreasonable, unduly discriminatory or preferential,” Order No. 707 does not support such a finding with any evidence, or explain how such a finding squares with the Commission's basic findings on the need for the new rules. Commission Determination 78. In response to FPL's request that the Commission clarify that the grandfathering language in Order No. 707 also applies with respect to the requirements of Order No. 697, we do not believe that this proceeding is the proper place to address the requirements of Order No. 697. We note that Order No. 697 establishes its own procedures seeking waivers of its requirements. As the Commission stated in its order of March 25, 2008 in this docket, the Commission's grandfathering of preexisting contracts, agreements and arrangements was only for purposes of compliance with this rule. 37 The Commission noted that to the extent public utilities were required to comply with the same or similar pricing restrictions pursuant to a merger order or in conjunction with a market-based rate authorization, our action to make Order No. 707 compliance prospective only did not change any such obligations under other orders or rules. In other words, pricing restrictions imposed pursuant to a merger order, a market-based rate authorization order or the Commission's market-based rate rules are not within the scope of Order No. 707 and, consequently, the Order No. 707 grandfathering provision does not relieve a public utility of its obligations under other orders and rules with respect to contracts, agreements or arrangements entered into prior to March 31, 2008. 37 *Cross-Subsidization Restrictions on Affiliate Transa ctions,* 122 FERC ¶ 61,280 at n.5 (2008). 79. We disagree with APPA and NRECA that our new rules should be applied prospectively to all transactions (as opposed to all agreements) entered into after the effective date of Order No. 707. Many or most of the agreements in question were approved or sanctioned by the SEC and/or state commissions, and the Commission will not lightly modify previously approved contracts or arrangements. To the extent such action is appropriate, we will act pursuant to FPA section 206 on a case-by-case basis. We are not permitting improper cross-subsidization by permitting existing contracts to remain in effect. Issues that may arise under these contracts will always be subject to our authority under FPA section 206. We reject the claim that the continuing effect of these pre-existing contracts violates our mandate under section 206. Nothing in the new rules limits or qualifies our powers and duties under that section, and the Commission's position on preexisting agreements in no way rests on a generic finding that these agreements are not unjust, unreasonable, unduly discriminatory or preferential. 80. We also disagree that we are facilitating abuse by allowing companies to enter into potentially abusive contracts before the effective date of these regulations and that would remain in effect after the effective date. Our powers with respect to these contracts are no different than they are with respect to contracts that already exist. As we stated in Order No. 707, the Commission on its own motion, or upon complaint, may on a case-by-case basis institute a section 206 proceeding to determine whether the costs incurred by a public utility under such pre-existing contracts, agreements or arrangements are just, reasonable and not unduly discriminatory or preferential. As we further noted in Order No. 707, many public utilities already have the same pricing restrictions in effect as a result of Commission orders approving mergers or market-based rates; these restrictions remain in place. III. Document Availability 81. In addition to publishing the full text of this document in the **Federal Register** , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Ho me Page *(http://www.ferc.gov)* and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426. 82. From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field. 83. User assistance is available for eLibrary and the FERC's Web site during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or e-mail at *ferconlinesupport@ferc.gov,* or the Public Reference Room at
(202)502-8371, TTY
(202)502-8659. E-mail the Public Reference Room at *public.referenceroom@ferc.gov.* IV. Effective Date and Congressional Notification 84. Changes to Order No. 707 adopted in this order on rehearing will become effective August 25, 2008. List of Subjects in 18 CFR Part 35 Electric power rates, Electric utilities, Reporting and recordkeeping requirements. By the Commission. Kimberly D. Bose, Secretary. In consideration of the foregoing, the Commission amends part 35, Chapter I, Title 18, Code of Federal Regulations, to read as follows: PART 35—FILING OF RATE SCHEDULES AND TARIFFS 1. The authority citation for part 35 continues to read as follows: Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352. 2. Amend § 35.44 as follows: A. Amend paragraph
(a)to add a sentence at the end of the paragraph; B. Revise paragraphs (b)(1) and (b)(2); and C. Add paragraph (b)(4) and paragraph (c). § 35.44. Protections against affiliate cross-subsidization.
(a)* * * This requirement does not apply to energy sales from a qualifying facility, as defined by 18 CFR 292.101, made under market-based rate authority granted by the Commission.
(b)* * * (b)(1) Unless otherwise permitted by Commission rule or order, and except as permitted by paragraph (b)(4) of this section, sales of any non-power goods or services by a franchised public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, including sales made to or through its affiliated exempt wholesale generators or qualifying facilities, to a market-regulated power sales affiliate or non-utility affiliate must be at the higher of cost or market price.
(2)Unless otherwise permitted by Commission rule or order, and except as permitted by paragraphs (b)(3) and (b)(4) of this section, a franchised public utility that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, may not purchase or receive non-power goods and services from a market-regulated power sales affiliate or a non-utility affiliate at a price above market.
(4)A company in a single-state holding company system, as defined in § 366.3(c)(1) of this chapter, may provide general administrative and management non-power goods and services to, or receive such goods and services from, other companies in the same holding company system, at cost, provided that the only parties to transactions involving these non-power goods and services are affiliates or associate companies, as defined in § 366.1 of this chapter, of a holding company in the holding company system.
(c)*Exemption for price under fuel adjustment clause regulations.* Where the price of fuel from a company-owned or controlled source is found or presumed under § 35.14 to be reasonable and includable in the adjustment clause, transactions involving that fuel shall be exempt from the affiliate price restrictions in § 35.44(b). [FR Doc. E8-16870 Filed 7-23-08; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9408] RIN 1545-BD01 Dependent Child of Divorced or Separated Parents or Parents Who Live Apart; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations; correction. SUMMARY: This document contains corrections to final regulations (TD 9408) that were published in the **Federal Register** on Wednesday, July 2, 2008 (73 FR 37797), relating to a claim that a child is a dependent by parents who are divorced, legally separated under a decree of separate maintenance, or separated under a written separation agreement, or who live apart at all times during the last 6 months of the calendar year. DATES: This correction is effective July 24, 2008, and is applicable to taxable years beginning after July 2, 2008. FOR FURTHER INFORMATION CONTACT: Victoria Driscoll,
(202)622-4920 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The final regulations that are the subject of this document are under section 152 of the Internal Revenue Code. Need for Correction As published, final regulations (TD 9408) contain errors that may prove to be misleading and are in need of clarification. Correction of Publication Accordingly, the publication of the final regulations (TD 9408), which were the subject of FR Doc. E8-15044, is corrected as follows: 1. On page 37798, column 2, in the preamble, under the paragraph heading “a. Custodial Parent's Failure To Release Exemption”, first paragraph, lines 8 thru 11, the language “6 months of the taxable year,
(2)the child was in the custody of one or both parents for more than one-half of the taxable year, and
(3)the child received” is corrected to read “6 months of the calendar year,
(2)the child was in the custody of one or both parents for more than one-half of the calendar year, and
(3)the child received”. 2. On page 37798, column 3, in the preamble, under the paragraph heading “a. Custodial Parent's Failure To Release Exemption”, first paragraph of the column, line 4, the language “6 months of the taxable year,
(2)the” is corrected to read “6 months of the calendar year,
(2)the”. LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E8-16921 Filed 7-23-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 220 RIN 0596-AC49 National Environmental Policy Act Procedures AGENCY: USDA Forest Service. ACTION: Final rule. SUMMARY: The Department of Agriculture is moving the Forest Service's National Environmental Policy Act
(NEPA)codifying procedures from Forest Service Manual
(FSM)1950 and Forest Service Handbook
(FSH)1909.15. In addition to codifying the procedures, the Department is clarifying and expanding them to incorporate Council on Environmental Quality
(CEQ)guidance and to better align Forest Service NEPA procedures with its decision processes. This rule gives Forest Service NEPA procedures more visibility, consistent with the transparent nature of the Forest Service's environmental analysis and decision making. Also, the additions to the Forest Service NEPA procedures in this rule are intended to provide an environmental analysis process that better fits with modern thinking on decisionmaking, collaboration, and adaptive management by describing a process for incremental alternative development and development of adaptive management alternatives. Maintaining Forest Service explanatory guidance in the FSH will facilitate timely responses to new ideas, new information, procedural interpretations, training needs, and editorial changes to assist field units when implementing the NEPA process. DATES: *Effective Date:* These NEPA procedures are effective July 24, 2008. ADDRESSES: The Forest Service NEPA procedures are set out in 36 CFR part 220, which is available electronically via the World Wide Web/Internet at *http://www.gpoaccess.gov/cfr/index.html* . Single paper copies are available by contacting Martha Twarkins, Forest Service, USDA, Ecosystem Management Coordination Staff (Mail Stop 1104), 1400 Independence Avenue, SW., Washington, DC 20250-1104. Additional information and analysis can be found at *http://www.fs.fed.us/emc/nepa* . FOR FURTHER INFORMATION CONTACT: Martha Twarkins, Ecosystem Management Staff,
(202)205-2935, Forest Service, USDA. Individuals who use telecommunication devices for the deaf
(TDD)may call the Federal Information Relay Service
(FIRS)at 1-800-877-8339 between 8 a.m. and 8 p.m. Eastern Daylight Time, Monday through Friday. SUPPLEMENTARY INFORMATION: Council on Environmental Quality
(CEQ)regulations at 40 CFR 1507.3 require Federal agencies to adopt procedures as necessary to supplement the requirements of the CEQ's regulations implementing the National Environmental Policy Act (NEPA). The regulation further encourages agencies to publish agency explanatory guidance for CEQ's regulations and agency procedures. In 1979, the Forest Service chose to combine its implementing procedures and explanatory guidance in Forest Service directives FSM 1950 and FSH 1909.15. Descriptions of Forest Service NEPA authority, objectives, policy, and responsibilities remain in FSM 1950. Forest Service explanatory guidance interpreting CEQ and Forest Service procedures in regulation remain in FSH 1909.15. For an explanation of NEPA and the NEPA process, see CEQ's “A Citizen's Guide to the NEPA—Having Your Voice Heard” at *http://ceq.eh.doe.gov/nepa/Citizens_Guide_Dec07.pdf.* This rule gives Forest Service NEPA procedures more visibility, consistent with the transparent nature of the Forest Service's environmental analysis and decision making. Maintaining Forest Service explanatory guidance in directives will facilitate quicker responses to new ideas, new information, procedural interpretations, training needs, and editorial changes to assist field units when implementing the NEPA process. Since the last major update of Forest Service NEPA policy in 1992, CEQ has issued guidance that the Department believes is appropriate to incorporate into Forest Service NEPA procedures with this regulation. The Department also believes it is appropriate to incorporate several concepts that the Forest Service currently uses, but for which explicit provisions in its current procedures are lacking. Finally, this rule will allow for better integration of NEPA procedures and documentation into the current Forest Service decisionmaking processes, including collaborative and incremental decisionmaking. On August 16, 2007, the Forest Service published a proposed rule to move its NEPA procedures from FSH 1909.15 to 36 CFR part 220 (72 FR 45998). The majority of implementing procedures found in FSH 1909.15 transfer to 36 CFR part 220 and remain intact. Forest Service explanatory guidance remains in the revised FSH 1909.15 being published concurrently with this rule and available at *http://www.fs.fed.us/cgi-bin/Directives/get_dirs/fsh?1909.15* . Key changes in this final rule: • Clarify actions subject to NEPA by summarizing the relevant CEQ regulations in one place. • Recognize Forest Service obligations to take immediate emergency responses and emphasize the options available for subsequent proposals to address actions related to the emergency when normal NEPA processes are not possible. • Incorporate CEQ guidance language regarding what past actions are “relevant and useful” to a cumulative effects analysis. • Clarify that an alternative(s), including the proposed action, may be modified through an incremental process. • Clarify that adaptive management strategies may be incorporated into an alternative(s), including the proposed action. • Incorporate CEQ guidance that states environmental assessments
(EAs)need to analyze alternatives to the proposed action if there are unresolved conflicts concerning alterative uses of available resources as specified by section 102(2)(E) of NEPA. The CEQ was consulted on the proposed and final rule. CEQ has issued a letter stating CEQ has reviewed this rule and found it to be in conformity with NEPA and CEQ regulations (per 40 CFR 1507.3 and NEPA section 102(2)(B)). This letter is available at *http://www.fs.fed.us/emc/nepa* . To improve clarity, this final rule received numerous corrections to punctuation, grammar, abbreviations, and citations. These edits did not change the substance or meaning of any of the rule's provisions. Substantive changes from the proposed to this final rule are discussed in the responses to comments that follow. Comments on the Proposal The proposed rule was published in the **Federal Register** on August 16, 2007, for a 60-day comment period. The Forest Service received 10,975 responses, consisting of letters, e-mails, web based submissions, and faxes. Of those, approximately 200 contained original substantive comments; the remaining responses were organized response campaign
(form)letters. Comments were received from the public, from within the Forest Service, and from other agencies. The Department considered all the comments and made a number of changes in response. A summary of comments received and the Department's responses follow. General Comments Generally, respondents favored the Forest Service's efforts to make the NEPA process run more efficiently for all interested parties. Many respondents like the idea of having Forest Service NEPA procedures in more readily accessible regulations, instead of in directives. They also like the concept that the Forest Service would like to work more closely with stakeholders. Respondents feel that the CFR is more readily available to the public, making it easier for the public and interested parties to engage the Forest Service during decisionmaking and to ensure they are following the regulations. In addition, many respondents feel that moving the NEPA procedures to regulation ensures they are part of the Federal Government's official regulations, enhancing the opportunities to legally enforce the requirements. Generally, most respondents support the proposed rule, but have concerns with some details, which are outlined below. *Response* . The Forest Service appreciates the comments. It should be clarified however that the Forest Service believes that the move from internal procedures to published regulations and handbook should not change the judicial interpretations of these procedures. NEPA *Comments* . Although most respondents agree with moving NEPA procedures to regulation, some asked the question, “What problem is the Forest Service trying to solve by moving its regulations?” Also, a few respondents cite *Western Radio Services Co.* v. *Espy* , 79 F.2d 896, 901 (9th Cir. 1996), stating that the Forest Service must explain the rationale for moving NEPA procedures. Many respondents are concerned that the proposed rule would weaken or undermine NEPA, which in turn would damage public lands, water, wildlife, and air. One individual stated that only Congress has the authority to change NEPA. Respondents are also concerned that the proposed rule would give special interest groups an opportunity to develop, extract, and log public lands without regulation or accountability to the general public. Many individuals commented about the proposed rule being “another attempt by the current administration to circumvent environmental regulations.” One conservation organization believes that “the Forest Service ‘decision process’ * * * is highly subject to political pressure, particularly from the natural resource extraction industry, which views natural resources on Federal lands as theirs for the taking.” Another individual views the proposal as “the agency giving itself too much discretion to avoid implementing the Act, possibly undermining NEPA's purpose.” *Response* . The Department is moving Forest Service procedures from internal directives to regulation to give its NEPA procedures more visibility, consistent with the transparent nature of the Forest Service's environmental analysis and decision making. The Forest Service procedures supplement the CEQ regulations and placing Forest Service NEPA procedures in regulation underscores their importance. The final rule incorporates existing Forest Service procedures and existing CEQ guidance. This final rule also incorporates existing Forest Service practices such as collaboration and adaptive management as options for the responsible official to use. The Department does not interpret the Ninth Circuit's decision in *Western Radio Services Co.* v. *Espy* as requiring a rationale for moving NEPA procedures. That case was about compliance with special use permitting regulations; on the page cited by the commenters the Ninth Circuit held that directives did not have independent force and effect of law. For this rule, the Department provides its rationale for moving the procedures to regulation. The Forest Service procedures supplement the CEQ and U.S. Department of Agriculture
(USDA)regulations for implementing NEPA procedural provisions; they neither supplant nor diminish those requirements. This final rule states under section 220.1(b), “This part supplements and does not lessen the applicability of the CEQ regulations, and is to be used in conjunction with the CEQ regulations and U.S. Department of Agriculture regulations at 7 CFR part 1b.” The Department is not changing NEPA nor providing deference to one group over another. Groups for, against, or neutral on any proposed actions including logging have equal access to the Forest Service decision making process as described in sections 220.4(c), (d), and (e). Section 220.1(b) makes it explicitly clear that this final rule does not “circumvent” or “avoid” the Forest Service commitment to, and responsibility for, implementing NEPA. *Comments* . Some respondents commented that the Forest Service needs to produce an environmental impact statement
(EIS)for the proposed rule. In addition, respondents stated that the proposed rule constitutes revised agency rules and regulations and violates 40 CFR 1502.4(b), which highlights when an EIS must be prepared. CEQ regulation at 40 CFR 1502.4(b) states ‘Environmental impact statements may be prepared, and are sometimes required, for broad federal actions such as the adoption of new agency programs or regulations (1508.18).' Some respondents feel that the NEPA procedures described in this rule should be characterized as the adoption of new agency regulations, thus requiring an EIS. *Response* . CEQ does not direct agencies to prepare a NEPA analysis or document before establishing agency NEPA procedures. Agency NEPA procedures are procedural guidance to assist agencies in the fulfillment of agency responsibilities under NEPA, but are not the Agency's final determination of what level of NEPA analysis is required for a particular proposed action. As stated in the preamble to the proposed rule, “The rule would not directly impact the environment.” (72 FR 46002). The regulations do not authorize or prohibit any action or have any effect on the environment. The requirements for establishing agency NEPA procedures are set forth at 40 CFR parts 1505.1 and 1507.3. Additionally, the Forest Service NEPA procedures presented in this rule are established procedures described in the Forest Service directive system, allowed under the existing Forest Service procedures, or are existing CEQ guidance and are not considered new agency regulations. Regulations establishing agency NEPA procedures do not require NEPA analysis and documentation. See, e.g., *Heartwood, Inc.* v. *U.S. Forest Service* , 230 F.3d 947, 954-55 (7th Cir. 2000). *Comments* . Several individuals are concerned that moving the Forest Service's procedures to the CFR's could encourage other agencies to do the same, for example, the Bureau of Land Management. One individual is concerned that the proposed change would affect judicial interpretations of the Forest Service's NEPA obligations, therefore increasing the Forest Service's susceptibility to lawsuits. *Response* . The majority of Federal agencies currently have their NEPA procedures in the CFR, and the Department believes it is appropriate to place the Forest Service's NEPA procedures in regulation. In addition, it will place the Forest Service's NEPA procedures in one easily accessible place, incorporate current CEQ guidance and place the procedures in line with current Forest Service decision making. The Forest Service believes that the move from internal procedures to published regulations and handbook should not change the judicial interpretations of these procedures and therefore should not increase uncertainty due to litigation. As for whether a regulation would make the Forest Service more susceptible to lawsuits, the Forest Service has an obligation to comply with NEPA and the CEQ regulations whether these procedures are specified in regulations or internal procedures. Furthermore, if the Forest Service's application of the regulation is challenged in court, the Department believes that the courts will give appropriate deference to the CEQ's interpretation of NEPA, as embodied in these regulations. Public Comment on Projects *Comments* . Many respondents are concerned that the proposed rule would take away the public's ability to comment on projects. Individuals ask the Forest Service to not limit public comment. *Response* . This final rule will not take away or limit the public's ability to comment on projects compared with current practice. The final rule supplements, but does not supercede the CEQ regulations, which contain public involvement requirements. Moreover, the final rule retains the proposed rule requirements for responsible officials to consider public and agency comments in decisionmaking and to include such comments and responses in the administrative record (section 220.4(c)). Collaboration *Comments* . Many respondents like the idea of collaboration and urge the Forest Service to involve the public as much as possible. One individual would like to see all agencies, States and local governments, organizations, and individuals included in the collaborative process identified in the NEPA documents, along with an indication of when they joined the process. Some respondents recommend the Forest Service make collaboration an optional process and if collaboration is undertaken, a strict timeline should be imposed. One individual was concerned that the proposed changes would “allow domination by whichever special interest group has the ear of those in authority.” Respondents feel that the Forest Service should integrate collaboration and adaptive management into the existing NEPA framework rather than implementing new changes “which lack the checks and balances NEPA provides.” *Response* . Given the concerns regarding collaboration being within the regulation, the Department removed the references to collaboration that were in the proposed section 220.5(e)(1), which is now section 220.5(e)(2). The proposed language stated “To facilitate collaborative processes and sound decisions, the responsible official may collaborate with interested parties to modify the proposed action and alternative(s) * * *.” The proposed language was interpreted by many as providing that the incremental development and modification of alternatives may only be done when the Forest Service collaborates with the public or that collaboration may only be done in a process involving the incremental development and modification of alternatives. Neither collaboration nor the incremental development and modification of alternatives are required in every case, nor is one a prerequisite for the other. Collaboration is a tool that enables the Forest Service to focus on issues that matter. The Department recognizes that collaboration may not be appropriate in every case (see CEQ publication, “Collaboration in NEPA— *A Handbook for NEPA Practitioners* ,” available at *http://ceq.eh.doe.gov/nepa/nepapubs/Collaboration_in_NEPA_Oct2007.pdf* ). The final rule does not set collaboration requirements, including timelines or documentation of when parties become involved in the process. Collaboration processes, like public involvement and scoping, will vary depending on the need and circumstances. Some situations will require a lot of time and others will not. Adaptive management is addressed in the final rule at section 220.5(e)(2). Section 220.3 Definitions *Comments* . Many respondents are concerned that the definition for “reasonably foreseeable future actions,” in section 220.3 is too narrow. They suggest the proposed rule definition could eliminate from consideration a large number of activities on National Forest System lands that are clearly foreseeable. Respondents believe that if the proposed rule is approved, the Forest Service would be ignoring the CEQ provision regarding “reasonably foreseeable future actions.” Of particular concern was the phrase “activities not yet undertaken.” Another concern was that the proposed rule suggests an improper focus on activities taking place primarily on NFS lands, and fails to include other agencies or private landowners with lands adjacent to NFS lands. *Response* . The final rule defines “reasonably foreseeable future actions” to explain a term in CEQ's definition for “cumulative impact” at 40 CFR 1508.7. The CEQ definition of “cumulative impact” includes both Federal and non-Federal actions for consideration of cumulative effects, including reasonably foreseeable future actions. To clarify that Federal and non-Federal actions are to be considered, in the final rule the words “Federal or non-Federal” are added to the definition of “Reasonably Foreseeable Future Actions.” The phrase: “activities not yet undertaken” is to distinguish foreseeable actions from past and present actions and does not alter CEQ's regulatory definition for cumulative impact (See 40 CFR 1508.7). The CEQ definition for cumulative impact includes past and present actions. Ongoing activities such as grazing and oil and gas development would be considered present activities and thereby accounted for in the description of the current state of the environment (the “Affected Environment”) and the future state of the environment in the absence of the proposed action (the “no-action alternative”), as well as in the cumulative effects analysis. The Department has struck a balance between speculation about activities that are not yet planned and remain speculative and those that are reasonably foreseeable and have evolved to the point of being a proposal capable of meaningful NEPA analysis (for example, based on other development in the area when there has been some decision, funding, or development of a proposal (see 40 CFR 1508.23)). *Comments* . Several individuals are concerned that “interested parties and agencies” is used throughout the entire proposed rule, but is not defined. They suggest that “interested parties and agencies” be defined to lend clarity on what individuals represent those groups. *Response* . This final rule supplements, but does not replace the CEQ regulations. Accordingly, the Forest Service is still subject to the CEQ public involvement requirements at 40 CFR 1501.4, 1501.7, 1503.1, and 1506.6, which include informing “persons and agencies who may be interested or affected” by agency proposals. The CEQ regulation at 40 CFR 1506.6 further requires agencies to “make diligent efforts to involve the public in preparing and implementing their NEPA procedures,” which would include public involvement in preparing environmental assessments and environmental impact statements. The Department believes the meaning of “interested” and “affected parties and agencies” is sufficiently defined in current NEPA usage and the courts' and CEQ's interpretation of these terms. *Comments* . The proposed rule defined preliminary environmental impact statement (PEIS). The regulations later went on to describe that if PEISs are prepared they would be available to those interested and affected persons and agencies for comment. Many respondents agree the development of a PEIS is good in that it makes the Forest Service's decisionmaking process transparent. However, respondents are concerned that the Forest Service does not indicate what this process will look like in practice and at what level the public will participate. Concern was raised that there could be inconsistency across the Forest Service in how the PEIS would be used which could confuse people. Also, the proposed rule does not indicate when the public must comment in order to maintain standing to appeal. One respondent feels the proposed rule violates CEQ regulation 40 CFR 1506.8 by adding an additional stage in the NEPA process. Some respondents question what role the PEIS will play, and how the PEIS and scoping process will interact. The same people ask what level of detail will be required in a PEIS. Moreover, if the responsible official chooses to use a PEIS, it is unknown whether there will be an opportunity to challenge the Forest Service to provide more information. There are concerns that the collaborative process and PEIS would “over-complicate the planning process,” “unduly burden the public and other government agencies,” and “unfairly” place those who cannot fully participate at a “disadvantage.” Others who commented felt that 40 CFR 1506.10, and 1502.19 should apply to all EISs the Forest Service produces for comment. *Response* . Due to the confusion and concern surrounding the PEIS the Department felt it was best to remove this provision. The definition in the proposed rule found at section 220.3 and description in section 220.5 have been removed in the final rule. As discussed previously in the proposed rule preamble, collaboration with the public is already allowed and will continue as an option for the responsible official. The PEIS is simply an optional tool and its removal from the final rule will not remove that option. The responsible official will still be free to involve and inform the public above and beyond the regulations in a manner that best meets the public and government good. The provisions in the final rule at section 220.5(f) regarding circulating and filing draft and final environmental impact statements remain unchanged from the proposal. Section 220.4(b) Emergency Responses *Comments* . Section 220.4(b)(2) of the proposed rule provided “the responsible official may take emergency actions necessary to control the immediate impacts of the emergency to mitigate harm to life, property, or important resources.” Overall, respondents generally agree that some emergency actions should be allowed, for example when an action is needed to mitigate harm to human life or property. However, some respondents feel that by not clearly defining what an important resource is, the Forest Service could use the emergency response clause as a way to permit “salvage logging” or other “high impact projects” on the national forests. Several respondents suggest that the Forest Service re-word the emergency response provision to something like “The responsible official may take emergency actions necessary to control the immediate impacts of the emergency to mitigate harm to human life, property, or rare natural resources.” *Response* . The final rule, at section 220.4(b)(1), replaces “other important resources” with “important natural or cultural resources” to more clearly identify the type of resources impacted by the emergency. Under section 220.4(b)(1), timber salvage activities solely to reduce economic loss are not emergency actions as such activity is not necessary to control the immediate impacts to life, property, or important natural or cultural resources. Some confusion and/or concern may have arisen with the use of the word “important” because the Forest Service appeal regulations at 36 CFR 215 includes provisions for “emergency situations”, a term that may include the concept of economic loss: “A situation on National Forest System
(NFS)lands for which immediate implementation of all or part of a decision is necessary for relief from hazards threatening human health and safety or natural resources on those NFS or adjacent lands; *or that would result in substantial loss of economic value to the Federal Government* if implementation of the decision were delayed.” (emphasis added). The appeal regulations cover a different process from the proposed NEPA procedures. The appeal rule covers a broader range of harms which might occur during the processing of an administrative appeal. The emergency stay determination in the appeal rule allows the Forest Service to consider harms that may result from this delay in implementation. In contrast, an emergency response under this final rule is limited to actions necessary to control the immediate effects of an emergency, not the economic effects of delay brought about by an appeal. *Comments* . Respondents wrote that an emergency response should not be used to constitute a special use permit request or to circumvent NEPA compliance for controversial projects. *Response* . The final rule at section 220.4(b) does not create new permits or circumvent existing permits; it simply allows limited actions under narrowly defined emergency circumstances. As an example, any situations involving the use of emergency procedures under these regulations are nonetheless subject to the separate requirements of existing special use regulations at 36 CFR 251.50(b), which allow for the temporary occupancy of NFS lands without a special use authorization when necessary for the protection of life and property in emergencies. *Comment* . Some people also questioned whether the emergency provision at § 220.4(b) would replace the Forest Service's efforts to assess the impacts of its fire retardant program. *Response* . The Forest Service has completed an assessment of the impacts of the aerial application of fire retardant in an EA which is unaffected by this final rule. The title for that assessment is *Aerial Application of Fire Retardant Environmental Analysis, October 2007. http://www.fs.fed.us/fire/retardant/* . *Comments* . Respondents were concerned about specific details of the “emergency response” provision. For example, what constitutes an emergency? Who determines the emergency, and how is it reported and documented for public review? Respondents are concerned that the looseness of the provision could provide an easy way to “slide projects through under the radar without having to do a proper analysis.” *Response* . There is no special meaning intended for the term “emergency” beyond its common usage as “an unforeseen combination of circumstances or the resulting state that calls for immediate action” ( *Webster's Third New International Dictionary Of The English Language* 1961 and *Merriam-Webster's Collegiate Dictionary* (11th ed. 2004)); “a sudden, urgent, usually unexpected occurrence or occasion requiring immediate action” ( *Random House Dictionary of the English Language* (2ed. 1987)); “a state of things unexpectedly arising, and urgently demanding immediate action” ( *The Oxford English Dictionary* 2ed. 1991) and “[a] situation that demands unusual or immediate action and that may allow people to circumvent usual procedures * * *” ( *Black's Law Dictionary* 260, 562 (8th ed. 2004)). The proposed regulation, as revised in this final rule, recognizes that responsible officials can take immediate actions to control the immediate impacts of an emergency to mitigate harm to life, property, or important natural or cultural resources. As stated in the preamble of the proposed regulations, only such actions required to address the “immediate impacts of the emergency that are urgently required to mitigate harm to life, property, or important natural or cultural resources” may be taken without regard to the procedural requirements of NEPA, the CEQ regulations, or the proposed agency regulations. Thus, there are no NEPA documentation requirements for these types of situations and the final rule requires NEPA to apply to any and all subsequent proposed actions that address the underlying emergency (220.4(b)(2) and (3)). The provisions of 220.4 codify the existing Forest Service practice and CEQ guidance for emergency actions. In the past the Forest Service has acted to protect lives, property, and important natural or cultural resources without this rule by adhering to CEQ regulations and guidance found in the CEQ *Memorandum for Federal NEPA Contacts on Emergency Actions and NEPA* , along with its associate attachments *http://ceq.hss.doe.gov/nepa/Memo_to_NEPA_Contacts_September_8_05* . For example, search and rescue or fire suppression operations responding to specific emergency situations caused by events such as flood, fire, landslides, storms, and explosions. Sections 220.4(b)(2) and (b)(3) address emergency situations where the Forest Service puts forth proposals to address actions where “alternative arrangements” or routine NEPA requirements will be followed. Section 220.4(d) Schedule of Proposed Actions *Comments* . A concern was expressed that 220.4(d) contains a great deal of guidance rather than procedure language. *Response* . The final rule removes the explanatory guidance related to the schedule of proposed actions (SOPA). The final rule adds a definition of “Schedule of Proposed Actions (SOPA)” in section 220.3. The final rule, in section 220.4(d), establishes the duty of the responsible official to make the SOPA available to the public. FSH 1909.15 contains the explanatory guidance associated with this requirement. *Comments* . A few respondents are concerned that the SOPA is used as the sole or only scoping mechanism. Respondents would like to see the Forest Service clarify that scoping must not be limited to the SOPA mechanism. *Response* . Since its inception, the SOPA has not been intended to be used as the only scoping mechanism as stated in previous Forest Service NEPA procedures and in the proposed rule. The final rule retains this clarification and explicitly states “the SOPA shall not be used as the *sole* scoping mechanism for a proposed action.” (220.4(e)(3)) (emphasis added). *Comment* . Several individuals mentioned that the Forest Service does not produce a SOPA for categorical exclusions (CE), which leads to projects being implemented before the public is informed. *Response* . Forest Service categorical exclusions are organized in two groups: Actions requiring a supporting record and a decision memo documenting the decision to proceed, and actions where a supporting record and a decision memo are not required, but may be prepared at the discretion of the responsible official (see section 220.6). The first group of categorically excluded actions, for which a decision memo has been or will be prepared, are included in the SOPA (see definition at section 220.3). The Forest Service believes the latter group of actions, not requiring documentation, to be of low public interest and, therefore, not appropriate for inclusion in the SOPA (such as mowing the lawn). It is important to note that the rule states, “the SOPA shall not be used as the *sole* scoping mechanism for a proposed action.” (220.4(e)(3)). Section 220.4(f) Cumulative Effects Considerations of Past Actions *Comments* . Section 220.4(f) of the proposed rule addresses the consideration of past actions in cumulative effects analysis. Many respondents feel that in order to complete an effective cumulative effects analysis, the Forest Service must consider past projects. Some people are concerned that the rule would weaken the requirements to look at past actions and future actions and would streamline the decisionmaking process for potentially destructive projects. On that same note, people believe that it is imperative to fully disclose all potential impacts a project might have or could have down the road, claiming that without full disclosure natural resources could be in danger. They asked how field personnel know what effects from past actions are relevant to current decisionmaking unless all such actions and their impacts were first considered. Another concern expressed by some respondents was that the proposed rule would change the baseline condition of the landscape to what condition the landscape is considered to be in at the time an action is proposed, rather than the landscape condition at the time the Forest Service first started “managing” it. Other individuals are concerned that any reduction in the scope of an agency's responsibility to conduct cumulative impact analyses will undermine CEQ guidance and regulations. A respondent stated that the CEQ itself has recognized evidence that “the most devastating environmental effects may result * * * from the combination of individually minor effects of multiple actions over time.” One respondent said the proposal was an illegal attempt to get around court rulings on what must be considered. The respondent points out that regulations are supposed to be complying with the CEQ regulations, not creating some guidance that attempts to get around the regulations. Because of the importance of national forests and their ecological and social benefits to people, wildlife, and plants, one respondent encouraged Forest Service personnel to consider all cumulative impacts. *Response* . At section 220.4(f), this final rule incorporates verbatim, the language for the analysis of cumulative effects from the June 24, 2005 CEQ *Guidance on the Consideration of Past Actions in Cumulative Effects Analysis* , which may be found at *http://ceq.eh.doe.gov/nepa/regs/Guidance_on_CE.pdf.* This provision is to be used with existing CEQ regulations, which use the terms effects and impacts synonymously and define cumulative impact as the incremental impact of an action when added to other past, present, and reasonably foreseeable future actions (40 CFR 1508.7). The Forest Service agrees that it must consider past actions to determine cumulative effects, however, there is no requirement under NEPA or the CEQ regulations to arrive at a description of the state of the environment at some distant point in the past when the Forest Service first began managing the land. The focus of the CEQ guidance incorporated in this final rule is on the consideration of useful and relevant information related to past actions when determining the cumulative effects of proposals and alternatives. The Forest Service will conduct cumulative effects analyses necessary to inform decisionmaking and disclose environmental effects in compliance with NEPA. To clarify the Forest Service's commitment to follow the quoted CEQ guidance concerning consideration of past actions, the first sentence in the final rule at section 220.4(g) is revised to state, “Cumulative effects analysis shall be carried out in accordance with 40 CFR 1508.7 and in accordance with “The Council on Environmental Quality Guidance Memorandum on Consideration of Past Actions in Cumulative Effects Analysis” dated June 24, 2005:” Section 220.4(h) Incorporation by Reference *Comments* . Several conservation organizations have concerns about the incorporation by reference provision in the proposed rule: “Consistent with 40 CFR 1502.21, material may be incorporated by reference into any environmental or decision document.” They are concerned the material will not be available to the public for review in a timely manner or included in the administrative record. One conservation group feels the following needs to be added to section 220.4(h), “No material may be incorporated by reference unless it is available for inspection by potentially interested persons within the time allowed for comment.” Another conservation group proposed the addition of “this material must be reasonably available to the public within the time allowed for comment and its content briefly described in the environmental document.” *Response* . Referring to material incorporated by reference, the proposed rule at section 220.4(h) explicitly stated, “This material must be reasonably available to the public and its contents briefly described in the environmental or decision document.” This language is retained in the final rule and meets the Forest Service responsibilities and obligations under NEPA and the CEQ NEPA regulations to have the materials readily available during the comment period. Section 220.5(a) Classes of Actions Requiring Environmental Impact Statements *Comments* . Section 220.5(a)(1) details the classes of actions “normally” requiring preparation of an EIS. Given that `normally' was not previously found in this provision of Forest Service procedures, many respondents are concerned that the word “normally” would allow the Forest Service to use its discretion to avoid preparing an EIS for environmentally damaging actions. A concern was raised that the examples given in classes of actions normally requiring an EIS are extreme and fail to acknowledge the fact that far less extreme activities will occur which will cause “significant environmental impacts.” A question was raised as to whether or not the requirements for these classes may be met by the appropriate use of program environmental impact statements and tiered site-specific environmental documents. A comment also noted that the requirements for a notice of intent to prepare an EIS at 220.5(b) should provide for situations where there is a lengthy period between the agency's decision to prepare an environmental impacts statement and the time of actual preparation pursuant to 40 CFR 1507.3(e). *Response* . As many respondents note, previous Forest Service procedures identified “Classes of Actions Requiring Environmental Impact Statements.” The proposed rule at section 220.5 added the word “normally”, thus identifying classes of actions for which EISs are typically, but not always, required. This addition was made to comply with CEQ regulations for agency NEPA procedures that require agencies to identify typical classes of action “Which normally do require environmental statements” (40 CFR 1507.3(b)(2)(i)). It will be rare to not prepare an EIS given the circumstances described in the classes. The responsible official may prepare an EA in situations where an EIS is “normally” prepared if, in their professional judgment, they have complied with the standards for determination of significance as specified in the CEQ regulations at 40 CFR 1508.27. This standard is also articulated in the handbook being published concurrently with these regulations. Therefore, the final rule retains the word “normally” in section 220.5. In the list of classes at section 220.5(a)(2), the final rule changes the reference to “inventoried roadless area” to “inventoried roadless area or potential wilderness area”. Forest Service land management planning procedures in FSH 1909.12, chapter 70, describe a facet of the land management planning process whereby potential wilderness areas are identified. Once completed, the identification of potential wilderness areas would be a more contemporary inventory than the previously-conducted roadless area inventory. Some units of the National Forest System have completed the identification of potential wilderness areas and no longer maintain an inventory of roadless areas, while others have not yet completed identification of potential wilderness areas and, therefore, still maintain a roadless area inventory. The intent of the revised language at 220.5(a)(2) is to account for either scenario. Acreages were removed from the Class 2 examples in the proposed rule section 220.5(a) in response to concerns that the examples of actions for which EISs would normally be required represent extreme cases. The word “substantial” replaces the acreage in the first example (220.5(a)(i)) in the final rule to be consistent with the description of Class 2. The following new language has been included in the final rule at section 220.5(a): “Examples include but are not limited to:” To emphasize that the stated examples are not all-inclusive. The Department feels that the examples reflect Forest Service experience implementing NEPA and provide the context for each class. The 3rd Class of Action listed in the proposed rule, “Other proposals to take major Federal actions that may significantly affect the quality of the human environment” was deleted in this final rule because it did not describe a proposal but only rephrased the requirement for when to prepare an EIS. Program environmental impact statements will continue to satisfy the requirements of this section. Such impact statements document analyses of broad actions or programs. Site-specific environmental impact statements or environmental assessments for actions that fall within the scope of a program environmental impact statement need only summarize the issues discussed in the program statement and incorporate discussions from the program statement by reference, concentrating on the issues specific to the subsequent action. (See 40 CFR 1502.20) Finally, the requirements for the notice of intent at 220.5(b) have been changed in the final rule to include the following sentence: “Where there is a lengthy period between the agency's decision to prepare an environmental impact statement and the time of actual preparation, the notice of intent may be published at a reasonable time in advance of preparation of the draft statement.” Section 220.5(e) Alternatives *Comments* . A concern was raised that the proposed rule language “reasonable alternatives should meet the purpose and need,” would preclude alternatives that do not fully meet the purpose and need for the proposal. The respondent felt the statement is unduly restrictive and should be modified to provide a justifiable range of reasonableness. *Response* . The word “should” is retained in this provision in the final rule because it provides focus for the development and design of alternatives and continues to allow for reasonable variations, which encompass a reasonable range. *Comments* . The proposed rule provision for documenting consideration of the no-action alternative by contrasting the current condition and expected future condition should the proposed action not be undertaken, raised a number of concerns that the Forest Service would no longer consider a no-action alternative. Some respondents are concerned that without the no-action alternative being documented and considered as traditionally done, the effects of doing nothing will not be adequately expressed. Some expressed that not considering a no-action alternative would be illegal. *Response* . The intent of the proposed regulation is to continue to require consideration of the no-action alternative as required by 40 CFR 1502.14(d), yet the wording caused some to think the no action alternative would not be considered. To avoid confusion as to the Forest Service's commitment always to consider and document the no-action alternative in an EIS, the proposed rule language is not in the final rule. *Comments* . Proposed rule section 220.5(e)(3) recognizes how adaptive management may be incorporated into a proposal and alternatives. Some respondents are supportive of adaptive management and feel that if adjustments are made during implementation, the action would be acceptable so long as the adjustments were fully described and their effects disclosed in the EIS. Others however feel the rule is self-defeating because it still requires that adjustments be “clearly articulated and pre-specified” and “fully analyzed.” They would like to see the Forest Service's final rule “clarify that adaptive management is intended to deal with uncertainty, and that the goal is to use adaptation to achieve a desired result.” Others expressed concern that a defined process for making adjustments with adaptive management has not been described. They ask, for example, who would be in charge of making the decision, how is the public informed, and how will the adjustments be monitored and reported. Several respondents feel that before an “adjustment” or substantial change is made, a supplemental EIS would be needed. *Response* . Section 220.5(e)(3) of the proposed rule is retained in the final rule at section 220.5(e)(2). The intent of the adaptive management option in the proposed regulation is to allow for possible changes in an action to achieve the desired effect without having to reanalyze the proposal and reconsider the decision. When proposing an action the responsible official may identify possible adjustments that may be appropriate during project implementation. Those possible adjustments must be described and their effects analyzed in the EIS. The decision may then allow for those adjustments during project implementation. The requirements for supplemental EISs at 40 CFR 1502.9(1) continues to apply under the final rule (see 220.1(b)). NEPA and the CEQ regulations do not specify how the Forest Service uses adaptive management, and it is the responsibility of the Forest Service to specify roles, responsibilities, and procedures for implementing adaptive management adjustments in the documents available for public notice and comment as part of NEPA and other statutes. If the responsible official identifies possible adjustments in the decision, the official will also identify any monitoring and/or public notification requirements as part of the NEPA and decisionmaking process. The need described under the CEQ regulations for a supplemental EIS on an adjustment is dependent on the degree to which the adjustment was specified and analyzed in the analyses. The responsible official is the person who is responsible for implementing the decision and making any adjustments during implementation. If the responsible official identified possible adjustments in the decision, the official will also identify any monitoring and/or public notification requirements as part of the NEPA and decisionmaking process. Section 220.5(g) Circulating and Filing Draft and Final Environmental Impact Statements Section 220.5(f)(2) of the final rule adds the reference “40 CFR 1506.9” to other citations related to requirements for filing and circulating EISs. The omission of this reference in the proposed rule was an oversight. Section 220.6 Categorical Exclusions *Comments.* Many respondents are concerned about a number of the categories set out in the proposed rule, for various reasons. Some conservation groups argue that the proposed rule is a continuation of the “administration's disturbing and unfortunate trend toward undermining NEPA, from categorically excluding both forest planning and project-level decisions from NEPA analysis and documentation.” Many respondents feel the categorical exclusions should be eliminated from the rule; various people suggest some categories are illegal. Many respondents argue that certain categorically excluded actions would create significant impacts and should go through the NEPA process. Some respondents reference *Citizens for Better Forestry* v. *U.S. Dept. of Agriculture* , 481 F. Supp. 2d 1059 (N.D. Cal. 2007), stating the proposed rule is illegal in light of this ruling. Additionally, some conservation groups are concerned about the Forest Service's proposal to allow an internal review to determine whether an extraordinary circumstance will cause a proposed action to have a significant impact on the environment. Citing *Rhodes* v. *Johnson* , 153 F.3d 785, 790 (7th Cir 1998), they state that the environmental assessment is the process required to make the determination if the proposed action will have a significant impact on the environment. The group believes that the wording of the proposed rule at 220.6(b), regarding the determination whether there are extraordinary circumstances, should be changed from “Resource conditions that should be considered” to “Resource conditions that shall be considered * * *”. They also believe that the list of resource conditions provided in the proposed rule should not be exhaustive, and that other items should be added such as inventoried roadless areas, steep slopes, highly erosive soils, state listed species, karst topography, caves, and proposed wild and scenic river corridors. The regulations should require an analysis addressing any extraordinary circumstance listed in the regulations or identified in public comments, according to the respondent. *Response* . This final rule is moving established categories and language on extraordinary circumstances from the Forest Service NEPA procedures previously located in FSH 1909.15 to 36 CFR 220.6. These categories and requirements were established following public review and comment, in consultation with CEQ and with CEQ's concurrence. The final rule does not add any new categories, nor does it substantively alter existing requirements regarding extraordinary circumstances. The Department did not propose any changes to the categorical exclusions or associated requirements and does not believe any changes are warranted in this final rule. Regarding the allegation that the court ruling in *Citizens for Better Forestry* v. *U.S. Dept. of Agriculture* makes this rule illegal: In an order dated March 30, 2007, the United States District Court enjoined the USDA from implementing and utilizing the 2005 land management planning rule at 36 CFR part 219 until it takes additional steps to comply with the court's opinion regarding the Administrative Procedure Act (APA), Endangered Species Act (ESA), and NEPA. The Court stated, “In particular, the agency must provide notice and comment on the 2005 Rule as required by the APA since the court concludes that the rule was not a ‘logical outgrowth’ of the 2002 Proposed Rule. Additionally, because the 2005 Rule may significantly affect the quality of the human environment under NEPA, and because it may affect listed species and their habitat under ESA, the agency must conduct further analysis and evaluation of the impact of the 2005 Rule in accordance with those statutes.” This ruling on the forest planning regulations (which have been revised and reissued in 2008) in no way invalidates this final rule regarding Forest Service NEPA obligations and responsibilities for proposed forest plans. The court ruling cited by some respondents in *Rhodes* v. *Johnson* concerned an interpretation of the Forest Service's procedures for determining whether extraordinary circumstances exist. The ruling was made in 1998. In 2002, the Forest Service clarified its procedures for consideration of extraordinary circumstances, in consultation with CEQ and following public review and comment. The clarification specified that the mere presence of one or more of the listed resource conditions does not preclude use of a categorical exclusion; rather it is the degree of potential effect of a proposed action on the resource conditions that determines whether or not extraordinary circumstances exist. Furthermore, the provision at § 220.6(c) states that uncertainty over the significance of effects of a proposed action requires preparation of an EA. If a proposed action is within a categorical exclusion identified in Forest Service procedures, the responsible official must determine that there are no extraordinary circumstances in which a normally excluded action may have a significant environmental effect. The responsible official relies on many sources of information in making a determination concerning extraordinary circumstances, including public comment, specialist reports, and consultation with other agencies. The extraordinary circumstances requirements include a list of resource conditions that “should” be considered. “Should” is used instead of “shall” because “should” underscores that the list is not intended to be exhaustive. The list of resource conditions is intended as a starting place and does not preclude consideration of other factors or conditions by the responsible official with the potential for significant environmental effects. While some Forest Service categorical exclusions of limited scope do not require a decision memo or project record, a majority of the Forest Service's categories do require preparation of a decision memo and a supporting record. The project record and decision memo both document the determination that no extraordinary circumstances exist (§ 220.6(e) and (f)). Reviewers should note that the United States Court of Appeals for the Ninth Circuit has invalidated the categorical exclusion for hazardous fuels reduction activities (§ 220.6(e)(10)). *Sierra Club* v. *Bosworth* , 510 F.3d 1016 (9th Cir. 2007). A motion for rehearing is pending for that case. Because judicial proceedings are ongoing the category will be retained subject to the Chief's December 19, 2007 instructions that Forest Service officials must refrain from use of this category while the litigation remains unresolved. See *http://www.fs.fed.us/emc/nepa/nepa_procedures/index.htm* . The Forest Service will fully comply with all judicial orders and instructions. Once the judicial process has been concluded, the category will either remain or be removed, depending upon the litigation's outcome. If, at a later date, the Department determines changes need to be made to section 220.6, those proposed changes will be made in consultation with CEQ and made available to the public for review and comment. The Department moved existing Forest Service categories and associated language directly from its NEPA procedures previously found in FSH 1909.15 chapter 30 to the proposed rule. The only changes made were minor editorial changes for clarity. In transmitting and formatting the existing categorical exclusions for the proposed regulation, the following statement about “decision memos” in the existing procedures was inadvertently left out of the proposed regulation: “If the proposed action is approval of a land management plan, plan amendment, or plan revision, the plan approval document required by 36 CFR 219.7(c) satisfies the decision memo requirements of this section.” The statement is intended to avoid duplicate decision documents for land management plans. Thus, the final rule includes this statement. Section 220.7 Environmental Assessments *Comments* . One conservation group is concerned about the length of EAs. This group believes the Forest Service is producing lengthy EAs, which should be EISs. They state that the CEQ has advised agencies to keep the length for an EA to 10-15 pages. They feel that the Forest Service may incorporate material by reference to reduce the length of the document. The group suggests that the Forest Service should add page requirements to its proposed rule, to avoid lengthy EAs. *Response* . The final rule includes incorporation by reference in section 220.4, General Requirements, subsection
(h)‘Incorporation by Reference’, section 220.7 `Environmental Analysis and Decision Notice', subsections (a), (b)(2)(iii) and (iv). Section 220.7, ‘Environmental Analysis and Decision Notices’ emphasizes brief, succinct documentation. Existing guidance emphasizes the use of incorporation by reference as a tool for the responsible official to use, and grants the flexibility needed to provide the documentation necessary for the analysis but keeps the page limits within what is required for adequate disclosure. Consequently, there is no need to set specific page limits. *Comments* . Many respondents commented on section 220.7(b)(iii) of the proposed rule, which would allow consideration of a no-action alternative to be shown by contrasting the impacts of the proposal and alternatives with the current condition and expected future conditions if the proposed action were not implemented. Many respondents expressed the importance of not allowing such a “no-action alternative” to lead to a decreased analysis and consideration of “no-action.” They emphasize that informed and meaningful consideration of alternatives, including the no-action alternative, is an integral part of the NEPA process. *Response* . After consideration of the comments, the Department has chosen to keep the provision in the final rule. There is no specific CEQ requirement to include a no-action alternative in an EA and the language follows CEQ's EA guidance *Preparing Focused, Concise and Timely Environmental Assessments* (see *http://ceq.eh.doe.gov/nepa/regs/Preparing_Focused_Concise_and_Timely_EAs.pdf* ). By contrasting the impacts of the proposal and alternatives with the current condition and expected future condition of the environment, the effects of a no-action alternative are considered. This provision is provided as an option for responsible officials to use if in their best judgment it serves the need of the analysis. *Comments* . Respondents want the Forest Service to provide a definition for “unresolved conflicts” and to present examples of such actions. Others want to know who decides whether there are “no unresolved conflicts concerning alternative uses of available resources.” *Response* . The term “unresolved conflicts” comes directly from NEPA (42 U.S.C. 4332(2)E). Typically, most Forest Service proposals will have alternatives; however, the final rule specifically recognizes that in some situations there may be no conflicts regarding a proposed action and in such cases alternatives would not be required. On September 8, 2005, the CEQ issued EA guidance to federal agencies entitled *Preparing Focused, Concise and Timely Environmental Assessments* , that explained language at section 102(2)(E) of NEPA “unresolved conflicts concerning alternative uses of available resources” (42 U.S.C. 4332(2)(E)). The CEQ guidance states: “When there is consensus about the proposed action based on input from interested parties, you can consider the proposed action and proceed without consideration of additional alternatives. Otherwise, you need to develop reasonable alternatives to meet project needs” (Attachment to September 8, 2005, Memorandum for Federal NEPA Contacts *http://ceq.eh.doe.gov/nepa/regs/Preparing_Focused_Concise_and_Timely_EAs.pdf* ). Ultimately, the responsible official must decide on whether alternatives to the proposed action are appropriate, “based on input from interested parties.” Regulatory Certification National Environmental Policy Act The final rule would move existing procedures for implementing the National Environmental Policy Act
(NEPA)from the Forest Service handbook to 36 CFR part 220 and provide additional direction. The rule would not directly impact the environment. Forest Service NEPA procedures are procedural guidance to assist in the fulfillment of agency responsibilities under NEPA, but are not the agency's final determination of what level of NEPA analysis is required for a particular proposed action. The CEQ set forth the requirements for establishing agency NEPA procedures in its regulations at 40 CFR 1505.1 and 1507.3. The CEQ regulations do not require agencies to conduct NEPA analyses or prepare NEPA documentation when establishing their NEPA procedures. The determination that establishing agency NEPA procedures does not require NEPA analysis and documentation has been upheld in *Heartwood, Inc.* v. *U.S. Forest Service* , 230 F.3d 947, 954-55 (7th Cir. 2000). Regulatory Impact This final rule has been reviewed under USDA procedures and Executive Order 12866 issued September 30, 1993, as amended by Executive Order 13422 on regulatory planning and review and the major rule provisions of the Small Business Regulatory Enforcement and Fairness Act (5 U.S.C. 800). It has been determined that this is not an economically significant action. This action to issue agency regulations will not have an annual effect of $100 million or more on the economy nor adversely affect productivity, competition, jobs, the environment, public health or safety, nor state or local governments. This action will not interfere with an action taken or planned by another agency. This action will not alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients of such programs. However, because of the extensive interest in National Forest System
(NFS)planning and decision-making, this final rule to establish agency implementing procedures for NEPA in the Code of Federal Regulations
(CFR)has been designated as significant and, therefore, is subject to Office of Management and Budget
(OMB)review under Executive Order 12866. In accordance with the OMB Circular A-4, “Regulatory Analysis,” a cost/benefit analysis was conducted. The analysis compared the costs and benefits associated with the current condition of having agency implementing procedures combined with agency explanatory guidance in Forest Service Handbook
(FSH)and this final condition of having implementing direction in regulation and explanatory guidance in FSH. Many benefits and costs associated with the rule are not quantifiable. Benefits, including collaborative and participatory public involvement to more fully address public concerns, timely and focused environmental analysis, flexibility in preparation of environmental documents, and improved legal standing indicate a positive effect of the new rule. Moving implementing NEPA procedures from the FSH to regulation is expected to provide a variety of potentially beneficial effects. This rule gives Forest Service NEPA procedures more visibility, consistent with the transparent nature of the Agency's environmental analysis and decision-making. Maintaining agency explanatory guidance in the FSH would facilitate timely agency responses to new ideas, new information, procedural interpretations, training needs, and editorial changes to addresses and internet links to assist field units when implementing the NEPA process. Finally, the changes to the Forest Service NEPA procedures are intended to provide the Forest Service specific options to meet the intent of NEPA through collaboration, the establishment of incremental alternative development, and the use of adaptive management principles. Based on the context of this analysis, no one factor creates a significant factor, but taken together does create the potential for visible improvements in the agency's NEPA program. Moreover, this final rule has been considered in light of Executive Order 13272 regarding proper consideration of small entities and the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which amended the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). An initial small entities flexibility assessment has been made and it has been determined that this action will not have a significant economic impact on a substantial number of small entities as defined by SBREFA. Federalism The Agency has considered this final rule under the requirements of Executive Order 13132, Federalism. The Agency has concluded that the rule conforms with the federalism principles set out in this Executive order; will not impose any compliance costs on the states; and will not have substantial direct effects on the States or the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, the Agency has determined that no further assessment of federalism implications is necessary. Consultation and Coordination With Indian Tribal Governments Pursuant to Executive Order 13175 of November 6, 2000, Consultation and Coordination with Indian Tribal Governments, the Agency has assessed the impact of this rule on Indian Tribal governments and has determined that it does not significantly or uniquely affect communities of Indian Tribal governments. The rule deals with requirements for NEPA analysis and has no direct effect regarding the occupancy and use of NFS land. The Agency has also determined that this rule does not impose substantial direct compliance costs on Indian Tribal governments or preempt Tribal law. Therefore, it has been determined that this rule does not have Tribal implications requiring advance consultation with Indian Tribes. No Takings Implications This rule has been analyzed in accordance with the principles and criteria contained in Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and it has been determined that the rule does not pose the risk of a taking of protected private property. Civil Justice Reform This rule has been reviewed under Executive Order 12988 of February 7, 1996, Civil Justice Reform. After adoption of this rule,
(1)all State and local laws and regulations that conflict with this rule or that would impede full implementation of this rule would be preempted;
(2)no retroactive effect would be given to this rule; and
(3)the rule would not require the use of administrative proceedings before parties could file suit in court challenging its provisions. Unfunded Mandates Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), which the President signed into law on March 22, 1995, the Agency has assessed the effects of this final rule on State, local, and Tribal governments and the private sector. This rule does not compel the expenditure of $100 million or more by any State, local, or Tribal government or anyone in the private sector. Therefore, a statement under section 202 of the act is not required. Energy Effects This rule has been reviewed under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. It has been determined that this rule does not constitute a significant energy action as defined in the Executive order. Controlling Paperwork Burdens on the Public This rule does not contain any additional recordkeeping or reporting requirements or other information collection requirements as defined in 5 CFR part 1320 that are not already required by law or not already approved for use, and therefore, imposes no additional paperwork burden on the public. Accordingly, the review provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) and its implementing regulations at 5 CFR part 1320 do not apply. List of Subjects in 36 CFR Part 220 Administrative practices and procedures, Environmental impact statements, Environmental protection, National forests, Science and technology. Therefore, for the reasons set forth in the preamble, the Department of Agriculture amends chapter II of Title 36 of the Code of Federal Regulations by adding part 220 to read as follows: PART 220—NATIONAL ENVIRONMENTAL POLICY ACT
(NEPA)COMPLIANCE Sec. 220.1 Purpose and scope. 220.2 Applicability. 220.3 Definitions. 220.4 General requirements. 220.5 Environmental impact statement and record of decision. 220.6 Categorical exclusions. 220.7 Environmental assessment and decision notice. Authority: 42 U.S.C. 4321 *et seq.* ; E. O. 11514; 40 CFR parts 1500-1508; 7 CFR part 1b. § 220.1 Purpose and scope.
(a)*Purpose* . This part establishes Forest Service, U.S. Department of Agriculture
(USDA)procedures for compliance with the National Environmental Policy Act
(NEPA)of 1969 (42 U.S.C. 4321 *et seq.* ) and the Council on Environmental Quality
(CEQ)regulations for implementing the procedural provisions of NEPA (40 CFR parts 1500 through 1508).
(b)*Scope* . This part supplements and does not lessen the applicability of the CEQ regulations, and is to be used in conjunction with the CEQ regulations and USDA regulations at 7 CFR part 1b. § 220.2 Applicability. This part applies to all organizational elements of the Forest Service. Consistent with 40 CFR 1500.3, no trivial violation of this part shall give rise to any independent cause of action. § 220.3 Definitions. The following definitions supplement, by adding to, the terms defined at 40 CFR parts 1500-1508. *Adaptive management* . A system of management practices based on clearly identified intended outcomes and monitoring to determine if management actions are meeting those outcomes; and, if not, to facilitate management changes that will best ensure that those outcomes are met or re-evaluated. Adaptive management stems from the recognition that knowledge about natural resource systems is sometimes uncertain. *Decision document* . A record of decision, decision notice or decision memo. *Decision memo* . A concise written record of the responsible official's decision to implement an action categorically excluded from further analysis and documentation in an environmental impact statement
(EIS)or environmental assessment (EA). *Decision notice* . A concise written record of the responsible official's decision when an EA and finding of no significant impact (FONSI) have been prepared. *Environmentally preferable alternative* . The environmentally preferable alternative is the alternative that will best promote the national environmental policy as expressed in NEPA's section 101 (42 U.S.C. 4321). Ordinarily, the environmentally preferable alternative is that which causes the least harm to the biological and physical environment; it also is the alternative which best protects and preserves historic, cultural, and natural resources. In some situations, there may be more than one environmentally preferable alternative. *Reasonably foreseeable future actions* . Those Federal or non-Federal activities not yet undertaken, for which there are existing decisions, funding, or identified proposals. Identified proposals for Forest Service actions are described in § 220.4(a)(1). *Responsible official* . The Agency employee who has the authority to make and implement a decision on a proposed action. *Schedule of proposed actions (SOPA).* A Forest Service document that informs the public about those proposed and ongoing Forest Service actions for which a record of decision, decision notice or decision memo would be or has been prepared. The SOPA also identifies a contact for additional information on any proposed actions. § 220.4 General requirements.
(a)*Proposed actions subject to the NEPA requirements.* As required by 42 U.S.C. 4321 *et seq.,* a Forest Service proposal is subject to the NEPA requirements when all of the following apply:
(1)The Forest Service has a goal and is actively preparing to make a decision on one or more alternative means of accomplishing that goal and the effects can be meaningfully evaluated ( *see* 40 CFR 1508.23);
(2)The proposed action is subject to Forest Service control and responsibility ( *see* 40 CFR 1508.18);
(3)The proposed action would cause effects on the natural and physical environment and the relationship of people with that environment ( *see* 40 CFR 1508.14); and
(4)The proposed action is not statutorily exempt from the requirements of section 102(2)(C) of the NEPA (42 U.S.C. 4332(2)(C)).
(b)*Emergency responses.* When the responsible official determines that an emergency exists that makes it necessary to take urgently needed actions before preparing a NEPA analysis and any required documentation in accordance with the provisions in §§ 220.5, 220.6, and 220.7 of this part, then the following provisions apply.
(1)The responsible official may take actions necessary to control the immediate impacts of the emergency and are urgently needed to mitigate harm to life, property, or important natural or cultural resources. When taking such actions, the responsible official shall take into account the probable environmental consequences of the emergency action and mitigate foreseeable adverse environmental effects to the extent practical.
(2)If the responsible official proposes emergency actions other than those actions described in paragraph (b)(1) of this section, and such actions are not likely to have significant environmental impacts, the responsible official shall document that determination in an EA and FONSI prepared in accord with these regulations. If the responsible official finds that the nature and scope of proposed emergency actions are such that they must be undertaken prior to preparing any NEPA analysis and documentation associated with a CE or an EA and FONSI, the responsible official shall consult with the Washington Office about alternative arrangements for NEPA compliance. The Chief or Associate Chief of the Forest Service may grant emergency alternative arrangements under NEPA for environmental assessments, findings of no significant impact and categorical exclusions (FSM 1950.41a). Consultation with the Washington Office shall be coordinated through the appropriate regional office.
(3)If the responsible official proposes emergency actions other than those actions described in paragraph (b)(1) of this section and such actions are likely to have significant environmental impacts, then the responsible official shall consult with CEQ, through the appropriate regional office and the Washington Office, about alternative arrangements in accordance with CEQ regulations at 40 CFR 1506.11 as soon as possible.
(c)*Agency decisionmaking.* For each Forest Service proposal (§ 220.4(a)), the responsible official shall coordinate and integrate NEPA review and relevant environmental documents with agency decisionmaking by:
(1)Completing the environmental document review before making a decision on the proposal;
(2)Considering environmental documents, public and agency comments (if any) on those documents, and agency responses to those comments;
(3)Including environmental documents, comments, and responses in the administrative record;
(4)Considering the alternatives analyzed in environmental document(s) before rendering a decision on the proposal; and
(5)Making a decision encompassed within the range of alternatives analyzed in the environmental documents.
(d)*Schedule of proposed actions (SOPA).* The responsible official shall ensure the SOPA is updated and notify the public of the availability of the SOPA.
(e)*Scoping (40 CFR 1501.7).*
(1)Scoping is required for all Forest Service proposed actions, including those that would appear to be categorically excluded from further analysis and documentation in an EA or an EIS (§ 220.6).
(2)Scoping shall be carried out in accordance with the requirements of 40 CFR 1501.7. Because the nature and complexity of a proposed action determine the scope and intensity of analysis, no single scoping technique is required or prescribed.
(3)The SOPA shall not to be used as the sole scoping mechanism for a proposed action.
(f)*Cumulative effects considerations of past actions.* Cumulative effects analysis shall be carried out in accordance with 40 CFR 1508.7 and in accordance with “The Council on Environmental Quality Guidance Memorandum on Consideration of Past Actions in Cumulative Effects Analysis” dated June 24, 2005. The analysis of cumulative effects begins with consideration of the direct and indirect effects on the environment that are expected or likely to result from the alternative proposals for agency action. Agencies then look for present effects of past actions that are, in the judgment of the agency, relevant and useful because they have a significant cause-and-effect relationship with the direct and indirect effects of the proposal for agency action and its alternatives. CEQ regulations do not require the consideration of the individual effects of all past actions to determine the present effects of past actions. Once the agency has identified those present effects of past actions that warrant consideration, the agency assesses the extent that the effects of the proposal for agency action or its alternatives will add to, modify, or mitigate those effects. The final analysis documents an agency assessment of the cumulative effects of the actions considered (including past, present, and reasonable foreseeable future actions) on the affected environment. With respect to past actions, during the scoping process and subsequent preparation of the analysis, the agency must determine what information regarding past actions is useful and relevant to the required analysis of cumulative effects. Cataloging past actions and specific information about the direct and indirect effects of their design and implementation could in some contexts be useful to predict the cumulative effects of the proposal. The CEQ regulations, however, do not require agencies to catalogue or exhaustively list and analyze all individual past actions. Simply because information about past actions may be available or obtained with reasonable effort does not mean that it is relevant and necessary to inform decisionmaking. (40 CFR 1508.7)
(g)*Classified information.* To the extent practicable, the responsible official shall segregate any information that has been classified pursuant to Executive order or statute. The responsible official shall maintain the confidentiality of such information in a manner required for the information involved. Such information may not be included in any publicly disclosed documents. If such material cannot be reasonably segregated, or if segregation would leave essentially meaningless material, the responsible official must withhold the entire analysis document from the public; however, the responsible official shall otherwise prepare the analysis documentation in accord with applicable regulations. (40 CFR 1507.3(c))
(h)*Incorporation by reference.* Material may be incorporated by reference into any environmental or decision document. This material must be reasonably available to the public and its contents briefly described in the environmental or decision document. (40 CFR 1502.21)
(i)*Applicants.* The responsible official shall make policies or staff available to advise potential applicants of studies or other information foreseeably required for acceptance of their applications. Upon acceptance of an application as provided by 36 CFR 251.54(g) the responsible official shall initiate the NEPA process. § 220.5 Environmental impact statement and record of decision.
(a)*Classes of actions normally requiring environmental impact statements.*
(1)*Class 1:* Proposals to carry out or to approve aerial application of chemical pesticides on an operational basis. Examples include but are not limited to:
(i)Applying chemical insecticides by helicopter on an area infested with spruce budworm to prevent serious resource loss.
(ii)Authorizing the application of herbicides by helicopter on a major utility corridor to control unwanted vegetation.
(iii)Applying herbicides by fixed-wing aircraft on an area to release trees from competing vegetation.
(2)*Class 2:* Proposals that would substantially alter the undeveloped character of an inventoried roadless area or a potential wilderness area. Examples include but are not limited to:
(i)Constructing roads and harvesting timber in an inventoried roadless area where the proposed road and harvest units impact a substantial part of the inventoried roadless area.
(ii)Constructing or reconstructing water reservoir facilities in a potential wilderness area where flow regimens may be substantially altered.
(iii)Approving a plan of operations for a mine that would cause considerable surface disturbance in a potential wilderness area.
(b)*Notice of intent.* Normally, a notice of intent to prepare an EIS shall be published in the **Federal Register** as soon as practicable after deciding that an EIS will be prepared. Where there is a lengthy period between the agency's decision to prepare an environmental impact statement and the time of actual preparation, the notice of intent may be published at a reasonable time in advance of preparation of the draft statement. A notice must meet the requirements of 40 CFR 1508.22, and in addition, include the following:
(1)Title of the responsible official(s);
(2)Any permits or licenses required to implement the proposed action and the issuing authority;
(3)Lead, joint lead, or cooperating agencies if identified; and
(4)Address(es) to which comments may be sent.
(c)*Withdrawal notice.* A withdrawal notice must be published in the **Federal Register** if, after publication of the notice of intent or notice of availability, an EIS is no longer necessary. A withdrawal notice must refer to the date and **Federal Register** page number of the previously published notice(s).
(d)*Environmental impact statement format and content.* The responsible official may use any EIS format and design as long as the statement is in accord with 40 CFR 1502.10.
(e)*Alternative(s).* The EIS shall document the examination of reasonable alternatives to the proposed action. An alternative should meet the purpose and need and address one or more significant issues related to the proposed action. Since an alternative may be developed to address more than one significant issue, no specific number of alternatives is required or prescribed. The following procedures are available to the responsible official to develop and analyze alternatives:
(1)The responsible official may modify the proposed action and alternative(s) under consideration prior to issuing a draft EIS. In such cases, the responsible official may consider the incremental changes as alternatives considered. The documentation of these incremental changes to a proposed action or alternatives shall be included or incorporated by reference in accord with 40 CFR 1502.21.
(2)The proposed action and one or more alternatives to the proposed action may include adaptive management. An adaptive management proposal or alternative must clearly identify the adjustment(s) that may be made when monitoring during project implementation indicates that the action is not having its intended effect, or is causing unintended and undesirable effects. The EIS must disclose not only the effect of the proposed action or alternative but also the effect of the adjustment. Such proposal or alternative must also describe the monitoring that would take place to inform the responsible official during implementation whether the action is having its intended effect.
(f)*Circulating and filing draft and final environmental impact statements.*
(1)The draft and final EISs shall be filed with the Environmental Protection Agency's Office of Federal Activities in Washington, DC ( *see* 40 CFR 1506.9).
(2)Requirements at 40 CFR 1506.9 “Filing requirements,” 40 CFR 1506.10 “Timing of agency action,” and 40 CFR 1502.19 “Circulation of the environmental impact statement” shall only apply to the last draft and final EIS and not apply to material produced prior to the draft EIS or between the draft and final EIS which are filed with EPA.
(3)When the responsible official determines that an extension of the review period on a draft EIS is appropriate, notice shall be given in the same manner used for inviting comments on the draft.
(g)*Distribution of the record of decision.* The responsible official shall notify interested or affected parties of the availability of the record of decision as soon as practical after signing. § 220.6 Categorical exclusions.
(a)*General.* A proposed action may be categorically excluded from further analysis and documentation in an EIS or EA only if there are no extraordinary circumstances related to the proposed action and if:
(1)The proposed action is within one of the categories established by the Secretary at 7 CFR part 1b.3; or
(2)The proposed action is within a category listed in § 220.6(d) and (e).
(b)*Resource conditions.*
(1)Resource conditions that should be considered in determining whether extraordinary circumstances related to a proposed action warrant further analysis and documentation in an EA or an EIS are:
(i)Federally listed threatened or endangered species or designated critical habitat, species proposed for Federal listing or proposed critical habitat, or Forest Service sensitive species;
(ii)Flood plains, wetlands, or municipal watersheds;
(iii)Congressionally designated areas, such as wilderness, wilderness study areas, or national recreation areas;
(iv)Inventoried roadless area or potential wilderness area;
(v)Research natural areas;
(vi)American Indians and Alaska Native religious or cultural sites; and
(vii)Archaeological sites, or historic properties or areas.
(2)The mere presence of one or more of these resource conditions does not preclude use of a categorical exclusion (CE). It is the existence of a cause-effect relationship between a proposed action and the potential effect on these resource conditions, and if such a relationship exists, the degree of the potential effect of a proposed action on these resource conditions that determines whether extraordinary circumstances exist.
(c)*Scoping.* If the responsible official determines, based on scoping, that it is uncertain whether the proposed action may have a significant effect on the environment, prepare an EA. If the responsible official determines, based on scoping, that the proposed action may have a significant environmental effect, prepare an EIS.
(d)*Categories of actions for which a project or case file and decision memo are not required.* A supporting record and a decision memo are not required, but at the discretion of the responsible official, may be prepared for the following categories:
(1)Orders issued pursuant to 36 CFR part 261—Prohibitions to provide short-term resource protection or to protect public health and safety. Examples include but are not limited to:
(i)Closing a road to protect bighorn sheep during lambing season, and
(ii)Closing an area during a period of extreme fire danger.
(2)Rules, regulations, or policies to establish servicewide administrative procedures, program processes, or instructions. Examples include but are not limited to:
(i)Adjusting special use or recreation fees using an existing formula;
(ii)Proposing a technical or scientific method or procedure for screening effects of emissions on air quality related values in Class I wildernesses;
(iii)Proposing a policy to defer payments on certain permits or contracts to reduce the risk of default;
(iv)Proposing changes in contract terms and conditions or terms and conditions of special use authorizations;
(v)Establishing a servicewide process for responding to offers to exchange land and for agreeing on land values; and
(vi)Establishing procedures for amending or revising forest land and resource management plans.
(3)Repair and maintenance of administrative sites. Examples include but are not limited to:
(i)Mowing lawns at a district office;
(ii)Replacing a roof or storage shed;
(iii)Painting a building; and
(iv)Applying registered pesticides for rodent or vegetation control.
(4)Repair and maintenance of roads, trails, and landline boundaries. Examples include but are not limited to:
(i)Authorizing a user to grade, resurface, and clean the culverts of an established NFS road;
(ii)Grading a road and clearing the roadside of brush without the use of herbicides;
(iii)Resurfacing a road to its original condition;
(iv)Pruning vegetation and cleaning culverts along a trail and grooming the surface of the trail; and
(v)Surveying, painting, and posting landline boundaries.
(5)Repair and maintenance of recreation sites and facilities. Examples include but are not limited to:
(i)Applying registered herbicides to control poison ivy on infested sites in a campground;
(ii)Applying registered insecticides by compressed air sprayer to control insects at a recreation site complex;
(iii)Repaving a parking lot; and
(iv)Applying registered pesticides for rodent or vegetation control.
(6)Acquisition of land or interest in land. Examples include but are not limited to:
(i)Accepting the donation of lands or interests in land to the NFS, and
(ii)Purchasing fee, conservation easement, reserved interest deed, or other interests in lands.
(7)Sale or exchange of land or interest in land and resources where resulting land uses remain essentially the same. Examples include but are not limited to:
(i)Selling or exchanging land pursuant to the Small Tracts Act;
(ii)Exchanging NFS lands or interests with a State agency, local government, or other non-Federal party (individual or organization) with similar resource management objectives and practices;
(iii)Authorizing the Bureau of Land Management to issue leases on producing wells when mineral rights revert to the United States from private ownership and there is no change in activity; and
(iv)Exchange of administrative sites involving other than NFS lands.
(8)Approval, modification, or continuation of minor, short-term (1 year or less) special uses of NFS lands. Examples include, but are not limited to:
(i)Approving, on an annual basis, the intermittent use and occupancy by a State-licensed outfitter or guide;
(ii)Approving the use of NFS land for apiaries; and
(iii)Approving the gathering of forest products for personal use.
(9)Issuance of a new permit for up to the maximum tenure allowable under the National Forest Ski Area Permit Act of 1986 (16 U.S.C. 497b) for an existing ski area when such issuance is a purely ministerial action to account for administrative changes, such as a change in ownership of ski area improvements, expiration of the current permit, or a change in the statutory authority applicable to the current permit. Examples include, but are not limited to:
(i)Issuing a permit to a new owner of ski area improvements within an existing ski area with no changes to the master development plan, including no changes to the facilities or activities for that ski area;
(ii)Upon expiration of a ski area permit, issuing a new permit to the holder of the previous permit where the holder is not requesting any changes to the master development plan, including changes to the facilities or activities; and
(iii)Issuing a new permit under the National Forest Ski Area Permit Act of 1986 to the holder of a permit issued under the Term Permit and Organic Acts, where there are no changes in the type or scope of activities authorized and no other changes in the master development plan.
(10)Amendment to or replacement of an existing special use authorization that involves only administrative changes and does not involve changes in the authorized facilities or increase in the scope or intensity of authorized activities, or extensions to the term of authorization, when the applicant or holder is in full compliance with the terms and conditions of the special use authorization. Examples include, but are not limited to:
(i)Amending a special use authorization to reflect administrative changes such as adjustment to the land use fees, inclusion of non-discretionary environmental standards or updating a special use authorization to bring it into conformance with current laws or regulations (for example, new monitoring required by water quality standards), and
(ii)Issuance of a new special use authorization to reflect administrative changes such as, a change of ownership or control of previously authorized facilities or activities, or conversion of the existing special use authorization to a new type of special use authorization (for example, converting a permit to a lease or easement).
(e)*Categories of actions for which a project or case file and decision memo are required.* A supporting record is required and the decision to proceed must be documented in a decision memo for the categories of action in paragraphs (e)(1) through
(17)of this section. As a minimum, the project or case file should include any records prepared, such as: The names of interested and affected people, groups, and agencies contacted; the determination that no extraordinary circumstances exist; a copy of the decision memo; and a list of the people notified of the decision. If the proposed action is approval of a land management plan, plan amendment, or plan revision, the plan approval document required by 36 CFR part 219 satisfies the decision memo requirements of this section.
(1)Construction and reconstruction of trails. Examples include, but are not limited to:
(i)Constructing or reconstructing a trail to a scenic overlook, and
(ii)Reconstructing an existing trail to allow use by handicapped individuals.
(2)Additional construction or reconstruction of existing telephone or utility lines in a designated corridor. Examples include, but are not limited to:
(i)Replacing an underground cable trunk and adding additional phone lines, and
(ii)Reconstructing a power line by replacing poles and wires.
(3)Approval, modification, or continuation of minor special uses of NFS lands that require less than five contiguous acres of land. Examples include, but are not limited to:
(i)Approving the construction of a meteorological sampling site;
(ii)Approving the use of land for a one-time group event;
(iii)Approving the construction of temporary facilities for filming of staged or natural events or studies of natural or cultural history;
(iv)Approving the use of land for a 40-foot utility corridor that crosses one mile of a national forest;
(v)Approving the installation of a driveway, mailbox, or other facilities incidental to use of a residence;
(vi)Approving an additional telecommunication use at a site already used for such purposes;
(vii)Approving the removal of mineral materials from an existing community pit or common-use area; and
(viii)Approving the continued use of land where such use has not changed since authorized and no change in the physical environment or facilities are proposed.
(4)[Reserved]
(5)Regeneration of an area to native tree species, including site preparation that does not involve the use of herbicides or result in vegetation type conversion. Examples include, but are not limited to:
(i)Planting seedlings of superior trees in a progeny test site to evaluate genetic worth, and
(ii)Planting trees or mechanical seed dispersal of native tree species following a fire, flood, or landslide.
(6)Timber stand and/or wildlife habitat improvement activities that do not include the use of herbicides or do not require more than 1 mile of low standard road construction. Examples include, but are not limited to:
(i)Girdling trees to create snags;
(ii)Thinning or brush control to improve growth or to reduce fire hazard including the opening of an existing road to a dense timber stand;
(iii)Prescribed burning to control understory hardwoods in stands of southern pine; and
(iv)Prescribed burning to reduce natural fuel build-up and improve plant vigor.
(7)Modification or maintenance of stream or lake aquatic habitat improvement structures using native materials or normal practices. Examples include, but are not limited to:
(i)Reconstructing a gabion with stone from a nearby source;
(ii)Adding brush to lake fish beds; and
(iii)Cleaning and resurfacing a fish ladder at a hydroelectric dam.
(8)Short-term (1 year or less) mineral, energy, or geophysical investigations and their incidental support activities that may require cross-country travel by vehicles and equipment, construction of less than 1 mile of low standard road, or use and minor repair of existing roads. Examples include, but are not limited to:
(i)Authorizing geophysical investigations which use existing roads that may require incidental repair to reach sites for drilling core holes, temperature gradient holes, or seismic shot holes;
(ii)Gathering geophysical data using shot hole, vibroseis, or surface charge methods;
(iii)Trenching to obtain evidence of mineralization;
(iv)Clearing vegetation for sight paths or from areas used for investigation or support facilities;
(v)Redesigning or rearranging surface facilities within an approved site;
(vi)Approving interim and final site restoration measures; and
(vii)Approving a plan for exploration which authorizes repair of an existing road and the construction of 1/3 mile of temporary road; clearing vegetation from an acre of land for trenches, drill pads, or support facilities.
(9)Implementation or modification of minor management practices to improve allotment condition or animal distribution when an allotment management plan is not yet in place. Examples include, but are not limited to:
(i)Rebuilding a fence to improve animal distribution;
(ii)Adding a stock watering facility to an existing water line; and
(iii)Spot seeding native species of grass or applying lime to maintain forage condition.
(10)Hazardous fuels reduction activities using prescribed fire, not to exceed 4,500 acres; and mechanical methods for crushing, piling, thinning, pruning, cutting, chipping, mulching, and mowing, not to exceed 1,000 acres. Such activities:
(i)Shall be limited to areas:
(A)In the wildland-urban interface; or
(B)Condition Classes 2 or 3 in Fire Regime Groups I, II, or III, outside the wildland-urban interface.
(ii)Shall be identified through a collaborative framework as described in “A Collaborative Approach for Reducing Wildland Fire Risks to Communities and Environment 10-Year Comprehensive Strategy Implementation Plan”;
(iii)Shall be conducted consistent with Agency and Departmental procedures and applicable land and resource management plans;
(iv)Shall not be conducted in wilderness areas or impair the suitability of wilderness study areas for preservation as wilderness; and
(v)Shall not include the use of herbicides or pesticides or the construction of new permanent roads or other new permanent infrastructure; and may include the sale of vegetative material if the primary purpose of the activity is hazardous fuels reduction.
(11)Post-fire rehabilitation activities, not to exceed 4,200 acres (such as tree planting, fence replacement, habitat restoration, heritage site restoration, repair of roads and trails, and repair of damage to minor facilities such as campgrounds), to repair or improve lands unlikely to recover to a management approved condition from wildland fire damage, or to repair or replace minor facilities damaged by fire. Such activities:
(i)Shall be conducted consistent with Agency and Departmental procedures and applicable land and resource management plans;
(ii)Shall not include the use of herbicides or pesticides or the construction of new permanent roads or other new permanent infrastructure; and
(iii)Shall be completed within 3 years following a wildland fire.
(12)Harvest of live trees not to exceed 70 acres, requiring no more than 1/2 mile of temporary road construction. Do not use this category for even-aged regeneration harvest or vegetation type conversion. The proposed action may include incidental removal of trees for landings, skid trails, and road clearing. Examples include, but are not limited to:
(i)Removal of individual trees for sawlogs, specialty products, or fuelwood, and
(ii)Commercial thinning of overstocked stands to achieve the desired stocking level to increase health and vigor.
(13)Salvage of dead and/or dying trees not to exceed 250 acres, requiring no more than 1/2 mile of temporary road construction. The proposed action may include incidental removal of live or dead trees for landings, skid trails, and road clearing. Examples include, but are not limited to:
(i)Harvest of a portion of a stand damaged by a wind or ice event and construction of a short temporary road to access the damaged trees, and
(ii)Harvest of fire-damaged trees.
(14)Commercial and non-commercial sanitation harvest of trees to control insects or disease not to exceed 250 acres, requiring no more than 1/2 mile of temporary road construction, including removal of infested/infected trees and adjacent live uninfested/uninfected trees as determined necessary to control the spread of insects or disease. The proposed action may include incidental removal of live or dead trees for landings, skid trails, and road clearing. Examples include, but are not limited to:
(i)Felling and harvest of trees infested with southern pine beetles and immediately adjacent uninfested trees to control expanding spot infestations, and
(ii)Removal and/or destruction of infested trees affected by a new exotic insect or disease, such as emerald ash borer, Asian long horned beetle, and sudden oak death pathogen.
(15)Issuance of a new special use authorization for a new term to replace an existing or expired special use authorization when the only changes are administrative, there are not changes to the authorized facilities or increases in the scope or intensity of authorized activities, and the applicant or holder is in full compliance with the terms and conditions of the special use authorization.
(16)Land management plans, plan amendments, and plan revisions developed in accordance with 36 CFR part 219 *et seq.* that provide broad guidance and information for project and activity decisionmaking in a NFS unit. Proposals for actions that approve projects and activities, or that command anyone to refrain from undertaking projects and activities, or that grant, withhold or modify contracts, permits or other formal legal instruments, are outside the scope of this category and shall be considered separately under Forest Service NEPA procedures.
(17)Approval of a Surface Use Plan of Operations for oil and natural gas exploration and initial development activities, associated with or adjacent to a new oil and/or gas field or area, so long as the approval will not authorize activities in excess of any of the following:
(i)One mile of new road construction;
(ii)One mile of road reconstruction;
(iii)Three miles of individual or co-located pipelines and/or utilities disturbance; or
(iv)Four drill sites.
(f)*Decision memos.* The responsible official shall notify interested or affected parties of the availability of the decision memo as soon as practical after signing. While sections may be combined or rearranged in the interest of clarity and brevity, decision memos must include the following content:
(1)A heading, which must identify:
(i)Title of document: Decision Memo;
(ii)Agency and administrative unit;
(iii)Title of the proposed action; and
(iv)Location of the proposed action, including administrative unit, county, and State.
(2)Decision to be implemented and the reasons for categorically excluding the proposed action including:
(i)The category of the proposed action;
(ii)The rationale for using the category and, if more than one category could have been used, why the specific category was chosen;
(iii)A finding that no extraordinary circumstances exist;
(3)Any interested and affected agencies, organizations, and persons contacted;
(4)Findings required by other laws such as, but not limited to findings of consistency with the forest land and resource management plan as required by the National Forest Management Act; or a public interest determination (36 CFR 254.3(c));
(5)The date when the responsible official intends to implement the decision and any conditions related to implementation;
(6)Whether the decision is subject to review or appeal, the applicable regulations, and when and where to file a request for review or appeal;
(7)Name, address, and phone number of a contact person who can supply further information about the decision; and
(8)The responsible official's signature and date when the decision is made. § 220.7 Environmental assessment and decision notice.
(a)*Environmental assessment.* An environmental assessment
(EA)shall be prepared for proposals as described in § 220.4(a) that are not categorically excluded from documentation (§ 220.6) and for which the need of an EIS has not been determined (§ 220.5). An EA may be prepared in any format useful to facilitate planning, decisionmaking, and public disclosure as long as the requirements of paragraph
(b)of this section are met. The EA may incorporate by reference information that is reasonably available to the public.
(b)*An EA must include the following:*
(1)Need for the proposal. The EA must briefly describe the need for the project.
(2)Proposed action and alternative(s). The EA shall briefly describe the proposed action and alternative(s) that meet the need for action. No specific number of alternatives is required or prescribed.
(i)When there are no unresolved conflicts concerning alternative uses of available resources (NEPA, section 102(2)(E)), the EA need only analyze the proposed action and proceed without consideration of additional alternatives.
(ii)The EA may document consideration of a no-action alternative through the effects analysis by contrasting the impacts of the proposed action and any alternative(s) with the current condition and expected future condition if the proposed action were not implemented.
(iii)The description of the proposal and alternative(s) may include a brief description of modifications and incremental design features developed through the analysis process to develop the alternatives considered. The documentation of these incremental changes to a proposed action or alternatives may be incorporated by reference in accord with 40 CFR 1502.21.
(iv)The proposed action and one or more alternatives to the proposed action may include adaptive management. An adaptive management proposal or alternative must clearly identify the adjustment(s) that may be made when monitoring during project implementation indicates that the action is not having its intended effect, or is causing unintended and undesirable effects. The EA must disclose not only the effect of the proposed action or alternative but also the effect of the adjustment. Such proposal or alternative must also describe the monitoring that would take place to inform the responsible official whether the action is having its intended effect.
(3)Environmental Impacts of the Proposed Action and Alternative(s). The EA:
(i)Shall briefly provide sufficient evidence and analysis, including the environmental impacts of the proposed action and alternative(s), to determine whether to prepare either an EIS or a FONSI (40 CFR 1508.9);
(ii)Shall disclose the environmental effects of any adaptive management adjustments;
(iii)Shall describe the impacts of the proposed action and any alternatives in terms of context and intensity as described in the definition of “significantly” at 40 CFR 1508.27;
(iv)May discuss the direct, indirect, and cumulative impact(s) of the proposed action and any alternatives together in a comparative description or describe the impacts of each alternative separately; and
(v)May incorporate by reference data, inventories, other information and analyses.
(4)Agencies and Persons Consulted.
(c)*Decision notice.* If an EA and FONSI have been prepared, the responsible official must document a decision to proceed with an action in a decision notice unless law or regulation requires another form of decision documentation (40 CFR 1508.13). A decision notice must document the conclusions drawn and the decision(s) made based on the supporting record, including the EA and FONSI. A decision notice must include:
(1)A heading, which identifies the:
(i)Title of document;
(ii)Agency and administrative unit;
(iii)Title of the project; and
(iv)Location of the action, including county and State.
(2)Decision and rationale;
(3)Brief summary of public involvement;
(4)A statement incorporating by reference the EA and FONSI if not combined with the decision notice;
(5)Findings required by other laws and regulations applicable to the decision at the time of decision;
(6)Expected implementation date;
(7)Administrative review or appeal opportunities and, when such opportunities exist, a citation to the applicable regulations and directions on when and where to file a request for review or an appeal;
(8)Contact information, including the name, address, and phone number of a contact person who can supply additional information; and
(9)Responsible Official's signature, and the date the notice is signed.
(d)*Notification.* The responsible official shall notify interested and affected parties of the availability of the EA, FONSI and decision notice, as soon as practicable after the decision notice is signed. Dated: July 14, 2008. Mark Rey, Under Secretary, NRE. [FR Doc. E8-16499 Filed 7-23-08; 8:45 am] BILLING CODE 3410-11-P NATIONAL ARCHIVES AND RECORDS ADMINISTRATION 36 CFR Part 1228 RIN 3095-AA81 Agency Records Centers AGENCY: National Archives and Records Administration (NARA). ACTION: Correcting amendment. SUMMARY: This document amends NARA's regulations related to the storage requirements for agency records, to correct language contained in final regulations that were published in the **Federal Register** of Thursday, December 2, 1999, (64 FR 67660). DATES: Effective on July 24, 2008. FOR FURTHER INFORMATION CONTACT: Jennifer Davis Heaps at 301-837-1850. SUPPLEMENTARY INFORMATION: Background The final regulations that are the subject of this correction updated the standards that records center storage facilities must meet to store Federal records. The regulation applies to all Federal agencies, including NARA, that establish and operate records centers, and to agencies that contract for the services of commercial records storage facilities. Need for Correction As published, the final regulations contain an error in Appendix B that needs to be clarified. The introductory paragraph erroneously referred to a nonexistent paragraph o. and the correct designation was n. List of Subjects in 36 CFR Part 1228 Archives and records. Accordingly, 36 CFR part 1228 is corrected by making the following correcting amendments: PART 1228—DISPOSITION OF FEDERAL RECORDS 1. The authority citation for part 1228 continues to read as follows: Authority: 44 U.S.C. chs. 21, 29, and 33. 2. Revise the introductory sentence of paragraph 2 of Appendix B to Part 1228 to read: Appendix B to Part 1228—Alternative Certified Fire-Safety Detection and Suppression System(s) 2. *Specifications for NARA facilities using 15 foot high records storage.* NARA fire-safety systems that incorporate all components specified in paragraphs 2.a. through n. of this appendix have been tested and certified to meet the requirements in § 1228.230(s) for an acceptable fire-safety detection and suppression system for storage of Federal records. Dated: July 21, 2008. Allen Weinstein, Archivist of the United States. [FR Doc. E8-17080 Filed 7-23-08; 8:45 am] BILLING CODE 7515-01-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 10 [PS Docket No. 07-287; FCC 08-99] Commercial Mobile Alert System AGENCY: Federal Communications Commission. ACTION: Final rule. SUMMARY: In this document, the Federal Communications Commission (Commission or FCC) adopts technical rules necessary to enable Commercial Mobile Service
(CMS)alerting capability for CMS providers who elect to transmit emergency alerts to their subscribers. By adopting these rules, the Commission takes the next step in its satisfaction of the requirements of the Warning, Alert and Response Network
(WARN)Act. The Commission adopts an architecture for the Commercial Mobile Alerting System
(CMAS)based on the recommendations of the Commercial Mobile Service Alert Advisory Committee (CMSAAC). DATES: Effective September 22, 2008. ADDRESSES: Federal Communications Commission, 445 12th Street, SW., Room TW-A325, Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: Jeffery Goldthorp, Communications Systems Analysis Division, Public Safety and Homeland Security Bureau, Federal Communications Commission at
(202)418-1096. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's CMAS First Report and Order in PS Docket No. 07-287, adopted and released on April 9, 2008. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., in person at 445 12th Street, SW., Room CY-B402, Washington, DC 20554, via telephone at
(202)488-5300, via facsimile at
(202)488-5563, or via e-mail at *FCC@BCPIWEB.COM* . Alternative formats (computer diskette, large print, audio cassette, and Braille) are available to persons with disabilities by sending an e-mail to *FCC504@fcc.gov* or calling the Consumer and Governmental Affairs Bureau at
(202)418-0530, TTY
(202)418-0432. This document is also available on the Commission's Web site at *http://www.fcc.gov* . Synopsis of the Order 1. *Background* . On October 13, 2006, the President signed the Security and Accountability for Every Port (SAFE Port) Act into law. Title VI of the SAFE Port Act, the Warning Alert and Response Network
(WARN)Act, establishes a process for the creation of the CMAS whereby CMS providers may elect to transmit emergency alerts to their subscribers. The WARN Act requires the Commission to undertake a series of actions to accomplish that goal, including, by December 12, 2006 (within 60 days of enactment), establishing and convening an advisory committee to recommend system critical protocols and technical capabilities for the CMAS. Accordingly, the Commission formed the CMSAAC, which had its first meeting on December 12, 2006. The WARN Act further required the CMSAAC to submit its recommendations to the Commission by October 12, 2007 (one year after enactment). The CMSAAC submitted its report on that date. 2. Section 602(a) of the WARN Act further requires that, by April 9, 2008 (within 180 days of receipt of the CMSAAC's recommendations), the Commission complete a proceeding to adopt “relevant technical standards, protocols, procedures and technical requirements” based on recommendations submitted by the CMSAAC, “necessary to enable commercial mobile service alerting capability for commercial mobile service providers that voluntarily elect to transmit emergency alerts.” On December 14, 2007, the Commission released Commercial Mobile Alert System, Notice of Proposed Rulemaking, 73 FR 546, January 3, 2008, requesting comment on, among other things, the technical requirements the Commission should adopt to facilitate CMS providers' voluntary transmission of emergency alerts. The Commission specifically invited comment on the CMSAAC's proposed technical requirements. Comments were due on February 4, 2008, with Reply Comments due on February 19, 2008. On April 9, 2008, the Commission adopted the CMAS First Report and Order, thus satisfying section 602(a) of the WARN Act. On July 15, 2008, the Commission released an Order on Reconsideration (FCC 08-166), in which the Commission, on its own motion, reconsidered and clarified the timeline under which the CMAS First Report and Order required CMS providers to implement the CMAS technical requirements, standards and protocols. This Order on Reconsideration revised paragraph 95 of the CMAS First Report and Order and § 10.11 of the rules adopted in the CMAS First Report and Order. These revisions are reflected in this **Federal Register** summary in paragraph 94 below and the rules published herein. 3. *Introduction* . In the CMAS First Report and Order, the Commission adopted rules necessary to enable CMS alerting capability for CMS providers who elect to transmit emergency alerts to their subscribers. Specifically, the Commission adopted the architecture for the CMAS proposed by the CMSAAC and concluded that a Federal Government entity should aggregate, authenticate, and transmit alerts to the CMS providers. In addition, the Commission adopted technologically neutral rules governing: • *CMS provider-controlled elements within the CMAS architecture* ( *e.g.* , the CMS Provider Gateway, CMS Provider infrastructure and mobile devices); • *Emergency alert formatting, classes, and elements:* Participating CMS Providers must transmit three classes of alerts—Presidential, Imminent Threat, and AMBER alerts; • *Geographic targeting (geo-targeting):* Participating CMS Providers generally are required to target alerts at the county-level as recommended by the CMSAAC; • *Accessibility for people with disabilities and the elderly:* Participating CMS Providers must include an audio attention signal and vibration cadence on CMAS-capable handsets; • *Multi-language Alerting:* Participating CMS Providers will not be required at this time to transmit alerts in languages other than English; • *Availability of CMAS alerts while roaming:* Subscribers receiving services pursuant to a roaming agreement will receive alert messages on the roamed upon network if the operator of the roamed upon network is a Participating CMS provider and the subscriber's mobile device is configured for and technically capable of receiving alert messages from the roamed upon network; • *Preemption of calls in progress:* CMAS alerts may not preempt a voice or data session in progress; • *Initial implementation:* Participating CMS Providers must begin development and testing of the CMAS in a manner consistent with the rules adopted in the CMAS First Report and Order no later than 10 months from the date that the Federal Alert Aggregator and Alert Gateway makes the Government Interface Design specifications available. 4. In adopting these rules, the Commission has taken a significant step towards implementing one of its highest priorities—to ensure that all Americans have the capability to receive timely and accurate alerts, warnings and critical information regarding disasters and other emergencies irrespective of what communications technologies they use. As the Commission has learned from disasters such as the 2005 hurricanes, such a capability is essential to enable Americans to take appropriate action to protect their families and themselves from loss of life or serious injury. The CMAS First Report and Order also is consistent with the FCC's obligation under Executive Order 13407 to “adopt rules to ensure that communications systems have the capacity to transmit alerts and warnings to the public as part of the public alert and warning system,” and its mandate under the Communications Act to promote the safety of life and property through the use of wire and radio communication. 5. The CMAS First Report and Order is the latest step of the Commission's ongoing drive to enhance the reliability, resiliency, and security of emergency alerts to the public by requiring that alerts be distributed over diverse communications platforms. In the 2005 EAS First Report and Order, the Commission expanded the scope of the Emergency Alert System
(EAS)from analog television and radio to include participation by digital television broadcasters, digital cable television providers, digital broadcast radio, Digital Audio Radio Service (DARS), and Direct Broadcast Satellite
(DBS)systems. As noted in the Further Notice of Proposed Rulemaking that accompanied the EAS First Report and Order, 70 FR 71072, November 25, 2005, wireless services are becoming equal to television and radio as an avenue to reach the American public quickly and efficiently. As of June 2007, approximately 243 million Americans subscribed to wireless services. Wireless service has progressed beyond voice communications and now provides subscribers with access to a wide range of information critical to their personal and business affairs. In times of emergency, Americans increasingly rely on wireless telecommunications services and devices to receive and retrieve critical, time-sensitive information. A comprehensive wireless mobile alerting system would have the ability to alert people on the go in a short timeframe, even where they do not have access to broadcast radio or television or other sources of emergency information. Providing critical alert information via wireless devices will ultimately help the public avoid danger or respond more quickly in the face of crisis, and thereby save lives and property. WARN Act Section 602(a)—Technical Requirements 6. Consistent with section 602(a) of the WARN Act, the Commission adopted “technical standards, protocols, procedures and other technical requirements * * * necessary to enable commercial mobile service alerting capability for commercial mobile service providers that voluntarily elect to transmit emergency alerts.” Specifically, the rules adopted in the CMAS First Report and Order address the CMS providers' functions within the CMAS, including CMS provider-controlled elements within the CMAS architecture, emergency alert formatting, classes and elements, geographic targeting (geo-targeting) and accessibility for people with disabilities and the elderly. In most cases, the rules adopted are generally based on the CMSAAC recommendations. In such cases, the Commission found that the CMSAAC's recommendations are supported by the record and that adoption of those recommendations serves the public interest and meets the requirements of the WARN Act. For reasons discussed below, however, in some cases, the Commission determined that the public interest requires us to adopt requirements that are slightly different than those recommended by the CMSAAC. 7. *Consideration of the CMSAAC Recommendations.* Several entities representing the wireless industry generally argue in their comments that the Commission has no authority to adopt technical requirements other than those proposed by the CMSAAC and that those must be adopted “as is.” The Commission disagrees. The WARN Act does not require that the Commission adopt the CMSAAC's recommendations verbatim. Rather, Congress required the Commission to adopt relevant technical requirements “based on recommendations of the CMSAAC.” This indicates that while Congress intended that the Commission give appropriate weight to the CMSAAC's recommendations in the adoption of rules, it did not intend to require the Commission to adopt the CMSAAC's recommendations wholesale, without any consideration for views expressed by other stakeholders in the proceeding or the need to address other significant policy goals. Moreover, adopting the CMSAAC's recommendations in their entirety, without scrutiny, would result in an abdication of the Commission's statutory mandate under the Communications Act to act in the public interest. Clearly the WARN Act did not delegate Commission authority under the Communications Act to an advisory committee; on the contrary, the Commission was to conclude a “proceeding” which necessarily implicates notice and an opportunity for public comment, and Commission discretion in adopting appropriate rules and requirements. 8. Commission discretion and flexibility in its adoption of the CMSAAC recommendations is also supported by the policy goal underlying the WARN Act, *i.e.* , the creation of a CMAS in which CMS providers will elect to participate, and which will effectively deliver alerts and warnings to the public. The comments of Ericsson, with which the Commission agrees, support Commission discretion by stating that the technical standards and requirements the Commission adopts for the CMAS should account for an evolving technology landscape. In order to account for changes in the wireless industry and maintain a technologically neutral approach to emergency alerting, the Commission must be able to apply the CMSAAC's recommendations to new technologies and services. A reasonable interpretation of the WARN Act, therefore, is that the Commission has the discretion to evaluate the CMAS technical requirements recommended by the CMSAAC. CMAS Architecture and CMS Provider Functions 9. In its recommendations, the CMSAAC proposed the following architecture for the CMAS. Functional Reference Model Diagram ER24JY08.001 10. Under this proposed reference model, a Federal government entity, the “Alert Aggregator,” operating under a “Trust Model,” would receive, aggregate, and authenticate alerts originated by authorized alert initiators ( *i.e.* , Federal, state, tribal and local government agencies) using the Common Alerting Protocol (CAP). The Federal government entity would also act as an “Alert Gateway” that would formulate a 90 character alert based on key fields in the CAP alert sent by the alert initiator. Based on CMS provider profiles maintained in the Alert Gateway, the Alert Gateway would then deliver the alert over a secure interface operated by the CMS provider to another gateway maintained by the appropriate CMS provider (CMS Provider Gateway). Each individual CMS Provider Gateway would be responsible for the management of the particular CMS provider elections to deliver alerts. The CMS Provider Gateway would also be responsible for formulating the alert in a manner consistent with the individual CMS provider's available delivery technologies, mapping the alert to the associated set of cell sites/paging transceivers, and handling congestion within the CMS provider infrastructure. Ultimately, the alert would be received on a customer's mobile device. The major functions of the mobile device would be to authenticate interactions with the CMS provider infrastructure, to monitor for CMAS alerts, to maintain customer options (such as the subscriber's opt-out selections), and to activate the associated visual, audio, and mechanical ( *e.g.* , vibration) indicators that the subscriber has indicated as options when an alert is received on the mobile device. As part of its recommended model, the CMSAAC also proposed technical standards defining the functions of the Alert Aggregator, Alert Gateway, CMS Provider Gateway, CMS infrastructure, CMS handsets and various interfaces ( *i.e.* , A, B, C, D and E interfaces). 11. In the CMAS NPRM, the Commission sought comment on the CMSAAC's proposed reference architecture, including its standards for defining the various element functions. Although most commenters supported the CMSAAC's proposal, a few objected to the CMSAAC's recommendation concerning the government-administered Alert Aggregator and an Alert Gateway. The Association of Public Television Stations
(APTS)suggested that the Commission's role under the WARN Act is limited to adopting protocols to enable mobile services to opt into the Digital Emergency Alert System (DEAS). CellCast asserted that a national Aggregator/Gateway is not required for CMAS implementation and that there are multiple models for alert distribution that do not use such an element. DataFM and the National Association of Broadcasters
(NAB)raised concerns that a national aggregator would create a single point of failure that would reduce CMAS resiliency and/or introduce unacceptable performance degradation. 12. According to the CMSAAC, a key element to CMS providers' ability to participate in the CMAS is the assumption of the Alert Aggregator and Alert Gateway functions by a Designated Federal Government Entity. Specifically, the CMSAAC recommended that the CMAS channel all Commercial Mobile Alert Messages (CMAMs) submitted by Federal, State, Tribal and local originators through a secure, Federal government administered, CAP-based alerting framework that would aggregate and hand off authenticated CMAMs to CMS Provider Gateways. The Commission sought comment on this recommendation in the CMAS NPRM. The overwhelming majority of commenting parties supported the CMSAAC's recommendation. Most wireless carriers commenting on the issue stressed that this was essential to CMS providers' participation in the CMAS. ALLTEL, for example, stated that if “a federal government entity does not assume these roles, wireless service providers are less likely to participate” in the CMAS because “in an emergency situation it is imperative that wireless service providers are able to rely on a single source * * * and government officials are more appropriately trained in authenticating and constructing messages.” 13. The Commission adopted the CMSAAC's proposed architecture for the CMAS. It found that the recommended model will facilitate an effective and efficient means to transmit alerts and find that the public interest will be served as such. Contrary to APTS's assertions, nothing in section 602(a) of the WARN Act mandates that the Commission only adopt requirements for CMS providers to opt into DEAS. While the Commission agreed with CellCast that there are other potential models for alert delivery by electing CMS providers, it noted that none of those alternative solutions received the support of the CMSAAC. Moreover, the Commission noted that the CMSAAC recommendation is the result of consensus among commercial wireless carriers and their vendors, public safety agencies, organizations representing broadcast stations and organizations representing people with disabilities and the elderly, and other emergency alert experts. This consensus was reached after approximately ten months of deliberation. No other party has suggested an alternative that would be superior in meeting the needs of the commercial wireless industry and in ensuring that alerts are received by electing CMS providers and then are transmitted to their subscribers. In fact, both during the CMSAAC deliberations as well as throughout this proceeding, many wireless carriers have indicated that the inclusion of an alert aggregator and alert gateway function is essential to their participation in the voluntary CMAS. 14. Finally, The Commission disagreed with the concerns raised by DataFM and NAB that a national aggregator would necessarily create a single point of failure. While the CMSAAC recommended a single logical aggregator/gateway function, the Commission expected that these functions will be implemented in a reliable and redundant fashion to maximize resiliency. Furthermore, given the volume of alerts expected for the CMAS, the Commission believes that technology for processing alerts will not place a constraint on aggregator/gateway performance. Accordingly, the Commission adopted the architecture proposed by the CMSAAC. As described below, however, the Commission adopted as rules only those CMAS elements within the control of the CMS providers. 15. *Federal Government Role* . The Commission agreed with the CMSAAC and the majority of commenters that a Federally administered aggregator/gateway is a necessary element of a functioning CMAS. While no Federal agency has yet been identified to assume these two functions, the Commission believes that a Federal government aggregator/gateway would offer the CMS providers the best possibility for the secure, accurate and manageable source of CMAS alerts that the WARN Act contemplates. 16. The Commission believes that FEMA, some other entity within DHS, or NOAA may be in the best position to perform these functions. DHS, and more specifically FEMA, traditionally has been responsible for origination of Presidential alerts and administration of the EAS. Moreover, Executive Order 13407 gives DHS primary responsibility for implementing the United States' policy “to have an effective, reliable, integrated, flexible and comprehensive system to alert and warn the American people in situations of war, terrorist attack, natural disaster or other hazards to public safety and well-being.” By the same token, the Department of Commerce, and more specifically NOAA Weather Radio, as the “All Hazards” radio network, acts as the source for weather and emergency information, including natural (such as earthquakes or avalanches), environmental (such as chemical releases or oil spills), and public safety (such as AMBER alerts or 911) warning information. 17. FEMA also played an integral role in the development of the CMSAAC's recommendations. FEMA chaired the Alert Interface Group (AIG), which was responsible for addressing issues at the front-end of the CMAS architecture ( *e.g.* , receipt and aggregation of alerts, development of trust model to authenticate alerts from various sources). It also represented the AIG before the CMSAAC Project Management Group (PMG), which coordinated the work of all the other CMSAAC working groups and assembled the CMSAAC recommendations document. In addition, FEMA voted to adopt the CMSAAC recommendations in October 2007, which included CMAS reliance on a single Federal authority to fulfill the gateway/aggregator role. 18. The Commission recognizes that FEMA asserted in its February 2008 comments that limits on its statutory authority preclude the agency from fulfilling the Federal aggregator/gateway functions. Nevertheless, timely identification of a federal agency capable of fulfilling the aggregator/gateway functions recommended by the CMSAAC is essential to bringing the concrete public safety benefits of a CMAS system to the American people. The Commission noted that it was hopeful that any bars that prevent FEMA or some other entity within DHS from fulfilling these roles will be lifted expeditiously. The Commission stated its intent to work with its Federal partners and Congress, if necessary, to identify an appropriate government entity to fulfill these roles, whether that is FEMA, another DHS entity, NOAA or the FCC. 19. *Scope of Order* . Accordingly for purposes of this Order, the Commission proceeded on the assumption that a Federal agency will assume these roles at a future date. The Order is limited to adopting rules governing those sections of the CMAS architecture that are within the control of electing CMS providers. These include rules regarding the CMS Provider Gateway, CMS provider infrastructure, and CMS provider handsets. Specifically, the Commission adopted rules, based on the CMSAAC's recommendations, that require each individual CMS Provider Gateway to be able to receive alerts from the Federal government alert gateway over a secure interface ( *i.e.* , “C Interface”). The CMS Provider Gateway will be required to, among other things:
(1)Manage the CMS provider's election to provide alerts;
(2)format alerts received in a manner consistent with the CMS provider's available delivery technology;
(3)map alerts to the associated set of cell sites/paging transceivers; and
(4)manage congestion within the CMS provider's infrastructure. In addition, The Commission adopted rules, based on the CMSAAC's recommendations, requiring the CMS infrastructure to, among other things:
(1)Authenticate interactions with the mobile device;
(2)distribute received CMAS alert messages to the appropriate set of cell sites/paging transceivers for transmission to the mobile device; and
(3)transmit the CMAS alert message for each specified cell site/pager transceiver. 20. The Commission adopted the CMSAAC's recommendations regarding capabilities of the mobile device including that it:
(1)Authenticate interactions with the CMS provider infrastructure;
(2)maintain configuration of CMAS alert options; and
(3)present received CMAS alert content to the subscriber. In addition, as explained below, the Commission adopted requirements for the mobile device to ensure that people with disabilities are able to receive CMAS alerts. The Commission also adopted the CMSAAC's recommendation that CMAS alerts not preempt ongoing voice or data sessions. 21. In keeping with the Commission's policy to promote technological neutrality, it declined to adopt rules governing the communications protocols that the CMS providers must employ for communications across the D or E interfaces as identified in the architecture. The Commission agreed with the CMSAAC that no specific protocols should be required for the D and E interface, but rather that CMS providers should be allowed to retain the discretion to define these protocols in conjunction with their overall network design and with the mobile device vendors. Both of these interfaces lie entirely within the control of the CMS providers and any implementation decisions there will have no impact on CMAS ability to satisfy the system requirements the Commission sets forth elsewhere in this Order. For example, while the Commission includes requirements on the type of alert information that must cross the D and E interfaces to enable CMAS alerts on mobile devices, it chose to remain silent as to the precise communications protocol that a CMS provider uses to convey this information to the mobile device. This approach gives the CMS providers maximum flexibility to leverage technological innovation and implement the CMAS in a cost effective manner. 22. The Commission also adopted rules requiring, per the CMSAAC's recommendation, that electing CMS providers assemble individual profile information to provide to the Authorized Federal Government Entity, once that entity is identified. The Commission believes that electing CMS providers expect to assemble this information, and by adopting this requirement now, it is providing direction to potential Alert Gateway providers. 23. The CMSAAC recommended detailed technical protocols and specifications for the Alert Aggregator/Gateway entity and the CMS providers to employ for the delivery of alerts over the various interfaces ( *i.e.* , A, B and C interfaces) in the Reference Model. Specifically, section 10 of the CMSAAC recommendations proposed requirements that Alert Initiators must meet to deliver CMAS alerts to the Alert Aggregator, and that the Alert Gateway must meet to deliver CMAS alerts to the CMS Provider Gateway. The CMSAAC also recommended CAP-based mapping parameters. 24. The Commission supports the technical protocols and specifications for the delivery of alerts recommended by the CMSAAC in this section. Electing CMS providers could use these technical protocols and specifications to design their internal systems that would enable compliance with the rules the Commission adopts in this docket. The Commission declines, however, to codify these protocols and specifications in this Order. It believes that these protocols offer a significant guidance to CMAS participants as they further develop the final protocols and interface for the CMAS, but until an Alert Aggregator/Gateway entity is determined, additional refinements and revisions of these protocols and specifications are inevitable. Accordingly, the Commission concludes that final determination of these interface protocols is better left to industry standards organizations. The Commission noted that it will revisit this matter in the future if Commission action in this area is indicated. General CMAS Requirements 25. In this section, the Commission establishes the basic regulatory framework of the new CMAS. Specifically, it adopts technologically neutral rules that address, among other things, the scope of CMAS alerts, geo-targeting and alert accessibility for people with disabilities and the elderly. 26. *Scope and Definition of CMAS Alerts* . The WARN Act requires the Commission to enable commercial mobile alerting capabilities for “emergency” alerts, but does not define what may comprise an emergency. Accordingly, in the CMAS NPRM, the Commission sought comment on the appropriate scope of emergency alerts, including whether and to what extent alerts should be classified. The Commission specifically asked parties to address whether it should implement the CMSAAC's recommendation to specify three alert classes:
(1)Presidential Alert;
(2)Imminent Threat Alert; and
(3)Child Abduction Emergency or AMBER Alert. For the reasons stated below, the Commission finds that the public interest will be best served by its adopting these three alert classes, which it defines below. 27. The Commission agrees with the majority of commenters that the three classes of alert recommended by the CMSAAC achieves the best balance between warning of imminent threat to life and property with the current technical limits that CMS provider systems face in delivering timely, accurate alerts. Alert Systems however argues that the Commission should include additional classes of alerts, such as traffic advisories. The Commission finds that inclusion of such alerts would be inconsistent with the intent of Congress, expressed throughout the WARN Act, that the Commission enable an “emergency” alerting system. The Commission believes that if the public were to receive commercial mobile alerts that do not relate to bona fide emergencies, there would be a serious risk that the public would disregard mobile alerts or possibly opt not to receive anything but Presidential alerts. The Commission also notes that, given the current technical capabilities of CMS providers to deliver emergency alerts, it is possible that if too many alerts are injected into a CMS provider's system in a very brief period, vital messages could be delayed. Accord-ingly, the Commission rejects arguments to broadly define eligible alert classes beyond those specified here. 28. *Presidential Alerts* . Section 602(b)(2)(E) of the WARN Act authorizes participating CMS providers to allow device users to prevent the receipt of alerts or classes of alerts “other than an alert issued by the President.” Congress thus intended to afford Presidential Alerts the highest priority. Affording Presidential Alerts the highest priority also will enable the Secretary of Homeland Security to meet his/her obligation, under Executive Order 13407, to “ensure that under all conditions the President of the United States can alert and warn the American people.” Accordingly, electing CMS providers must transmit such alerts and assign the highest priority to any alert issued by the President or the President's authorized designee. Further, Presidential Alerts must be transmitted upon receipt by a CMS provider, without any delay, and therefore will preempt any other pending alert. The Commission notes that due to the initial 90-character text message protocol that it is adopting below for the first generation CMAS, it is possible that a Presidential Alert may direct recipients to other sources, possibly taking the form recommended by the CMSAAC: “The President has issued an Emergency Alert. Check local media for more details.” 29. *Imminent Threat Alerts* . The Commission notes that virtually all commenting parties support adoption of the CMSAAC's recommendation to define an Imminent Threat Alert class. This alert class is narrowly tailored to those emergencies where life or property is at risk, the event is likely to occur, and some responsive action should be taken. Specifically, an Imminent Threat Alert must meet separate thresholds regarding urgency, severity, and certainty. Each threshold has two permissible CAP values. • *Urgency* . The CAP “urgency” element must be either Immediate ( *i.e.* , responsive action should be taken immediately) or Expected ( *i.e.* , responsive action should be taken soon, within the next hour). • *Severity* . The CAP “severity” element must be either Extreme ( *i.e.* , an extraordinary threat to life or property) or Severe ( *i.e.* , a significant threat to life or property). • *Certainty* . The CAP “certainty” element must be either Observed ( *i.e.* , determined to have occurred or to be ongoing) or Likely ( *i.e.* , has a probability of greater than fifty percent). That is, the event must have occurred, or be occurring (Observed), or be more likely to occur than not (Likely). 30. The Commission finds that the transmission of these imminent threat alerts is essential to a useful CMAS. The CMSAAC recommended such action and the commenting parties overwhelmingly support this conclusion. As T-Mobile correctly states, CMAS alerts are not appropriate for warning the public about minor events. Subscribers are more likely to opt out if they are bombarded by minor notices, and may fail to notice a truly serious alert. Also, inclusion of minor events would be an unnecessary burden on the CMS provider infrastructure. Accordingly, the Commission finds it appropriate to require participating CMS providers to transmit Imminent Threat Alerts. 31. *Child Abduction Emergency/AMBER Alerts* . There is broad support in the record for adoption of the CMSAAC's recommendation to specify a third alert class, Child Abduction Emergency or AMBER Alert. *There are four types of AMBER Alerts:*
(1)Family Abduction,
(2)Nonfamily Abduction,
(3)Lost, Injured, or Otherwise Missing, and Endangered Runaway. AMBER plans are voluntary partnerships between law enforcement agencies, broadcasters and CMS providers to activate an urgent bulletin in the most serious child abduction cases, and AMBER alerts are issued only where an AMBER plan has been duly established. The Commission also notes that a number of CMS providers currently transmit AMBER Alerts using Short Message Service
(SMS)technology, and applauds their potentially life-saving efforts in this regard. 32. In 2006, 261 AMBER Alerts were issued in the United States involving 316 children. Most of these alerts were issued on an intrastate basis. Of the 261 AMBER Alerts issued in 2006, 214 cases resulted in a recovery, 53 of which were resolved as a direct result of an AMBER Alert being issued. Based on the limited number of AMBER alerts and their confined geographic scope, the Commission does not expect such alerts to be overly burdensome to CMS providers that participate in the CMAS. Moreover, because of the efficacy of AMBER Alerts, the Commission finds that the public interest in the safety of America's children will be well served by the provision of AMBER Alerts by the wireless industry. Accordingly, the Commission requires participating CMS providers to transmit AMBER alerts. 33. *Technologically Neutral Alert System* . The CMSAAC recommended that CMS providers that elect to participate in the CMAS should “not be bound to use any specific vendor, technology, software, implementation, client, device, or third party agent, in order to meet [their] obligations under the WARN Act.” The Commission agrees. As SouthernLINC notes, participating CMS providers should be able to choose the technology that will allow them to best meet the emergency alerting needs of the American public. Consistent with the Commission's well-established policy of technologically-neutral regulation of the wireless telecommunications industry, it believes that CMS providers and equipment manufacturers are in the best position to select and incorporate the technologies that will enable them to most effectively and efficiently deliver mobile alerts. Accordingly, the Commission does not limit the range of technologies that electing CMS providers may deploy to participate in the CMAS. In reaching this conclusion, the Commission balances the alerting needs of the public and the capabilities of electing CMS providers and the Commission's mandate under section 602(a) of the WARN Act to enable the provision of emergency alerts. The Commission emphasizes that the WARN Act does not require the establishment of any specific technology to be used for the CMAS. 34. CMS providers are in various stages of readiness to participate in the CMAS. Paging carriers already provide point to multipoint services, using technologies such as ReFLEX and POCSAG (Post Office Code Standardization Advisory Group), to reach many subscribers at the same time and therefore appear well-positioned to participate in CMAS. However, as the American Association of Paging Carriers notes, it may not be feasible for paging carriers to confine their alerts to either county-wide or sub-county distribution. Further, cellular, PCS, and SMR service providers, report that they have not deployed an emergency alerting capability that satisfies all requirements in the CMSAAC recommendations and that is currently available for the mass transmission of alerts. The Commission notes that many of the requirements that it adopts are intended to apply to a first generation text-based alerting service. Other service profiles, such as streaming audio and video, are in their early developmental stages and thus not ripe for implementation by the Commission. The Commission foresees that as CMS providers gain experience with these and other alerting technologies, they may well be incorporated into future alerting system deployments. 35. Although the CMSAAC found that point-to-point technologies may not be well suited for mass alerting, the Commission will not prohibit their use if a CMS provider can otherwise meet the requirements that the Commission establishes. Short Message Service
(SMS)text messaging is available to most cellular, PCS, and SMR subscribers and is currently used by some municipalities and other local jurisdictions to provide emergency alerts on an opt-in basis. The Commission recognizes, however, that SMS may not be a desirable solution for the widespread dissemination of alerts to the public because the mass delivery of SMS-formatted alerts could degrade network performance and delay alert delivery. Despite these potential drawbacks, SMS text messaging may offer a viable, short-term delivery method for electing CMS providers that do not yet have a point-to-multipoint text messaging capability. 36. The CMSAAC noted that technologies such as MediaFLO and DVB-H “may provide supplemental alert information,” but recommended that they should not be considered as part of the CMAS. The Commission's goal in this proceeding is to enable the broadest possible voluntary participation in the CMAS, and it will not foreclose the possible deployment of these or other innovative technologies as a means of participating in the nascent CMAS. The public interest is best served by not circumscribing the range of technologies that CMS providers may elect to deploy to meet the alerting needs of the American public. 37. Several parties express support for an FM-based CMAS solution such as that provided by ALERT-FM and Global Security Systems. The CMSAAC however considered the costs and benefits of Radio Broadcast Data System
(RBDS)and other FM-based alert and warning solutions, and found them to be infeasible for the CMAS. Moreover, a number of parties have expressed reservations about these technologies. Nonetheless, in keeping with its overall policy to maintain technological neutrality, the Commission does not require or prohibit the use of ALERT-FM, RBDS or similar systems as the basis of the CMAS. 38. The Commission also strongly encourages fair, reasonable, and nondiscriminatory Intellectual Property Rights
(IPR)licensing in the context of the CMAS. It agrees with the CMSAAC that the technical standards, protocols, procedures, and related requirements that the Commission adopts pursuant to section 602(a) of the WARN Act should be standardized in industry bodies that have well defined IPR policies. The Commission declines, however, to compel all CMSAAC participants “to provide written assurance to the Commission that, if and insofar as one or more licenses may be required under any of their respective IPRs that are technically essential for purposes of implementing or deploying CMAS, the rights holders shall license such IPR on a fair, reasonable and nondiscriminatory basis for those limited purposes only.” The Commission also declines to require “all participants in the public comment process on th[e] CMAS Architecture and Requirements document” to make such a written assurance. These requests are outside the scope of section 602(a) of the WARN Act. 39. The CMSAAC made a number of additional recommendations that the Commission concludes are outside the scope of its mandate under section 602(a) of the WARN Act to adopt “technical standards, protocols, procedures, and other technical requirements,” to enable voluntary commercial mobile alerting. Specifically, the CMSAAC submitted recommendations regarding the applicability of requirements for location, number portability and the Communications Assistance for Law Enforcement Act (CALEA). The CMSAAC also submitted recommendations on whether CMS providers may utilize the technical requirements adopted herein for other services and purposes and whether CMS providers may recover certain costs related to the development of the CMAS. The Commission finds that these issues are outside the scope of section 602(a) of the WARN Act and, therefore, does not address these issues in the Order. 40. The CMSAAC recommended that, to the extent practicable, “Federal, state, tribal, and local level CMAS alert messages [should] be supported using the same CMAS solution.” The Commission agrees and believes that a uniform approach to implementation of the CMAS will be inherently more cost effective, more technologically consistent and thus more likely to facilitate participation by small and rural CMS providers. Further, the Commission agrees that electing CMS providers should not be required to support alerting on mobile handsets manufactured for sale to the public prior to a CMS provider's initiation of the CMAS alerting service. In a subsequent order, the Commission will address how participating CMS providers may sell such non-compliant handsets consistent with the requirement under section 602(b) of the WARN Act that they disclose “at the point of sale of any devices with which its commercial mobile service is included, that it will not transmit such alerts via the service it provides for the device.” Finally, the Commission agrees that electing CMS providers should have discretion regarding whether certain devices, such as laptop wireless data cards, will support alerting capabilities. CMAS Message Elements and Capabilities 41. *Required Alert Message Elements* . The CMSAAC recommended that emergency alert messages follow the same general format of National Weather Service alert messages, subject to a 90-character text limitation. Specifically, the CMSAAC recommended that for initial CMAS deployments, messages should include five elements in the following order: • Event Type or Category • Area Affected • Recommended Action • Expiration Time (with time zone) • Sending Agency 42. The CMSAAC proposed this format to facilitate CAP value field mapping to text. It also noted that the format would likely evolve as experience is gained by alert initiators and by electing CMS providers. In the CMAS NPRM, the Commission sought comment on the five elements and asked parties to address whether the elements are consistent with accepted industry practices for emergency alerts. 43. There is broad support in the record for standardization of alert messages and adoption of the five recommended message elements. T-Mobile explains that the format “is designed to ensure that the most critical information is succinctly and clearly communicated in a manner most compatible with the technical attributes of wireless networks.” Purple Tree Technologies also supports the five message elements, but urges that event type and area affected be the only required elements, with others optional if space permits. Based on the Commission's review of the record, it finds that on balance the five message elements identified above will enable standardization of alerting messages and adopts them. The Commission rejects Alert Systems' claim that the element for “area affected” should be reconsidered based on its hypothesis that “visitors and newcomers to areas often do not recognize geographic landmarks in warning messages.” A biohazard or flash flood warning, for example, would not enable the public to avoid a lethal hazard without appropriate area affected information. The Commission also expects that as CMAS providers eventually deploy technologies capable of messages of more than 90 characters, additional alert message elements will be implemented. 44. In the CMAS NPRM, the Commission also sought comment on whether alert messages should include telephone numbers, URLs or other response and contact information, including any related network impacts. The CMSAAC advised against inclusion of URLs or telephone numbers because such information would encourage mass access of wireless networks. The California Public Utility Commission (CAPUC) supports inclusion of a sixth message element for URLs, if feasible. AT&T (and many commenting parties) note that inclusion of a URL or telephone number in an emergency message, some of which might be delivered to tens of thousands of users in a matter of seconds, could lead to unacceptable network congestion and, in extreme cases, network failure. The Commission finds that mandating URLs or telephone numbers in an emergency alert could exacerbate wireless network congestion at a time when network traffic is already dramatically increasing as individuals contact police, fire, and rescue personnel, as well as their loved ones. The Commission therefore will not require participating CMS providers to accept or transmit any alert message that contains an embedded URL or telephone number. 45. *CMAS Generation of Free Text Alert Messages* . In the CMAS NPRM, the Commission sought comment on the CMSAAC's recommendation that the Alert Gateway automatically generate messages by extracting information from specified fields of a CAP-formatted message, SAME codes, or free-form text, which would then be transmitted across Reference Point C to electing CMS providers. The CMSAAC recommended this approach for initial system deployments. The Commission also sought comment on the CMSAAC's recommendation to allow the generation of free text for Presidential and AMBER alert messages. While numerous parties in this proceeding support adoption of the CMSAAC recommendations in full, few address the specific mechanics of generating alert messages via the Alert Gateway. AT&T states that proposals for automatic generation of alert text “merit further investigation, but responsibility for the content of alerts should remain with initiators and the federal government—not wireless carriers.” The Commission agrees with AT&T and other parties that electing CMS providers should act as a conduit for messages, the content of which is fixed before transmission to a CMS provider. 46. CellCast argues that the Commission should “ignore” the CMSAAC recommendations regarding alert generation, asserting that message generation is beyond its mandate under the WARN Act. The mechanisms for generating messages at the Alert Gateway are undefined currently and may be subject to implementation by the federal entity selected to administer the Alert Gateway. Nonetheless, the Commission supports the CMSAAC's recommended approach of allowing the Alert Gateway to create messages using CAP fields and SAME codes. Specifically, the Commission believes that this approach would enable the provision of consistent and accurate messages to the public, while facilitating future enhancements to the Alert Gateway. 47. The Commission also agrees with the CMSAAC that automatic generation of messages via CAP fields and SAME codes may not always provide sufficient flexibility to alert initiators to tailor messages for emergencies that may fall with the Imminent Threat Alert category. A message with a translated event code of “security warning,” for example, may not provide adequate information about a shooting incident on a college campus. A more apt warning might be “a shooting has occurred on the north campus,” with directions to “stay indoors.” The Commission thus believes that the public interest would be served if the CMAS architecture accommodates free-form text messaging, subject to the 90-character text limit that it adopts and its determination that electing CMS providers will generally not be obligated to accept or transmit any alert message that includes an embedded URL or phone number. The Commission also agrees with the CMSAAC that free-form text should be included as a CAP message parameter. 48. Finally, the Commission concurs with the CMSAAC that automatic text generation at the Alert Gateway would be impractical for Presidential or AMBER Alerts, both of which are likely to be highly fact specific. As the CMSAAC noted, the efficacy of a particular AMBER Alert hinges on specific information such as a description of a vehicle, abductor, or missing child. Accordingly, the Commission finds that law enforcement authorities should have the ability to formulate unique message text for the dissemination of AMBER Alerts via the CMAS. The Commission envisions that such free text messages would be presented to the Alert Gateway in a free text CAP field. In the event of a Presidential Alert, it agrees with the CMSSAC that, until such time as electing CMS providers are able to transmit messages longer than 90 characters, the Alert Gateway may employ a generic statement such as “The President has issued an emergency alert. Check local media for more details.” 49. *Geo-targeting CMAS Alerts* . The CMSAAC recommended that “to expedite initial deployments of CMAS an alert that is specified by a geocode, circle or polygon” should “be transmitted to an area not larger than the CMS [provider's] approximation of coverage for the county or counties with which that geocode, circle, or polygon intersects.” The Commission, based on the substantial record before it, and for the reasons stated below, requires electing CMS providers to geographically target (geo-target) alerts accordingly. The Commission notes that radio frequency
(RF)propagation areas for some paging systems and cell sites may exceed a single county, and will permit geo-targeting that exceeds county boundaries in these limited circumstances. 50. Congress recognized the importance of geo-targeting alerts in the WARN Act. Specifically, in section 604 of the WARN Act, Congress directed the Under Secretary of Homeland Security for Science and Technology, in consultation with the National Institute of Standards and Technology
(NIST)and the FCC, to establish a research program for “developing innovative technologies that will transmit geographically targeted emergency alerts to the public.” The Commission stands ready to work with DHS and NIST to facilitate this important undertaking. The Commission fully expects that as more refined and cost effective geo-targeting capabilities become available to electing CMS providers, they will voluntarily elect to target alerts more granularly. Several CMS providers have indicated their intention to geo-target alerts below the county level and the Commission strongly encourages them to do so. As T-Mobile notes, electing CMS providers should be free to target more specifically, subject to the liability protections of the WARN Act. 51. In the CMAS NPRM, the Commission sought comment on what level of precision it should require for geo-targeting, considering the CMSAAC's recommendation for county-level geo-targeting. The CMSAAC recognized “that it is the goal of the CMAS for CMS providers to be able to deliver geo-targeted alerts to the areas specified by the Alert Initiator.” Based upon current capabilities and to expedite initial deployments, the CMSAAC recommended targeting “an area not larger than the CMS [provider's] approximation of coverage for the county or counties with which [a transmitted] geocode, circle, or polygon intersects.” The CMSAAC recommended that providers should be allowed (but not required) to deliver alerts to areas smaller than a county, using Geographic Names Identification System
(GNIS)codes, polygon, or circle information to identify a predefined list of cell sites/paging transceivers within the alert area. 52. Several parties however urge us to mandate sub-county targeting. Alert Systems claims that disaster managers often require greater geographic granularity than that permitted by CAP and the CMSAAC recommendations. Purple Tree Technologies asserts that sub-county targeting is “possible with cell broadcast,” and that there are few technical hurdles preventing granular alerts. Acision and CellCast both contend that cell broadcast technology would allow for targeting to the individual cell level. DataFM claims its technology could target “specific geographic areas without regard to the location of its transmitters.” 53. The National Emergency Number Association
(NENA)favors targeting smaller areas, noting that some counties are very large and that alert originators often need to target precisely. NENA asserts that targeting messages to the block level (similar to emergency telephone notification systems) would be “ideal,” but recognizes this is not possible. The CAPUC argues that county targeting would be overbroad for most emergencies, and urges ZIP-code level targeting. The Commission notes that there are more than 40,000 active ZIP codes in the United States, and many of these are assigned to specific addresses. The CAPUC does not explain how ZIP code targeting could be implemented. 54. The weight of the record supports county-level targeting as recommended by the CMSAAC. CTIA, TIA and 3G Americas urge us to implement county-level targeting, with optional granularity, to encourage expeditious deployment of alerting capabilities. T-Mobile agrees that electing CMS providers should not be required to target alerts to areas smaller than a county, noting that given current technological limitations, many carriers would be unable to achieve more specificity. Alltel also supports county-level targeting, but states that it intends to target more granularly. 55. MetroPCS notes that for smaller targeting areas, electing CMS providers would have to more precisely control the delivery of messages by the base stations serving a given targeted area than is currently economically feasible. Similarly, The National Telecommunications Cooperative Association
(NTCA)states that requiring electing rural CMS providers to send alerts to sub-county areas may be too expensive and may reduce the incentive to participate in the CMAS. The American Association of Paging Carriers
(AAPC)opposes county-level targeting, noting that it may not be feasible for some paging providers to confine alerts to the county level, and that they would target alerts to the extent permitted by their networks. 56. Based on the foregoing, and subject to the limited exception discussed below, the Commission concludes that it would be premature for it generally to require targeting of alerts more precisely than the county level. The Commission specifically notes that county-level targeting is consistent with the current practices of the National Weather Service, which is expected to originate many CMAS alerts. While some commenters argue that cell broadcast and perhaps other technologies could support more granular targeting, the record indicates that not all CMS providers may employ cell broadcasting for their delivery of CMAS. Further, while several vendors urge us to mandate sub-county targeting, at this point the Commission finds that the public interest is best served by enabling participating CMS providers to determine which technologies will most efficiently and cost effectively allow them to target alerts more precisely than the county level. 57. Accordingly, the Commission generally requires CMS providers that elect to participate in the CMAS to geographically target emergency alerts to the county level. In adopting this rule, the Commission recognizes the concerns of many CMS providers that face technical limitations on their ability to geo-target alerts to areas smaller than a county. In those limited circumstances where the propagation area of a paging system or cell site exceeds a single county, the Commission will permit the RF signal carrying the alert to extend beyond a county's boundaries. Electing CMS providers may determine which network facilities, elements, and locations will be used to transmit alerts to mobile devices. Regarding the CMSAAC recommendation that, until such time as emergency alerts can be delivered to areas smaller than a county in real-time ( *i.e.* , dynamic geo-targeting), certain urban areas with populations of greater than 1 million or with specialized alerting needs be identified for more precise geo-targeting, the Commission will address this recommendation once an entity has been identified to provide the Alert Aggregator and Gateway functions. 58. *Meeting the Needs of Users, Including Individuals with Disabilities and the Elderly* . Section 603(b)(3)(F) of the WARN Act required that the CMSAAC include representatives of national organizations representing people with special needs, including individuals with disabilities and the elderly. Because the WARN Act directed the CMSAAC to submit recommendations to the Commission “as otherwise necessary to enable electing CMS providers to transmit emergency alerts to subscribers,” the CMSAAC concluded, and the Commission agrees, that Congress intended to include the elderly and those with disabilities among the class to which electing CMS providers are to deliver alerts. Accordingly, the Commission concludes that CMAS access to those with disabilities and the elderly falls within its obligation under section 602(a) of the WARN Act, and thus seek to ensure that commercial mobile alerts are accessible to all Americans, including individuals with disabilities and the elderly. 59. The CMSAAC recommended that the needs of individuals with disabilities and the elderly be addressed by, *inter alia* , the inclusion of a common audio attention signal, and a common vibration cadence, on devices to be used for commercial mobile alerts. The CMSAAC recommended that both functions be distinct from any other device alerts and restricted to use for commercial mobile alerting purposes. The CMSAAC further noted that these features would benefit not only individuals with disabilities and the elderly, but also subscribers more generally. 60. For devices with polyphonic capabilities, the CMSAAC recommended that the audio attention signal should consist of more than one tone, in a frequency range below 2 kHz and preferably below 1 kHz, combined with an on-off pattern to make it easier for individuals with hearing loss to detect. For devices with only a single frequency capability, the CMSAAC recommended an audio attention signal below 2 kHz. The CMSAAC also recommended that the unique vibration cadence should be noticeably different from the default cadence of the handset. The CMSAAC further recommended that if a device includes both the audio and vibration functions, simultaneous activation of both functions should not be required and that configuration should be determined by end users. 61. In the CMAS NPRM, the Commission sought comment on the CMSAAC recommendations, including any technical or accessibility requirements that the Commission should adopt to ensure that commercial mobile alerts will be received by individuals with disabilities and the elderly. The Commission asked whether attention signals should be required for all users. It also noted that the CMSAAC recommended that alert initiators use clear and simple language whenever possible, with a minimal use of abbreviations and the ability to recall alert messages for review—and sought comment on these recommendations within the context of accessibility for individuals with disabilities and the elderly. 62. Nearly all commenting parties support the CMSAAC's recommendations for addressing the needs for individuals with disabilities and the elderly. AT&T, for example, states that adoption of the CMSAAC's recommendations for a common audio signal and vibration cadence will “allow for the immediate identification of emergency alerts” and foster “the widest possible distribution of alerts” to the public. Alert Systems likewise notes that “[u]rgency coding of messages is vital,” and that caretakers and operators of certain industrial facilities in particular “need unique alert tone patterns/amplitudes to quickly reprioritize activities.” 63. The Wireless Rehabilitation Engineering Research Center for Wireless Technologies (Wireless RERC) supports adoption of a common audio attention signal, and recommends that the Commission adopt the existing 8-second EAS attention signal for all users, asserting that it provides the necessary period of time to alert individuals with hearing disabilities. The Wireless RERC also supports adoption of a common vibration cadence, and states that electing CMS providers should provide clear instructions on the alert capabilities of their devices, including labels identifying mobile devices suitable for persons with audio and visual disabilities. AAPC supports the CMSAAC recommendations, but states that legacy devices should not be required to support such functions. CAPUC adds that although the CMSAAC was required to issue recommendations on wireless alerts exclusively, the Commission should consider ensuring interoperability with wireline devices for individuals with disabilities and the elderly, noting that some such users may not have access to wireless devices. DataFM notes that it currently has equipment for text-to-speech for the blind and strobe light warnings for the deaf, and would employ audio alerts and vibration alerts for portable devices. 64. Although there is near unanimous support of the CMSAAC's recommendations for addressing the needs of individuals with disabilities and the elderly, several parties argue that no additional requirements are necessary. MetroPCS claims that the handsets that will be used to receive mobile alerts are already subject to disability access requirements, and any additional requirements may raise costs, thereby discouraging CMS provider participation. CellCast argues that no changes to CMS provider networks should be required, noting that some mobile devices can be configured to enable the elderly or blind to hear an audio conversion of the message using text-to-speech technologies. 65. The Commission agrees with the majority of those commenting and the CMSAAC that it is vital that the Commission ensures access to commercial mobile alerts by individuals with disabilities and the elderly. The Commission disagrees with the premise articulated by some commenters that merely because some device manufacturers already include accessibility features for receipt of mobile alerts, no requirements are needed to ensure access to mobile alerts for individuals with disabilities and the elderly. 66. Accordingly, to address the needs of these user groups and the needs of users more generally, the Commission will require that participating CMS providers include both a common vibration cadence and a common audio attention signal on any device offered to the public for reception of commercial mobile alerts. Specifically, as the CMSAAC recommended, the Commission specifies a temporal pattern for the audio attention signal of one long tone of two
(2)seconds, followed by two short tones of one
(1)second each, with a half (0.5) second interval between the tones. The Commission also requires that the entire sequence be repeated twice with a half (0.5) second interval between repetitions. For devices with polyphonic capabilities, the Commission adopts the CMSAAC's recommendation that the audio attention signal consist of the two EAS tones (853 Hz and 960 Hz). For devices with a monophonic capability, the Commission requires that a universal audio attention signal be of 960 Hz (the higher frequency EAS tone). 67. The Commission also seeks to facilitate recognition of alerts for individuals that may have a hearing disability (or who may have muted the audio attention signal on their device), and therefore adopts the same temporal pattern for the vibration cadence as the CMSAAC recommended that the Commission specify for the audio attention signal. The Commission strongly encourages CMS providers to coordinate with device manufacturers to utilize existing technologies to comply with these requirements as soon as possible. 68. The Commission recognizes that incorporating capabilities for a common audio attention signal and a common vibration cadence on the many devices that it expects to be offered to the public will take time to develop and implement successfully. However, the Commission believes that assuring full access for all Americans is sufficiently important that equipment may not be considered CMAS compliant unless it includes both the common audio attention signal and the vibration cadence adopted in this Report and Order. Further, both functions must be distinct from any other incoming message alerts and restricted to use for CMAS alerting purposes. Finally, simultaneous activation of both the audio attention signal and vibration cadence is permissible. 69. *Output Mode/Display* . The CMSAAC issued several recommendations regarding the output mode/display of mobile devices. Specifically, the CMSAAC recommended that CMAS-enabled mobile devices should employ display fonts that are easily readable with recognizable characters, citing three typeface examples. MetroPCS notes that certain accessibility requirements already apply to CMS providers, and that CMAS-enabled mobile devices will therefore accommodate certain disabilities. CellCast adds that the development of mobile devices is highly competitive and flexible enough to meet the needs of all users including those with special needs. Although the Commission agrees with the CMSAAC that “the goal in font selection is to use easily recognizable characters,” it does not want to constrain the ability of CMS providers and manufacturers of devices to implement display modes that they find will best meet the needs of people with disabilities and other users. Accordingly, the Commission does not limit the display of CMAS alerts to a particular font or character set. 70. Text-to-speech
(TTS)enabled wireless mobile devices are becoming increasingly common, and the Commission strongly encourages all participating CMS providers to offer devices with such capabilities so that blind individuals and those with severe visual impairments can obtain the public safety benefits of commercial mobile alerts. The Commission notes that many of the requirements that it adopts for the first generation of CMAS are intended to enable the provision of text-based alerts to the public. Although the Commission envisions that the CMAS will evolve to include audio and video service profiles, it finds that at this initial stage of the CMAS, it would be premature to address the CMSAAC's recommendations regarding output mode/displays for such future service profiles. 71. *Message Retransmission* . The Commission agrees with the CMSAAC that alerts should be retransmitted periodically to an affected area until their specified expiration. Periodic retransmission of alerts is vital because some individuals, particularly motorists, may enter an alert area after initial transmission of an alert. Others may miss the initial alert because of an ongoing call (as explained below, alerts may not preempt a call in progress), or because they had their mobile device turned off or muted when an alert was first transmitted. As the CMSAAC noted, the optimal frequency of alert retransmission requires a balancing of many factors, including the capabilities of a CMS provider's delivery technology and end users' handsets, the number of ongoing active alerts, device battery life, and impacts on network call and data processing. The CMSAAC recommended that each CMS provider should determine how often an alert will be retransmitted based on such considerations. The Commission agrees with this assessment and adopts this recommendation as reasonable for the initial implementation of the CMAS. As the system is deployed, the Commission may wish to revisit the issue to see if a consistent, industry-wide alert retransmission interval would be more appropriate. 72. *Multi-Language CMAS Alerting* . The WARN Act required the CMSAAC to submit recommendations to the Commission regarding “the technical capability to transmit emergency alerts by electing commercial mobile providers to subscribers in languages in addition to English, to the extent practical and feasible.” In the CMAS NPRM, the Commission sought comment on the technical feasibility of providing commercial mobile alerts in languages in addition to English, including how the provision of alerts in multiple languages could affect the generation and distribution of messages on a local, state, and national level. Based on the record before us, the Commission finds that it would be premature to require CMS providers to transmit alerts in languages in addition to English. As explained below, the Commission agrees with the CMSAAC and those commenters that state that further technical study is needed to enable the provision of alerts in multiple languages. 73. The CMSAAC provided recommendations regarding multi-language alerting in section 5.7 of its report. The CMSAAC specifically “recognized that there is a strong desire for the CMAS to support Spanish in addition to English,” but found that supporting multiple languages in the first generation of CMAS could adversely impact system capacity and increase message latency. It noted that while Spanish and English would cover 99 percent of all U.S. households, there are more than 37 languages in the United States that exceed 1 percent of households on a local level. The CMSAAC stated that delivering CMAS alerts in these languages would require mobile devices capable of supporting at least 16 different character sets. The CMSAAC also stated that some languages require two bytes per character rather than one byte per character for English, thereby further limiting message length. The CMSAAC found that the technical feasibility of providing alerts in languages in addition to English is a highly complex issue requiring further study. Finally, the CMSAAC noted that the CMAS architecture can support language extensions and recommended that this capability be reserved for future study. 74. Several parties disagree that the technical feasibility of providing alerts in languages in addition to English requires further study, and urge us to mandate the provision of alerts in multiple languages now. The CAPUC notes that “roughly 30.1 percent of California's population has limited English proficiency,” and that the State “uses different languages for different types of communications * * * [including] Spanish, Cantonese, Mandarin, Tagalog, Vietnamese, Korean, Farsi, Arabic, and Hmong.” The CAPUC asserts “that various commercial alert service providers represent that they can provide alerts in six different languages,” but does not identify these service providers. There is no evidence in the record before us however of any CMS provider having the current capability to deliver alerts in six different languages, and the Commission therefore cannot adopt CAPUC's request that the Commission require transmission of alerts in a minimum of six languages. 75. CellCast and One2many also urge us to implement multiple language alerting. CellCast notes that pending standards under the ITU for Message Indicators
(MIs)can facilitate either the dedication of discrete MIs for specific languages, or the rejection of messages in undesired languages via the message preamble. CellCast suggests that such standards would provide clear direction for international harmonization of emergency alerting systems and handsets. CellCast further argues that the potential latency of multiple messages in sequential languages would be indiscernible to a mobile user and should not impact that user's ability to react to an emergency. CellCast claims that the delivery of multi-language alerts would not add any new burden on the Alert Aggregator or the CMS provider, and would not require any development of new technology. One2many states that there are numerous “channels,” or Message Identifiers, available in a cell broadcast. According to One2many, end users can activate their phones to receive messages on the channel number that matches their language. 76. By contrast, most parties in this proceeding concur with the CMSAAC that further study of multiple language alerting is necessary. CTIA, for example, states that the Commission should not require electing CMS providers to transmit alerts in multiple languages because of limitations in providers' existing air interfaces, handset character sets, and traffic overflow. Regarding the varying air interfaces, Alltel concurs with the CMSAAC that transmitting multi-language alerts is not technically feasible for CDMA systems, subject to future review as technology improves. According to Alltel, GSM can support multiple channels for simultaneous broadcast and discrete channels could be dedicated to different languages. Alltel explains that CDMA lacks this capability and would require sequential broadcasts of alerts in multiple languages with the potential for unacceptable latency between broadcasts of the same language while alerts in multiple languages are sequentially broadcast. 77. With respect to character set limitations in mobile devices, MetroPCS states that most handsets currently marketed in the United States use the Latin alphabet and would not support other languages—and that adding such capabilities would create substantial burdens on electing CMS providers and manufacturers, while increasing the costs of handsets to consumers. The American Association of Paging Carriers similarly explains that parallel alerts in languages other than English would threaten network congestion, and complicate subscriber device designs and capabilities. T-Mobile adds that a multi-language requirement would impede CMAS deployment, and that until the technology improves to facilitate multiple languages, non-English speaking users could be prompted by an English alert to turn to sources in their respective languages for further information. 78. Several parties, including AT&T, recommend that the Commission initially require alerts only in English, but also develop a national plan that provides federal, state, and local alert initiators with clear guidance on how alert initiators must craft multi-language alerts that reach the electing CMS Provider Gateways in a standardized format ready for end-user delivery without translation. The CAPUC, which advocates mandatory multi-language alerting, urges the Commission to examine whether latency or delivery concerns could be resolved if language receipt were part of a pre-subscription process. The Wireless RERC asks that the Commission encourage providers serving non-English speaking users to install software that will automatically translate English emergency messages into other languages, especially given the potential delay caused by an alert originator having to send out messages in multiple languages. These parties' insightful comments as well as those discussed above underscore that electing CMS providers face many technical challenges as they seek to implement alerting in languages in addition to English. Accordingly, the Commission concludes that further study is needed to develop capabilities for providing alerts in multiple languages, and does not require provision of alerts in any language other than English at this time. The Commission encourages the wireless industry and the public safety community to expeditiously develop and implement capabilities to deliver alerts in languages in addition to English. 79. *Roaming* . The Commission agrees with the CMSAAC and the majority of commenting parties that the public interest will be served by requiring participating CMS providers to support CMAS alerting when subscribers are receiving services through roaming. As discussed further below, the Commission finds that adopting such a requirement is consistent with its responsibility under the WARN Act to enable commercial mobile service alerting, as well as its duty under Executive Order 13407 to “adopt rules to ensure that communications systems have the capacity to transmit alerts and warnings to the public as part of the public alert and warning system.” 80. In the *Automatic Roaming Order* , the Commission found that “consumers have come to expect seamless wireless service wherever they travel within the United States and, ultimately, this will be achieved through automatic roaming.” Thus, as a general matter, mobile device users will anticipate that the alerting features and services available to them in their home market will be available when roaming. Under the rules the Commission adopts, when a subscriber receives services pursuant to a roaming agreement and the operator of the roamed upon network is a participating CMS provider, the subscriber will receive alert messages, provided the subscriber's mobile device is configured for and technically capable of receiving alert messages from the roamed upon network. 81. *Preemption of Calls in Progress* . The CMSAAC recommended that CMAS alerts not preempt ongoing voice or data sessions. The Commission agrees with this recommendation. It believes that it would be contrary to the public interest if alert messages were to preempt certain active voice or data sessions. During a crisis, such as a terrorist attack, many individuals will be seeking emergency aid related to the actual event and other emergencies. In either circumstance, the public would be ill served if their calls for urgent aid were summarily preempted. In light of this, the Commission will require that any device marketed as “CMAS compliant” must not permit an alert to preempt an ongoing call. 82. *Service Profiles* . In its recommendations, the CMSAAC introduced the concept of technology-neutral service profiles for emergency alerts, each containing, for example, information on maximum payload and displayable message size. The CMSAAC further recommended specific service profiles for:
(a)Text;
(b)Streaming Audio (future capability);
(c)Streaming Video (future capability); and
(c)Downloaded Multimedia Profile (future capability), and provided general recommendations and conclusions for each. In the CMAS NPRM, the Commission sought comment on the service profiles recommended by the CMSAAC. The Commission agrees with those commenters who argue that it should adopt the CMSAAC's recommendation that text-only alerts are appropriate for an initial system. Because the Commission believes that it would be premature and not consistent with its obligations under section 602(a) of the WARN Act to adopt standards and requirements for technologies that are still under development, this Order will not address future technologies such as streaming audio, video and downloadable multimedia. Rather, this Order will only address CMSAAC recommended profiles for text. 83. As part of the text profile, the CMSAAC recommended a maximum displayable message size of 90 characters. The Commission sought comment on this recommendation in the CMAS NPRM. Several commenters support the CMSAAC's recommendation. For example, AT&T states that, “given the current technical limitations in delivering emergency alerts, during the nascent stages of the CMAS the Commission should limit alerts to 90 characters * * *” Motorola supports this view and notes that inclusion of additional information and characters beyond 90 characters will strain the network, causing few people to receive the alert. AAPC states that the 90 character limit strikes an appropriate balance between complexity and a reasonably constructed CMAS. Other commenters raised concerns that a 90 character limit would not provide sufficient information to subscribers about emergencies. For example, CellCast states in their comments that 90 characters alone is insufficient to convey a complete alert to mobile devices. Furthermore, one commenter stated that the “character count recommendations are reasonable for display of `basic' warnings but CMSAAC recommendations should accommodate supplemental and verbose message formats.” 84. The Commission concludes that, at this initial stage, adoption of a 90 character limit serves the public interest. The Commission agrees with commenters such as MetroPCS that a 90 character limit will allow all systems to transmit the message with minimal change, and that 90 characters is an effective limit to allow the message to be delivered and actually be read. As the CMSAAC concluded and the Wireless Rehabilitation Engineering Research Center (WRERC) notes, the 90 character text limit of any CMAS alert is reasonable because the CMAS alert is intended to get the attention of a person. The person can then seek out other media for confirmation of the alert and more information. 85. The CMSAAC also recommended that where the alert coming into the Alert Gateway contains a link to an Internet Web site (or URL) as a resource element, the Alert Gateway would retrieve any file specified by the URL and deliver that file to the CMS Provider Gateway. This is a different issue from the URL in free text issue discussed above, because it implicates the manner in which the alert is sent to the CMS Provider Gateway, as opposed to the actual content of the alert itself. The Commission agrees with the CMSAAC that CMS provider networks do not have the resources to process alerts with internet links. Further, URLs may link the CMS Provider Gateway to untrusted Internet sites that could fall outside the security requirements that the electing CMS providers have indicated are an essential element of the CMAS. Accordingly, in the CMS provider profile, no alerts with internal URLs may be accepted. Rather, related files or other resource elements must be provided separately by the Alert Gateway to the CMS Provider Gateway. 86. The Commission also adopts the CMSAAC observation that the CMAS profiles will not be able to accommodate real-time content, including a Presidential alert, even in text format. The Commission believes that the CMSAAC has given sufficient indication of the limits of current CMS provider architecture to support this conclusion. Currently, the only real-time alert that could potentially be provided to the CMAS is the Presidential alert (Emergency Alert Notification or EAN). In the event that such a significant event were to occur, all broadcast media would be carrying the message, and as the Wireless RERC recommends, instructing the public to tune to their local radio and television station and other mass media is the best option for obtaining additional emergency information. 87. The text profiles the Commission adopts are reflected in table below: Text Profile Attribute Name Attribute Definition Note Service Profile: Text_Universal_Service_Profile Purpose Common denominator for text messages Maximum Payload Size 120 bytes Size is estimated. Maximum Displayable Message Size 90 characters for an English language CMA encoded with 7-bit encoding Languages other than English, or coding other then 7-bit coding, will result in a change to the maximum number of characters supported. Data Coding Scheme UTF-8 as defined in IETF RFC-3629 The text provided over the C interface is provided in UTF-8 format which is capable of supporting text in English and other languages. It is the responsibility of the CMS Provider Gateway to translate to any character format encoding required by the CMS provider selected delivery technology. 88. *Security for CMAS Alerts* . The CMSAAC recommended a specific Alert Aggregator and Alert Gateway Trust Model to assure the security, authentication and authorization of alerts from the Alert initiator to the CMS Provider Gateway. The CMSAAC also recommended security requirements for communications across the “C” interface between the Alert Gateway and CMS Provider Gateways and within each CMS provider's network. For example, the CMSAAC recommended that communications across the “C” interface be IP based. According to the CMSAAC, the security of the Reference Point C interface should be based upon standard IP security mechanisms such as VPN tunnels and IPSEC functionalities. 89. The Commission finds that an IP-based communications across the “C” interface serves the public interest because it would enhance the security of the CMAS. Accordingly, the Commission adopts the CMSAAC's recommendation. It disagrees with Purple Tree Technologies' concerns that the protocols put forth are insufficient to provide the security required, and that a higher layer security protocol is necessary over the “C” interface between the Alert and CMS Provider Gateways. Rather, the Commission agrees with Verizon Wireless, which in its Reply Comments rejects such a need. As Verizon Wireless correctly points out, under the CMAS Reference Architecture, which the Commission has adopted in this Order, the need for higher layer security protocols exists only as an element of the “Trust Model,” which addresses the linkage between the Alert Gateway and alert initiators. By the time the Alert Gateway hands off a particular alert to the CMS Provider Gateway, any necessary authentication and authorization has been completed, thus obviating the need for a higher level security layer over the “C” interface. 90. The CMSAAC recommended that the security at Reference Points D and E be based upon CMS provider policies and upon the capabilities of the CMS provider selected delivery technologies. No commenter opposes this recommendation, and the Commission believes that the recommendation is consistent with the technologically neutral policy of this Order and is consistent with section 602(a) of the WARN Act which requires that the Commission adopt technical requirements necessary to facilitate emergency alert capabilities of CMS providers. Accordingly, the Commission adopts this recommendation of the CMSAAC. 91. *CMAS Reliability and Performance* . The CMSAAC made general recommendations concerning CMAS system performance requirements. Most requirements are prospective observations and recommendations. Major ones include: • *Alert Gateway capacity* . Based on historical data, the CMSAAC made certain predictions concerning Alert Gateway performance requirements, including the capability to monitor system utilization for capacity planning purposes, and to temporarily disable and buffer CMAS alert traffic in the event of an overload. • *Assessing latency in alert delivery* . The CMSAAC stated that such an assessment would be difficult to make prior to deployment, but notes certain relevant factors, including: Mobile device battery life impact, call processing impact; capabilities of the delivery technology; message queues; number of languages; number of targeted cell sites/paging transceivers for the alert area; and any geo-targeting processing. • *End-to-end reliability* . The CMSAAC recommends that the CMAS end-to-end reliability technology meet telecom standards for highly reliable systems, but notes that the over-all reliability of CMAS is unpredictable because RF transmissions can be subject to noise and other interference or environmental factors; the capabilities of the cellular environment are not predictable especially in a disaster environment; the subscriber may be in a location that does not have any RF signal; and the subscriber's mobile device may not have any remaining power. 92. In order to assure the reliability and performance of this new system, the CMSAAC recommended procedures for logging CMAS alerts at the Alert Gateway and for testing the system at the Alert Gateway and on an end-to-end basis. Because this presumes the existence of an entity acting in the role of Alert Aggregator/Gateway, the Commission cannot adopt rules in this area at this time. 93. *Timeline for Implementation of Technical Requirements, Standards and Protocols* . In its recommendations, the CMSAAC proposed a specific timeline for the implementation of the CMAS. According to the CMSAAC, it would take a minimum of 24 months from the date by which CMS providers must elect to participate in the CMAS under section 602(b)(2)(A) of the WARN Act to deploy the CMAS. The CMSAAC proposed deployment timeline was based upon the assumptions that
(1)the CMSAAC recommendations contained within this document are accepted without any major technical changes and
(2)the government documentation and deliverables are available at the milestone dates indicated on the timeline. In this regard, the CMSAAC also assumed that the requirements, development, and deployments of the Alert Gateway and Alert Aggregator would align with the CMS provider developments to allow for testing during the development process and prior to CMAS deployments. The CMSAAC recommended timeline assumed that Federal Government interface specifications would be available in January, 2008, 10 months before CMAS development and testing was to begin. 94. At the outset the Commission notes that the majority of commenters that addressed the issue supported the CMSAAC's proposed deployment timeline. Further, in its comments, FEMA asked the Commission not to adopt an effective date for these rules until all legal issues regarding the Federal government's role in the CMAS have been identified and resolved. In making this request, FEMA provided no indication as to when it believes such issues may be resolved. 95. Issues related to the CMSAAC proposed timeline fall under the election provisions of section 602(b) of the WARN Act, and so are not strictly within the purview of this initial technical Order that complies with section 602(a). However, the Commission agrees with the CMSAAC that the Alert Aggregator and Alert Gateway must be in place in order for CMS providers to complete development of the CMAS and to begin receiving and transmitting emergency alerts. 96. The Federal Alert Aggregator and Alert Gateway will make the Government Interface Design specifications available. In accordance with the CMSAAC proposed timeline, CMS providers must begin development and testing of the CMAS in a manner consistent with the rules adopted in the CMAS First Report and Order no later than 10 months from the date that the Alert Aggregator/Alert Gateway makes the Government Interface Design specifications available. This time period is consistent with the 10 months the CMSAAC proposed timeline indicates would elapse between the availability of the Aggregator/Gateway interface design specification and the beginning of CMAS development and testing. The Commission believes that this will give the government and industry stakeholders sufficient time to begin development, including the federal government's role. It will also give electing CMS providers adequate time to come into compliance with the rules adopted herein. Procedural Matters A. Final Paperwork Reduction Act Analysis 97. This Report and Order may contain new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. If the Commission determines that the Report and Order contains collection subject to the PRA, it will be submitted to the Office of Management and Budget
(OMB)for review under section 3507(d) of the PRA at an appropriate time. At that time, OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, *see* 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” B. Report to Congress 98. The Commission will send a copy of the CMAS First Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, *see* 5 U.S.C. 801(a)(1)(A). Final Regulatory Flexibility Analysis 99. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis
(IRFA)was incorporated in the Notice of Proposed Rulemaking in PSHSB Docket 07-287 (CMAS NPRM). The Commission sought written public comments on the proposals in the CMAS NPRM, including comment on the IRFA. Comments on the IRFA were to have been explicitly identified as being in response to the IRFA and were required to be filed by the same deadlines as that established in section IV of the CMAS NPRM for other comments to the CMAS NPRM. The Commission sent a copy of the CMAS NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the CMAS NPRM and IRFA were published in the **Federal Register** . Need for, and Objectives of, the Order 100. Section 602(a) of the WARN Act requires the Commission to “complete a proceeding to adopt relevant technical standards, protocols, procedures, and other technical requirements based on the recommendations of [the Commercial Mobile Service Alert Advisory Committee (CMSAAC)] necessary to enable commercial mobile service alerting capability for commercial mobile service providers that voluntarily elect to transmit emergency alerts.” Although the CMAS NPRM solicited comment on issues related to section 602(b) (CMS provider election to the CMAS) or 602(c) (Public Television Station equipment requirements), the CMAS First Report and Order only addresses issues raised by section 602(a) of the WARN Act. Accordingly, this FRFA only addressees the manner in which any commenters to the IRFA addressed the Commission's adoption of technical standards, requirements and protocols for the CMAS as required by section 602(a) of the WARN Act. 101. The CMAS First Report and Order adopts rules necessary to enable CMS alerting capability for CMS providers who elect to transmit emergency alerts to their subscribers. The Order adopts technologically neutral rules governing the CMS provider-related functions and responsibilities with respect to the CMAS. Specifically, the rules address the CMS providers' functions within the CMAS, including CMS provider-controlled elements within the CMAS architecture, emergency alert formatting, classes and elements, geographic targeting (geo-targeting) and accessibility for people with disabilities and the elderly. Summary of Significant Issues Raised by Public Comments in Response to the IRFA 102. There were no comments filed that specifically addressed the IRFA. The only commenter that explicitly identified itself as a small business was Interstate Wireless, Inc., which supported the Commission's adoption of the CMSAAC's recommendations. Although Interstate Wireless did not comment specifically on the IRFA, it did state that the cost of building and maintaining a CMS Provider Gateway would be more than it and other similarly situated Small Business CMS providers could afford and still be able to provide the alert service to the public without cost. Accordingly, Interstate Wireless requested that the Federal Government either provide the proper software and reception equipment for the CMS Provider Gateways, or provide grants to the Small Business CMS providers to purchase, install, and maintain the equipment themselves. In paragraph 19, note 58 of the CMAS First Report and Order the Commission notes that questions of funding are not addressed by section 602(a) of the WARN Act and are outside of the scope of this Order. Description and Estimate of the Number of Small Entities to Which Rules Will Apply 103. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which:
(1)Is independently owned and operated;
(2)is not dominant in its field of operation; and
(3)satisfies any additional criteria established by the Small Business Administration (SBA). 104. *Wireless Telecommunications Carriers (except Satellite)* . Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. Because Census Bureau data are not yet available for the new category, the Commission estimates small business prevalence using the prior categories and associated data. For the first category of Paging, data for 2002 show that there were 807 firms that operated for the entire year. Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more. For the second category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year. Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more. Thus, using the prior categories and the available data, the Commission estimates that the majority of wireless firms can be considered small. 105. *Cellular Service* . As noted, the SBA has developed a small business size standard for small businesses in the category “Wireless Telecommunications Carriers (except satellite).” Under that SBA category, a business is small if it has 1,500 or fewer employees. Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Accordingly, the pertinent data for this category is contained within the prior Wireless Telecommunications Carriers (except Satellite) category. 106. *Auctions* . Initially, the Commission notes that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. 107. *Broadband Personal Communications Service* . The broadband Personal Communications Service
(PCS)spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission has created a small business size standard for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. For Block F, an additional small business size standard for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA. No small businesses within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the C Block auctions. A total of 93 “small” and “very small” business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. On March 23, 1999, the Commission reauctioned 155 C, D, E, and F Block licenses; there were 113 small business winning bidders. On January 26, 2001, the Commission completed the auction of 422 C and F PCS licenses in Auction 35. Of the 35 winning bidders in this auction, 29 qualified as “small” or “very small” businesses. Subsequent events concerning Auction 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant. 108. *Narrowband Personal Communications Service* . The Commission held an auction for Narrowband Personal Communications Service
(PCS)licenses that commenced on July 25, 1994, and closed on July 29, 1994. A second commenced on October 26, 1994 and closed on November 8, 1994. For purposes of the first two Narrowband PCS auctions, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less. Through these auctions, the Commission awarded a total of forty-one licenses, 11 of which were obtained by four small businesses. To ensure meaningful participation by small business entities in future auctions, the Commission adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order. A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million. A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million. The SBA has approved these small business size standards. A third auction commenced on October 3, 2001 and closed on October 16, 2001. Here, five bidders won 317 (MTA and nationwide) licenses. Three of these claimed status as a small or very small entity and won 311 licenses. 109. *Wireless Communications Services* . This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses in the 2305-2320 MHz and 2345-2360 MHz bands. The Commission defined “small business” for the wireless communications services
(WCS)auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. The Commission auctioned geographic area licenses in the WCS service. In the auction, which commenced on April 15, 1997 and closed on April 25, 1997, there were seven bidders that won 31 licenses that qualified as very small business entities, and one bidder that won one license that qualified as a small business entity. 110. *700 MHz Guard Bands Licenses* . In the 700 MHz Guard Bands Order, the Commission adopted size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. SBA approval of these definitions is not required. An auction of 52 Major Economic Area
(MEA)licenses for each of two spectrum blocks commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of remaining 700 MHz Guard Bands licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses. Subsequently, in the 700 MHz Second Report and Order, the Commission reorganized the licenses pursuant to an agreement among most of the licensees, resulting in a spectral relocation of the first set of paired spectrum block licenses, and an elimination of the second set of paired spectrum block licenses (many of which were already vacant, reclaimed by the Commission from Nextel). A single licensee that did not participate in the agreement was grandfathered in the initial spectral location for its two licenses in the second set of paired spectrum blocks. Accordingly, at this time there are 54 licenses in the 700 MHz Guard Bands. 111. *700 MHz Band Commercial Licenses* . There is 80 megahertz of non-Guard Band spectrum in the 700 MHz Band that is designated for commercial use: 698-757, 758-763, 776-787, and 788-793 MHz Bands. With one exception, the Commission adopted criteria for defining two groups of small businesses for purposes of determining their eligibility for bidding credits at auction. These two categories are:
(1)“small business,” which is defined as an entity that has attributed average annual gross revenues that do not exceed $15 million during the preceding three years; and
(2)“very small business,” which is defined as an entity with attributed average annual gross revenues that do not exceed $40 million for the preceding three years. In Block C of the Lower 700 MHz Band (710-716 MHz and 740-746 MHz), which was licensed on the basis of 734 Cellular Market Areas, the Commission adopted a third criterion for determining eligibility for bidding credits: an “entrepreneur,” which is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small size standards. 112. An auction of 740 licenses for Blocks C (710-716 MHz and 740-746 MHz) and D (716-722 MHz) of the Lower 700 MHz Band commenced on August 27, 2002, and closed on September 18, 2002. Of the 740 licenses available for auction, 484 licenses were sold to 102 winning bidders. Seventy-two of the winning bidders claimed small business, very small business, or entrepreneur status and won a total of 329 licenses. A second auction commenced on May 28, 2003, and closed on June 13, 2003, and included 256 licenses: Five EAG licenses and 251 CMA licenses. Seventeen winning bidders claimed small or very small business status and won 60 licenses, and nine winning bidders claimed entrepreneur status and won 154 licenses. 113. The remaining 62 megahertz of commercial spectrum is currently scheduled for auction on January 24, 2008. As explained above, bidding credits for all of these licenses will be available to “small businesses” and “very small businesses.” 114. *Advanced Wireless Services* . In the AWS-1 Report and Order, the Commission adopted rules that affect applicants who wish to provide service in the 1710-1755 MHz and 2110-2155 MHz bands. The Commission did not know precisely the type of service that a licensee in these bands might seek to provide. Nonetheless, the Commission anticipated that the services that will be deployed in these bands may have capital requirements comparable to those in the broadband Personal Communications Service (PCS), and that the licensees in these bands will be presented with issues and costs similar to those presented to broadband PCS licensees. Further, at the time the broadband PCS service was established, it was similarly anticipated that it would facilitate the introduction of a new generation of service. Therefore, the AWS-1 Report and Order adopts the same small business size definition that the Commission adopted for the broadband PCS service and that the SBA approved. In particular, the AWS-1 Report and Order defines a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million. The AWS-1 Report and Order also provides small businesses with a bidding credit of 15 percent and very small businesses with a bidding credit of 25 percent. 115. *Common Carrier Paging* . As noted, the SBA has developed a small business size standard for wireless firms within the broad economic census category of “Wireless Telecommunications Carriers (except Satellite).” Under this category, the SBA deems a business to be small if it has 1,500 or fewer employees. Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, the SBA had developed a small business size standard for wireless firms within the now-superseded census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. Because Census Bureau data are not yet available for the new category, the Commission will estimate small business prevalence using the prior categories and associated data. For the first category of Paging, data for 2002 show that there were 807 firms that operated for the entire year. Of this total, 804 firms had employment of 999 or fewer employees, and three firms had employment of 1,000 employees or more. For the second category of Cellular and Other Wireless Telecommunications, data for 2002 show that there were 1,397 firms that operated for the entire year. Of this total, 1,378 firms had employment of 999 or fewer employees, and 19 firms had employment of 1,000 employees or more. Thus, using the prior categories and the available data, the Commission estimates that the majority of wireless firms can be considered small. Thus, under this category, the majority of firms can be considered small. 116. In the Paging Third Report and Order, the Commission developed a small business size standard for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small business size standards. An auction of Metropolitan Economic Area licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies claiming small business status won. Also, according to Commission data, 365 carriers reported that they were engaged in the provision of paging and messaging services. Of those, the Commission estimates that 360 are small, under the SBA-approved small business size standard. 117. *Wireless Communications Service* . This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission established small business size standards for the wireless communications services
(WCS)auction. A “small business” is an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” is an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these small business size standards. The Commission auctioned geographic area licenses in the WCS service. In the auction, there were seven winning bidders that qualified as “very small business” entities, and one that qualified as a “small business” entity. 118. *Wireless Communications Equipment Manufacturers* . While these entities are merely indirectly affected by its action, the Commission describes them to achieve a fuller record. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: All such firms having 750 or fewer employees. According to Census Bureau data for 2002, there were a total of 1,041 establishments in this category that operated for the entire year. Of this total, 1,010 had employment of under 500, and an additional 13 had employment of 500 to 999. Thus, under this size standard, the majority of firms can be considered small. 119. *Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing* . The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: All such firms having 750 or fewer employees. According to Census Bureau data for 2002, there were a total of 1,041 establishments in this category that operated for the entire year. Of this total, 1,010 had employment of under 500, and an additional 13 had employment of 500 to 999. Thus, under this size standard, the majority of firms can be considered small. 120. *Software Publishers* . While these entities are merely indirectly affected by its action, the Commission is describing them to achieve a fuller record. These companies may design, develop or publish software and may provide other support services to software purchasers, such as providing documentation or assisting in installation. The companies may also design software to meet the needs of specific users. The SBA has developed a small business size standard of $23 million or less in average annual receipts for the category of Software Publishers. For Software Publishers, Census Bureau data for 2002 indicate that there were 6,155 firms in the category that operated for the entire year. Of these, 7,633 had annual receipts of under $10 million, and an additional 403 firms had receipts of between $10 million and $24,999,999. For providers of Custom Computer Programming Services, the Census Bureau data indicate that there were 32,269 firms that operated for the entire year. Of these, 31,416 had annual receipts of under $10 million, and an additional 565 firms had receipts of between $10 million and $24,999,999. Consequently, the Commission estimates that the majority of the firms in this category are small entities that may be affected by its action. 121. *NCE and Public Broadcast Stations* . The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” The SBA has created a small business size standard for Television Broadcasting entities, which is: Such firms having $13 million or less in annual receipts. According to Commission staff review of the BIA Publications, Inc., Master Access Television Analyzer Database as of May 16, 2003, about 814 of the 1,220 commercial television stations in the United States had revenues of $12 (twelve) million or less. The Commission notes, however, that in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. The Commission's estimate, therefore, likely overstates the number of small entities that might be affected by the Commission's action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. 122. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. The Commission is unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply do not exclude any television station from the definition of a small business on this basis and are therefore over-inclusive to that extent. Also as noted, an additional element of the definition of “small business” is that the entity must be independently owned and operated. The Commission notes that it is difficult at times to assess these criteria in the context of media entities and its estimates of small businesses to which they apply may be over-inclusive to this extent. There are also 2,117 low power television stations (LPTV). Given the nature of this service, the Commission will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard. 123. The Commission has, under SBA regulations, estimated the number of licensed NCE television stations to be 380. The Commission notes, however, that, in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. The Commission's estimate, therefore, likely overstates the number of small entities that might be affected by its action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. The Commission does not compile and otherwise does not have access to information on the revenue of NCE stations that would permit it to determine how many such stations would qualify as small entities. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements 124. This Report and Order may contain new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. If the Commission determines that the Report and Order contains collection subject to the PRA, it will be submitted to the Office of Management and Budget
(OMB)for review under section 3507(d) of the PRA at an appropriate time. At that time, OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered 125. The RFA requires an agency to describe any significant alternatives that it has considered in developing its approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities;
(2)the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities;
(3)the use of performance rather than design standards; and
(4)an exemption from coverage of the rule, or any part thereof, for such small entities.” 126. As noted above, the CMAS First Report and Order deals only with the WARN Act section 602(a) requirement that the Commission adopt technical standards, protocols, procedures, and other technical requirements based on the recommendations of the Commercial Mobile Service Alert Advisory Committee. The entities affected by this Order were largely the members of the CMSAAC. In its formation of the CMSAAC, the Commission made sure to include representatives of small businesses among the advisory committee members. Also, as the Commission indicates by its treatment of the comments of Interstate Wireless above, the technical requirements, standards and protocols on which the Commission sought comment already contain concerns raised by small businesses. The WARN ACT NPRM also sought comment on a number of alternatives to the recommendations of the CMSAAC, such as the Digital EAS and FM sub-carrier based alerts. In its consideration of these and other alternatives the CMSAAC recommendations, the Commission has attempted to impose minimal regulation on small entities to the extent consistent with the Commission's goal of advancing its public safety mission by adopting technical requirements, standards and protocols for a CMAS that CMS providers would elect to provide alerts and warnings to their customers. The affected CMS providers have overwhelmingly expressed their willingness to cooperate in the formation of the CMAS, and the Commission anticipates that the standards, protocols and requirement that it adopts in this Order will encourage CMS providers to work with other industry and government entities to complete and participate in the CMAS. Federal Rules That May Duplicate, Overlap, or Conflict with the Proposed Rules 127. None. Report to Congress 128. The Commission will send a copy of the Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of this present summarized Order and FRFA is also hereby published in the **Federal Register** . Ordering Clauses 129. *It is ordered,* that pursuant to sections 1, 4(i) and (o), 201, 303(r), 403, and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (o), 201, 303(r), 403, and 606, as well as by sections 602(a),(b),(c), (f), 603, 604 and 606 of the WARN Act, this Report and Order is hereby adopted. The rules adopted in this Report and Order shall become effective September 22, 2008, except that any new information collection requirements contained in these rules will not become effective prior to OMB approval. The Commission will publish a document in the **Federal Register** announcing the effective date of any information collections. 130. *It is further ordered* that the Commission's Consumer and Government Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Council for Advocacy of the Small Business Administration. List of Subjects in 47 CFR Part 10 Alert and warning, AMBER alert, Commercial mobile service provider. Federal Communications Commission. Marlene H. Dortch, Secretary. Final Rules For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR chapter I by adding Part 10 to read as follows: PART 10—COMMERCIAL MOBILE ALERT SYSTEM Subpart A—General Information Sec. 10.1 Basis. 10.2 Purpose. 10.10 Definitions. 10.11 CMAS Implementation Timeline. Subpart B—Election To Participate in Commercial Mobile Alert System [Reserved] Subpart C—System Architecture 10.300 Alert Aggregator [Reserved] 10.310 Federal Alert Gateway [Reserved] 10.320 Provider Gateway Requirements. 10.330 Provider Infrastructure Requirements. Subpart D—Alert Message Requirements 10.400 Classification. 10.410 Prioritization. 10.420 Message Elements. 10.430 Character Limit. 10.440 Embedded Reference Prohibition. 10.450 Geographic Targeting. 10.460 Retransmission Frequency [Reserved] 10.470 Roaming. Subpart E—Equipment Requirements 10.500 General Requirements. 10.510 Call Preemption Prohibition. 10.520 Common Audio Attention Signal. 10.530 Common Vibration Cadence. 10.540 Attestation Requirement [Reserved] Authority: 47 U.S.C. 151, 154(i) and (o), 201, 303(r), 403, and 606; sections 602(a), (b), (c), (f), 603, 604 and 606 of Pub. L. 109-347, 120 Stat. 1884. Subpart A—General Information § 10.1 Basis. The rules in this part are issued pursuant to the authority contained in the Warning, Alert, and Response Network Act, Title VI of the Security and Accountability for Every Port Act of 2006, Public Law 109-347, Titles I through III of the Communications Act of 1934, as amended, and Executive Order 13407 of June 26, 2006, Public Alert and Warning System, 71 FR 36975, June 26, 2006. § 10.2 Purpose. The rules in this part establish the requirements for participation in the voluntary Commercial Mobile Alert System. § 10.10 Definitions.
(a)*Alert Message.* An Alert Message is a message that is intended to provide the recipient information regarding an emergency, and that meets the requirements for transmission by a Participating Commercial Mobile Service Provider under this part.
(b)*Common Alerting Protocol.* The Common Alerting Protocol
(CAP)refers to Organization for the Advancement of Structured Information Standards (OASIS) Standard CAP-V1.1, October 2005 (available at *http://www.oasis-open.org/specs/index.php#capv1.1* ), or any subsequent version of CAP adopted by OASIS and implemented by the CMAS.
(c)*Commercial Mobile Alert System.* The Commercial Mobile Alert System
(CMAS)refers to the voluntary emergency alerting system established by this part, whereby Commercial Mobile Service Providers may elect to transmit Alert Messages to the public.
(d)*Commercial Mobile Service Provider.* A Commercial Mobile Service Provider (or CMS Provider) is an FCC licensee providing commercial mobile service as defined in section 332(d)(1) of the Communications Act of 1934 (47 U.S.C. 332(d)(1)). Section 332(d)(1) defines the term commercial mobile service as any mobile service (as defined in 47 U.S.C. 153) that is provided for profit and makes interconnected service available to the public or to such classes of eligible users as to be effectively available to a substantial portion of the public, as specified by regulation by the Commission.
(e)*County and County Equivalent.* The terms County and County Equivalent as used in this part are defined by Federal Information Processing Standards
(FIPS)6-4, which provides the names and codes that represent the counties and other entities treated as equivalent legal and/or statistical subdivisions of the 50 States, the District of Columbia, and the possessions and freely associated areas of the United States. Counties are considered to be the “first-order subdivisions” of each State and statistically equivalent entity, regardless of their local designations (county, parish, borough, *etc.* ). Thus, the following entities are considered to be equivalent to counties for legal and/or statistical purposes: The parishes of Louisiana; the boroughs and census areas of Alaska; the District of Columbia; the independent cities of Maryland, Missouri, Nevada, and Virginia; that part of Yellowstone National Park in Montana; and various entities in the possessions and associated areas. The FIPS codes and FIPS code documentation are available online at *http://www.itl.nist.gov/fipspubs/index.htm* .
(f)*Participating Commercial Mobile Service Provider.* A Participating Commercial Mobile Service Provider (or a Participating CMS Provider) is a Commercial Mobile Service Provider that has voluntarily elected to transmit Alert Messages under subpart B of this part. § 10.11 CMAS Implementation Timeline. Notwithstanding anything in this part to the contrary, a Participating CMS provider shall begin development and testing of the CMAS in a manner consistent with the rules in this part no later than 10 months from the date that the Federal Alert Aggregator and Alert Gateway makes the Government Interface Design specifications available. Subpart B—Election to Participate in Commercial Mobile Alert System [Reserved] Subpart C—System Architecture § 10.300 Alert Aggregator [Reserved] § 10.310 Federal Alert Gateway [Reserved] § 10.320 Provider Alert Gateway Requirements. This section specifies the functions that each Participating Commercial Mobile Service provider is required to support and perform at its CMS provider gateways.
(a)*General.* The CMS provider gateway must provide secure, redundant, and reliable connections to receive Alert Messages from the Federal alert gateway. Each CMS provider gateway must be identified by a unique IP address or domain name.
(b)*Authentication and Validation.* The CMS provider gateway must authenticate interactions with the Federal alert gateway, and validate Alert Message integrity and parameters. The CMS provider gateway must provide an error message immediately to the Federal alert gateway if a validation fails.
(c)*Security.* The CMS provider gateway must support standardized IP-based security mechanisms such as a firewall, and support the defined CMAS “C” interface and associated protocols between the Federal alert gateway and the CMS provider gateway.
(d)*Geographic Targeting.* The CMS provider gateway must determine whether the provider has elected to transmit an Alert Message within a specified alert area and, if so, map the Alert Message to an associated set of transmission sites.
(e)*Message Management.*
(1)Formatting. The CMS provider gateway is not required to perform any formatting, reformatting, or translation of an Alert Message, except for transcoding a text, audio, video, or multimedia file into the format supported by mobile devices.
(2)Reception. The CMS provider gateway must support a mechanism to stop and start Alert Message deliveries from the Federal alert gateway to the CMS provider gateway.
(3)Prioritization. The CMS provider gateway must process an Alert Message on a first in-first out basis except for Presidential Alerts, which must be processed before all non-Presidential alerts.
(4)Distribution. A Participating CMS provider must deploy one or more CMS provider gateways to support distribution of Alert Messages and to manage Alert Message traffic.
(5)Retransmission. The CMS provider gateway must manage and execute Alert Message retransmission, and support a mechanism to manage congestion within the CMS provider's infrastructure.
(f)*CMS Provider Profile.* The CMS provider gateway will provide profile information on the CMS provider for the Federal alert gateway to maintain at the Federal alert gateway. This profile information must be provided by an authorized CMS provider representative to the Federal alert gateway administrator. The profile information must include the data listed in Table 10.320(f) and must comply with the following procedures:
(1)The information must be provided 30 days in advance of the date when the CMS provider begins to transmit CMAS alerts.
(2)Updates of any CMS provider profiles must be provided in writing at least 30 days in advance of the effective change date. Table 10.320( f ).—CMSP Profile on Federal Alert Gateway Profile parameter Parameter election Description CMSP Name Unique identification of CMSP. CMSP gateway Address IP address or Domain Name Alternate IP address Optional and subject to implementation. Geo-Location Filtering <yes/no> If “yes” the only CMAM issued in the listed states will be sent to the CMSP gateway. If “no”, all CMAM will be sent to the CMSP gateway. If yes, list of states CMAC Geocode for state List can be state name or abbreviated state name. § 10.330 Provider Infrastructure Requirements. This section specifies the general functions that a Participating CMS Provider is required to perform within their infrastructure. Infrastructure functions are dependent upon the capabilities of the delivery technologies implemented by a Participating CMS Provider.
(a)Distribution of Alert Messages to mobile devices.
(b)Authentication of interactions with mobile devices.
(c)Reference Points D & E. Reference Point D is the interface between a CMS Provider gateway and its infrastructure. Reference Point E is the interface between a provider's infrastructure and mobile devices including air interfaces. Reference Points D and E protocols are defined and controlled by each Participating CMS Provider. Subpart D—Alert Message Requirements § 10.400 Classification. A Participating CMS Provider is required to receive and transmit three classes of Alert Messages: Presidential Alert; Imminent Threat Alert; and Child Abduction Emergency/AMBER Alert.
(a)*Presidential Alert.* A Presidential Alert is an alert issued by the President of the United States or the President's authorized designee.
(b)*Imminent Threat Alert.* An Imminent Threat Alert is an alert that meets a minimum value for each of three CAP elements: Urgency, Severity, and Certainty.
(1)Urgency. The CAP Urgency element must be either Immediate ( *i.e.* , responsive action should be taken immediately) or Expected ( *i.e.* , responsive action should be taken soon, within the next hour).
(2)Severity. The CAP Severity element must be either Extreme ( *i.e.* , an extraordinary threat to life or property) or Severe ( *i.e.* , a significant threat to life or property).
(3)Certainty. The CAP Certainty element must be either Observed ( *i.e.* , determined to have occurred or to be ongoing) or Likely ( *i.e.* , has a probability of greater than 50 percent).
(c)*Child Abduction Emergency/AMBER Alert.*
(1)An AMBER Alert is an alert initiated by a local government official based on the U.S. Department of Justice's five criteria that should be met before an alert is activated:
(i)Law enforcement confirms a child has been abducted;
(ii)The child is 17 years or younger;
(iii)Law enforcement believes the child is in imminent danger of serious bodily harm or death;
(iv)There is enough descriptive information about the victim and the abduction to believe an immediate broadcast alert will help; and
(v)The child's name and other data have been entered into the National Crime Information Center.
(2)There are four types of AMBER Alerts: Family Abduction; Non-family Abduction; Lost, Injured or Otherwise Missing; and Endangered Runaway.
(i)Family Abduction. A Family Abduction
(FA)alert involves an abductor who is a family member of the abducted child such as a parent, aunt, grandfather, or stepfather.
(ii)Nonfamily Abduction. A Nonfamily Abduction
(NFA)alert involves an abductor unrelated to the abducted child, either someone unknown to the child and/or the child's family or an acquaintance/friend of the child and/or the child's family.
(iii)Lost, Injured, or Otherwise Missing. A Lost, Injured, or Otherwise Missing
(LIM)alert involves a case where the circumstances of the child's disappearance are unknown.
(iv)Endangered Runaway. An Endangered Runaway
(ERU)alert involves a missing child who is believed to have run away and in imminent danger. § 10.410 Prioritization. A Participating CMS Provider is required to transmit Presidential Alerts upon receipt. Presidential Alerts preempt all other Alert Messages. A Participating CMS Provider is required to transmit Imminent Threat Alerts and AMBER Alerts on a first in-first out
(FIFO)basis. § 10.420 Message Elements. A CMAS Alert Message processed by a Participating CMS Provider shall include five mandatory CAP elements—Event Type; Area Affected; Recommended Action; Expiration Time (with time zone); and Sending Agency. This requirement does not apply to Presidential Alerts. § 10.430 Character Limit. A CMAS Alert Message processed by a Participating CMS Provider must not exceed 90 characters of alphanumeric text. § 10.440 Embedded Reference Prohibition. A CMAS Alert Message processed by a Participating CMS Provider must not include an embedded Uniform Resource Locator (URL), which is a reference (an address) to a resource on the Internet, or an embedded telephone number. This prohibition does not apply to Presidential Alerts. § 10.450 Geographic Targeting. This section establishes minimum requirements for the geographic targeting of Alert Messages. A Participating CMS Provider will determine which of its network facilities, elements, and locations will be used to geographically target Alert Messages. A Participating CMS Provider must transmit any Alert Message that is specified by a geocode, circle, or polygon to an area not larger than the provider's approximation of coverage for the Counties or County Equivalents with which that geocode, circle, or polygon intersects. If, however, the propagation area of a provider's transmission site exceeds a single County or County Equivalent, a Participating CMS Provider may transmit an Alert Message to an area not exceeding the propagation area. § 10.460 Retransmission Frequency [Reserved] § 10.470 Roaming. When, pursuant to a roaming agreement ( *see* § 20.12 of this chapter), a subscriber receives services from a roamed-upon network of a Participating CMS Provider, the Participating CMS Provider must support CMAS alerts to the roaming subscriber to the extent the subscriber's mobile device is configured for and technically capable of receiving CMAS alerts. Subpart E—Equipment Requirements § 10.500 General Requirements. CMAS mobile device functionality is dependent on the capabilities of a Participating CMS Provider's delivery technologies. Mobile devices are required to perform the following functions:
(a)Authentication of interactions with CMS Provider infrastructure.
(b)Monitoring for Alert Messages.
(c)Maintaining subscriber alert opt-out selections, if any.
(d)Maintaining subscriber alert language preferences, if any.
(e)Extraction of alert content in English or the subscriber's preferred language, if applicable.
(f)Presentation of alert content to the device, consistent with subscriber opt-out selections. Presidential Alerts must always be presented.
(g)Detection and suppression of presentation of duplicate alerts. § 10.510 Call Preemption Prohibition. Devices marketed for public use under part 10 must not enable an Alert Message to preempt an active voice or data session. § 10.520 Common Audio Attention Signal. A Participating CMS Provider and equipment manufacturers may only market devices for public use under part 10 that include an audio attention signal that meets the requirements of this section.
(a)The audio attention signal must have a temporal pattern of one long tone of two
(2)seconds, followed by two short tones of one
(1)second each, with a half (0.5) second interval between each tone. The entire sequence must be repeated twice with a half (0.5) second interval between each repetition.
(b)For devices that have polyphonic capabilities, the audio attention signal must consist of the fundamental frequencies of 853 Hz and 960 Hz transmitted simultaneously.
(c)For devices with only a monophonic capability, the audio attention signal must be 960 Hz.
(d)The audio attention signal must be restricted to use for Alert Messages under part 10.
(e)A device may include the capability to mute the audio attention signal. § 10.530 Common Vibration Cadence. A Participating CMS Provider and equipment manufacturers may only market devices for public use under part 10 that include a vibration cadence capability that meets the requirements of this section.
(a)The vibration cadence must have a temporal pattern of one long vibration of two
(2)seconds, followed by two short vibrations of one
(1)second each, with a half (0.5) second interval between each vibration. The entire sequence must be repeated twice with a half (0.5) second interval between each repetition.
(b)The vibration cadence must be restricted to use for Alert Messages under part 10.
(c)A device may include the capability to mute the vibration cadence. § 10.540 Attestation Requirement [Reserved] [FR Doc. E8-16853 Filed 7-23-08; 8:45 am] BILLING CODE 6712-01-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 80 [FWS-R9-WSR-2008-0035; 91400-5110-0000-7B] RIN 1018-AV99 Financial Assistance: Wildlife Restoration, Sport Fish Restoration, Hunter Education and Safety AGENCY: Fish and Wildlife Service, Interior. ACTION: Final rule. SUMMARY: We, the U.S. Fish and Wildlife Service, are revising certain provisions of the regulations governing the Wildlife Restoration, Sport Fish Restoration, and Hunter Education and Safety financial assistance programs. These revisions:
(a)Address changes in law and regulation;
(b)clarify rules on license certification to address a greater number of licensing choices that States have offered hunters and anglers;
(c)delete provisions on audits and records that are addressed in other regulations broadly applicable to financial assistance programs managed by the Department of the Interior; and
(d)reword the regulations to make them easier to understand. The revisions will improve the regulations by making them more current and clear. DATES: This rule is effective August 25, 2008. FOR FURTHER INFORMATION CONTACT: Joyce Johnson, Wildlife and Sport Fish Restoration Program, Division of Policy and Programs, U.S. Fish and Wildlife Service, 703-358-2156. SUPPLEMENTARY INFORMATION: Background The U.S. Department of the Interior's Fish and Wildlife Service (Service) manages 40 financial assistance programs, 14 of which are managed, in whole or in part, by the Service's Wildlife and Sport Fish Restoration Program. This final rule will revise title 50, part 80, of the Code of Federal Regulations (CFR), which contains the regulations that govern three programs: Wildlife Restoration, Sport Fish Restoration, and Hunter Education and Safety. These programs provide financial assistance to the fish and wildlife agencies of States and other eligible jurisdictions to manage fish and wildlife and provide hunter education and safety programs. The Catalog of Federal Domestic Assistance at *http://www.cfda.gov* describes these programs under 15.611, 15.605, and 15.626. The Federal Aid in Wildlife Restoration Act of September 2, 1937, and the Federal Aid in Sport Fish Restoration Act of August 9, 1950, as amended, established the programs affected by this rule. These Acts are more commonly known as the Pittman-Robertson Wildlife Restoration Act (50 Stat. 917; 16 U.S.C. 669-669k) and the Dingell-Johnson Sport Fish Restoration Act (64 Stat. 430; 16 U.S.C. 777-777n). They established a user-pay and user-benefit system in which the fish and wildlife agencies of the States, Commonwealths, and territories receive formula-based funding from a continuing appropriation. The District of Columbia also receives such funding, but only for managing fish resources. Industry partners pay taxes on equipment and gear purchased by hunters, anglers, boaters, archers, and recreational shooters. Taxes on fuel for motor boats and small engines are also a source of revenue. The Service then distributes these funds to the fish and wildlife agencies of States and other eligible jurisdictions. States must match these Federal funds by providing at least a 25-percent cost share. In fiscal year 2008, the States and other eligible jurisdictions received $310 million through the Wildlife Restoration and Hunter Education and Safety programs and $398 million through the Sport Fish Restoration program. The Service revised two sections of 50 CFR 80 in 2001, but we have not reviewed other sections for revision since the 1980's. Consequently, some provisions do not reflect:
(a)43 CFR 12, subpart C “Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments”;
(b)The Transportation Equity Act for the 21st Century
(1998)(Pub. L. [P.L.] 105-178);
(c)The Wildlife and Sport Fish Restoration Programs Improvement Act of 2000 (Pub. L. 106-408);
(d)The Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users
(2005)(Pub. L. 109-59); and
(e)The Presidential memorandum of June 1, 1998, that required the use of plain language in Government writing. In addition, we must clarify 50 CFR 80.10 on certification of hunting and fishing licenses to address the greater number of licensing choices that some States and other jurisdictions have offered hunters and anglers in recent years. On May 5, 2008, we published a proposed rule (73 FR 24524) to revise the regulations governing 50 CFR 80. We accepted public comments that we received or were postmarked during a 30-day period that ended on June 4, 2008. This final rule adopts the changes we proposed on May 5, 2008, with additional changes described below. Updates of the Regulations We are making nonsubstantive administrative changes in 50 CFR 80 to ensure that its provisions reflect changes in law and regulation over the past 20 years. An important change was the Wildlife and Sport Fish Restoration Programs Improvement Act of 2000, which amended the legal authorities that established the affected programs. We are updating the U.S. Code citations in 50 CFR 80.1 for the Pittman-Robertson Wildlife Restoration Act and Dingell-Johnson Sport Fish Restoration Act to reflect this amendment. The 2000 amendment also allows us to refer to the Federal Aid in Wildlife Restoration Act of September 2, 1937, and the Federal Aid in Sport Fish Restoration Act of August 9, 1950, by their more common names, “Pittman-Robertson Wildlife Restoration Act” and “Dingell-Johnson Sport Fish Restoration Act.” We are changing the collective name of all activities associated with the affected financial assistance programs from “Federal Aid” to “Wildlife and Sport Fish Restoration Programs,” which is consistent with the 2000 amendment. We are deleting the definition and references to the Federal Aid Manual in § 80.1 and § 80.11 because it is no longer an official publication, and its successor document, the Service Manual, addresses Service employees and not the general public. We are also replacing the reference in § 80.14 to Office of Management and Budget
(OMB)Circular A-102's Attachment N with 43 CFR 12.71 and 12.932 as sources of guidance on the use and disposition of unneeded real property. We are changing “aquatic education” to “aquatic resource education” in § 80.15 to reflect more accurately the language of the Dingell-Johnson Sport Fish Restoration Act. The provisions of § 80.19 on records and § 80.22 on audits refer to subject matter that was in the 1971 version of A-102. We are deleting all the contents of these sections because 43 CFR 12.82 and 12.66 are applicable to the affected programs and they address these subjects adequately. We are deleting the estimates of time to fill out forms in § 80.27. This information will change over time and is not appropriate for regulations. We have applied plain language principles to those provisions where we have to change or clarify the content of the regulations. This conversion to plain language makes the affected provisions clearer as well as complies with the Service's plain language policy. More specifically, we are replacing words that are susceptible to different meanings with words that are more precise, e.g., we are changing “shall” to “must.” We refer to the territories, Commonwealths, and the District of Columbia in a consistent way throughout 50 CFR 80. Finally, we are alphabetizing the definitions in § 80.1 for ease of reference. Clarifying the Requirements We are adding the territory of American Samoa to the jurisdictions in § 80.2(b) that are eligible to participate in the benefits of the Pittman-Robertson Wildlife Restoration Act. This is consistent with section 4(c) and 8A of the Act. We are making administrative changes in § 80.10 to ensure that the process for certifying the number of hunter and angler licenses provides accurate data that are comparable among the States (“States” includes Commonwealths, territories, and the District of Columbia in the context of license certification.). This change is important because we apportion funds to the States based in part on the numbers of these licenses. We are clarifying this process because, as States offered more licensing options, they began to use different approaches in counting the individuals who purchased licenses. We are making several changes to resolve these differences. We are clarifying the timeframe during which a State's license year must occur for the State to use it as the State-specified license certification period. We are establishing a common approach for States to assign single-year license holders to a license year. Under this approach, States will assign single-year license holders only to the period in which they purchased the license instead of having the option of assigning them to the period in which their licenses are legal. Finally, we are clarifying that, under certain conditions, States may assign a person who purchases a multiyear license to each license period in which the license is legal. We are revising § 80.12 to add the District of Columbia to the three territories and two Commonwealths subject to the cost-sharing requirements of that section. This revision will make § 80.12 consistent with section 12 of the Dingell-Johnson Sport Fish Restoration Act, which authorizes the Secretary of the Interior to cooperate with the six jurisdictions on fish restoration and management projects under terms and conditions that the Secretary finds fair, just, and equitable. The Act also states that the Secretary may not require these jurisdictions to pay an amount that exceeds 25 percent of any project. The current version of § 80.12 authorizes Regional Directors to waive non-Federal cost sharing at their discretion for the jurisdictions listed in the section. The final rule continues to provide Regional Directors with discretionary waiver authority. We are revising § 80.24 to make it consistent with the following provisions of the Dingell-Johnson Sport Fish Restoration Act:
(a)A State must allocate 15 percent of each annual apportionment for recreational boating access facilities;
(b)a State may allocate more or less than 15 percent in a fiscal year provided that the total regional allocation averages 15 percent over a 5-year period;
(c)any portion of a State's 15-percent set aside for recreational boating access that remains unexpended or unobligated after 5 years must revert to the Service for apportionment among the States. To ensure that the total regional allocation averages 15 percent, we are requiring that a State obtain the approval of the Service's Regional Director to allocate more or less than 15 percent of each annual apportionment under the Dingell-Johnson Sport Fish Restoration Act. We changed § 80.8 to indicate that the 5-year obligation period for recreational boating access funds is an exception to the general rule of 2 years for the obligation or expenditure of funds. Response to Public Comments We published the proposed rule in the May 5, 2008, **Federal Register** (73 FR 24524) and invited public comments. We reviewed and considered all comments that were delivered to the Service's Division of Policy and Directives Management from May 5 to June 4, 2008, and all comments that were entered on *http://www.regulations.gov* or postmarked during that period. We received 29 comments from 27 State agencies, 2 comments from nonprofit organizations, and 3 comments from individuals. Most commenters addressed several issues, many of which were also addressed by other commenters. We classified these issues and the general expressions of support or nonsupport into 29 comments that follow the order of the subject matter of 50 CFR 80. General *Comment 1:* Three commenters expressed unqualified support for the proposed rule or major elements of it. They did not suggest any additions, deletions, or modifications. *Response 1:* We did not change the proposed rule as a result of these comments. *Comment 2:* Two commenters recommended that we withdraw the proposed rule to allow further consultations with State fish and wildlife agencies. Both listed specific provisions that they opposed. *Response 2:* We did not accept the recommendation that we withdraw the proposed rule. We are responding to an urgent need to clarify how States can count individuals who purchased licenses under options that have become available in recent years. We are also updating 50 CFR 80 to reflect changes in law, regulatory format, and style. We addressed the commenters' specific issues in our responses below, and we accepted some of their recommendations on changing the proposed rule. *Comment 3:* A commenter recommended that most funding for these programs should go to the State agencies that achieve the highest quality of hunter education and safety training. *Response 3:* The Pittman-Robertson Wildlife Restoration Act and Dingell-Johnson Sport Fish Restoration Act provide formulas for apportioning funds among the States. The commenter's recommendation is not an option under these formulas. We did not change the proposed rule as a result of this comment. Section 80.1 Definitions *Comment 4:* A commenter recommended that we delete the definition of “resident hunter” from proposed § 80.1 because the term does not occur in 50 CFR 80. *Response 4:* We changed the proposed rule to delete “resident hunter” from § 80.1. Section 80.2 Eligibility *Comment 5:* Several commenters recommended that we add programs on outreach and communications and aquatic resource education to § 80.5 on eligible undertakings. *Response 5:* The Dingell-Johnson Sport Fish Restoration Act clearly authorizes these programs, and § 80.5 is not in conflict with the law as stated. Therefore, we will defer consideration of this issue to a future rulemaking process so that we can invite the public to review the proposed language and provide comments. Section 80.10 State Certification of Licenses *Comment 6:* Several commenters recommended that we replace the word “accounting period” in § 80.10(a)(1) with “license certification period” or “enumeration period.” One commenter recommended that we strike “12-month” between “State-specified” and “period” in several places in § 80.10(b). *Response 6:* We replaced “accounting period” with “license certification period” in § 80.10(a)(1). We also replaced “State-specified period” in § 80.10(a)(2) (redesignated as § 80.10(a)(3) by Response 9) and “State-specified 12-month period” in § 80.10(b) with “State-specified license certification period.” *Comment 7:* A commenter recommended that we change § 80.10(a)(1)(ii) from “corresponds with or includes the State's fiscal year or license year” to “must be the State's fiscal year or license year.” *Response 7:* We changed the rule so that § 80.10(a)(1)(ii) now reads, “is either the State's fiscal year or license year,” which closely follows the language of the Pittman-Robertson Wildlife Restoration Act and Dingell-Johnson Sport Fish Restoration Act. *Comment 8:* A commenter stated that the certification period is too complicated, and recommended that we request data for the most recently completed license year (as defined by the State, but not to exceed 1 year) when the Service annually requests certified license numbers. *Response 8:* Our ability to provide a less complicated license certification period is limited by the apportionment formulas in the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson Sport Fish Restoration Act. These formulas require that we use the number of paid license holders of each State “in the second fiscal year preceding the fiscal year for which such apportionment is made, as certified to said Secretary by the State fish and game departments. * * * ” The Acts clarify that the license certification period must be 12 consecutive months and “shall be a State's fiscal or license year.” We did not change the proposed rule as a result of this comment. *Comment 9:* A commenter expressed support for proposed § 80.10(a)(1), which requires that each director of a State fish and wildlife agency specify a 12-month license certification period. Another commenter stated that States should select the 12-month license certification period and it should be consistent from year to year. Another commenter recommended that the Service approve changes in the license certification period. Another commenter recommended that States notify the Service before any change in the license certification period and provide justification. *Response 9:* The proposed rule provides that each director of a State fish and wildlife agency specify an accounting period within the timeframe provided by the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson Sport Fish Restoration Act. We redesignated proposed § 80.10(a)(1)(iii) as § 80.10(a)(1)(iv) and added a new § 80.10(a)(1)(iii) that reads, “Is consistent from year to year; and.” We also redesignated proposed § 80.10(a)(2) as § 80.10(a)(3) and added a new § 80.10(a)(2) that states, “Obtain the Director's approval before changing the State-specified license certification period; and”. *Comment 10:* Nine commenters recommended that we allow the use of the most recent calendar year as the license certification year. *Response 10:* We analyzed the wording necessary to implement the suggestion. Our review indicated that some State license certification periods are such that these States would not have sufficient time to obtain the license data, analyze it, and certify their numbers to the Director. Therefore, we did not make any changes in the proposed rule as a result of these comments. *Comment 11:* Eight commenters recommended that we replace the term “purchased licenses” with “paid licenses” to conform to the term used in the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson Sport Fish Restoration Act. *Response 11:* We accepted the recommendation and replaced “purchased licenses” with “paid licenses” in § 80.10(a) and
(b)of the proposed rule. *Comment 12:* Several commenters stated that the proposed timeframe for the license certification period and the transition from “year-valid” licenses to “year-sold” licenses will:
(a)Cause inconsistencies with past reporting;
(b)require the re-use of data during the transition year; or
(c)significantly affect the certified numbers of license holders in the transition year. *Response 12:* The commenters' assessments may apply to some States and are the unavoidable results of making this transition to uniform certification standards. Their comments substantiated the need to bring a consistent timeframe to this process. We did not change the proposed rule as a result of these comments. *Comment 13:* A commenter recommended that we rewrite § 80.10(a)(2) believing that it is awkward and inconsistent with § 80.10(b)(3). Another commenter stated that § 80.10(a)(2)'s reference to “The number of people in that State * * * ” may unintentionally exclude nonresident license holders. *Response 13:* We accepted the recommendations and changed the proposed rule by rewriting § 80.10(a)(2)(i) and
(ii)(redesignated as § 80.10(a)(3)(i) and
(ii)by Response 9) as follows: “(i) The number of persons who hold paid licenses that authorize an individual to hunt in the State during the State-specified license certification period; and
(ii)The number of persons who hold paid licenses that authorize an individual to fish in the State during the State-specified license certification period.” *Comment 14:* Several commenters recommended that we change § 80.10(b)(1) to indicate that a State may count
(a)trapping licenses that also permit licensees to hunt furbearers and
(b)commercial fishing licenses that also permit recreational fishing. *Response 14:* We accepted the recommendation. We changed the proposed rule by changing the second sentence of § 80.10(b)(1) to: “The State may not count persons holding a license that allows the licensee only to trap animals or only to engage in commercial activities.” *Comment 15:* Two commenters specifically supported the proposed requirement that States count only those persons who possess a license that produced net revenue, which is an amount of at least $1 per year returned to the State fish and wildlife agency. Another commenter supported it for single-year licenses, but expressed concern about differences among the States in how they quantify annual net revenue for lifetime licenses. Another commenter recommended the removal of the $1 minimum net revenue requirement and recommended that States be allowed to count licenses that produce any net revenue. *Response 15:* Although the amount of net revenue would vary from State to State, we settled on $1 as a reasonable, consistent benchmark amount to determine that net revenue accrues to a State. We did not change the proposed rule as a result of these comments. *Comment 16:* Four commenters recommended changes in § 80.10(b)(2). Two of the four recommended that we not require that a license produce net revenue to be returned to the State fish and wildlife agency because this would allow a State to buy licenses to enhance the fish and wildlife agency's apportionment. One stated that this could have unforeseen consequences, and the other stated that allowing the State to buy licenses was against Federal law. Two other commenters recommended that we clarify § 80.10(b)(2), and one recommended specific language indicating that the States may deduct average direct sales costs to arrive at a net revenue amount but may not deduct indirect sales costs. *Response 16:* We accepted the first two commenters' recommendation and deleted the words “fish and wildlife agency” from proposed § 80.10(b)(2). We did not accept the specific language offered by one commenter on average direct sales costs and indirect sales costs. However, we replaced the language of proposed § 80.10(b)(2) with: “The State may count only those persons who possess a license that produced net revenue of at least $1 per year returned to the State after deducting costs directly associated with issuance of the license. Examples of such costs are agents' or sellers' fees and the cost of printing, distribution, and control.” We also changed “people” to “persons” wherever it occurs in § 80.10(b) for purposes of consistent usage. *Comment 17:* A commenter recommended that we clarify the proposed rule to ensure that hunters and anglers who have free licenses, but also have revenue-generating game tags, bird stamps, or fish tags/harvest cards will count as persons possessing paid licenses for license certification. *Response 17:* We will request a Solicitor's interpretation on this State-specific issue and distribute it to the affected States. We did not change the proposed rule as a result of this comment. *Comment 18:* Three commenters disagreed with or had concerns about proposed § 80.10(b)(3). This provision would allow State fish and wildlife agencies to count only those persons possessing a single-year license in the license certification year in which it was purchased. One of the three commenters stated that the proposed rule goes beyond the law on this point because the Pittman-Robertson Wildlife Restoration Act and Dingell-Johnson Sport Fish Restoration Act refer to “paid license holders,” but do not refer to *when* the license holders purchased their licenses. This commenter also stated that the proposed rule was arbitrary by applying one set of conditions to persons possessing licenses valid for less than 2 years and a different set of conditions to persons possessing licenses valid for more than 2 years. One of the three commenters stated that reporting license sales in the year sold would require a separate tracking process. Two other commenters stated that this proposed requirement would not allow States to count licensees who renew their licenses immediately before expiration. Finally, two other commenters specifically supported the proposed requirement that States count only those persons possessing a single-year license in the license certification year in which it was purchased. *Response 18:* We do not believe that proposed § 80.10(b)(3) is inconsistent with the language of the Pittman-Robertson Wildlife Restoration Act and Dingell-Johnson Sport Fish Restoration Act. This effort to reduce inconsistencies among the States may affect some States more than others during the transition period. However, we do not believe that any losses that may result from this final rule will be significant. We did not change the proposed rule as a result of these comments. *Comment 19:* Three commenters supported the proposed requirement in § 80.10(b)(4) to count only those persons who possess multiyear licenses and who would otherwise be required to have a license. Another commenter supported the proposed requirement, but only if the license revenues from persons not counted as certified license holders are protected by § 80.4 on diversion of license fees. Twelve commenters did not agree with the proposed requirement. Two of the 12 stated that by counting only those persons who possess multiyear licenses and who would otherwise be required to have a license, we would negatively affect efforts to get seniors and young people to buy licenses to support wildlife conservation. One of the 12 commenters stated that the proposed requirement would cause many hunters and anglers to be excluded from the certified number of license holders. This would result in a loss of funds for the agency. The same commenter also stated that trying to determine if a multiyear license holder would otherwise be required to have a license would be a burdensome new compliance cost. Several commenters recommended that we remove “anywhere” from § 80.10(b)(4)(i-iii). Most expressed concern about the implications of the use of “anywhere” for counting fishing licenses specific to freshwater or saltwater. Finally, several commenters recommended that we clarify the meaning of “commensurate” in § 80.10(b)(4)(ii) on multiyear licenses. *Response 19:* In response to the expressed concerns, we removed the requirement that a multiyear licensee would otherwise be required to have a paid license to hunt or fish anywhere in the State. We also replaced “commensurate” in proposed § 80.10(b)(4)(ii) with “in close approximation.” To make the final rule reflect these changes, we deleted proposed § 80.10(b)(4)(i), redesignated proposed § 80.10(b)(4)(ii) as § 80.10(b)(4)(i), and redesignated proposed § 80.10(b)(4)(iii) as § 80.10(b)(4)(ii). We changed the redesignated § 80.10(b)(4)(i) to read, “The net revenue from the license is in close approximation with the number of years in which the license is legal.” We changed “valid” to “legal” in § 80.10(b)(3) for purposes of consistency with the change in the redesignated § 80.10(b)(4)(i). For the same reason, we changed the introductory statement of § 80.10(b)(4) to read, “The State may count persons possessing a multiyear license (one that is legal for 2 years or more) in each State-specified license certification period in which the license is legal whether it is legal for a specific or indeterminate number of years.” Finally, we changed the redesignated § 80.10(b)(4)(ii) to read, “The State fish and wildlife agency uses statistical sampling or other techniques approved by the Director to determine whether the licensee remains a license holder.” (See Response 20 on the use of “other techniques approved by the Director.”) *Comment 20:* Several commenters said that the “statistical sampling or other appropriate techniques” required in § 80.10(b)(4)(iii) (redesignated as § 80.10(b)(4)(ii) by Response 19) and § 80.10(c) is either unnecessary, too expensive, or vague. One commenter recommended the use of life expectancy tables. Another recommended that a joint Federal/State committee be charged with developing a fair and simple technique for determining license status that would include clarifying or replacing “statistical sampling or other appropriate techniques.” *Response 20:* We do not agree that statistically valid samples are unnecessary or too expensive. We agree that “other appropriate techniques” may be too vague. We replaced “other appropriate techniques” in proposed § 80.10(b)(4)(iii) (redesignated as § 80.10(b)(4)(ii) by Response 19) and proposed § 80.10(c) with “other techniques approved by the Director.” Under this change, States may seek the Director's approval for the use of life expectancy tables. *Comment 21:* A commenter expressed support for § 80.10(b)(5) on combination licenses. Another commenter recommended that we count a combination license to fish or hunt only if the State provides an option to purchase a less-expensive license to hunt or fish. If a separate less-expensive license is not available, a State would, by design, force persons who might not hunt or fish to be counted as hunters or anglers, in effect giving this privilege free to those who might not want or need it. If there is not an option to purchase a less-expensive separate hunting or fishing license, the State would have to use a survey or other means to determine what proportion bought the license to fish and what proportion bought the license to hunt. *Response 21:* We reviewed the hunting, fishing, and combination license fees for several States. Based on that review, we have not seen any indication that a State is using combination licenses to increase the numbers of hunters or anglers for license certification purposes. Until we determine that this practice is occurring, we will not address this issue through regulation. We did not change the proposed rule as a result of this comment. *Comment 22:* A commenter recommended that we add language to ensure that the Service remains the lead in initiating the certification process. *Response 22:* We deleted proposed § 80.10(d) and changed § 80.10(c) to the following: “The director of the State fish and wildlife agency must provide the certified information required in paragraphs
(a)and
(b)of this section to the Service by the date and in the format that the Director specifies. If the Director requests it, the director of the State fish and wildlife agency must provide documentation to support the accuracy of this information. The director of the State fish and wildlife agency is responsible for eliminating multiple counting of single individuals in the information that he or she certifies and may use statistical sampling or other techniques approved by the Director for this purpose.” The above change required the redesignation of proposed § 80.10(e) as § 80.10(d). *Comment 23:* A commenter recommended that the Service adjust the certified information on persons holding hunting and fishing licenses if the Service made an error. *Response 23:* We accepted the recommendation and added this sentence to the redesignated § 80.10(d): “However, the Director may correct an error made by the Service.” Section 80.14 Application of Wildlife and Sport Fish Restoration Program Funds *Comment 24:* A commenter recommended that we revise the first sentence in proposed § 80.14(b)(1) so that it would read: “When such property passes from management control of the State fish and wildlife agency, the control must be fully restored to the State fish and wildlife agency or the real property must be replaced using non-Federal funds not derived from license revenues.” *Response 24:* We changed the proposed rule as recommended. *Comment 25:* A commenter asked that we change the proposed rule to add language referenced in a 2002 Director's memorandum on revenues generated by timber sales on lands acquired under financial assistance awards in the Wildlife Restoration and Sport Fish Restoration programs. *Response 25:* The proposed rule did not address this issue. We will defer it to a future rulemaking process so that we can invite the public to review the proposed language and provide comments. Section 80.15 Allowable Costs *Comment 26:* A commenter stated that the question-and-answer format of § 80.15 on allowable costs is inconsistent with other sections of 50 CFR 80. *Response 26:* The proposed rule did not address this issue. We will defer consideration of a format change to a future rulemaking process so that we can invite the public to review the proposed changes and provide comments. Section 80.24 Recreational Boating Access Facilities *Comment 27:* Eight commenters recommended that we add to § 80.24, “The State may fund access facilities for nonmotorized boats where use of power boats is restricted or sites for power boats are not available.” Another commenter indicated that the proposed rule had moved away from the language and intent of the Dingell-Johnson Sport Fish Restoration Act by limiting funding to power boats. Another commenter stated that we should allow funding for non-motor boats and replace the last sentence of § 80.24 with, “Any portion of the 15-percent set aside for the above purposes that remains unexpended or unobligated after 2 years be allowed for the State to obligate for nonmotorized projects that support recreational sport fishing.” Another commenter recommended that we rewrite § 80.24 to reflect the requirements of the Act and how these requirements are administered by the Service and the States. This same commenter recommended that a new version of § 80.24 be reviewed again through public comment before being finalized. Another commenter recommended that we address only the time-sensitive and noncontroversial issues, such as State certification of licenses, and withdraw § 80.24 and § 80.28. The commenter recommended that we refer these issues to the Joint Federal/State Task Force on Federal Assistance Policy for further review. *Response 27:* The language on power boats has been in 50 CFR 80 since 1985. We will defer consideration of any changes in the recreational and power boating language to a future rulemaking process. This will allow us to consult with others on the proposed language and invite the public to review the proposed language and provide comments. *Comment 28:* One commenter stated that the first sentence of § 80.24 in the proposed rule is incorrect. It reads, “The State must allocate at least 15 percent of each annual apportionment under the annual apportionment under the Dingell-Johnson Sport Fish Restoration Act for recreational boating access facilities.” The commenter suggested that we change the proposed rule to make it consistent with the following language of section 8(b)(1) of the Dingell-Johnson Sport Fish Restoration Act, “States within a United States Fish and Wildlife Service Administrative Region may allocate more or less than 15 percent in a fiscal year, provided that the total regional allocation averages 15 percent over a 5-year period.” Nine commenters also pointed out that the last sentence of proposed § 80.24 should specify 5 years instead of 2 years to be consistent with the Dingell-Johnson Sport Fish Restoration Act. *Response 28:* In response to the comments, we added the following sentence immediately after the first sentence of proposed § 80.24, “However, a State may allocate more or less than 15 percent of its annual allocation with the approval of the Service's Regional Director.” We replaced the last sentence of proposed § 80.24 with the following: “Any portion of a State's 15-percent set aside for the above purposes that remains unexpended or unobligated after 5 years must revert to the Service for apportionment among the States.” We also added “except as provided in § 80.24” to the end of the first sentence in § 80.8, which will now read, “Funds are available for obligation or expenditure during the fiscal year for which they are apportioned and until the close of the succeeding fiscal year except as provided in § 80.24.” Finally, we changed the second sentence of § 80.8 to read, “For the purposes of this section, funds become available when the Regional Director approves the grant.” We made this change because the wording of that sentence in the current regulations does not adequately describe when obligation occurs, and the term “project agreement” is not a standard term. Section 80.28 Exceptions *Comment 29:* Eleven commenters recommended that we withdraw proposed § 80.28, which would allow the Director to authorize exceptions to any provisions of 50 CFR 80 that are not explicitly required by law. Two commenters recommended that we withdraw § 80.28 to allow for further discussion. Five commenters recommended that we modify the exception authority with one or more of the following:
(a)Add specific qualifiers;
(b)limit and specify circumstances in which the Director can make exceptions;
(c)include standards and triggering events that would establish parameters for exercising this authority;
(d)indicate which provisions of 50 CFR 80 that the Director's exception authority would apply to and which are required by law; and
(e)include the process and criteria to be followed for making exceptions including feedback from the States and the process for notifying States of exceptions. Three commenters expressed unqualified support for proposed § 80.28. *Response 29:* We deleted proposed § 80.28 in response to the expressed concerns. Changes of the Proposed Rule We are making 25 changes in this final rule as a result of the public comments that we summarized in the preceding section: 1. Delete “(U.S. Fish and Wildlife Service)” from the definition of “ *Director* .” and replace it with “Service.” in § 80.1. 2. Delete “ *Resident hunter.* One who hunts within the same State where legal residence is maintained.” in § 80.1. (Response 4) 3. Add “ *Service.* The U.S. Fish and Wildlife Service.” to § 80.1. 4. Change § 80.8 to read “Funds are available for obligation or expenditure during the fiscal year for which they are apportioned and until the close of the succeeding fiscal year except as provided in § 80.24. For the purposes of this section, funds become available when the Regional Director approves the grant.” (Response 28) 5. Change the section heading of § 80.10 from “State Certification of Licenses.” to “State certification of licenses.” 6. Replace “accounting period” with “license certification period” in § 80.10(a)(1). (Response 6) 7. Replace “State-specified period” in § 80.10(a)(2) (redesignated as § 80.10(a)(3) by Response 9) and “State specified 12-month period” in § 80.10(b) with “State-specified license certification period.” (Response 6) 8. Change § 80.10(a)(1)(ii) from “corresponds with or includes the State's fiscal year or license year” to “Is either the State's fiscal year or license year.” (Response 7) 9. Delete “and” at the end of § 80.10(a)(1)(ii); redesignate § 80.10(a)(1)(iii) as § 80.10(a)(1)(iv); and add a new § 80.10(a)(1)(iii) that reads, “Is consistent from year to year; and”. (Response 9) 10. Delete “and” at the end of the redesignated § 80.10(a)(1)(iv); redesignate § 80.10(a)(2) as § 80.10(a)(3); and add a new § 80.10(a)(2) that reads, “Obtain the Director's approval before changing the State-specified license certification period; and”. (Response 9) 11. Replace “purchased licenses” with “paid licenses” in § 80.10(a) and (b). (Response 11) 12. Change redesignated § 80.10(a)(3)(i) and
(ii)to: “(i) The number of persons who hold paid licenses that authorize an individual to hunt in the State during the State-specified license certification period; and
(ii)The number of persons who hold paid licenses that authorize an individual to fish in the State during the State-certified license certification period.” (Response 13) 13. Change “people” to “persons” in the introductory statement of § 80.10(b) and in § 80.10(b)(5).” (Response 16) 14. Change the second sentence of § 80.10(b)(1) to: “The State may not count persons holding a license that allows the licensee only to trap animals or only to engage in commercial activities.” (Response 14) 15. Delete the words “fish and wildlife agency” from § 80.10(b)(2). (Response 16) 16. Replace § 80.10(b)(2) with: “The State may count only those persons who possess a license that produced net revenue of at least $1 per year returned to the State after deducting costs directly associated with issuance of the license. Examples of such costs are agents' or sellers' fees and the cost of printing, distribution, and control.” (Response 16) 17. Change “valid” to “legal” in § 80.10(b)(3). (Response 19) 18. Replace that part of the introductory sentence before the colon in § 80.10(b)(4) with, “The State may count persons possessing a multiyear license (one that is legal for 2 years or more) in each State-specified license certification period in which the license is legal whether it is legal for a specific or indeterminate number of years.” (Response 19) 19. Delete § 80.10(b)(4)(i). Redesignate § 80.10(b)(4)(ii) as § 80.10(b)(4)(i). Redesignate § 80.10(b)(4)(iii) as § 80.10(b)(4)(ii). Change redesignated § 80.10(b)(4)(i) to read, “The net revenue from the license is in close approximation with the number of years in which the license is legal; and”. Change redesignated § 80.10(b)(4)(ii) to read, “The State fish and wildlife agency uses statistical sampling or other techniques approved by the Director to determine whether the licensee remains a license holder.” (Response 19) 20. Delete proposed § 80.10(d) and change § 80.10(c) to the following: “The director of the State fish and wildlife agency must provide the certified information required in paragraphs
(a)and
(b)of this section to the Service by the date and in the format that the Director specifies. If the Director requests it, the director of the State fish and wildlife agency must provide documentation to support the accuracy of this information. The director of the State fish and wildlife agency is responsible for eliminating multiple counting of single individuals in the information that he or she certifies and may use statistical sampling or other techniques approved by the Director for this purpose.” Redesignate § 80.10(e) as § 80.10(d). (Responses 20 and 22) 21. Delete “State fish and wildlife” after “other than the” in redesignated § 80.10(d) and add this sentence to the end of § 80.10(d): “However, the Director may correct an error made by the Service.” (Response 23) 22. Add to the first sentence in § 80.14(b)(1) “not derived from license revenues.” (Response 24) 23. Add the following sentence immediately after the first sentence of proposed § 80.24, “However, a State may allocate more or less than 15 percent of its annual allocation with the approval of the Service's Regional Director.” (Response 28) 24. Replace the last sentence of § 80.24 with the following, “Any portion of a State's 15-percent set aside for the above purposes that remains unexpended or unobligated after 5 years must revert to the Service for apportionment among the States.” (Response 28) 25. Delete § 80.28, Exceptions. (Response 29) Required Determinations Regulatory Planning and Review (Executive Order 12866) OMB has determined that this rule is not a significant regulatory action under the criteria in Executive Order (E.O.) 12866. These criteria are:
(a)Whether the rule will have an annual effect of $100 million or more on the economy or adversely affect an economic sector, productivity, jobs, the environment, or other units of the government.
(b)Whether the rule will create inconsistencies with other Federal agencies' actions.
(c)Whether the rule will materially affect entitlements, grants, user fees, loan programs, or the rights and obligations of their recipients.
(d)Whether the rule raises novel legal or policy issues. Regulatory Flexibility Act Under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.,* as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 (Pub. L. 104-121)), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities, i.e., small businesses, small organizations, and small government jurisdictions. However, no regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. The SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide the statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities. We have examined this rule's potential effects on small entities as required by the Regulatory Flexibility Act and have determined that the rule will not have a significant economic impact on small entities because the changes we are making are intended to:
(a)Address changes in law and regulation;
(b)clarify rules on license certification to address a greater number of licensing choices that States and other jurisdictions have offered hunters and anglers;
(c)delete provisions on audits and records that are addressed in other regulations; and
(d)reword the regulations to make them easier to understand. No costs are associated with this regulatory change. Consequently, we certify that, because this rule will not have a significant economic effect on a substantial number of small entities, a regulatory flexibility analysis is not required. This rule is not a major rule under SBREFA (5 U.S.C. 804(2)). It will not have a significant impact on a substantial number of small entities.
(a)This rule will not have an annual effect on the economy of $100 million or more.
(b)This rule will not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions.
(c)This rule will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Unfunded Mandates Reform Act In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 *et seq.* ), we have determined the following:
(a)This rule will not “significantly or uniquely” affect small governments. A small government agency plan is not required. The programs governed by the current regulations assist small governments financially, and this rule will simply improve these regulations.
(b)This rule will not produce a Federal mandate of $100 million or greater in any year, *i.e.* , it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. Takings (E.O. 12630) In accordance with E.O. 12630, this rule will not have significant takings implications because it does not contain a provision for taking private property. Therefore, a takings implication assessment is not required. Federalism (E.O. 13132) This rule will not have sufficient Federalism effects to warrant preparation of a Federalism assessment under E.O. 13132. It will not interfere with the States' ability to manage themselves or their funds. We work closely with the States in administration of these programs. The rule will benefit recipients in three grant programs by establishing a common approach and clarifying the rules applicable to grant recipients' legally required annual certification of the number of hunters and anglers who purchased licenses. Civil Justice Reform (E.O. 12988) In accordance with E.O. 12988, the Office of the Solicitor has determined that the rule will not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. The rule will also benefit grantees by eliminating unnecessary or outdated elements of the regulations governing the affected programs and by making the regulations easier to understand. Paperwork Reduction Act We examined the rule under the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). We may not collect or sponsor, nor is a person required to respond to, a collection of information unless it displays a currently valid OMB control number. The rule will clarify 50 CFR 80.10, which requires States to submit information on the number of persons holding hunting and fishing licenses. On January 25, 2007, OMB approved our collection of information from States based on the requirements of 50 CFR 80.10. OMB approved this information collection on forms FWS 3-154a and 3-154b under control number 1018-0007. The rule will not change the information items required on forms FWS 3-154a and 3-154b. It will only establish a common approach for States to assign license holders to a license year for purposes of the information collection. The rule will also remove outdated information in 50 CFR 80.27. National Environmental Policy Act We have analyzed this rule in accordance with the National Environmental Policy Act, 42 U.S.C. 432-437(f), and part 516 of the Departmental Manual. This rule does not constitute a major Federal action significantly affecting the quality of the human environment. An environmental impact statement/assessment is not required due to the categorical exclusion for administrative changes provided at 516 DM 2, Appendix 1, section 1.10. Government-to-Government Relationship With Tribes In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and 512 DM 2, we evaluated potential effects on federally recognized Indian Tribes and determined that there are no potential effects. This rule will not interfere with the Tribes' ability to manage themselves or their funds. Energy Supply, Distribution, or Use (E.O. 13211) On May 18, 2001, the President issued E.O. 13211 addressing regulations that significantly affect energy supply, distribution, and use. E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not a significant regulatory action under E.O. 12866, and will not significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required. List of Subjects in 50 CFR Part 80 Aquatic resource education, Boating access, Fish, Grant programs—natural resources, Hunter education and safety, License certification, Reporting and recordkeeping requirements, Signs and symbols, Wildlife. Final Regulation For the reasons stated in the preamble, we amend part 80 of subchapter F, chapter I, title 50 of the Code of Federal Regulations, as follows: Subchapter F—Financial Assistance—Wildlife and Sport Fish Restoration Program 1. Revise the heading of subchapter F to read as set forth above. PART 80—ADMINISTRATIVE REQUIREMENTS, PITTMAN-ROBERTSON WILDLIFE RESTORATION AND DINGELL-JOHNSON SPORT FISH RESTORATION ACTS 2. The authority citation for part 80 is revised to read as follows: Authority: 16 U.S.C. 777-777n; 16 U.S.C. 669-669k; 18 U.S.C. 701. 3. Revise the heading of part 80 to read as set forth above. 4. Revise § 80.1 to read as follows: § 80.1 Definitions. As used in this part, the following terms have these meanings: *Common horsepower.* Any size motor that can be reasonably accommodated on the body of water slated for development. *Comprehensive fish and wildlife management plan.* A document describing the State's plan for meeting the long-range needs of the public for fish and wildlife resources, and the system for managing the plan. *Director.* The Director of the Service, or his or her designated representative. The Director serves as the Secretary's representative in matters relating to the administration and execution of the Wildlife and Sport Fish Restoration Acts. *Project.* One or more related undertakings necessary to fulfill a need or needs, as defined by the State, and consistent with the purposes of the appropriate Act. *Regional Director.* The regional director of any region of the Service, or his or her designated representative. *Resident angler.* One who fishes within the same State where legal residence is maintained. *Secretary.* The Secretary of the Interior or his or her designated representative. *Service.* The U.S. Fish and Wildlife Service. *State.* Any State of the United States and the Commonwealths of Puerto Rico and the Northern Mariana Islands, the District of Columbia, and the territories of Guam, the U.S. Virgin Islands, and American Samoa. References to “the 50 States” pertain only to the 50 States of the United States and do not include these other six areas. *State fish and wildlife agency.* The agency or official of a State designated under State law or regulation to carry out the laws of the State in relation to the management of fish and wildlife resources of the State. Such an agency or official also designated to exercise collateral responsibilities, e.g., a State Department of Natural Resources, will be considered the State fish and wildlife agency only when exercising the responsibilities specific to the management of the fish and wildlife resources of the State. *Wildlife and Sport Fish Restoration Acts* or *the Acts.* Pittman-Robertson Wildlife Restoration Act of September 2, 1937, as amended (50 Stat. 917; 16 U.S.C. 669-669k), and the Dingell-Johnson Sport Fish Restoration Act of August 9, 1950, as amended (64 Stat. 430; 16 U.S.C. 777-777n). *Wildlife and Sport Fish Restoration Program Funds.* Funds provided under the Acts. 5. Amend § 80.2 by revising paragraphs
(a)and
(b)to read as follows: § 80.2 Eligibility.
(a)Dingell-Johnson Sport Fish Restoration—Any of the States as defined in § 80.1.
(b)Pittman-Robertson Wildlife Restoration—Any of the States as defined in § 80.1, except the District of Columbia. § 80.4 [Amended] 6. Amend paragraph (a)(4) of § 80.4 by removing the words “Federal Aid project” and adding in their place the word “Project”. § 80.5 [Amended] 7. Amend § 80.5 by: a. In paragraph (a), removing the words “Federal Aid in” and adding in their place the words “Pittman-Robertson”; and b. In paragraph (b), removing the words “Federal Aid in” and adding in their place the words “Dingell-Johnson”. 8. Revise § 80.8 to read as follows: § 80.8 Availability of funds. Funds are available for obligation or expenditure during the fiscal year for which they are apportioned and until the close of the succeeding fiscal year except as provided in § 80.24. For the purposes of this section, funds become available when the Regional Director approves the grant. § 80.9 [Amended] 9. Amend paragraph
(b)of § 80.9 by removing the words “Federal Aid” and adding in their place the words “Wildlife and Sport Fish Restoration Program”. 10. Revise § 80.10 including the section heading to read as follows: § 80.10 State certification of licenses.
(a)To ensure proper apportionment of Federal funds, the Service requires that each director of a State fish and wildlife agency:
(1)Specify a license certification period that:
(i)Is 12 consecutive months in length;
(ii)Is either the State's fiscal year or license year;
(iii)Is consistent from year to year; and
(iv)Ends no less than 1 year and no more than 2 years before the beginning of the Federal fiscal year that the apportioned funds first become available for expenditure;
(2)Obtain the Director's approval before changing the State-specified license certification period; and
(3)Annually provide to the Service the following data:
(i)The number of persons who hold paid licenses that authorize an individual to hunt in the State during the State-specified license certification period; and
(ii)The number of persons who hold paid licenses that authorize an individual to fish in the State during the State-specified license certification period.
(b)When counting persons holding paid hunting or fishing licenses in a State-specified license certification period, a State fish and wildlife agency must abide by the following requirements:
(1)The State may count all persons who possess a paid license that allows the licensee to hunt or fish for sport or recreation. The State may not count persons holding a license that allows the licensee only to trap animals or only to engage in commercial activities.
(2)The State may count only those persons who possess a license that produced net revenue of at least $1 per year returned to the State after deducting costs directly associated with issuance of the license. Examples of such costs are agents' or sellers' fees and the cost of printing, distribution, and control.
(3)The State may count persons possessing a single-year license (one that is legal for less than 2 years) only in the State-specified license certification period in which the license was purchased.
(4)The State may count persons possessing a multiyear license (one that is legal for 2 years or more) in each State-specified license certification period in which the license is legal, whether it is legal for a specific or indeterminate number of years, only if:
(i)The net revenue from the license is in close approximation with the number of years in which the license is legal, and
(ii)The State fish and wildlife agency uses statistical sampling or other techniques approved by the Director to determine whether the licensee remains a license holder.
(5)The State may count persons possessing a combination license (one that permits the licensee to both hunt and fish) with:
(i)The number of persons who hold paid hunting licenses in the State-specified license certification period, and
(ii)The number of persons who hold paid fishing licenses in the same State-specified license certification period.
(6)The State may count persons possessing multiple hunting or fishing licenses (in States that require or permit more than one license to hunt or more than one license to fish) only once with:
(i)The number of persons who hold paid hunting licenses in the State-specified license certification period, and
(ii)The number of persons who hold paid fishing licenses in the same State-specified license certification period.
(c)The director of the State fish and wildlife agency must provide the certified information required in paragraphs
(a)and
(b)of this section to the Service by the date and in the format that the Director specifies. If the Director requests it, the director of the State fish and wildlife agency must provide documentation to support the accuracy of this information. The director of the State fish and wildlife agency is responsible for eliminating multiple counting of single individuals in the information that he or she certifies and may use statistical sampling or other techniques approved by the Director for this purpose.
(d)Once the Director approves the certified information required in paragraphs
(a)and
(b)of this section, the Service must not adjust the numbers if such adjustment would adversely impact any apportionment of funds to a State fish and wildlife agency other than the agency whose certified numbers are being adjusted. However, the Director may correct an error made by the Service. 11. Revise § 80.11 to read as follows: § 80.11 Submission of proposals. A State may apply to use funds apportioned under the Acts by submitting to the Regional Director either a comprehensive fish and wildlife management plan or grant proposal.
(a)Each application must contain such information as the Regional Director may require to determine if the proposed activities are in accordance with the Acts and the provisions of this part.
(b)The State must submit each application and amendments of scope to the State Clearinghouse as required by Office of Management and Budget
(OMB)Circular A-95 and by State Clearinghouse requirements.
(c)Applications must be signed by the director of the State fish and wildlife agency or an official delegated to exercise the authority and responsibilities of the State director in committing the State to participate under the Acts. The director of each State fish and wildlife agency must notify the Regional Director, in writing, of the official(s) authorized to sign the Wildlife and Sport Fish Restoration Program documents, and any changes in such authorizations. 12. Amend § 80.12 by revising the introductory paragraph and paragraph
(b)as follows: § 80.12 Cost sharing. Federal participation is limited to 75 percent of eligible costs incurred in the completion of approved work or the Federal share specified in the grant, whichever is less, except that the non-Federal cost sharing for the Commonwealths of Puerto Rico and the Northern Mariana Islands, the District of Columbia, and the territories of Guam, the U.S. Virgin Islands, and American Samoa must not exceed 25 percent and may be waived at the discretion of the Regional Director.
(b)The non-Federal share of project costs may be in the form of cash or in-kind contributions. 13. Revise § 80.14 to read as follows: § 80.14 Application of Wildlife and Sport Fish Restoration Program funds.
(a)States must apply Wildlife and Sport Fish Restoration Program funds only to activities or purposes approved by the Regional Director. If otherwise applied, such funds must be replaced or the State becomes ineligible to participate.
(b)Real property acquired or constructed with Wildlife and Sport Fish Restoration Program funds must continue to serve the purpose for which acquired or constructed.
(1)When such property passes from management control of the State fish and wildlife agency, the control must be fully restored to the State fish and wildlife agency or the real property must be replaced using non-Federal funds not derived from license revenues. Replacement property must be of equal value at current market prices and with equal benefits as the original property. The State may have up to 3 years from the date of notification by the Regional Director to acquire replacement property before becoming ineligible.
(2)When such property is used for purposes that interfere with the accomplishment of approved purposes, the violating activities must cease and any adverse effects resulting must be remedied.
(3)When such property is no longer needed or useful for its original purpose, and with prior approval of the Regional Director, the property must be used or disposed of as provided by 43 CFR 12.71 or 43 CFR 12.932.
(c)Wildlife and Sport Fish Restoration Program funds cannot be used for the purpose of producing income. However, income-producing activities incidental to accomplishment of approved purposes are allowable. Income derived from such activities must be accounted for in the project records and disposed of as directed by the Director. 14. Amend § 80.15 by revising paragraphs (c), (d), and
(f)to read as follows: § 80.15 Allowable costs.
(c)*Are costs allowable if they are incurred prior to the date of the grant?* Costs incurred prior to the effective date of the grant are allowable only when specifically provided for in the grant.
(d)*How are costs allocated in multipurpose projects or facilities?* Projects or facilities designed to include purposes other than those eligible under either the Dingell-Johnson Sport Fish Restoration or Pittman-Robertson Wildlife Restoration Acts must provide for the allocation of costs among the various purposes. The method used to allocate costs must produce an equitable distribution of costs based on the relative uses or benefits provided.
(f)*How much money may be obligated for aquatic resource education and outreach and communications?*
(1)Each of the 50 States may spend no more than 15 percent of the annual amount apportioned to it under the provisions of the Dingell-Johnson Sport Fish Restoration Act for an aquatic resource education and outreach and communications program for the purpose of increasing public understanding of the Nation's water resources and associated aquatic life forms.
(2)The Commonwealths of Puerto Rico and the Northern Mariana Islands, the District of Columbia, and the territories of Guam, the U.S. Virgin Islands, and American Samoa are not limited to the 15-percent cap imposed on the 50 States. Each of these entities may spend more for these purposes with the approval of the appropriate Regional Director. § 80.16 Payments. 15. Amend § 80.16 by: a. Revising the section heading as set forth above; b. Removing the word “shall” wherever it appears and adding in its place the word “must”; and c. Removing the words “regional director” and “region director” wherever they appear and adding in their place the words “Regional Director”. 16. Revise § 80.17 to read as follows: § 80.17 Maintenance. The State is responsible for maintenance of all capital improvements acquired or constructed with Wildlife and Sport Fish Restoration Program funds throughout the useful life of each improvement. Costs for such maintenance are allowable when provided for in approved projects. The maintenance of improvements acquired or constructed with funds other than funds from the Wildlife and Sport Fish Restoration Program are allowable costs when such improvements are necessary for accomplishment of project purposes as approved by the Regional Director and when such costs are otherwise allowable by law. § 80.19 [Removed] 17. Remove and reserve § 80.19. § 80.20 [Amended] 18. Amend § 80.20 by removing the words “Federal Aid” and adding in their place the words “Wildlife and Sport Fish Restoration Program”. § 80.22 [Removed] 19. Remove and reserve § 80.22. 20. Amend § 80.23 by revising paragraphs
(a)introductory text and (a)(1) to read as follows: § 80.23 Allocation of funds between marine and freshwater fishery projects.
(a)Each coastal State, to the extent practicable, must equitably allocate those funds specified by the Secretary, in the apportionment of the Dingell-Johnson Sport Fish Restoration funds, between projects having recreational benefits for marine fisheries and projects having recreational benefits for freshwater fisheries.
(1)Coastal States are: Alabama, Alaska, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Oregon, Rhode Island, South Carolina, Texas, Virginia, and Washington; the territories of Guam, the U.S. Virgin Islands, and American Samoa; and the Commonwealths of Puerto Rico and the Northern Mariana Islands. 21. Revise § 80.24 to read as follows: § 80.24 Recreational boating access facilities. The State must allocate 15 percent of each annual apportionment under the Dingell-Johnson Sport Fish Restoration Act for recreational boating access facilities. However, a State may allocate more or less than 15 percent of its annual allocation with the approval of the Service's Regional Director. Although a broad range of access facilities and associated amenities can qualify for funding under the 15-percent provision, the State must accommodate power boats with common horsepower ratings, and must make reasonable efforts to accommodate boats with larger horsepower ratings if they would not conflict with aquatic resources management. Any portion of a State's 15-percent set aside for the above purposes that remain unexpended or unobligated after 5 years must revert to the Service for apportionment among the States. § 80.25 [Amended] 22. Amend § 80.25 by: a. In the section heading and paragraph (a), removing the words “Federal Aid in” and adding in their place the words “Dingell-Johnson”; and b. In paragraphs (a)(1) and (a)(2), removing the word “Aid”. 23. Amend § 80.26 by revising the text of the introductory paragraph and paragraphs (b),
(f)introductory text,
(g)introductory text, and
(h)introductory text to read as set forth below: § 80.26 Symbols. We have prescribed distinctive symbols to identify projects funded by the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson Sport Fish Restoration Act and items on which taxes and duties have been collected to support the respective Acts.
(b)Other persons or organizations may use the symbol(s) for purposes related to the Wildlife and Sport Fish Restoration Program as authorized by the Director. Authorization for the use of the symbol(s) will be by written agreement executed by the Service and the user. To obtain authorization, submit a written request stating the specific use and items to which the symbol(s) will be applied to Director, U.S. Fish and Wildlife Service, Washington, DC 20240.
(f)The symbol pertaining to the Pittman-Robertson Wildlife Restoration Act is below. * * *
(g)The symbol pertaining to the Dingell-Johnson Sport Fish Restoration Act is below. * * *
(h)The symbol pertaining to the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson Sport Fish Restoration Act when used in combination is below. * * * 24. Revise § 80.27 to read as follows: § 80.27 Information collection requirements.
(a)Information gathering requirements include filling out forms to apply for certain benefits offered by the Federal Government. Information gathered under this part is authorized under the Dingell-Johnson Sport Fish Restoration Act (16 U.S.C. 777-777n) and the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669-669k). The Service may not conduct or sponsor, and applicants or grantees are not required to respond to, a collection of information unless the request displays a currently valid OMB control number. OMB has approved our collection of information under OMB control number 1018-0007. Our requests for information will be used to apportion funds and to review and make decisions on grant applications and reimbursement payment requests submitted to the Wildlife and Sport Fish Restoration Program.
(b)Submit comments on the accuracy of the information collection requirements to: U.S. Fish and Wildlife Service, Information Collection Clearance Officer, 4401 North Fairfax Drive, Suite 222, Arlington, VA 22203. Dated: July 14, 2008. Lyle Laverty, Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. E8-16829 Filed 7-23-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 216 [Docket No. 080220219-8829-02] RIN 0648-AT77 Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to a U.S. Navy Shock Trial AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS, upon application from the U.S. Navy (Navy), issues regulations to govern the unintentional taking of marine mammals incidental to conducting a Full Ship Shock Trial
(FSST)of the USS MESA VERDE (LPD 19) in the waters of the Atlantic Ocean offshore of Mayport, FL. Authorization of incidental take is required by the Marine Mammal Protection Act
(MMPA)when the Secretary of Commerce (Secretary), after notice and opportunity for comment, finds, as here, that such takes will have a negligible impact on the affected species or stocks of marine mammals and will not have an unmitigable adverse impact on their availability for taking for subsistence uses. These regulations set forth the permissible methods of take and other means of effecting the least practicable adverse impact on the affected species or stocks of marine mammals and their habitat, as well as monitoring and reporting requirements. DATES: July 18, 2008 through July 18, 2013. ADDRESSES: A copy of the Navy's MMPA application, containing a list of references used in this document, NMFS’ Record of Decision (ROD), and other documents cited herein, may be obtained by writing to the Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910-3225, by telephoning the contact listed under FOR FURTHER INFORMATION CONTACT , or at: *http://www.nmfs.noaa.gov/pr/permits/incidental.htm* . A copy of the Navy's Final Environmental Impact Statement/Overseas Environmental Impact Statement (Final EIS/OEIS) can be downloaded at: *http://www.mesaverdeeis.com* . A copy of the Navy's documents cited in this final rule may also be viewed, by appointment, during regular business hours at the NMFS address provided here. FOR FURTHER INFORMATION CONTACT: Ken Hollingshead, Office of Protected Resources, NMFS,
(301)713-2289, ext. 128. SUPPLEMENTARY INFORMATION: Background Sections 101(a)(5)(A) and
(D)of the MMPA (16 U.S.C. 1361 *et seq.* ) direct the Secretary to allow, upon request, the incidental, but not intentional taking of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) if certain findings are made and regulations are issued or, if the taking is limited to harassment, notice of a proposed authorization is provided to the public for review. Authorization for incidental takings may be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), and will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant). NMFS must promulgate regulations setting forth the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such taking. NMFS has defined “negligible impact” in 50 CFR 216.103 as: “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” With respect to military readiness activities (MRAs), such as the FSST, the MMPA defines “harassment” as:
(i)Any act that injures or has the significant potential to injure a marine mammal or marine mammal stock in the wild [Level A Harassment]; or
(ii)any act that disturbs or is likely to disturb a marine mammal or marine mammal stock in the wild by causing disruption of natural behavioral patterns, including, but not limited to, migration, surfacing, nursing, breeding, feeding, or sheltering, to a point where such behavioral patterns are abandoned or significantly altered [Level B Harassment]. Summary of Request On June 25, 2007, NMFS received an application from the Navy requesting authorization for the taking of marine mammals incidental to its FSST during a 4-week period in the spring/summer of 2008 utilizing the USS MESA VERDE (LPD 19), a new amphibious transport dock ship. The shock trial of the USS MESA VERDE consists of up to four underwater detonations of a nominal 4,536 kilogram
(kg)(10,000 pound (lb)) charge at a rate of one detonation per week. The purpose of the proposed action is to generate data that the Navy would use to assess the survivability of SAN ANTONIO Class amphibious transport dock ships. According to the Navy, an entire manned ship must undergo an at-sea shock trial to obtain survivability data that are not obtainable through computer modeling and component testing on machines or surrogates. Navy ship design, crew training, and survivability lessons learned during previous shock trials, and total ship survivability trials, have proven their value by increasing a ship's ability to survive battle damage. Because marine mammals may be killed, injured or behaviorally harassed incidental to conducting the FSST, regulations and an authorization under section 101(a)(5)(A) of the MMPA are required. Background According to the Navy, each new class of surface ships must undergo realistic survivability testing to assess the survivability of the hull and the ship's systems, and to evaluate the ship's capability to protect the crew from an underwater explosion. The Navy has developed the shock trial to meet its obligation to perform realistic survivability testing. A shock trial consists of a series of underwater detonations that propagate a shock wave through the ship's hull under deliberate and controlled conditions. The effects of the shock wave on the ship's hull, equipment, and personnel safety features are then evaluated. This information is used by the Navy to validate or improve the survivability of the SAN ANTONIO Class, thereby reducing the risk of injury to the crew, and damage to or loss of a ship. The proposed shock trial qualifies as a military readiness activity as defined in Section 315(f) of Public Law 107-314 (16 U.S.C. 703 note). The USS MESA VERDE is the third ship in the new SAN ANTONIO (LPD 17) Class of nine planned amphibious transport dock ships being acquired by the Navy to meet Marine Air-Ground Task Force lift requirements. The ships of the SAN ANTONIO Class will be replacements for four classes of amphibious ships—two classes that have reached the end of their service life (LPD 4 and LSD 36) and two classes that have already been retired (LKA 113 and LST 1179)—replacing a total of 41 ships. These new LPDs are a means to support Marine Expeditionary Brigade
(MEB)amphibious lift requirements. The mission of the SAN ANTONIO Class will be to operate in various scenarios, as a member of a three-ship, forward-deployed Amphibious Ready Group with a Marine Expeditionary Unit; in a variety of Expeditionary Strike Group scenarios; or as a member of a 12-14 ship MEB. The USS MESA VERDE, would be exposed to a series of underwater detonations. The FSST is proposed to take place at a location at least 70 km (38 nm) off-shore of Naval Station Mayport within the Navy's Jacksonville/Charleston Operating Area over a four-week period in the summer of 2008, based on the Navy's operational and scheduling requirements for the ship class. The ship and the explosive charge will be brought closer together with each successive detonation to increase the severity of the shock to the ship. This approach ensures that the maximum shock intensity goal is achieved in a safe manner. A nominal 4,536 kg (10,000 lb) explosive charge would be used. This charge size is used to ensure that the entire ship is subjected to the desired level of shock intensity. The use of smaller charges would require many more detonations to excite the entire ship to the desired shock intensity level. The proposed shock trial would be conducted at a rate of one detonation per week to allow time to perform detailed inspections of the ship's systems prior to the next detonation. Three detonations would be required to collect adequate data on survivability and vulnerability. The first detonation would be conducted to ensure that the ship's systems are prepared for the subsequent higher severity detonations. The second detonation would be conducted to ensure the safety of the ship's systems during the third detonation, and to assess the performance of system configuration changes implemented as a result of the first detonation. The third and most severe detonation would be conducted to assess system configuration changes from the previous detonations. In the event that one of the three detonations does not provide adequate data, a fourth detonation may be required. As a result, the Navy's proposed action was analyzed as consisting of up to four detonations. An operations vessel would tow the explosive charge in parallel with the USS MESA VERDE using the parallel tow method, as illustrated in Figure 1 of the Navy's Letter of Authorization
(LOA)application. The charge would be located approximately 610 meters
(m)(2,000 feet (ft)) behind the operations vessel and suspended from a pontoon at a depth of 61 m (200 ft) below the water surface. Co-located with the charge would be a transponder used to track the exact location of the charge prior to detonation. After each detonation, the shock trial array and rigging debris would be recovered. For each detonation, the USS MESA VERDE would cruise in the same direction as the operations vessel at a speed of up to 13 kilometers per hour (km/h) (up to 7 knots (kts or nm/hr)) with the charge directly abeam of it. After each detonation, an initial inspection for damage would be performed. The USS MESA VERDE would return to the shore facility for a detailed post-detonation inspection and to prepare for the next detonation. For each subsequent detonation, the USS MESA VERDE would move closer to the charge to experience a more intense shock level. Comments and Responses On April 11, 2008 (73 FR 19789), NMFS published a proposed rule on the Navy's application for an incidental take authorization and requested comments, information and suggestions concerning the request and the structure and content of regulations to govern the take. During the 30-day public comment period, NMFS received comments from the U.S. Marine Mammal Commission and from one member of the public. The comments of the individual did not address issues specific to NMFS' proposed action, so it is not addressed further in this final rule. The Commission concurs with NMFS' finding that the planned shock trial is unlikely to have more than a negligible, short-term impact on the potentially affected marine mammal species and stocks, provided that the planned mitigation measures are imposed. Specific recommendations of the Commission follow. *Comment 1:* The Commission recommends that NMFS issue the requested authorization, subject to a requirement that operations be suspended immediately if more than the anticipated number of marine mammals are killed or injured incidental to the operations or if a dead or seriously injured North Atlantic right whale is found in the vicinity of the operations and the death or injury could have occurred incidental to the proposed activities. Suspension of operations should remain in place until NMFS
(1)has determined that the death is not related to the shock testing activities,
(2)has reviewed the situation and determined that further deaths or serious injuries are unlikely to occur, or
(3)has revised the regulations to authorize additional takes under section 101(a)(5)(A) of the MMPA. *Response:* Taking marine mammal species not authorized (e.g., North Atlantic right whales), by means not authorized (e.g., ship strike), and/or in numbers greater than authorized in the regulations, will result in at least a temporary suspension of the LOA while NMFS scientists investigate the mitigation and monitoring measures and recommend improvements to that program. While NMFS believes that the 1-week period between detonations will provide sufficient time to investigate any unauthorized takings and recommend a solution, future detonations may need to be delayed pending resolution. *Comment 2:* The Commission agrees that the data used to estimate marine mammal density, seasonality of habitat use, and other relevant biological factors appear to be the latest and best data from NMFS and other sources. One exception involves the use of data collected jointly by NMFS and the Minerals Management Service
(MMS)between 1996 and 2001, which is used instead of more recent data from the MMS' (sperm whale seismic study (Palka and Johnson, 2007). The final report for that program was published in 2007, and several related, peer-reviewed publications of sighting and tagging data also are available. *Response:* The Navy's MMPA application for taking marine mammals incidental to conducting the FSST is for takings in the offshore waters of northern Florida and southern Georgia during the spring/summer of 2008. Sperm whales will not be found in these waters at this time of the year. As a result, the new analysis by Palka and Johnson (2007), which was conducted in waters north of Cape Hatteras, is not relevant to the current action. However, NMFS plans to merge the line transect data from Palka and Johnson
(2007)with data collected during its previous surveys to investigate habitat preferences of sperm whales in the Atlantic Ocean. This new information will be used by NMFS and the Navy in future MMPA applications. *Comment 3:* The Commission is concerned about the possible consequences of staging the shock tests in the DeSoto Canyon area because the canyon appears to support relatively high concentrations of sperm whales, beaked whales, and other deep-diving cetaceans. *Response:* While the Navy's Draft EIS/OEIS identified offshore Norfolk, VA, Mayport, FL, and Pensacola, FL, as locations for conducting the shock trial, the Navy's application under section 101(a)(5)(A) of the MMPA requested an authorization for taking marine mammals in the offshore waters of Mayport, FL (the Navy's preferred alternative under its Final EIS/OEIS). As a result, the FSST will not take place in DeSoto Canyon, which is off the west coast of Florida. *Comment 4:* The Commission recommends if the proposed shock trial cannot be completed before the end of summer 2008, that it be postponed until the spring or summer of 2009 to avoid the seasons when North Atlantic right whales are most likely to be present. *Response:* During the 5-year effectiveness period of these final regulations, NMFS, through an LOA, will authorize take incidental to the Navy's proposed ship shock trial only during a period from May 1 through September 20, except in the case of 2008, where an LOA will authorize take only upon the effective date of the regulations, and in the case of 2013, where an LOA would authorize take only up until the regulations expire. *Comment 5:* The Commission questions NMFS's view that temporary threshold shift
(TTS)constitutes Level B harassment under the MMPA. The Commission continues to believe that an across-the-board definition of “TTS” as constituting no more than Level B harassment inappropriately dismisses the possibility that an affected animal may experience injury or biologically significant behavioral changes if its hearing is compromised, even temporarily. The Commission believes this constitutes Level A harassment under both the generally applicable definition of this term and applicability to military readiness activities. NMFS should revisit this issue and revise its interpretation of TTS to recognize the potential for Level A harassment due to secondary effects of temporary hearing loss. *Response:* NMFS has addressed to this issue in several previous **Federal Register** notices in regards to potential impacts on marine mammals from explosives and sonar. Please see 70 FR 48675, 48677 (August 19, 2005) and 66 FR 22450 (May 4, 2001) for a detailed response. Affected Marine Mammals Up to 26 marine mammal species may be present in the waters off Mayport, FL: 4 species of mysticetes, 19 species of odontocetes, 2 species of pinnipeds, and 1 sirenian species (manatee). Mysticetes are unlikely to occur in this area during the spring or summer time period. Odontocetes may include the sperm whale, dwarf and pygmy sperm whale, 4 species of beaked whales, and 11 species of dolphins and porpoises. For detailed information on marine mammal species, abundance, density estimates, and the methods used to obtain this information, reviewers are requested to refer to the Navy's LOA application, and Final EIS/OEIS for the Shock Trial of the USS MESA VERDE (see ADDRESSES for information on the availability of the Navy's LOA application and Final EIS/OEIS). Potential Impacts to Marine Mammals Potential impacts on the marine mammal species known to occur in the area offshore of Mayport, FL from shock testing include both lethal and non-lethal injury, as well as Level B harassment. NMFS concurs with the Navy that it is very unlikely that injury will occur from exposure to the chemical by-products released into the surface waters due to the low initial concentrations and rapid dispersion of such by-products. NMFS concurs with the Navy also believe that no permanent alteration of marine mammal habitat would occur as a result of the detonations. The Navy's calculations (which include mitigation effectiveness) indicate that the FSST at the Mayport site, during summer, has the potential to result in up to 1 take by mortality, 2 Level A harassment takes (injuries), and 282 takings by Level B (behavioral) harassment across all species of odontocetes. Calculations by species are provided in the Navy's LOA application and summarized here. Mortality and Injury Marine mammals can be killed or injured by underwater explosions due to the response of air cavities, such as the lungs and bubbles in the intestines, to the shock wave. The criterion for mortality used by the Navy in its analysis for the proposed USS MESA VERDE shock trial is the onset of extensive lung hemorrhage. In this analysis, the acoustic exposure associated with onset of severe lung injury (extensive lung hemorrhage) is used to define the outer limit of the zone within which species are considered to experience mortality. Extensive lung hemorrhage is considered debilitating and potentially fatal as a result of air embolism or suffocation. For the predicted impact ranges, representative marine mammal body sizes (mean body mass values) and average lung volumes were established, relative densities identified, and species were subsequently grouped by size (i.e., mysticetes and sperm whales, large odontocetes, small odontocetes). Thresholds and associated ranges for the onset of severe lung injury are variable for each of these groups depending upon their mean body mass and lung volume. Tables 4 and 5 in the Navy's LOA application provide a list of the criterion with thresholds and ranges for each grouping by mean body mass. In the Navy's analysis, all marine mammals within the calculated radius for onset of extensive lung injury (i.e., onset of mortality) are counted as lethal takes. The range at which onset of extensive lung hemorrhage is expected to occur is greater than the ranges at which 50 percent to 100 percent lethality would occur from closest proximity to the charge or from presence within the bulk cavitation region (see Tables 4 and 5 of the Navy's LOA application). The region of bulk cavitation is an area near the water surface above the detonation point in which the reflected shock wave creates a region of cavitation within which smaller animals would not be expected to survive. Because the range for onset of extensive lung hemorrhage for smaller animals tends beyond the range of bulk cavitation and because all injuries more serious than onset of extensive lung hemorrhage are considered lethal takes, all smaller animals within the region of cavitation and all animals (regardless of body mass) with more serious injuries than onset of extensive lung hemorrhage are accounted for in the lethal take estimate. The calculated maximum ranges for onset of extensive lung hemorrhage depend upon animal body mass, with smaller animals having the greatest potential for impact, as well as water column temperature and density. Appendix D of the USS MESA VERDE Final EIS/OEIS presents calculations that estimate the range for the onset of extensive lung hemorrhage. For injury (Level A harassment), the criterion applied is permanent threshold shift (PTS), a non-recoverable injury that must result from the destruction of tissues within the auditory system (e.g., tympanic membrane rupture, disarticulation of the middle ear ossicles, and hair-cell damage). Onset-PTS is indicative of the minimum level of injury that would occur due to sound exposure. All other forms of trauma would occur closer to the sound source than the range at which the onset of PTS occurs. In this analysis, the smallest amount of PTS (onset-PTS) is taken to be the indicator for the smallest degree of injury that can be measured. The acoustic exposure associated with onset-PTS is an energy flux density
(EL)of 198 decibel
(dB)re 1 μPa 2 -sec or greater for all mean body mass sizes. Appendix D of the USS MESA VERDE Final EIS/OEIS presents calculations that estimate the range for the onset of PTS in marine mammals exposed to detonations associated with the FSST. Incidental Level B Harassment In the Navy's LOA request and the accompanying USS MESA VERDE Final EIS/OEIS, TTS is used as the criterion for Level B (behavioral) harassment for marine mammals. As the Navy explains in the Final EIS/OEIS: Some physiological effects can occur that are non-injurious but which can potentially disrupt the behavior of a marine mammal. These include temporary distortions in sensory tissue that alter physiological function but which are fully recoverable without the requirement for tissue replacement or regeneration. For example, an animal that experiences a temporary reduction in hearing sensitivity suffers no injury to its auditory system, but may not perceive some sounds due to the reduction in sensitivity. As a result, the animal may not respond to sounds that would normally produce a behavioral reaction. This lack of response qualifies as a disruption of normal behavioral patterns—the animal is impeded from responding in a normal manner to an acoustic stimulus. As explained in previous incidental take authorizations for explosions, the smallest measurable amount of TTS (onset-TTS) is taken as the best indicator for Level B (behavioral) harassment. Because it is considered non-injurious, the acoustic exposure associated with onset-TTS is used to define the outer limit of the range within which marine mammal species are predicted to experience Level B harassment attributable to physiological effects. This follows from the concept that hearing loss potentially affects an animal's ability to react normally to the sounds around it; it potentially disrupts normal behavior by preventing it from occurring. Therefore, the potential for TTS qualifies as a Level B harassment that is mediated by physiological effects upon the auditory system. In this analysis, a dual criterion for onset-TTS has been developed by the Navy:
(1)An energy-based TTS criterion of 183 dB re 1 μPa 2 -sec EL, and
(2)a pressure-based TTS criterion of 224 dB re 1 μPa (23 psi) received peak pressure. For additional information on the establishment of these criteria by the Navy and NMFS, please see Appendix D in the Final EIS/OEIS. If either threshold is met or exceeded, TTS is assumed to have occurred. The thresholds are primarily based on cetacean TTS data from Finneran *et al.* (2002). Because the impulsive sound exposures analyzed in this cetacean TTS data are similar to the sounds of interest for this analysis, they provide the data that are most directly relevant to this action. The predicted impact ranges applied the more stringent criterion, in this case, the 183-dB re 1 μPa 2 -sec weighted energy flux density level. Corresponding TTS ranges are listed in Table 5 in the Navy's LOA application. For onset-TTS, the more conservative of the two criteria was chosen for determining the range that defined the impact zone, regardless of water depth. Expected numbers of marine mammals within these radii were calculated using mean densities from Appendix B of the USS MESA VERDE Final EIS/OEIS. Mean density values were previously adjusted to account for submerged (undetectable) individuals. Because the range defining the zone in which onset-TTS is predicted is much larger than the range corresponding to mortality or injury, more individuals and more species could be affected. Marine mammal species known to occur at or near the proposed Mayport location, but not seen during aerial surveys used to develop density estimates (i.e., fin, humpback, minke, sperm, and North Atlantic right whales, and several dolphin species) and not expected to be present during the time of the year when the FSST will occur (summer), were not taken into account in these calculations. The results for individual species were rounded to the nearest whole number and then summed. For summations which were less than 0.5, calculations were rounded down to zero (see USS MESA VERDE Final EIS/OEIS, App. C). Table 1 below (Table 7 in the Navy's LOA application) summarizes the mortality, injury, and harassment exposure estimates in summer, for the proposed Mayport location. The Navy estimates that for offshore Mayport, FL in summer 1 marine mammal (a bottlenose dolphin) will be killed and 2 injured (a bottlenose dolphin and a Risso's dolphin). Estimated numbers of marine mammals predicted to experience Level B harassment are 282 individual marine mammals at Mayport, FL in the summer. BILLING CODE 3510-22-P ER24JY08.000 BILLING CODE 3510-22-C Potential Impact on Marine Mammal Habitat As described in the Final EIS/OEIS, detonations would have only short-term, localized impacts on the water column's physical, chemical, and biological characteristics. No lasting or significant impact on marine mammal habitat is anticipated, and no restoration would be necessary. Therefore, we conclude that marine mammal habitat would not be affected. Mitigation and Monitoring Measures The operational site for the proposed shock trial off Mayport, FL would be a 3.5-nm (6.5-km) radius Safety Range centered on the explosive charge. The concept of Safety Range is an integral part of the Navy's protective measures plan, the purpose of which is to prevent death and injury to marine mammals (and sea turtles). The Safety Range for the Mayport location would be greater than the predicted maximum ranges for mortality and injury (onset PTS) associated with detonation of a 4,536 kg (10,000 lb) explosive (see Table 5 of the Navy's LOA application). The Navy's proposed action includes mitigation and monitoring that would minimize risk to marine mammals, which NMFS included in its proposed rule. (Mitigation measures for sea turtles have been analyzed in the Navy's Final EIS/OEIS and addressed through consultation under section 7 of the Endangered Species Act
(ESA)and issuance of a Biological Opinion on this action). The mitigation and monitoring measures that will be implemented to minimize risk to marine mammals are as follows:
(1)Through pre-detonation aerial surveys, the Navy will select a primary and two secondary test sites within the test area where, based on the results of aerial surveys conducted one day prior to the first detonation, observations indicate that marine mammal populations are the lowest;
(2)Pre-detonation aerial monitoring will be conducted on the day of each detonation to evaluate the primary test site and verify that the 3.5 nm (6.5 km) Safety Range is free of visually detectable marine mammals (and other critical marine life). If marine mammals are detected in the primary test area, the Navy will survey the secondary areas for marine mammals, and may move the shock test to one of the other two sites;
(3)Independent marine mammal observers
(MMOs)will visually monitor the Safety Range by air (2 MMOs), onboard the USS MESA VERDE (a minimum of 6 MMOs) and onboard the Marine Animal Recovery Team
(MART)support vessel (a minimum of 2 MMOs) before each test and coordinate with the Lead Scientist and Shock Trial Officer to postpone detonation if any marine mammal is detected within the Safety Range of 3.5 nm (6.5 km);
(4)A detonation will not occur if an ESA-listed marine mammal is detected within the Safety Range, and subsequently cannot be detected. If a North Atlantic right whale or other ESA-listed marine mammal is seen, detonation will not occur until the animal is positively relocated outside the Safety Range and at least one additional aerial monitoring of the Safety Range shows that no other right whales or other listed marine mammals are present;
(5)Detonation will not occur if the sea state exceeds 3 on the Beaufort scale (i.e., whitecaps on 33 to 50 percent of surface; 0.6 m (2 ft) to 0.9 m (3 ft) waves), or the visibility is equal to or less than 5.6 km (3 nm), and/or the aircraft ceiling (i.e., vertical visibility) is equal to or less than 305 m (1,000 ft);
(6)Detonation will not occur earlier than 3 hours after sunrise or later than 3 hours prior to sunset to ensure adequate daylight for pre- and post-detonation monitoring; and
(7)The area will be monitored by observers onboard the MART vessel and by aircraft observers for 48 hours after each detonation, and for 7 days following the last detonation, to find, document and track any injured or dead animals. The aerial survey will search for a minimum of 3 hrs/day; the MART observers will monitor during all daylight hours. If post-detonation monitoring shows that marine mammals were killed or injured as a result of the shock trial, or if any marine mammals are observed in the Safety Range immediately after a detonation, NMFS will be notified immediately and detonations will be halted until procedures for subsequent detonations can be reviewed by NMFS and the Navy and changed as necessary. More detailed descriptions of the protocols for the shock trial's mitigation and monitoring can be found in Section 5 of the Navy's Final EIS/OEIS. Reporting Requirements Within 120 days of the completion of the USS MESA VERDE shock trial, the Navy will submit a final report to NMFS. This report will include the following information:
(1)Date and time of each of the detonations;
(2)a detailed description of the pre-test and post-test activities related to mitigating and monitoring the effects of explosives detonation on marine mammals;
(3)the results of the monitoring program, including numbers by species/stock of any marine mammals noted injured or killed as a result of the detonations and an estimate of the number of marine mammals in the Safety Range at the time of the detonation based on post-test aerial monitoring and current density estimates; and
(4)results of coordination with coastal marine mammal/sea turtle stranding networks. Determinations Based on the scientific analyses detailed in the Navy's LOA application and further supported by information and data contained in the Navy's Final EIS/OEIS for the USS MESA VERDE shock trial and summarized in the preamble to this final rule, NMFS has determined that the incidental taking of marine mammals resulting from conducting an FSST on the USS MESA VERDE in the waters offshore of Mayport, FL during the summer months would have a negligible impact on the affected marine mammal species or stocks. While detonation of up to four 4,536-kg (10,000-lb) charges may adversely affect some marine mammals, the latest abundance and seasonal distribution estimates support the finding that the lethal taking of a single bottlenose dolphin, the injury of one bottlenose dolphin and one Risso's dolphin, and the Level B behavioral harassment of 282 small whales and dolphins of 7 different genera will have a negligible impact on the affected species or stocks of marine mammals inhabiting the waters of the U.S. Atlantic Coast. Impacts will be mitigated by mandating a conservative safety range for pre-detonation marine mammal exclusion, incorporating aerial and shipboard monitoring efforts in the program both prior to, and after, detonation of explosives, and prohibiting detonations whenever marine mammals are either detected within the 3.5-nm (6.5-km) Safety Range (or may enter the Safety Range at the time of detonation), or if weather and sea conditions preclude adequate aerial surveillance. Implementation of required mitigation and monitoring measures will result in the least practicable adverse impact on marine mammal stocks. NMFS has also determined that the FSST operation will not have an unmitigable adverse impact on the availability of marine mammals for subsistence uses identified in MMPA section 101(a)(5)(A)(i) (16 U.S.C. 1371(a)(5)(A)(i)). Therefore, NMFS has determined that the requirements of section 101(a)(5)(A) of the MMPA have been met. National Environmental Policy Act
(NEPA)The Navy released its Draft EIS/OEIS for the USS MESA VERDE shock trial for public review on October 26, 2007 (72 FR 60846; 72 FR 61329, October 30, 2007) with the public review period ending on December 10, 2007. On May 30, 2008 (73 FR 3115), the Environmental Protection Agency
(EPA)announced receipt of the Navy's Final EIS/OEIS on this action. NMFS is a cooperating agency, as defined by the Council on Environmental Quality (40 CFR 1501.6), in the preparation of both the Draft and Final EIS/OEIS. The Navy's Draft and Final EIS/OEISs are available for viewing or downloading at: *http://www.mesaverdeeis.com* . In accordance with NOAA Administrative Order 216-6 (Environmental Review Procedures for Implementing the National Environmental Policy Act, May 20, 1999), NMFS has reviewed the information contained in the Navy's Final EIS/OEIS and determined that the Navy's Final EIS/OEIS accurately and completely describes the Navy proposed action alternative, reasonable additional alternatives, and the potential impacts on marine mammals, endangered species, and other marine life that could be impacted by the preferred alternative and the other alternatives. NMFS has also concluded that the impacts on the human environment (particularly on marine mammals) evaluated by the Navy are substantially the same as the impacts of NMFS/NOAA's proposed action to issue these regulations and an authorization under section 101(a)(5)(A) of the MMPA to the Navy to take marine mammals, by harassment, incidental to conducting an FSST on the USS MESA VERDE in the waters off Mayport, FL. In addition, the NMFS/NOAA has evaluated the U.S. Navy's Final EIS/OEIS and found that it includes all required components for adoption by NOAA, including:
(1)A discussion of the purpose and need for the action;
(2)a summary of the EIS, including the issues to be resolved, and in the Final EIS/OEIS, the major conclusions and areas of controversy including those raised by the public;
(3)a listing of the alternatives to the proposed action;
(4)a description of the affected environment;
(5)a succinct description of the environmental impacts of the proposed action and alternatives, including cumulative impacts; and
(6)a listing of agencies and persons consulted, and to whom copies of the EIS have been sent. Based on this review and analysis, NMFS/NOAA has adopted the Navy's Final EIS/OEIS under the Council on Environmental Quality's Regulations for Implementing the National Environmental Policy Act (40 CFR 1506.3). As a result, NMFS has determined it is not necessary to issue an Environmental Assessment (EA), supplemental EA or a new EIS for the issuance of regulations and an LOA to the Navy for the taking of marine mammals incidental to this activity. NMFS (ROD is available on NMFS' Web site (see ADDRESSES ). ESA On June 12, 2007, the Navy submitted a Biological Assessment to NMFS to initiate consultation under section 7 of the ESA for the USS MESA VERDE shock trial. NMFS concluded consultation with the Navy on this action on July 17, 2008. The conclusion of that consultation is NMFS' Biological Opinion that conducting an FSST of the USS MESA VERDE in the waters offshore of Mayport, FL during the summer of 2008 and the issuance by NMFS of an incidental take authorization under section 101(a)(5)(A) for this activity are not likely to jeopardize the continued existence of any endangered or threatened species under the jurisdiction of NMFS or result in the destruction or adverse modification of critical habitat. Classification This action has been determined to be not significant for purposes of Executive Order 12866. The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration at the proposed rule stage, that this action would not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. If implemented, this rule would affect only the U.S. Navy which, by definition, is not a small business. Because of this certification, a regulatory flexibility analysis is not required and none has been prepared. The Assistant Administrator for Fisheries, NOAA, finds good cause to waive the 30-day delay in effective date for this final rule under 5 U.S.C. 553(d)(3) as impracticable and contrary to the public interest. This rule governs NMFS' issuance of an LOA and sets forth the mitigation, monitoring and reporting requirements with which the U.S. Navy must comply in conducting the shock test of the USS MESA VERDE. The Navy has provided NMFS with information that a 30-day delay in effective date would eliminate any opportunity to conduct the FSST for two full years because of the short window available in 2008 to conduct the test and because the Navy can conduct LPD 17 class FSSTs on the East Coast only every other year. The Navy is required by 10 U.S.C. Section 2366 to conduct realistic life fire testing of new classes of ships and the FSST is a critical piece of this testing. Additionally the Navy conducts the FSST on a class of ships prior to overseas deployment, to ensure that the ship can survive damage sustained in a combat situation. As a result, the delay would negatively affect national security and military readiness by requiring the Navy to either alter the scheduled deployment of several ships, or send ships overseas without their normal validation of combat survivability. For these reasons, NMFS finds good cause to waive the 30-day delay in effective date. This rule is effective upon filing. Changes From the Proposed Rule Other than minor edits to the rule for clarification and consistency NMFS has made one change to the rule: 1. The common dolphin has been added to the marine mammal species authorized for incidental taking in 50 CFR 216.161(b). List of Subjects in 50 CFR Part 216 Administrative practice and procedure, Imports, Indians, Marine mammals, Penalties, Reporting and recordkeeping requirements, Transportation. Dated: July 18, 2008. John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. For reasons set forth in the preamble, 50 CFR part 216 is amended as follows: PART 216—REGULATIONS GOVERNING THE TAKING AND IMPORTING OF MARINE MAMMALS 1. The authority citation for part 216 continues to read as follows: Authority: 16 U.S.C. 1361 *et seq.* 2. Subpart O is added to read as follows: Subpart O—Taking of Marine Mammals Incidental to Shock Testing the USS MESA VERDE (LPD 19) by Detonation of Conventional Explosives in the Offshore Waters of the U.S. Atlantic Coast Sec. 216.161 Specified activity and incidental take levels by species. 216.162 Effective dates. 216.163 Mitigation. 216.164 Prohibitions. 216.165 Requirements for monitoring and reporting. 216.166 Modifications to the Letter of Authorization. Subpart O—Taking of Marine Mammals Incidental to Shock Testing the USS MESA VERDE (LPD 19) by Detonation of Conventional Explosives in the Offshore Waters of the U.S. Atlantic Coast § 216.161 Specified activity and incidental take levels by species.
(a)Regulations in this subpart apply only to the incidental taking of marine mammals specified in paragraph
(b)of this section by persons engaged in the detonation of up to four 4,536 kg (10,000 lb) conventional explosive charges within the waters of the U.S. Atlantic Coast offshore Mayport, FL, for the purpose of conducting one full ship-shock trial
(FSST)of the USS MESA VERDE (LPD 19) during the time period between July 23 and September 20, 2008, and May 1 and September 20, 2009 through 2013.
(b)The incidental take of marine mammals under the activity identified in paragraph
(a)of this section is limited to the following species: Minke whale ( *Balaenoptera acutorostrata* ), dwarf sperm whale ( *Kogia simus* ); pygmy sperm whale ( *K. breviceps* ); pilot whale ( *Globicephala macrorhynchus* ); Atlantic spotted dolphin ( *Stenella frontalis* ); spinner dolphin ( *S. longirostris* ); bottlenose dolphin ( *Tursiops truncatus* ); Risso's dolphin ( *Grampus griseus* ); rough-toothed dolphin ( *Steno bredanensis* ); common dolphin ( *Delphinus delphis* ), false killer whale ( *Pseudorca crassidens* ); Cuvier's beaked whale ( *Ziphius cavirostris* ), Blainville's beaked whale ( *Mesoplodon densirostris* ); Gervais' beaked whale ( *M. europaeus* ); and True's beaked whale ( *M. mirus* ).
(c)The incidental take of marine mammals identified in paragraph
(b)of this section is limited to a total, across all species, of no more than 1 mortality or serious injury, 2 takings by Level A harassment (injuries), and 282 takings by Level B behavioral harassment (through temporary threshold shift). The incidental taking of any species listed as threatened or endangered under the Endangered Species Act is prohibited. § 216.162 Effective dates. Regulations in this subpart are effective July 18, 2008 through July 18, 2013. § 216.163 Mitigation.
(a)Under a Letter of Authorization issued pursuant to § 216.106, the U.S. Navy may incidentally, but not intentionally, take marine mammals in the course of the activity described in § 216.161(a) provided all requirements of these regulations and such Letter of Authorization are met.
(b)The activity identified in paragraph § 216.161(a) of this section must be conducted in a manner that minimizes, to the greatest extent practicable, adverse impacts on marine mammals and their habitat. When detonating explosives, the following mitigation measures must be implemented:
(1)Except as provided under the following paragraph (2), if any marine mammals are visually detected within the designated 3.5 nm (6.5 km) Safety Range surrounding the USS MESA VERDE, detonation must be delayed until the marine mammals are positively resighted outside the Safety Range either due to the animal(s) swimming out of the Safety Range or due to the Safety Range moving beyond the mammal's last verified location.
(2)If a North Atlantic right whale or other marine mammal listed under the Endangered Species Act
(ESA)is seen within the Safety Range, detonation must not occur until the animal is positively resighted outside the Safety Range and at least one additional aerial monitoring of the Safety Range shows that no other right whales or other ESA-listed marine mammals are present;
(3)If the sea state exceeds 3 on the Beaufort scale (i.e., whitecaps on 33 to 50 percent of surface; 2 ft (0.6 m) to 3 ft (0.9 m) waves), the visibility is equal to or less than 3 nm (5.6 km), or the aircraft ceiling (i.e., vertical visibility) is equal to or less than 1,000 ft (305 m), detonation must not occur until conditions improve sufficiently for aerial surveillance to be undertaken.
(4)A detonation must not be conducted earlier than 3 hours after sunrise or later than 3 hours prior to sunset to ensure adequate daylight for conducting the pre-detonation and post-detonation monitoring requirements in § 216.165;
(5)If post-detonation surveys determine that an injury or lethal take of a marine mammal has occurred,
(i)the Director, Office of Protected Resources, National Marine Fisheries Service must be notified within 24 hours of the taking determination,
(ii)the FSST procedures and monitoring methods must be reviewed in coordination with the National Marine Fisheries Service, and
(iii)appropriate changes to avoid future injury or mortality must be made prior to conducting the next detonation. § 216.164 Prohibitions. No person in connection with the activities described in § 216.161(a) shall:
(a)Take any marine mammal not specified in § 216.161(b);
(b)Take any marine mammal specified in § 216.161(b) other than by incidental, unintentional Level A or Level B harassment or mortality;
(c)Take a marine mammal specified in § 216.161(b) if such taking results in more than a negligible impact on the species or stocks or marine mammals;
(d)Violate, or failure to comply with, the requirements of a Letter of Authorization issued under § 216.106. § 216.165 Requirements for monitoring and reporting.
(a)The holder of the Letter of Authorization is required to cooperate with the National Marine Fisheries Service and any other Federal, or state or local agency with regulatory authority for monitoring the impacts of the activity on marine mammals. The holder must notify the Director, Office of Protected Resources, National Marine Fisheries Service at least 2 weeks prior to activities involving the detonation of explosives in order to satisfy paragraph
(f)of this section.
(b)The holder of the Letter of Authorization must designate at least 6 experienced on-site marine mammal observers
(MMOs)onboard the USS MESA VERDE, 2 experienced MMOs onboard the survey aircraft and 2 experienced MMOs onboard the Navy support vessel each of whom has been approved in advance by NMFS, to monitor the Safety Range for presence of marine mammals and to record the effects of explosives detonation on marine mammals that inhabit the Navy's Jacksonville/Charleston Operating Area offshore of Mayport, Florida. (c)(1) Prior to each detonation for the FSST, an area will be located which has been determined by an aerial survey to contain the lowest marine mammal abundance relative to other areas within the area off Mayport, FL.
(2)The test area must be monitored by aerial and shipboard monitoring for the following periods of time:
(i)48-72 hours prior to a scheduled detonation (aircraft only),
(ii)on the day of detonation,
(iii)immediately after each detonation and continuing for at least 3 hours subsequent to each detonation (or until sighting conditions become unsuitable for visual observations),
(iv)for at least 2 days after each detonation, unless weather and/or sea conditions preclude surveillance, in which case post-test survey dates must be extended, and
(v)for a period of 7 days after the last detonation for a minimum of 3 hours per day at the detonation site and down-current from the site.
(3)Monitoring shall include, but is not limited to, aerial and vessel surveillance sufficient to ensure that no marine mammals are within the designated Safety Range prior to or at the time of detonation.
(d)Under the direction of an attending U.S.-licensed veterinarian (an attending U.S. licensed veterinarian is one who has graduated from a veterinary school accredited by the American Veterinary Medical Association Council on Education, has a certificate by the American Veterinary Graduates Association's Education Commission for Foreign Veterinary Graduates, or has received equivalent formal education, as determined by the NMFS Assistant Administrator), an examination and recovery of any dead or injured marine mammals will be conducted in accordance with protocols and best practices of the NOAA Health and Stranding Response Program. Necropsies will be performed and tissue samples taken from any dead animals. After completion of the necropsy, animals not retained for shoreside examination will be tagged and returned to the sea.
(e)Activities related to the monitoring described in paragraphs
(c)and
(d)of this section, including the retention of marine mammals, may be conducted without a separate scientific research permit. The use of retained marine mammals for scientific research other than shoreside examination must be authorized pursuant to Subpart D of this part.
(f)Subject to relevant Navy regulations, the National Marine Fisheries Service at its discretion may place an observer on any ship or aircraft involved in marine mammal monitoring either prior to, during, or after explosives detonation.
(g)A final report must be submitted to the Director, Office of Protected Resources, no later than 120 days after completion of the USS MESA VERDE (LPD 19) shock trial. This report must contain the following information:
(1)Date and time of all detonations conducted under the Letter of Authorization.
(2)A detailed description of all pre-detonation and post-detonation activities related to mitigating and monitoring the effects of explosives detonation on marine mammals.
(3)Results of the monitoring program, including numbers by species/stock of any marine mammals noted injured or killed as a result of the detonation and an estimate of the number, by species, of marine mammals in the Safety Range at the time of detonation based on post-test aerial monitoring and current density estimates.
(4)Results of coordination with coastal marine mammal/sea turtle stranding networks. § 216.166 Modifications to the Letter of Authorization.
(a)Except as provided in paragraph
(b)of this section, no substantive modification, including withdrawal or suspension, to a Letter of Authorization issued pursuant to § 216.106 and subject to the provisions of this subpart shall be made until after notice and an opportunity for public comment.
(b)If the Assistant Administrator determines that an emergency exists that poses a significant risk to the well-being of the species or stocks of marine mammals specified in § 216.151(b), the Letter of Authorization may be substantively modified without prior notification and an opportunity for public comment. Notification will be published in the **Federal Register** subsequent to the action. [FR Doc. 08-1461 Filed 7-18-08; 3:06 pm]
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92 references not yet in our index
  • 14 CFR 103
  • Pub. L. 96-354
  • Pub. L. 96-39
  • Pub. L. 104-4
  • 14 CFR 61
  • 14 CFR 65
  • 14 CFR 67
  • 14 CFR 183
  • 18 CFR 33
  • 656 F.2d 925
  • 494 F.3d 188
  • 5 CFR 1320.12
  • 16 USC 791a-825r
  • 42 USC 7101-7352
  • Pub. L. 109-58
  • 119 Stat. 594
  • 18 CFR 35
  • 73 FR 25
  • 397 F.3d 1004
  • 165 F.3d 54
  • 26 CFR 1
  • T.D. 9408
  • 36 CFR 220
  • 40 CFR 1507.3
  • 79 F.2d 896
  • 7 CFR 1
  • 40 CFR 1502.4(b)
  • 230 F.3d 947
  • 40 CFR 1508.7
  • 40 CFR 1508.23
  • 40 CFR 1501.4
  • 40 CFR 1506.6
  • 40 CFR 1506.8
  • 40 CFR 1506.10
  • 36 CFR 215
  • 40 CFR 1502.21
  • 40 CFR 1507.3(e)
  • 40 CFR 1507.3(b)(2)(i)
  • 40 CFR 1508.27
  • 40 CFR 1502.20
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C.F.R.§ 33.1
C.F.R.§ 33.2
C.F.R.§ 1.3
F. App'x656 F.2d 925
F. App'x494 F.3d 188
F. App'x397 F.3d 1004
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