[The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions] [The Regulatory Plan] [From the U.S. Government Printing Office, www.gpo.gov][[Page 63891]] DEPARTMENT OF AGRICULTURE (USDA) Statement of Regulatory Priorities To comply with the National Performance Review (NPR) directive to achieve regulatory reform, the Department of Agriculture continues to implement an ongoing program to eliminate unnecessary regulations and improve those remaining by making them easier to understand and more user friendly. To date, the Department's review and revision effort has resulted in actions on over 60 percent of our NPR commitment to regulatory reform. At program conclusion, the Department will have eliminated or reinvented 81 percent of its regulatory holdings in the CFR. Positive changes resulting from proposed and completed regulatory reform actions will reach into every corner of the country and, both directly and indirectly, touch the lives of most Americans. Those programs that offer support to specific rural and urban segments of the economy are being simplified so that persons who qualify for assistance, or some other form of participation, will find less burdensome rules. Yet high standards are in place to ensure efficient and effective program management that makes the best use of taxpayer dollars. Farmers, ranchers, and other USDA customers will find significant changes in all aspects of regulations that govern their interaction with the Department and its programs. Farm credit, a mainstay of the Nation's rural economy, is being significantly streamlined by the merger of cumbersome loan-making regulations with forms and certifications simplified to facilitate the application process. The Department is undertaking a number of actions in the regulation of commodities that will increase efficiency, improve customer service, reduce intervention in markets, and allow States to assume greater responsibility in controlling the spread of plant and animal pests or disease. The Department is also improving the regulations that serve rural communities. Several changes are being made in rural housing programs that will facilitate access and simplify the application process. Nutrition programs are also being strengthened, their efficiency improved, and their integrity enhanced through regulatory reform. In the area of food safety, the Department has undertaken a significant reinvention of all policies and relationships with industry and the public. There are also several important reinvention plans in the natural resources and conservation area. Reducing Paperwork Burden on Farmers The Department has made substantial progress under the guidance of the Chief Information Officer in implementing the goal of the Paperwork Reduction Act of 1995 to reduce the burden of information collection on the public. USDA continues to work toward the goal of reducing burden by an additional 5 percent for fiscal year 2000. Further reductions will result from program changes, improved efficiency in the collection and management of information, and adjustments in the collection burden. The Department established a Paperwork Reduction Implementation Team (PRIT), under the guidance of the Food and Agriculture Council, based on direction from the Secretary of Agriculture, to create a plan to reduce the paperwork burden on farmers. The PRIT has developed a USDA Paperwork Reduction Framework--a set of standards and guidelines for the Service Center agencies. USDA agencies will use the framework in the execution of their paperwork reduction initiatives. Simultaneously, the PRIT, working with the Service Center agencies, will continue ongoing initiatives to reduce burden as quickly as possible. Business process reengineering initiatives are addressing customer needs by integrating agency processes to streamline information collected from the farmer. This will eliminate redundant data collection, provide direct access to benefit and eligibility information, and reduce and simplify the number of regulations and forms. The Role of Regulations The programs of the Department are diverse and far reaching, as are the regulations that attend their delivery. Regulations codify how the Department will conduct its business, including the specifics of access to, and eligibility for, USDA programs. Regulations also specify the behavior of State and local governments, private industry, businesses, and individuals that is necessary to comply with their provisions. The diversity in purpose and outreach of our programs contributes significantly to the USDA being at or near the top of the list of departments that produce the largest number of regulations annually. These regulations range from nutrition standards for the school lunch program, to natural resource and environmental measures governing national forest usage and soil conservation, to regulations protecting American agribusiness (the largest dollar value contributor to exports) from the ravages of domestic or foreign plant or animal pestilence and they extend from farm to supermarket to ensure the safety, quality, and availability of the Nation's food supply. Many regulations function in a dynamic environment which requires their periodic modification. The factors determining various entitlement, eligibility, and administrative criteria often change from year to year. Therefore, many significant regulations must be revised annually to reflect changes in economic and market benchmarks. Almost all legislation that affects departmental programs has accompanying regulatory needs, often with a significant impact. The Farm Bill of 1996, Public Law 104-127, has considerable regulatory consequences. This key legislation affects most agencies of USDA and will result in the addition of new programs, the deletion of others, and modification to still others. Administration Guidance--USDA Response In developing and implementing regulations, the Department has been guided by the regulatory principles and philosophy set forth by the President in Executive Order 12866 ``Regulatory Planning and Review.'' As prescribed in the Order, the USDA is committed to ``promulgate only those regulations that are required by law, are necessary to interpret the law, or are made necessary by compelling public need.'' When considering a rulemaking action, the Department will assess the costs and benefits of available regulatory alternatives, including the alternative of not regulating. Our analysis will consider the costs and benefits of both quantifiable and qualitative measures and opt for approaches that maximize net benefits. Major Regulatory Priorities Six agencies are represented in this regulatory plan. They include the Farm Service Agency, the Food and Nutrition Service, the Forest Service, the Food Safety and Inspection Service, the Animal and Plant Health Inspection Service, and the Agricultural Marketing Service. This document represents summary information on prospective significant regulations as called for in Executive Order 12866. A brief comment on each of the six agencies appears below, which summarizes the Agency mission and its key regulatory [[Page 63892]] priorities. The Agency summaries are followed by the regulatory plan entries. Farm Service Agency Mission: The Farm Service Agency (FSA) administers contract commodity, conservation, farm loan, commodity purchase, and emergency loan and disaster programs, as prescribed by various statutes, in order to support farming certainty and flexibility while ensuring compliance with farm conservation and wetland protection requirements and to assist owners and operators of farms and ranches to conserve and enhance soil, water, and related natural resources. Priorities: FSA's priority for 2000 will be to continue to implement these programs with emphasis on enhanced service to our customers. The most significant FSA regulations are those that operate the contract commodity programs and farm loans. The farm programs were significantly changed by the 1996 Farm Bill. The Farm Bill instituted the contract commodity programs, which utilize production flexibility contracts and marketing assistance loans in place of the deficiency payments and production adjustment of past programs. The contracts removed the link between income support payments and farm prices by providing for seven annual fixed but declining payments. FSA's farm loan programs make and guarantee loans to family farmers and ranchers to purchase farm land and finance agricultural production. While the contract commodity and farm loan programs have significant economic impact, they are driven by specific statutory requirements. Therefore, they are noted here to acknowledge their significance in the overall USDA regulatory plan, but are not further listed in the body of the plan which appears below. In addition to its normal program operations, FSA is committed to the Paperwork Reduction Act of 1995's goal of reducing the information collection burden on the public. FSA has initiated a business process reengineering project to streamline its farm loan-making and servicing regulations and reduce the information collection burden associated with the programs. FSA plans to reduce the number of CFR parts containing its farm loan program regulations by approximately 70 percent. In addition, FSA hopes to achieve a significant reduction in the total number of CFR pages by removing administrative provisions and internal policy, and eliminating duplicative material. Furthermore, FSA intends to improve the clarity of the farm loan program regulations by following the guidelines established in the President's Plain Language in Government Writing Initiative. As part of this project, all Farm Loan Program (FLP) regulations and internal Agency directives will be completely rewritten. All application processes and information collections will be reviewed, and unnecessary or redundant requirements will be eliminated. Under one phase of the contract, all forms associated with FLP were reviewed and assigned to one of the following categories: prepared by the public prepared by the Agency, reviewed by the public, or internal agency use only. FLP will concentrate on streamlining forms assigned to the first category to reduce public burden. In addition, a database was developed listing each field contained on the forms. This information will be used to identify duplicate collections and ensure consistency in terminology. FLP is completing three regulation packages under the streamlining project. Guaranteed loan program regulations were published in February 1999. The following changes are being implemented to reduce public burden: Establish the Certified Lender Program, which reduces documentation and application requirements Eliminate requirements that lenders submit copies of leases, contracts, and legal documents Reduce the number of years of production and financial records from 5 years to 3 years Reduce application requirements for loans under $50,000. FLP plans to publish regulations for direct loan program and administrative regulations as a proposed rule in March 2000, and as a final rule in September 2001. While rewriting of the regulations has begun, it will be a lengthy process because approximately 37 CFR parts are being consolidated into 3 parts and more than 750 CFR pages must be rewritten. Revised regulations for special loan programs (including Indian land acquisition, boll weevil eradication, drainage and irrigation and grazing association loans) are planned for publication as a proposed rule in August 2001, and as a final rule in April 2002. These programs will be completed last because there are only about 850 borrowers with outstanding special loans in comparison to almost 110,000 borrowers with outstanding direct loans. In addition to the FLP streamlining initiative, FSA is one of the major participants in USDA's Service Center Implementation Team (SCIT) along with the Natural Resources Conservation Service and the Rural Development mission area. Information collections at the service center level represent most of FSA's total collection burden. FSA believes that SCIT provides a unique opportunity to achieve new levels of information collection efficiency because collections across organizational boundaries can be consolidated as common service center business processes are reengineered. FSA is taking full advantage of this opportunity by sponsoring a companion initiative of the Paperwork Reduction Implementation Team (PRIT) that brings a paperwork reduction focus to the business process reengineering initiative under SCIT. Another focus of PRIT is to develop standard methodologies for information collection management and to standardize burden calculations and reporting processes. Food and Nutrition Service Mission: FNS reduces hunger and food insecurity in partnership with cooperating organizations by providing children and needy people access to food, a healthful diet, and nutrition education in a manner that supports American agriculture and inspires public confidence. Priorities: In addition to responding to provisions of legislation authorizing and modifying Federal nutrition assistance programs, FNS's 2000 regulatory plan supports broad strategic policy goals aimed at improving the nutritional well-being of program participants, and improving stewardship of Federal resources. These goals, included in our strategic plan, are: Enhanced food and nutrition security for low-income Americans. This goal reflects the continuation of the Food Stamp Program's traditional role in providing nutrition assistance, as well as improving program administration to meet the future challenges. Our plan supports ongoing implementation of welfare reform legislation that modified the eligibility criteria for food stamp benefits and increased program design options for States, while continuing to meet the overall mission to provide food and nutrition security for low-income Americans participating in the FSP and to enhance program efficiency and integrity. [[Page 63893]] Healthful diets for school-age children. The two major programs serving this goal are the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). This goal reflects the Agency's recognition of its National health and education responsibilities for school-age children. Improved nutritional status and health of low-income women, infants, and children. This goal reflects the mission of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). It emphasizes nutrition education, healthy infant feeding practices, and positive health outcomes while seeking to enhance program efficiency and integrity. Improved nutritional status of children in day-care settings. This goal reflects our effort to enhance the effectiveness of the Child and Adult Care Food Program (CACFP), by improving the nutritional quality of program meals, improving program access for low-income families and enhanced program integrity. Low-income children consume nutritious lunches when school meals are not available. Through its Summer Food Service Program, FNS seeks to extend its commitment to children from low-income households during summer months when school meals are not available. Improved quality of food distribution commodities and service. FNS continues its support for agricultural markets with an emphasis on more healthful commodities, as well as improved program efficiency through automation, reduced Federal and State inventories, and timely deliveries of commodity foods. Forest Service Mission: The mission of the Forest Service is to sustain the health, productivity, and diversity of the Nation's forest and rangelands to meet the needs of present and future generations. This includes protecting and managing the National Forest and Grasslands; providing technical and financial assistance to States, communities, and private forest landowners; and developing and providing scientific and technical assistance and scientific exchanges in support of international forest and range conservation. Priorities: On October 13, 1999, the President issued a Memorandum directing the Forest Service to develop, and propose for public comment, regulations to provide appropriate long-term protection for most or all of the currently inventoried ``roadless'' areas and to determine whether such protection is warranted for any smaller ``roadless'' areas not yet inventoried. The President further directed that the final regulations should reflect the best available science and a careful consideration of the full range of ecological, economic, and social values inherent in these lands. A notice of intent to prepare an Environmental Impact Statement to analyze and disclose various alternatives for meeting the President's directive was published in the Federal Register on October 19, 1999. As an adjunct to this roadless policy, another agency priority is to revise its road management rules and policy to reflect reduced funding available for road construction and maintenance, the need to better inventory and analyze the need for existing forest roads, and thus the need to shift the emphasis from building new roads to better maintaining and managing those already in use. A proposal is expected to be published in November. Finally, the President's environmental program also includes incorporation of the principles of ecosystem management in natural resource planning for the National Forest System. In support of that effort, a proposed rule was published in the Federal Register of October 5, 1999 (Part II, 64 FR 54074-54112). Guided by recommendations of a Committee of Scientists, the proposed rule provides for science-based planning, ecosystem sustainability, use of ecoregional and watershed-level assessments, and strengthened collaboration with the individuals, organizations, State, local, tribal governments and other Federal agencies. Food Safety and Inspection Service Mission: The Food Safety and Inspection Service (FSIS) is responsible for ensuring the Nation's meat, poultry, and egg products are safe, wholesome, and properly packaged and labeled. Priorities: FSIS is continuing to review its regulations to eliminate duplication of and inconsistency with its own and other agencies' regulations. The Agency's regulatory review efforts are directed, in particular, at improving the consistency of the regulations with the July 25, 1996, final rule ``Pathogen Reduction; Hazard Analysis and Critical Control Points (HACCP) Systems.'' HACCP is a science-based process control system for producing safe food products. The final rule requires official meat and poultry establishments to develop and implement HACCP plans incorporating the controls they have determined are necessary and appropriate to produce safe products. HACCP places the responsibility for food safety firmly on meat and poultry establishments but enables them to tailor their control systems to their particular needs and processes and to take advantage of the latest technological innovations. FSIS must revise its numerous ``command-and-control'' regulations, which prescribe the exact means establishments must use to ensure the safety of their products. Some of these regulations specify precise cooking time-and-temperature combinations. Others require prior approval by FSIS of equipment and procedures, in effect assigning to the Agency the responsibility for the means used by establishments to comply with the regulations. As a general matter, command-and-control regulations are incompatible with HACCP because they deprive plants of the flexibility to innovate and undercut the clear delineation of responsibility for food safety. Therefore, FSIS is conducting a thorough review of its current regulations and, to the maximum extent possible, converting its command-and-control regulations to performance standards. Following are some of the Agency's recent and planned initiatives to convert command-and-control regulations to performance standards, to streamline and simplify the regulations and to facilitate the continuing implementation of the pathogen reduction and HACCP systems final rule: FSIS has proposed consolidating the sanitation regulations into a single part of the Code of Federal Regulations that would be applicable to both meat and poultry establishments, eliminating unnecessary differences between the meat and poultry sanitation requirements, and converting many of the highly prescriptive requirements to performance standards. FSIS will be proposing to remove most requirements pertaining to partial quality control programs. The Agency will also be proposing to consolidate and streamline the regulations governing the importation of meat, meat food and poultry products. This rulemaking also will implement provisions in recent international agreements, notably that on veterinary equivalence between the United States and the European Union. [[Page 63894]] FSIS has proposed new regulations limiting the amount of processing water that can be retained by raw, single- ingredient, meat or poultry products requiring labeling to indicate the amount of water retention. FSIS has proposed, in coordination with FDA, amending the regulations to harmonize and improve the efficiency of the procedures used for reviewing, approving and listing food or color additives that are used in the preparation of meat, meat food and poultry products. FSIS will be proposing generic Escherichia coli process control criteria, based on the sponge method of sampling, for cattle, swine and geese slaughtering establishments, and for turkey slaughtering establishments based on both the sponge and the whole-bird rinse sampling methods. The Agency also will be proposing updated Salmonella performance standards for all market classes of cattle and swine. Finally, FSIS will be proposing to require federally inspected egg product establishments to develop and implement HACCP systems and sanitation standards operating procedures. The Agency will be proposing pathogen reduction performance standards for pasteurizing egg products. Further, the Agency will be proposing to remove current requirements for approval by FSIS of egg-product plant drawings, specifications, and equipment prior to use and to end the system for pre-marketing approval of labels for egg products. The Agency also is planning to propose requiring safe-handling labels on shell eggs and egg products. Animal and Plant Health Inspection Service Mission: A major part of the mission of the Animal and Plant Health Inspection Service (APHIS) is to protect U.S. animal and plant resources from destructive pests and diseases. APHIS conducts programs to control and eradicate exotic pests and diseases in the United States. These activities enhance agricultural productivity and competitiveness and contribute to the national economy and the public health. Priority: APHIS is developing a proposal to strengthen restrictions on the importation of solid wood packing material (e.g., crates, dunnage, wooden spools, pallets, packing blocks) into the United States. Imported solid wood packing material (SWPM) has been linked to introductions of exotic plant pests such as the pine shoot beetle and the Asian longhorned beetle. These and other plant pests that could be carried by imported SWPM pose a serious threat to U.S. agriculture and to natural, cultivated, and urban forests. SWPM accompanies nearly all types of imported commodities, from fruits and vegetables to machinery and electrical equipment. Agricultural Marketing Service Mission: The Agricultural Marketing Service (AMS) facilitates the marketing of agricultural products in domestic and international markets, while ensuring fair trading practices, and promoting a competitive and efficient marketplace, to the benefit of producers, traders, and consumers of U.S. food and fiber products. Priorities: AMS' top regulatory priority is to establish the National Organic Program (NOP). The NOP will establish national standards for the production and handling of organically produced products, including a National List of substances approved and prohibited for use in organic production and handling. AMS will also publish the procedures for Mandatory Market News Reporting of Livestock and Meat. These regulations will establish a program that will provide livestock producers, packers, and other market participants with information on pricing, contracting for purchase, numbers and quality marketed for cattle, swine, lambs, and production of livestock products. AMS will publish a regulation to update the Federal Seed Act to incorporate current seed testing and seed certification procedures. This regulation will keep the Federal Seed Act consistent with present technology and prevent conflicts between Federal and State regulations that could inhibit the free movement of seed. AMS published an interim final rule that established a voluntary, fee- for-service program, under the Agricultural Marketing Act of 1946, under which AMS assesses State and private agencies in the United States to verify compliance with the requirements of the International Organization for Standardization (ISO) Guide 65. This assessment facilitates uninterrupted imports of U.S. organic products to countries in the European Union (EU) by enabling organic certifying agencies to comply with EU requirements. The interim final rule was effective June 10, 1999. A 60-day period was provided for interested persons to comment on the interim rule before the final rule is published in the near future. AMS will continue to review its regulations to keep them up-to-date and consistent with industry terminology and to eliminate duplication with its own and other agencies' regulations. This includes amending the regulations governing the inspection of eggs to delete regulatory detail not needed by AMS to administer its responsibilities under the Egg Products Inspection Act. _______________________________________________________________________ USDA--Agricultural Marketing Service (AMS) ----------- PROPOSED RULE STAGE ----------- 1. NATIONAL ORGANIC PROGRAM Priority: Economically Significant Legal Authority: PL 101-624, sec 2101 to 2123; 7 USC 6501 to 6522 CFR Citation: 7 CFR 205 Legal Deadline: Other, Statutory, May 28, 1991. NPRM, Statutory, May 28, 1992. Final, Statutory, October 1, 1993, The Organic Foods Production Act calls for the Secretary to appoint the National Organic Standards Board 180 days after enactment and convene it within 60 days thereafter. Abstract: The program is proposed under the Organic Foods Production Act of 1990 (title XXI of the Food, Agriculture, Conservation and Trade Act, Pub. L. 101-624), as amended (OFPA or Act), which requires the establishment of national standards governing the marketing of certain agricultural products as organically produced to facilitate commerce in fresh and processed food that is organically produced and to assure consumers that such products meet consistent standards. This program would establish national standards for the organic production and handling of agricultural products, which would include a national list of synthetic substances approved for use in the production and handling of organically produced products. It also would establish an accreditation program for State officials and private persons who want to be accredited to certify farms and handling operations that comply with the program's requirements and a [[Page 63895]] certification program for farms and handling operations that want to be certified as meeting the program's requirements. The program additionally would include labeling requirements for organic products and products containing organic ingredients and enforcement provisions. It further provides for the approval of State organic programs and the importation into the United States of organic agricultural products from foreign programs determined to have equivalent requirements. On December 16, 1997, the proposed rule was published with a public comment period that ended on April 30, 1998. Over 275,000 comments were received and are currently being reviewed with a subsequent revised proposed rule planned for calender year 1999. Statement of Need: The purpose of these regulations is to implement the Organic Foods Production Act (OFPA). The Act requires the establishment of consistent national standards for products labeled as organic; mandatory independent, third-party certification of such products; U.S. Department of Agriculture (USDA) oversight of the independent certifiers and their inspectors; and assurance that imported organic food products are produced and processed under practices equivalent to USDA standards. Establishment of the National Organic Program is necessary to eliminate the confusion that exists among consumers because of the variety of standards under which organic foods are currently produced, and the irregular and sometimes unsubstantiated labeling claims. As required by law, the National Organic Standards Board made recommendation on the development of the program. Based on recommendations of the Board, the Agency prepared a proposed rule for the accreditation of State and private persons to carry out the certification procedures and processors of organic foods, and a separate proposed rule for defining standards for the production of organic crops, livestock, and for processing foods to be labeled as organic. The proposed rule for standards will include the national list of prohibited substances and allowed synthetic substances to be used in organic production and processing. The standards will also include the process for the collection of user fees, enforcement provisions, determination of equivalency of foreign certification programs (either national or private certification programs), and the ongoing functions of the Board. The Board submitted recommendations for most of the program to the Secretary. Summary of Legal Basis: This regulatory action is authorized by statute. The Organic Foods Production Act of 1990, which is title XXI--Organic Certification--of the 1990 Farm Bill, calls for the Secretary of Agriculture to establish an organic certification program that relies on State and private agencies to verify that agricultural products are produced according to national standards. The Act also authorizes State officials to establish State Organic Certification Programs, provided that the provisions of each program are first submitted to USDA and approved by the Secretary. Alternatives: The Board developed recommendations through an open discussion process with the interested parties. The Board formed six subcommittees to draft recommendations for the following subject areas: crop standards; livestock standards; processing, packaging, and labeling standards; materials; accreditation of certifying agents; and, international (import) requirements. The Board held 14 full board meetings and 11 subcommittee meetings, during which the Board accepted public comments. In addition, the Agency held four public hearings on livestock to develop additional input to the development of livestock standards. In reviewing the Organic Foods Production Act, the subcommittees identified about 25 specific topics requiring recommendation development such as an organic plan, pesticide drift, livestock health, and materials review. Draft documents were prepared by the subcommittees in the specific subject areas and circulated initially to known individuals with expertise in these subjects in the organic community for comment. Comments were received and documents revised and sent out to a mailing list exceeding 1,000 names, for additional public comment. Documents were further revised, became committee position papers and were sent out to the mailing list for additional public comment. If the comments were minimal the documents were then approved by the subcommittees and forwarded to the full Board to be approved as draft recommendations. These documents were then further revised with full board-member input and submitted a final time for public comment. Upon receipt of comments, revisions were made, and the document was approved as a recommendation to the Secretary. Approximately 25 of these recommendations were approved at a Board meeting in June 1994 and forwarded to the Secretary (after minor editing in the approval process) in August 1994. In all of the documents, the Board committees considered alternatives and altered positions based on reasoned public comments received. The Board will continue to provide recommendations for modification or additions to program recommendations as the program is implemented and operating. The allowed synthetic substances and prohibited natural substances on the National List are subject to review by the Board and the Secretary every 5 years in order for the National List to be valid according to section 211(e) of the OFPA. The Secretary received the recommendations and used them as the basis for developing proposed rules for implementing the program. The Secretary may not accept recommendations that are deemed to be inconsistent with Department policy or lack a defensible position. Anticipated Cost and Benefits: The calculations and research related to the costs and benefits for the program are still under development. Because information is not collected on organic farmers, as a class, there is a lack of a good database to be used in determining the impacts of the program. Administrative costs would include staff costs for managing the accreditation program, costs for a peer review panel, costs for site visits to observe and review certifier program activities, overhead and/or indirect costs. If it is determined that income from the accreditation program would need to pay for all costs associated with the program, additional costs would include staff and indirect costs for support for the Board, ongoing materials reviews for the National List, enforcement costs, international equivalency costs to determine whether to allow organic imports, collection and management of the user-fee program, and approval of State programs. The program anticipates being funded through user fees. However, we believe that full user-fee support will not be possible for at least 3 years following implementation; appropriated general funds will be necessary to provide support while the organic industry develops a sufficient economic base. It is expected that the industry will soon be able to financially cover program activities related to accreditation if it continues to grow at its current annual rate of 20 percent as reported by a private natural foods magazine; [[Page 63896]] however, full coverage of costs related to development of State and international programs may not be possible for several years. The tangible benefits of the program are numerous. The benefits will extend to the marketplace, where it is expected that the price of organic food will decrease with increasing volume and availability and benefit current and potential consumers; all products labeled as organic will have been produced from systems certified to a national and consistent standard; truthful market information will be developed; access to international markets with products from certification programs overseen by USDA will be improved; certifying agents will be relieved of the financial costs related to standards development, materials review, and other endeavors that duplicate activities at the Federal level; and manufacturers and processors will be able to buy certified organic products from producers certified by different certifying agents without requiring the paperwork process in use today. Finally, exports will be enhanced by a common natural standard. Risks: The program does not purport to directly address either environmental problems or food residue issues. Any reduction in risks to public health, safety, or the environment are indirect benefits of the criteria used by organic producers in choosing materials that serve as an adjunct to the preferred methodology of mechanical and biological control measures. Organic agriculture is based on management practices and materials that enhance ecological activity. Organic producers seek to reduce or eliminate practices and materials that do not enhance ecological activity. Organic producers seek to reduce or eliminate practices and materials that may harm soil life, deplete nonrenewable resources, pose a hazard to water and air quality, or threaten farmworker health. The Act requires the establishment of a ``National List'' of approved synthetic and prohibited natural materials as an integral part of the program. Synthetic materials approved for the National List must have been determined by the USDA, FDA, and EPA to be not harmful to human health or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ Organic Livestoc58 FR 69315 12/30/93 Notice - Procedu60 FR 15744t Names of Substances for National L03/27/95 NPRM 62 FR 65850 12/16/97 NPRM Comment Period End 10/01/98 Reproposal 12/00/99 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: State, Tribal Agency Contact: Eileen Stommes Deputy Administrator, Transportation and Marketing Programs Department of Agriculture Agricultural Marketing Service Room 4006 P.O. Box 96456, Room 2748-So. Bldg. Washington, DC 20090-6456 Phone: 202 720-3252 RIN: 0581-AA40 _______________________________________________________________________ USDA--Animal and Plant Health Inspection Service (APHIS) ----------- PROPOSED RULE STAGE ----------- 2. IMPORTATION OF SOLID WOOD PACKING MATERIAL Priority: Other Significant. Major status under 5 USC 801 is undetermined. Legal Authority: 7 USC 150dd to 150ff; 7 USC 151 to 167; 7 USC 450; 7 USC 2803; 7 USC 2809; 21 USC 136; 21 USC 136a CFR Citation: 7 CFR 319.40 Legal Deadline: None Abstract: APHIS is undertaking rulemaking to strengthen restrictions on the importation of solid wood packing material (e.g., crates, dunnage, wooden spools, pallets, packing blocks) into the United States. Imported solid wood packing material (SWPM) has been linked to introductions of exotic plant pests such as the pine shoot beetle and the Asian longhorned beetle. These and other plant pests that could be carried by imported SWPM pose a serious threat to U.S. agriculture and to natural, cultivated, and urban forests. SWPM accompanies nearly all types of imported commodities, from fruits and vegetables to machinery and electrical equipment. Statement of Need: Unmanufactured wood articles imported into the United States could pose a serious threat of introducing plant pests detrimental to agriculture and to natural, cultivated, and urban forests. Regulations in 7 CFR 319.40-1 through 319.40-11 are intended to mitigate this plant pest risk. Introductions into the United States of exotic plant pests such as the pine shoot beetle and the Asian longhorned beetle have been linked to the importation of solid wood packing material (an unmanufactured wood article). Solid wood packing material accompanies nearly all types of imported commodities, from fruits and vegetables to machinery and electrical equipment. For this reason, we are undertaking rulemaking to strengthen the regulations that restrict the importation of solid wood packing material in order to reduce the risk that plant pests will be introduced into the United States. Summary of Legal Basis: The Animal and Plant Health Inspection Service (APHIS) is authorized to take action under the Federal Plant Pest Act (7 U.S.C. 150aa-150jj). Alternatives: APHIS presented three alternatives in an advance notice of proposed rulemaking. The alternatives were to apply restrictions on the importation of solid wood packing material based on risk assessment of regions, apply restrictions on a general basis regardless of origin, and prohibit importation of any solid wood packing material. We accepted comments on other alternatives to consider. These and other alternatives will be considered in analyses prepared in connection with further rulemaking. Anticipated Cost and Benefits: The costs of proposed regulatory changes will be dependent on the option that is chosen. We anticipate that costs will be alleviated by utilization of alternative materials, such as nonwood packing material. The benefits of increased restrictions will be [[Page 63897]] the reduction in the risk of potentially destructive plant pests being introduced into the United States and the resulting avoidance of economic losses to forest and agricultural resources. For the Asian longhorned beetle alone (a pest detected on solid wood packing material imported from China), we estimate that, if left unchecked, this pest has the potential to cause economic losses of $41 billion, affecting the forest products, commercial fruit, maple syrup, nursery, and tourist industries in the United States. Risks: APHIS will conduct a comprehensive pest risk assessment prior to making any regulatory changes. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 64 FR 3049 01/20/99 ANPRM Comment Period End 03/22/99 NPRM 01/00/01 Regulatory Flexibility Analysis Required: Undetermined Government Levels Affected: Undetermined Agency Contact: Dr. Robert Flanders Regulatory Coordination Specialist, Regulatory Coordination Staff, PPQ Department of Agriculture Animal and Plant Health Inspection Service Unit 141 4700 River Road Riverdale, MD 20737-1228 Phone: 301 734-5930 Email: [email protected] RIN: 0579-AA99 _______________________________________________________________________ USDA--Food and Nutrition Service (FNS) ----------- PROPOSED RULE STAGE ----------- 3. CHILD AND ADULT CARE FOOD PROGRAM: IMPROVING MANAGEMENT AND PROGRAM INTEGRITY Priority: Other Significant Unfunded Mandates: Undetermined Legal Authority: 42 USC 1766; PL 104-193; PL 105-336; PL 103-448 CFR Citation: 7 CFR 226 Legal Deadline: None Abstract: This rule amends the Child and Adult Care Food Program (CACFP) regulations. The changes in this rule result from the findings of State and Federal Program reviews and from audits and investigations conducted by the Office of Inspector General. This rule proposes to revise: State agency criteria for approving and renewing institution applications; Program training and other operating requirements for child care institutions and facilities; State- and institution-level monitoring requirements; and criteria for terminating agreements with institutions. This rule also includes changes that are required by the Healthy Meals for Healthy Americans Act of 1994 (PL 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PL 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (PL 105-336). The changes are designed to improve Program operations and monitoring at the State and institution levels and, where possible, to streamline and simplify Program requirements for State agencies and institutions. (95-024) Statement of Need: In recent years, State and Federal Program reviews have found numerous cases of mismanagement, abuse, and in some instances, fraud by child care institutions and facilities in the CACFP. These reviews revealed weaknesses in management controls over Program operations, and examples of regulatory noncompliance by institutions, including failure to pay facilities or failure to pay them in a timely manner; improper use of Program funds for non-Program expenditures; and improper meal reimbursements due to incorrect meal counts or to mis-categtorized or incomplete income eligibility statements. In addition, audits and investigations conducted by the Office of Inspector General (OIG) have raised serious concerns regarding the adequacy of financial and administrative controls in CACFP. Based on its findings, OIG recommended changes to CACFP review requirements and management controls. Summary of Legal Basis: Most of the changes proposed in the rule are discretionary changes being made in response to deficiencies found in Program reviews and OIG audits. Other proposed changes codify statutory changes made by the Healthy Meals for Healthy Americans Act of 1994 (PL 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PL 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (PL 105-336). Alternatives: In developing the proposal, the agency considered various alternatives to minimize burden on State agencies and institutions while ensuring effective Program operation. Key areas in which alternatives were considered include State agency reviews of institutions and sponsoring organization oversight of day care homes. Anticipated Cost and Benefits: This rule contains changes designed to improve management and financial integrity in the CACFP. When implemented, these changes would affect all entities in CACFP, from USDA to participating children and children's households. These changes will primarily affect the procedures used by State agencies in reviewing applications submitted by, and monitoring the performance of, institutions which are participating or wish to participate in the CACFP. Those proposed changes which would affect institutions and facilities will not, in the aggregate, have a significant economic impact. Data on CACFP integrity is limited, despite numerous OIG reports on individual institutions and facilities that have been deficient in CACFP management. While Program reviews and OIG reports clearly illustrate that there are weaknesses in parts of the Program regulations, and that there have been weaknesses in oversight, neither Program reviews, OIG reports, nor any other data sources illustrate the prevalence and magnitude of CACFP fraud and abuse. This lack of information precludes USDA from estimating the amount of money lost due to fraud and abuse or the reduction in fraud and abuse the changes in this rule will realize. Risks: Continuing to operate the CACFP under existing provisions of the regulations [[Page 63898]] that do not sufficiently protect against fraud and abuse in CACFP puts the Program at significant risk. This rule includes changes designed to strengthen current program regulations to reduce the risk associated with the Program. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 12/00/99 NPRM Comment Period End 03/00/00 Final Action 08/00/01 Final Action Effective 09/00/01 Regulatory Flexibility Analysis Required: No Small Entities Affected: Organizations Government Levels Affected: State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AC24 _______________________________________________________________________ USDA--FNS 4. FSP: PERSONAL RESPONSIBILITY PROVISIONS OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 Priority: Economically Significant. Major under 5 USC 801. Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: PL 104-193 CFR Citation: 7 CFR 271; 7 CFR 272; 7 CFR 273 Legal Deadline: Other, Statutory, August 22, 1996, Stat. implementation deadline of 8/ 22/96 for sec 813, 814, 820, 821, 837, and 911 of PL 104-193; stat. implementation deadline of 7/1/97 for sec 115, and 11/22/96 for sec 824 of PL 104-193. Abstract: This rule will implement 13 provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. (96-019) Statement of Need: P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, amends the Food Stamp Act of 1977, to add some new eligibility requirements and disqualifiers and increase some existing penalties for noncompliance with food stamp rules. The new law: (1) Makes individuals convicted of drug-related felonies ineligible for food stamps; (2) doubles the penalties for violating food stamp program requirements; (3) permanently disqualifies individuals convicted of trafficking in food stamp benefits of $500 or more; (4) allows States to disqualify an individual from food stamps if the individual is disqualified from another means-tested program for failure to perform an action required by that program; (5) makes individuals ineligible for 10 years if they misrepresent their identity or residence in order to receive multiple food stamp benefits; (6) makes fleeing felons and probation and parole violators ineligible for the food stamp program; (7) allows States to require food stamp recipients to cooperate with child support agencies as a condition of food stamp eligibility; (8) allows States to disqualify individuals who are in arrears in court-ordered child support payments; (9) limits the food stamp participation of most able-bodied adults without dependents to three months in a three-year period during times the individual is not working or participating in a work program; (10) prohibits an increase in food stamp benefits when households' income is reduced because of a penalty imposed under a Federal, State, or local means- tested public assistance program for failure to perform a required action; (11) requires States to provide households' addresses, social security numbers, or photographs to law enforcement officers to assist them in locating fugitive felons or probation or parole violators; and (12) prohibits an increase in food stamp benefits when households' income is reduced because of a penalty imposed under a Federal, State, or local means-tested public assistance program for an act of fraud by the individual under the program. Summary of Legal Basis: All of the provisions of this rule are mandated by P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Alternatives: None. Anticipated Cost and Benefits: Over 7 years, the provisions are expected to reduce the cost of the Food Stamp Program by approximately $5.565 billion. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 12/00/99 NPRM Comment Period End 02/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: Federal, State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AC39 _______________________________________________________________________ USDA--FNS 5. FSP: STATE FLEXIBILITY AND CERTIFICATION PROVISIONS OF PUBLIC LAW 104-193 Priority: Economically Significant. Major under 5 USC 801. Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: PL 104-193; PL 104-208; 7 USC 2011 to 2032 CFR Citation: 7 CFR 272.3; 7 CFR 273.1; 7 CFR 273.2; 7 CFR 273.4; 7 CFR 273.9(c); 7 CFR [[Page 63899]] 273.9(d); 7 CFR 273.10(a); 7 CFR 273.10(c) to 273.10(f); 7 CFR 273.11(a) to 273.11(c); 7 CFR 273.11(e); 7 CFR 273.11(j); 7 CFR 273.13; 7 CFR 273.14(b); 7 CFR 273.14(e) Legal Deadline: Other, Statutory, August 22, 1996, Stat. implementation deadline of 8/ 22/96 for sec 813, 814, 820, 821, 837, and 911 of PL 104-193; stat. implementation deadline of 7/1/97 for sec 115, and 11/22/96 for sec 824 of PL 104-193. For provisions effective upon enactment, the statutory implementation date is August 22, 1996. Abstract: This rule proposes to amend Food Stamp Program regulations to implement 14 provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and one provision of the Omnibus Consolidated Appropriations Act of 1996. These provisions would increase State agency flexibility in processing applications for the Food Stamp Program and allow greater use of standard amounts for determining deductions and self-employment expenses. The provisions would also give State agencies options to issue partial allotments for households in treatment centers, issue combined allotments to certain expedited service households, and certify elderly or disabled households for 24 months. Other changes would revise requirements for determining noncitizen eligibility and the eligibility and benefits of sponsored noncitizens, eliminate the exclusion of certain transitional housing payments and State and local energy assistance, exclude the earnings of students under 18, and require proration of benefits following any break in certification. (96-020) Statement of Need: This action is required by P. L. 104-193, P. L. 104-208, P. L. 105-53, and P. L. 105-185. Summary of Legal Basis: This rule is required to implement the provisions of sections 402, 421, 801, 807, 808, 809, 811, 812, 818, 827, 828, 830, and 835 of P. L. 104- 193; section 552 of P. L. 104-208; sections 5302, 5305, 5306, 5562, 5563, 5571, 5572, and 5573 of P. L. 105-53; and section 503 of P. L. 105-185. Anticipated Cost and Benefits: The provision of this rule would reduce Food Stamp Program costs for FY 1997-2002 by approximately $6.605 billion. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 12/00/99 NPRM Comment Period End 02/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: Federal, State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AC40 _______________________________________________________________________ USDA--FNS 6. FOOD STAMP PROGRAM: WORK PROVISIONS OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 Priority: Other Significant. Major status under 5 USC 801 is undetermined. Legal Authority: PL 104-193 CFR Citation: 7 CFR 273.7; 7 CFR 273.22 Legal Deadline: None Abstract: This proposed rule will implement revisions to the Food Stamp Program's work and employment and training requirements, as well as new provisions for a work supplementation or support program and an employment initiative program. (96-025) Statement of Need: This rule is necessary to implement revisions to the Food Stamp Program's work requirements. Summary of Legal Basis: All provisions of this proposed rule are mandated by Public Law 104- 193. Alternatives: The alternative is not to revise current rules. This is not practical. The current rules have been superseded by changes brought about by Public Law 104-193. Anticipated Cost and Benefits: Federal costs will increase by $15 million between fiscal year 1997 and fiscal year 2002. State agencies will benefit by achieving greater flexibility to encourage work and foster personal responsibility and independence. Risks: An increase in food stamp rolls would result by not implementing this rule. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 12/00/99 NPRM Comment Period End 02/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AC45 _______________________________________________________________________ USDA--FNS ----------- FINAL RULE STAGE ----------- 7. SPECIAL SUPPLEMENTAL FOOD PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC): FOOD DELIVERY SYSTEMS INTEGRITY Priority: Other Significant Legal Authority: 42 USC 1786 CFR Citation: 7 CFR 246 Legal Deadline: NPRM, Statutory, March 1, 1999. Final, Statutory, March 31, 2000. [[Page 63900]] Abstract: A proposed rule addressing WIC Food Delivery Systems was published on December 28, 1990 (55 FR 53446). The Department provided a 120-day comment period for the proposed rule, which closed on April 28, 1991. Nearly 1,100 comments were received from a wide variety of sources. Despite the degree of preliminary input to the December 28, 1990, proposed rule, many of the commenters responding during the formal comment period suggested that the Department's food delivery regulations be proposed again, rather than proceeding directly to a final rule. In addition, several members of Congress requested that the rule be reproposed in light of its impact on State agency food delivery systems. Therefore, the Department has issued a second proposed rule addressing WIC food delivery systems and requirements. This second rule addresses many of the provisions contained in the previous rulemaking, and contains modifications to some of the proposed provisions, as well as clarifications of several provisions that may not have been clearly understood in the earlier rule. See also RIN 0584-AC50 for related provisions that fulfill the statutory deadline. Statement of Need: On December 28, 1990, the Department published a proposed rule designed primarily to strengthen State agency operations in vendor management and related food delivery areas for the WIC Program. This proposal was developed with input over several years' time from State agency experts in food delivery, and with the full support of and encouragement from Congress and the Department's Office of Inspector General (OIG). The Department provided a 120-day comment period for the proposed rule, which closed on April 28, 1991. During this comment period, nearly 1,100 comments were received from State and local WIC agencies, vendors, and associated groups, public interest groups, members of Congress, members of the public, and WIC participants. Despite the degree of preliminary input to the December 28, 1990, proposed rule, many of the commenters suggested that the Department's food delivery regulations needed to be proposed again, rather than proceeding directly to a final rule. In addition, several members of Congress requested that the rule be reproposed in light of its impact on State agency food delivery systems. The Department has therefore issued a second proposed rule addressing WIC food delivery systems integrity and procedural requirements. This second rule addresses many of the provisions contained in the previous rulemaking, and contains significant modifications to some of the proposed revisions, as well as clarifications to a number of provisions that may not have been clearly understood in the earlier rule. The rule is intended to provide for more cost effective and efficient management of WIC vendors by State agencies. A 120-day public comment period is provided with this proposed rule. The Department intends to publish a final rule, based on all of the comments received, by the end of fiscal year 2000. Although this rule does not have a direct impact on reducing risks to public health, safety, or the environment, it will significantly improve the operation and accountability of the WIC Program nationwide. Alternatives: Given the intensive input that has been gathered for the development of this rule since it was recommended by the General Accounting Office in 1988, and the comments that were received pertaining to the first proposed version of the rule in December 1990, the Department has determined that there are no viable alternatives to the provisions included in this reproposal. The alternative of proceeding directly to promulgation of a final rule based on the 1990 proposal has been rejected by Congress. Anticipated Cost and Benefits: The costs of this action include costs due to vendor overcharges and costs associated with the proposal. The estimated costs for implementation of the proposal include a shift of not more than $2.0 million in WIC Program Nutrition Services and Administration (NSA) funds within the 88 State agencies, partially from reduced requirements for management evaluations of local agencies and reduced costs due to elimination of representative on-site monitoring. They also include $0.5 million in additional costs to vendors to meet the proposed minimum training and authorization requirements. It should be noted that all the vendors are currently required to participate in some type of training and complete an application form for program authorization. The estimated $0.5 million in additional costs therefore represents those instances where current training and authorization requirements are below the level established in the proposal. In these instances, vendors may incur costs in attending more frequent training sessions or may be required to complete an application form at more frequent intervals. The estimated cost does not represent charges to the vendor for training or authorization. Rather, the cost represents the estimated cost of the vendor's time to participate in the training session and to complete the application form. The gross benefit results from a significant reduction in vendor overcharges. A significant net benefit of $37 million is expected, as vendor overcharges are estimated at $39.5 million and costs associated with the proposal are a maximum of $2.5 million. Risks: This rule is intended to reduce and minimize the risk of vendor fraud and abuse of the WIC program. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 32308 06/16/99 NPRM Comment Period End 09/14/99 Final Action 03/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: State, Local, Tribal Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AA80 _______________________________________________________________________ USDA--FNS 8. FOOD STAMP PROGRAM: FOOD STAMP RECIPIENT CLAIM ESTABLISHMENT AND COLLECTION STANDARDS Priority: Economically Significant. Major under 5 USC 801. [[Page 63901]] Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 7 USC 2011 to 2032 CFR Citation: 7 CFR 272; 7 CFR 273 Legal Deadline: None Abstract: The Food and Nutrition Service is revising Food Stamp Program regulations which cover the establishment and collection of recipient claims. This action is the result of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and is consistent with the President's regulatory reform effort. In addition, this rule revises existing discretionary areas to improve claim establishment and promote effective management. The inability of State agencies to establish and collect claims has continuously been cited as a deficiency by the Department's Office of Inspector General. The last significant revision to these regulations was in 1983. Subsequent activities, such as technological advances and general debt management regulations, have rendered many portions of the current rule obsolete. In addition, the current rule has been found to place unnecessary burdens on State agencies. State agencies are responsible for establishing and collecting recipient claims. Statement of Need: In addition to implementing PRWORA, this rule is necessary to improve the establishment and collection of recipient claims. The last significant revision to these regulations was in 1983. Subsequent activities, such as technological advances and general debt management regulations, have rendered many portions of the current rule obsolete. The current rule has also been found to place unnecessary burdens on State agencies. State agencies are responsible for establishing and collecting recipient claims. This rule will address two dimensions of the overissuance problem: establishing claims on excess allowances, and recovering overages where possible. Data from the food stamp quality control system for 1998 show that overissuances to recipients totaled over $1.3 billion, 7.63 percent of the $16.9 billion in total food stamp issuances that year. Claims against recipients are a direct means to recover overissuances and, to the extent that recipients know that recovery of overissuances will be sought, represent a deterrent to households who quietly accept the extra food benefits. Alternatives: The alternative is not to revise the current rule governing this aspect of the Program. In addition, the existing regulations must be changed to conform with the new legislative requirement. The current rule is not adequate to facilitate effective and efficient debt management. The inability of State agencies to establish and collect claims has continuously been cited as a deficiency by the Department's Office of Inspector General. Anticipated Cost and Benefits: Nationwide, as of October 1, 1998, there was over $1.2 billion in uncollected recipient claims. Inspector General reports have also noted that, in addition to large accounts receivable for established, uncollected claims, there are backlogs of hundreds of millions of claims that have not yet been established. These unestablished claims represent the most current, and typically the most collectable losses to the program. Updated regulations that incorporate recent debt management rules and technological advances, as well as practical suggestions and feedback received from State agencies, should improve the establishment and collection of recipient claims in the Food Stamp Program. In addition, efforts will be made to increase the degree of conformity with claims-related issues and procedures currently used in other social programs. Risks: The tolerance of program abuse or even the perception of such undermines the fundamental mission of the Food Stamp Program. The efficient and effective establishment and collection of recipient claims, which this rulemaking addresses, is essential in ensuring that this does not occur. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 29303 05/28/98 NPRM Comment Period End 08/26/98 Final Action 01/00/00 Final Action Effective 01/00/01 Regulatory Flexibility Analysis Required: No Government Levels Affected: State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AB88 _______________________________________________________________________ USDA--FNS 9. FOOD STAMP PROGRAM: REVISIONS TO THE RETAIL FOOD STORE DEFINITION AND PROGRAM AUTHORIZATION GUIDANCE Priority: Other Significant Legal Authority: PL 103-225; 7 USC 2012; 7 USC 2018 CFR Citation: 7 CFR 271; 7 CFR 278 Legal Deadline: Final, Statutory, March 25, 1994. Abstract: This proposed rule would implement provisions of Public Law 103-225 requiring firms to offer a variety of staple food items for sale or to have more than 50 percent of gross retail sales in staple foods. This rule also addresses the requirement in Public Law 103-225 to provide periodic notices to participating firms, clarifying certain eligibility criteria. (95-003) Statement of Need: Public Law 103-225 amends the Food Stamp Act of 1977, to make changes in eligibility requirements for retail food stores to participate in the Food Stamp Program. Prior to enactment of these changes, a retail food store qualified to participate in the Food Stamp Program if more than 50 percent of its total eligible food sales were in staple foods. The new law changes that to require 50 percent of its total gross sales in staple foods. It also provides another option for stores not meeting the new 50 percent rule. Those stores can now qualify if they offer for sale, on a continuous basis, a variety of food [[Page 63902]] in each of four categories of staple foods. The staple food categories are defined as ``(1) meat, poultry, or fish; (2) bread or cereals; (3) vegetables or fruits; or (4) dairy products.'' This statutory change in eligibility will require developing policy definitions for the terms ``continuous basis,'' ``variety,'' and ``perishable.'' Alternatives: None. The new law also requires the Secretary to issue new rules providing for the periodic reauthorization of retail food stores and wholesale food concerns. This must include providing periodic notice of the definitions for ``retail food stores,'' ``staple foods,'' and ``perishable foods.'' Anticipated Cost and Benefits: It is not anticipated that this proposed rule will impact program costs. It is anticipated that the clarifications of program eligibility criteria in this proposed rule will make it easier for firms to understand and for the Food and Consumer Service to administer. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 35082 06/30/99 NPRM Comment Period End 08/30/99 Final Action 08/00/00 Regulatory Flexibility Analysis Required: Undetermined Small Entities Affected: Businesses Government Levels Affected: None Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AB90 _______________________________________________________________________ USDA--FNS 10. FSP: NONDISCRETIONARY PROVISIONS OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 Priority: Economically Significant. Major under 5 USC 801. Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: PL 104-193, sec 803; PL 104-193, sec 804; PL 104-193, sec 805; PL 104- 193, sec 809; PL 104-193, sec 810; PL 104-193, sec 838; PL 104-193, sec 109; PL 104-193, sec 826 CFR Citation: 7 CFR 271.2; 7 CFR 273.1; 7 CFR 273.2; 7 CFR 273.8; 7 CFR 273.9; 7 CFR 273.10; 7 CFR 276.2(e) Legal Deadline: Other, Statutory, For provisions effective upon enactment, the statutory implementation date is August 22, 1996. Statutory Implementation Dates: PL 104-193, sec 809 - 1/1/97; PL 104- 193, sec 803, 805 and 838 - 08/22/96; PL 104-193, sec 804 and 810 - 10/ 01/96. Abstract: This proposed rule amends the Food Stamp Program regulations to implement eight provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. These provisions require no interpretation or discretion: 1) Freeze the minimum allotment at $10; 2) change the way the maximum allotments are calculated to use 100% of the Thrifty Food Plan as opposed to 103%; 3) freeze the standard deduction at current level and eliminate the adjustment procedures; 4) cap the excess shelter expense deduction; 5) change the household composition definition so that children under 22 years of age and living with their parents cannot be a separate household; 6) increase the time frame from 5 to 7 days for expedited service; 7) set a time limit of not more than 90 days living in another person's house for considering a person homeless; and 8) set the fair market value of vehicles at $4,600 through 9/30/96 and raise it to $4,650 effective 10/ 1/96 and eliminate future adjustments. (96-021) Statement of Need: This action is required by P.L. 104-193. Summary of Legal Basis: This rule is required to implement the provisions of sections 109, 803, 804, 805, 809, 810, 826, and 838 of P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Alternatives: None. The provisions are mandated by statute. Anticipated Cost and Benefits: The provisions of this rule would reduce Food Stamp Program costs for FY 1997-2002 by $11.2 billion. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 37454 07/12/99 NPRM Comment Period End 09/10/99 Final Action 08/00/00 Regulatory Flexibility Analysis Required: Undetermined Small Entities Affected: Businesses Government Levels Affected: State, Local Agency Contact: Sheri Ackerman Agency Regulatory Officer Department of Agriculture Food and Consumer Service Room 322 3101 Park Center Drive Alexandria, VA 22302 Phone: 703 305-2246 Email: [email protected] RIN: 0584-AC41 _______________________________________________________________________ USDA--Food Safety and Inspection Service (FSIS) ----------- PROPOSED RULE STAGE ----------- 11. REFORM OF REGULATIONS ON IMPORTED LIVESTOCK AND POULTRY PRODUCTS Priority: Other Significant [[Page 63903]] Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will eliminate existing text in the CFR. Legal Authority: 21 USC 451 et seq; 21 USC 601 et seq CFR Citation: 9 CFR 327; 9 CFR 381 Legal Deadline: None Abstract: As part of its continuing regulatory reform effort, FSIS is proposing to consolidate and streamline the regulations governing the importation of livestock and poultry products to make them consistent with the regulatory approach the Agency has taken in its Pathogen Reduction/ Hazard Analysis and Critical Control Point (PR/HACCP) regulations and related rulemakings. FSIS is proposing to eliminate obsolete provisions and, where appropriate, to replace command-and-control provisions with performance standards. The Agency is proposing to require establishments where import inspection is conducted to have documented process controls that parallel in some respects the HACCP and other documented systems that establishments where inspection of domestic products is conducted must have. The rulemaking stems from the Agency's commitment to its regulatory reform, reinventing government, effort to eliminate duplication and inconsistency in the regulations and especially to make the regulations PR/HACCP consistent. Statement of Need: The rulemaking stems from the Agency's commitment to its regulatory reform, reinventing government, effort to eliminate duplication and inconsistency in the regulations and especially to make the regulations consistent with PR/HACCP. Summary of Legal Basis: This rulemaking is proposed under the authorities of the Federal Meat Inspection Act, as amended (21 U.S.C. 601-695) and the Poultry Products Inspection Act, as amended (21 U.S.C. 451-470). Alternatives: FSIS considered the following alternative courses of action with respect to the regulation of imported products: (1) no rulemaking; (2) combining and streamlining the current regulations into a single body of regulations covering imported livestock and poultry products; (3) combining and streamlining the import regulations and requiring establishments to have documented process controls for imported product. (1) The first alternative would preserve the status quo. Leaving the current regulations unchanged would preserve the inconsistencies between these regulations and the PR/HACCP regulations. Obsolete, duplicative, and command-and-control provisions would not be amended or removed. (2) The second alternative, to combine and streamline the current regulations, would provide the opportunity for FSIS to remove the obsolete. command-and-control provisions of the current regulations. (3) The third alternative, combining and streamlining the current regulations and requiring importing establishments to have documented process controls, would provide a more flexible system of imported product controls than that furnished by the current regulations. Both FSIS and the imported products industry would gain with improved flexibility and efficiency. FSIS chose the third alternative. Anticipated Cost and Benefits: This proposed rule would affect about 125 import inspection establishments. These would have to develop, maintain, and carry out documented process control systems. These costs would primarily be those associated with system development, i.e., paperwork or information collection costs. FSIS estimates that the development costs to the establishments would be, in the aggregate, about $55,000. The on-going costs would be incidental to the operation of the establishments, a number of which already have documented process control systems. FSIS is likely to gain some flexibility in its administration of import inspection. The proposed requirement for official import inspection establishments to have documented process control systems will benefit some establishments by introducing more efficient to assess the establishments and products for compliance because the Agency would be verifying controls managed by the establishments rather than, in effect, carrying out some checks that should be a normal part of establishment operations. The proposal would potentially have a positive effect on international trade. The listing of additional European Union (E.U.) countries eligible to export product to the United States, with reciprocal actions by those countries in favor of the U.S., would potentially expand trade in livestock products and poultry products. The amount by which such trade would increase would depend, in part, on the number of livestock and poultry products establishments listed respectively by the U.S. or the E.U. as eligible to have their products imported into the U.S. or the E.U. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 07/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: Businesses Government Levels Affected: None Agency Contact: Daniel L. Engeljohn Director, Regulations Development and Analysis Division Department of Agriculture Food Safety and Inspection Service Washington, DC 20250 Phone: 202 720-5276 RIN: 0583-AC56 _______________________________________________________________________ USDA--FSIS 12. EGG PRODUCTS INSPECTION REGULATIONS Priority: Economically Significant. Major status under 5 USC 801 is undetermined. Unfunded Mandates: Undetermined Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 21 U.S.C. 1031-1056 CFR Citation: 9 CFR 590.570; 9 CFR 590.575; 9 CFR 590.146; 9 CFR 590.10; 9 CFR 590.411; [[Page 63904]] 9 CFR 590.502; 9 CFR 590.504; 9 CFR 590.580; 9 CFR 591; ... Legal Deadline: None Abstract: The Food Safety and Inspection Service (FSIS) is proposing to require egg products plants to develop and implement Hazard Analysis and Critical Control Point (HACCP) Systems and Sanitation Standard Operating Procedures (SOP's). FSIS also is proposing pathogen reduction performance standards that would be applicable to pasteurized egg products. Plants would be expected to develop HACCP systems that ensure processed egg products meet the pathogen reduction performance standards. Finally, FSIS is proposing to amend the Federal shell egg and egg products inspection regulations by removing current requirements for prior approval by FSIS of egg products plant drawings, specifications, and equipment prior to their use in official plants. The Agency also plans to eliminate the prior label approval system for egg products, as well as require safe handling labels on shell eggs and egg products. The actions being proposed are part of FSIS's regulatory reform effort to improve FSIS's shell egg and egg products food safety regulations, better define the roles of Government and the regulated industry, encourage innovations that will improve food safety, remove unnecessary regulatory burdens on inspected egg products plants, and make the shell egg and egg products regulations as consistent as possible with the Agency's livestock and poultry products regulations. FSIS is also taking these actions in light of changing inspection priorities and recent findings of Salmonella in pasteurized egg products. Statement of Need: The actions being proposed are part of FSIS's regulatory reform effort to improve FSIS's shell egg and egg products food safety regulations, better define the roles of Government and the regulated industry, encourage innovations that will improve food safety, remove unnecessary regulatory burdens on inspected egg products plants, and make the shell egg and egg products regulations as consistent as possible with the Agency's livestock and poultry products regulations. FSIS is also taking these actions in light of changing inspection priorities and recent findings of Salmonella in pasteurized egg products. Summary of Legal Basis: This rulemaking is proposed under the authority of the Egg Products Inspection Act, as amended, 21 U.S.C. 1031-1056. Alternatives: FSIS is engaged in a thorough review of its current regulations and, where possible, will eliminate overly prescriptive regulations and replace them with regulations that embody performance standards. Performance standards establish requirements in terms of the objective to be achieved. They specify, the ends, but do not detail the means to achieve those ends. Performance standards allow food processing establishments to develop and employ innovative and more effective sanitation or processing procedures customized to the nature and volume of their production. To address hazards that can be presented by egg products, FSIS now is considering (1) requiring all inspected egg products plants to develop, adopt, and implement written Sanitation SOP's and HACCP plans; and (2) converting to a lethality-based pathogen reduction performance standard many of the current highly prescriptive egg products processing requirements. The implementation of HACCP and Sanitation SOP requirements by egg products plants would reduce the occurrence and numbers of pathogenic microorganisms in egg products. Further, with HACCP and Sanitation SOP's in place, FSIS would be better able to allocate its inspection resources to the areas of greatest risk; FSIS inspection program personnel, therefore, would be better able to ensure that egg products processing would grant plants the flexibility needed to properly implement HACCP and Sanitation SOP's, and encourage innovation in egg products processing. In addition, such a performance standard for egg products processing would provide FSIS inspection program employees an objective measure of performance useful in processing, inspection, and enforcement. The Agency will also propose to require that egg products plants adopt sanitation SOP and HACCP plans. Plants will have significant latitude in identifying the sanitation SOP and HACCP plan suitable for their process. The egg products industry has indicated its desire to adopt HACCP on an industry-wide basis. About 30 percent of egg products plants have already implemented HACCP or HACCP-like programs. The pathogen reduction performance standard that egg product plants will have to achieve under their HACCP plans would likely have a more economically significant impact than the requirement of Sanitation SOP's or HACCP plans. Anticipated Cost and Benefits: Costs The expected costs of the proposal will depend on a number of factors, including the following: Required Lethality. The level of lethality required in the pathogen reduction performance standard will have a significant impact on the cost of the proposal. The expected type performance standard may specify a uniform level of pathogen reduction for a target organism. Alternatively, different reduction levels may be specified for white, yolk, and whole egg products, or production processes, reflecting the relative level of risk. As the level of lethality increases, the ability to utilize the egg for different products and formulations is diminished. The Agency will investigate the level of lethality that provides an acceptable balance between risk and egg utilization. HACCP and Sanitation Standard Operating Procedures. Implementing a HACCP plan and Sanitation SOP's requires the preparation of a plan, employee training, documentation and record keeping, and testing procedures. The costs associated with HACCP implementation are reduced by the extent to which quality assurance or similar programs are utilized by egg products firms and the availability of off-the-shelf HACCP plans. The types of Sanitation SOP's being considered are essentially the same as those for meat and poultry, and costs would be similar. Plant Compliance/Enforcement. FSIS costs for monitoring and enforcement are expected to be lower than those for current comparable activities as the program moves from continuous inspection (inspector on duty throughout the entire shift) to being monitored on a patrol assignment. We are not aware of any estimates of FSIS costs for verifying process control and pathogen reduction for egg products. They would probably be similar in costs to those for meat and poultry inspection. The monitoring costs for some plants may increase, especially those reliant on the inspector to be the quality control expert. [[Page 63905]] Benefits The types of potential benefits associated with this rule are: Improvements in human health due to pathogen reduction; improved utilization of FSIS inspection program resources; and cost savings resulting from the flexibility of egg products plants in achieving a lethality-based pathogen reduction performance standard. Once specific alternatives are identified, economic analysis will identify the quantitative and qualitative benefits associated with each. Human health benefits are based on changes from a baseline level of illnesses and the health cost per illness. FSIS egg products testing results indicate either some pasteurization processes are inadequate, or that egg products are being contaminated with Salmonella after pasteurization, prior to, or during packaging. The results indicate a very low level of contamination. Pasteurized egg products have not been identified/associated with any known outbreaks; however, unpasteurized egg products have been implicated in foodborne outbreaks. Salmonella would principally be found in unpasteurized product. However, there have been a few instances when SE has been isolated from egg products found to be positive for the presence of Salmonella. In the majority of these cases, the Salmonella contamination can be attributed to post- pasteurization product contamination. Sanitation SOP and HACCP requirements could remedy this problem by enhancing the effectiveness of pasteurization by minimizing microbiological hazards before and after pasteurization. Two recent studies have raised questions about the efficacy of the current regulatory requirements for egg products pasteurization (9 CFR 590.570). The research suggests that for certain formulations of egg products, the required time/temperature combinations are not sufficient to destroy high numbers of Salmonella (5 log 10), as originally projected by USDA research completed in the 1960s. A pathogen reduction performance standard requiring a specific reduction of Salmonella in egg products would assist plants in ensuring that pasteurization of egg products is effective. FSIS has established an Egg Products Risk Management Analysis Team to better assess the information available on potential human health risks associated with egg products. The team is comprised of technical personnel from FSIS and other Federal agencies. The primary task is to fully characterize the hazard and identify potential risk mitigation alternatives for further analysis. The USDA Salmonella Enteritidis Risk Assessment and the CDC Salmonella surveillance data provide estimates of the baseline level of risk. The Egg Products component of the risk assessment is being used to identify the expected reduction in illness attributed to the alternative identified in the proposed rule. Any new scientific or epidemiological information will be incorporated into the risk assessment model. The analysis will identify a range of estimated annual illnesses prevented. A standard methodology employed by the Economic Research Service will be used to calculate the health cost per illness, taking into account the severity of the illness. Sanitation SOP's would improve the utilization of FSIS inspection program resources by refocusing FSIS sanitation inspection on the oversight of establishment prevention and correction of conditions that cause direct product contamination or adulteration. If Sanitation SOP's are put in place, Agency inspection personnel will spend less time enforcing detailed sanitation requirements and directing the correction of problems after they occur. Instead, FSIS inspection program personnel will focus on oversight of an establishment's implementation of Sanitation SOP's and on taking appropriate regulatory action when an establishment's Sanitation SOP's are not properly executed, or when product contamination or adulteration is imminent, directly observed, or probably had occurred. Under the current command-and-control based system, the inspector assumes responsibility for ``approving'' production-associated decisions. Under HACCP, industry would assume full responsibility for production decisions and execution. FSIS would monitor establishments' compliance with the pathogen reduction performance standard and HACCP requirements. The number of inspection tasks will be reduced, so inspection program personnel can focus more attention on areas of greatest risk in the production system within each establishment. Performance standards set forth requirements in terms of what is to be achieved by a given regulatory requirement. They represent a shift in focus from ``command-and-control'' regulations in that they specify the ends to be achieved, but not the means to achieve those ends. The command-and-control provisions in the current regulations prescribe the means for producing safe egg products and do not account for the uniqueness of individual processing procedures and needs within different plants. FSIS command-and-control regulations require all establishments to produce egg products in the same manner. Such prescriptive regulations are burdensome and often conflict with HACCP and the new FSIS food safety strategy. As a general matter, command-and-control regulations are incompatible with HACCP and the new food safety strategy because they deprive plants of the flexibility to innovate-adopt new, more cost-effective production technologies, or develop new egg products. Potential technical innovations in improving product safety can be expected with the introduction of Sanitation SOP's and HACCP. In addition, with the elimination of prior approval requirements, the industry would be able to utilize computer integrated process controls and other technologies (currently used for other types of food processing). There is potential for the development of shelf-stable product which does not require refrigeration. Similarly, command-and-control regulations are incompatible with the proposed Sanitation SOP requirements because they often prescribe the exact means by which egg product plants must maintain sanitary conditions and do not allow the plant to assume responsibility for sanitation. Command-and-control regulations undercut the clear delineation of responsibility on which the food safety strategy is based. Analysis of the gains in resource productivity, technological change, and consumer choice will be largely qualitative. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 06/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses, Governmental Jurisdictions Government Levels Affected: None [[Page 63906]] Agency Contact: Daniel L. Engeljohn Director, Regulations Development and Analysis Division Department of Agriculture Food Safety and Inspection Service Washington, DC 20250 Phone: 202 720-5276 RIN: 0583-AC58 _______________________________________________________________________ USDA--FSIS 13. PATHOGEN REDUCTION; HAZARD ANALYSIS AND CRITICAL CONTROL POINT (HACCP) SYSTEMS; ADDITIONS TO E. COLI CRITERIA AND SALMONELLA PERFORMANCE STANDARDS Priority: Other Significant Legal Authority: 21 U.S.C. 601 to 695; 21 U.S.C. 451 to 470 CFR Citation: 9 CFR 310; 9 CFR 381 Legal Deadline: None Abstract: FSIS is proposing to add generic E. coli criteria and Salmonella performance standards to the regulations. In addition, FSIS is proposing to revise the terms used to identify and define certain classes of product listed in the Salmonella tables. Statement of Need: To further enhance its Pathogen Reduction/HACCP implementation, the Agency is proposing to add generic Eschericha coli (E. coli) criteria for cattle, swine, and goose carcasses based on the sponging method of sample collection and for turkey carcasses by the sponging and rinse methods of sample collection. FSIS is also proposing new Salmonella performance standards for cattle, swine, young turkey, and goose carcasses by the sponging method and fresh pork sausage by direct sampling. The new cattle performance standard replaces the existing Salmonella performance standards for steers/heifers and cows/bulls. The new swine standard replaces the existing standard for hogs. These new standards apply to all market classes of cattle and swine, respectively. In addition, FSIS is proposing to revise the terms used to identify and define certain classes of product listed in the Salmonella tables to more accurately reflect the products sampled in the baseline studies that are the basis for the standards. The Agency also intends to correct some errors in the E. coli and Salmonella tables and to change the footnotes to the tables for greater clarity. This rulemaking stems from the Agency's commitment to increase the use of science-based methodology in meat and poultry inspection. Summary of Legal Basis: This rulemaking was proposed under the authorities of the Federal Meat Inspection Act, as amended (21 U.S.C. 601-695), and the Poultry Products Inspection Act, as amended (21 U.S.C. 451-470). Alternatives: No action. Anticipated Cost and Benefits: The Pathogen Reduction/HACCP final rule included a Final Regulatory Impact Assessment (FRIA) (61 FR 38945). Except for the proposed performance standard for goose carcasses, the cost and benefit estimates and impact assessments were already presented in the FRIA. The final rule estimated that a small percentage of firms would have to make process modifications in order to meet the standards based on national prevalence levels. The ongoing compliance-testing program has basically validated the FRIA estimates. Approximately ten percent of establishments must take corrective actions to meet existing standards. The final rule noted that benefits would accrue from reductions in pathogen levels, which, in turn, would lead to reductions in foodborne illness. In the preamble to the Pathogen Reduction/HACCP final rule, the Agency acknowledged that the initial performance standards were based on the current national prevalence and not on a quantitative assessment of the risk posed by any particular incidences of Salmonella contamination or the determination of a safe incidence level. This policy was based on the public health judgement that reducing the percentage of carcasses with Salmonella will reduce the risk of foodborne illness and on the regulatory judgement that the pathogen reduction performance standards implemented in conjunction with HACCP would lead to significant reductions in contamination rates. Preliminary evidence indicates that these judgements were correct. The revised and new standards proposed now are based on the same original judgements supported by preliminary data showing reductions in both contamination rates and foodborne illness. Also in the preamble of the Pathogen Reduction/HACCP final rule, FSIS stated that the scientific basis for establishing food safety performance standards needs to be improved. However, as noted in the preamble and it is still true today, there is no scientific basis for setting pathogen standards based on a quantitative assessment of risk. As noted above, the FRIA prepared for the Pathogen Reduction/HACCP final rule did not address the cost of complying with a performance standard for geese. In Fiscal Year 1998 only 7 federally inspected establishments slaughtered more than 100 geese. Based on past experience it is likely that one or two of these establishments will have to make some process modification to meet the proposed standard. The adjustments could range from having to make minor adjustments to spray nozzles used for the final carcass wash to having to install a trisodium phosphate rinse system (estimated at $40,000 in the FRIA). Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 05/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Agency Contact: Daniel L. Engeljohn Director, Regulations Development and Analysis Division Department of Agriculture Food Safety and Inspection Service Washington, DC 20250 Phone: 202 720-5276 RIN: 0583-AC63 _______________________________________________________________________ USDA--FSIS ----------- FINAL RULE STAGE ----------- 14. SUBSTANCES APPROVED FOR USE IN THE PREPARATION OF MEAT AND POULTRY PRODUCTS Priority: Other Significant [[Page 63907]] Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 21 USC 451 et seq; 21 USC 601 et seq CFR Citation: 9 CFR 318; 9 CFR 381 Legal Deadline: None Abstract: This rule will amend the Federal meat and poultry products inspection regulations to simplify the procedures by which FSIS approves food additives and Generally Recognized as Safe substances to be used as ingredients in meat food products and poultry products. The final rule will be developed in cooperation with the Food and Drug Administration to make the Federal regulation of food additives and other substances that may be used as ingredients in meat food and poultry products more efficient and uniform. Statement of Need: This rule is a response to longstanding requests by industry representatives for FSIS the procedures for approving and listing in the Agency's regulations food additives and other substances used in the preparation of meat, meat food, and poultry products. The industry representatives have argued that the FSIS rulemakings to permit the use of FDA-approved additives in meat, meat food, and poultry products have been largely duplicative of the FDA procedures. FSIS adopted a final rule in July 1983 under which the Agency could amend its regulations on a ``fast track'' basis to provide for the use in livestock products or poultry products, at appropriate levels and for appropriate purposes, of FDA-approved substances. The Agency discontinued this procedure in 1988, however, because of concerns it might not satisfy the requirements of the Administrative Procedure Act. Comments submitted in response to USDA's February 25, 1992, notice requesting public comments on how Department regulations can be improved, updated, or streamlined, supported the Agency's decision to initiate this rulemaking project in coordination with FDA. This rulemaking has been included among the Administration's proposals for reinventing food regulations. Summary of Legal Basis: This rulemaking was proposed under the authorities of the Federal Meat Inspection Act, as amended (21 U.S.C. 601-695), and the Poultry Products Inspection Act, as amended (21 U.S.C. 451-470). Alternatives: No action. Anticipated Cost and Benefits: The public benefits conferred by this rulemaking include, principally, those associated with the more timely regulatory approval of food and color additives added to foods and those associated with having the food and color additives themselves available for use more quickly. The benefits of food and color additives added to meat, meat food, and poultry products include the technical effects on the characteristics of food products, the uses of the food and color additives in food processing, and a greater variety of foods in the marketplace. Public health benefits include the greater availability of food through preservation techniques and improved food safety through, for example, antimicrobial treatments of raw product and the use of curing solutions in processed products. The benefits conferred by the availability of food and color additives and this rulemaking will marginally increase the food and color additives' use. The public benefits of regulating food and color additives generally will not change. These include, principally, the prevention of adulteration or misbranding of food products. Consumers are provided assurances that the products they buy do not contain food and color additives whose use ought, for various reasons, to be prohibited, and food and color additives that have been approved have not been used improperly in foods. This final rulemaking will not affect such benefits because FDA will continue to conduct safety reviews of food and color additives proposed for use in foods, including--in consultation with FSIS--meat, meat food, and poultry products, and FSIS will continue to exercise its in-plant inspection and other regulatory authorities to prevent the marketing of adulterated or misbranded meat, meat food, and poultry products. Therefore, elimination of the duplicative FSIS rulemaking process involved in listing or approving food and color additives for use in meat, meat food, and poultry products will probably save the regulated industry between $400,000 and $600,000 a year over and above the savings the Government itself will realize in administrative costs. (According to industry representatives, the cost of filing one food or color additive is approximately $100,000. This includes research and administrative costs.) Other less calculable benefits arise through the removal of a disincentive to innovative. With the potential expansion of uses of approved food additives and other new food and color additives that will result from the easing of the current regulatory burden, new product development and marketing are encouraged. This final rule will not have a significant economic impact on a substantial number of small entities. Obtaining approval for the use in meat, meat food, and poultry products of new food and color additives or for new uses of previously listed or approved food and color additives will be simpler, faster, and less costly for both industry and the Federal Government than under the current system. FSIS now may authorize for use in meat, meat food, or poultry products only those food and color additives that have been previously reviewed for safety and approved for such use by FDA. Under the final rule, separate petitions to FSIS will no longer have to be submitted. FSIS will permit food and color additives to be used in products under its jurisdiction based on FDA's title 21 regulations permitting such uses. Those food and color additives not approved for meat, meat food, or poultry product use under current FDA regulations will require only one petition for rulemaking--to FDA. FSIS currently receives approximately four to six petitions per year for the listing or approval of food and color additives for use in livestock products and poultry products. Approximately 75 percent of these petitions are from large commercial entities. Risks: As mentioned, potential public health benefits of this rule include the greater availability of food through preservation techniques and improved food safety through, for example, antimicrobial treatments of raw product and the use of curing solutions in processed products. A more timely and efficient approval process would make these benefits available sooner than [[Page 63908]] they can be under the current approval process. However, FSIS has no way of forecasting how many food and color additives that yield health and safety benefits will be submitted to FDA in any given future year. The Agency therefore does not have a basis for quantifying the future health and safety benefits of this rule. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 60 FR 67459 12/29/95 NPRM Comment Period End 05/06/96 Final Action 01/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: None Agency Contact: Daniel L. Engeljohn Director, Regulations Development and Analysis Division Department of Agriculture Food Safety and Inspection Service Washington, DC 20250 Phone: 202 720-5276 RIN: 0583-AB02 _______________________________________________________________________ USDA--FSIS 15. ELIMINATION OF REQUIREMENTS FOR PARTIAL QUALITY CONTROL PROGRAMS Priority: Other Significant Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will eliminate existing text in the CFR. Legal Authority: 21 USC 451 et seq; 21 USC 601 et seq CFR Citation: 9 CFR 317; 9 CFR 318; 9 CFR 319; 9 CFR 381 Legal Deadline: None Abstract: This proposed rule would amend the meat and poultry inspection regulations by removing most requirements pertaining to partial quality control (PQC) programs. A PQC program controls a single product, operation, or part of an operation in a meat or poultry establishment. The proposal would remove the design requirements affecting most PQC programs that establishments have and most requirements for establishments to have PQC programs for certain products or processes. The proposal would also remove from the thermal processing regulations the requirements for FSIS prior approval, or approval before use, of systems and devices not specified in the regulations and all requirements concerning PQC programs. The proposal would expand the alternatives available to establishments under the thermal processing regulations for ensuring the safety of their products. However, the requirements for establishments to have quality control programs to control food irradiation processing and certain slaughtering inspection systems for poultry and the requirements concerning the design and content of those programs would be unaffected by this rulemaking. This proposal is intended to allow establishments under inspection additional flexibility, consistent with the Pathogen Reduction/Hazard Analysis and Critical Control Points (HACCP) regulations, to adopt new technologies and methods that will improve food safety and other consumer protections. Statement of Need: FSIS carries out programs designed to ensure that meat, poultry, and egg products are wholesome, not adulterated, and properly marked, labeled, and packaged. FSIS is implementing the ``Pathogen Reduction; Hazard Analysis and Critical Control Point (HACCP) Systems'' final rule promulgated July 25, 1996 (61 FR 38806), to reduce the risk of foodborne illness associated with consumption of meat and poultry products to the maximum extent possible. Under the Pathogen Reduction/ HACCP final rule, establishments are to accomplish this objective by taking appropriate and feasible measures to prevent or reduce the likelihood of physical, chemical, and microbiological hazards in the production of meat and poultry products. FSIS is reviewing its other regulations to determine how they can be made more consistent with the Pathogen Reduction/HACCP regulations and the regulations and the regulatory approach they embody. Included in this review are regulations concerning sanitation standards, the exclusion from the food supply of meat and poultry products with visible defects affecting safety or quality, and preventing the economic adulteration of meat and poultry products. As stated in the December 29, 1995, advance notice of proposed rulemaking (ANPRM) ``FSIS Agenda for Change'' (60 FR 67469), FSIS plans to eliminate regulations that are unnecessary and, to the extent possible, modify or replace command-and-control prescriptions with performance standards. Command-and-control requirements specify, often in great detail, how a plant is to achieve particular food safety or other regulatory objectives, while performance standards state the objectives or levels of performance to be achieved, and the plant can then choose how to achieve them. Replacing command-and-control requirements with performance standards will afford inspected establishments the flexibility to adopt technological innovations that can yield food safety benefits. This change is also compelled by the philosophy underlying HACCP systems. Under the HACCP approach, plant management builds into its food production processes science-based controls and related measures-- the HACCP plans--required to ensure food safety. The HACCP plans can vary from plant to plant. Where appropriate, command-and-control regulations must be changed to provide greater flexibility for industry to design and implement processes and HACCP systems of control, tailored to the circumstances of each plant. This is consistent with the HACCP approach, which clearly delineates industry and Government responsibility for food safety, with plants establishing procedures they will follow to ensure the production of safe food. Among the regulations FSIS has identified as candidates for modification or elimination to be consistent with HACCP are restrictive, command-and-control-type regulations which delimit processing and treatment methods intended to eliminate specific food safety hazards and requirements concerning PQC programs. Among these are requirements that establishments have such programs for their products or processes and requirements concerning the design of such programs. Summary of Legal Basis: Under the Federal Meat Inspection Act (21 USC 601 et seq.) and the Poultry Products Inspection Act (21 USC 451 et seq.), FSIS issues regulations governing the production of meat and poultry products prepared for [[Page 63909]] distribution in interstate commerce. The Agency also issues regulations concerning the sanitation conditions under which such products are prepared. Alternatives: The alternatives to this proposed rulemaking that FSIS considered were, in addition to the alternative of no rulemaking, market sampling of finished products, mandating additional in-plant controls, sampling finished products for chemical analysis, general requirements and standards for PQC programs, and the elimination of all TQC and PQC requirements. Anticipated Cost and Benefits: The proposed rule could save the regulated industry up to $14,000,000 in costs associated with developing PQC programs according to FSIS specifications and in operating PQC programs that are mandated by the regulations. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 26892 05/18/99 NPRM Comment Period End 07/19/99 Final Rule 03/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: Federal, State Agency Contact: Daniel L. Engeljohn Director, Regulations Development and Analysis Division Department of Agriculture Food Safety and Inspection Service Washington, DC 20250 Phone: 202 720-5276 RIN: 0583-AC35 _______________________________________________________________________ USDA--Forest Service (FS) ----------- PRERULE STAGE ----------- 16. NATIONAL FOREST SYSTEM ROADLESS AREAS Priority: Other Significant Legal Authority: 16 USC 472; 16 USC 551; 16 USC 1604; 42 USC 4321 CFR Citation: 36 CFR 294 Legal Deadline: None Abstract: On October 13, 1999, the President directed the Forest Service to begin an open and public dialogue about the future of inventoried roadless areas within the National Forest System. As the first step in carrying out the President's direction, the Forest Service published a Notice of Intent to prepare an environmental impact statement in the Federal Register on October 19, 1999 (64 FR 56306). The Notice of Intent initiates the scoping process, whereby the Forest Service is soliciting public comment on the nature and scope of the environmental, social, and economic issues related to roadless areas. The public has been asked to provide comments by December 20, 1999. Additionally, the agency is holding scoping meetings in every Forest Service Region to facilitate public comment on the scope of an environmental analysis and alternatives. This initiative responds to strong public sentiment for protecting roadless areas and the public benefits those areas provide, including clean water, biological diversity, wildlife habitat, forest health, dispersed recreational opportunities, and other benefits. It also responds to budgetary concerns about the National Forest road system. The public has long questioned the logic of building new roads in roadless areas when the Forest Service receives insufficient funding to maintain its existing road system. To assist in determining the scope and content of a proposed rule, the agency will prepare an environmental impact statement to analyze (1) the effects of eliminating certain activities such as road construction in the remaining unroaded portions of inventoried roadless areas on the National Forest System; and (2) the effects of establishing criteria and procedures to ensure that the social and ecological values are considered and protected through the forest planning process. The draft environmental impact statement (EIS) and a proposed rule that embodies the preferred alternative identified in the draft EIS are expected to be available for public review and comment in the spring of 2000. Statement of Need: Areas that are without roads have inherent values that are increasingly scarce and highly desirable. Under present management policies, the maintenance of areas with these values cannot be guaranteed. At the same time, present and foreseeable funding for road maintenance is expected to be only a small fraction of the total needed to meet environmental and safety standards. Therefore, it is necessary for the agency to change its policies and practices for roadless area management to reflect different resource priorities and realistic funding levels. Summary of Legal Basis: The Forest Service's proposal to initiate a rulemaking process to protect roadless areas comes under applicable administrative and environmental laws, including the Organic Act, the Multiple-Use Sustained-Yield Act, the National Forest Management Act, and the National Environmental Policy Act. Alternatives: The agency could either continue under existing regulations or propose regulations to address the protection of roadless areas. Anticipated Cost and Benefits: As part of the development of a proposed rule, the agency will assess the environmental impacts, as well as the costs and benefits of promulgating a rule for the protection of roadless areas. The benefits of publishing the rule are to preserve the value of areas without roads, including biological diversity, clean water, and other social, economic, and ecological values. Without this protection, the cost to the taxpayer in the future may be considerable, in terms of the loss of desirable aesthetic qualities that are becoming increasingly scarce. Risks: The planned regulatory action addresses the protection of roadless areas and would not directly cause specific risks to public health, safety, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 64 FR 56306 10/19/99 ANPRM Comment Period End 12/20/99 NPRM 04/00/00 NPRM Comment Period End 06/00/00 [[Page 63910]] Regulatory Flexibility Analysis Required: Undetermined Government Levels Affected: Undetermined Agency Contact: Marian P. Connolly Regulatory Officer Department of Agriculture Forest Service P.O. Box 96090 Washington, DC 20090-6090 Phone: 703 605-4533 Fax: 703 605-5111 Email: mconnoll/[email protected] RIN: 0596-AB77 _______________________________________________________________________ USDA--FS ----------- FINAL RULE STAGE ----------- 17. NATIONAL FOREST SYSTEM LAND AND RESOURCE MANAGEMENT PLANNING Priority: Other Significant Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 16 USC 1600 et seq; 5 USC 301 CFR Citation: 36 CFR 219 Legal Deadline: None Abstract: On October 5, 1999, the Forest Service published a proposed rule to guide land and resource management planning for the National Forest System. The proposed planning framework makes sustainability the foundation for National Forest System planning and management and establishes requirements for implementation, monitoring, evaluation, amendment, and revision of land and resource management plans. The intended effects are to simplify, clarify, and otherwise improve the planning process to reduce burdensome and costly procedural requirements; and to strengthen collaborative relationships with the public and other government entities. The comment period ends on January 4, 2000. Statement of Need: The need for the rule arises from having completed the first round of forest plans as required by the National Forest Management Act. The Forest Service contracted with the Conservation Foundation and Purdue University to conduct a comprehensive critique of the planning process and plan decisions. The critique involved both agency employees and external participants--state and local governments, businesses, environmental organizations, and others--and resulted in several volumes of findings and recommendations. Key recommendations were to strengthen the emphasis on ecosystem sustainability and health; to incorporate ecoregional and watershed-level assessments; and to strengthen opportunities for public participation in the planning process and for greater interaction and dialog with Federal, State, local and Indian tribal governments. Building on those recommendations, the agency published an Advance Notice of Proposed Rulemaking and a proposed rule in 1995. The proposed rule was controversial. There was a strong concern that the agency had not chartered a Committee of Scientists as was required by the statute for the initial planning regulations. In response, the Secretary of Agriculture decided to appoint a Committee of Scientists to provide advice in the development of a science-based approach to the planning process. The proposed rule is built on the Committee's recommendations for achieving more collaborative, dynamic, science-based planning that fosters collaboration among Forest Service officials, state, local, and Indian governments, organizations, and the public at large. Summary of Legal Basis: The legal basis for the planned regulatory action is the National Forest Management Act, which requires that regulations be promulgated. This final action will revise the existing regulation which was finalized in 1982. Alternatives: Alternatives to this rule that were considered include continuing under existing regulations or staying with the concepts in the embodied 1995 rulemaking effort. The agency determined that the Committee's recommendations should be the basis for a new proposed rule. Anticipated Cost and Benefits: A cost-benefit analysis has been completed as part of an Environmental Assessment. Based on that analysis, it is anticipated that streamlined planning procedures will result in a reduction in the cost of amending and revising forest plans relative to the same procedures under the existing regulation. Other benefits should include improved communication and coordination with the public and other agencies and governments, better understanding of the planning process, improved procedures for resource decisionmaking, and improved on-the-ground results as those decisions are implemented. Risks: The planned regulatory action addresses agency planning procedures and would not directly cause specific risks to public health, safety, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 56 FR 6508 02/15/91 NPRM 60 FR 18886 04/13/95 NPRM Comment Per60 FR 36767 08/17/95 Second NPRM 64 FR 54074 10/05/99 Second NPRM Comment Period End 01/04/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Agency Contact: Marian P. Connolly Regulatory Officer Department of Agriculture Forest Service P.O. Box 96090 Washington, DC 20090-6090 Phone: 703 605-4533 Fax: 703 605-5111 Email: mconnoll/[email protected] RIN: 0596-AB20 BILLING CODE 3410-90-F [[Page 63911]] DEPARTMENT OF COMMERCE (DOC) Statement of Regulatory and Deregulatory Priorities Sustainable, long-term economic growth is a central focus of the President's policies and priorities. The mission of the Department of Commerce (DOC) is to promote job creation, economic growth, sustainable development, and improved living standards for all Americans by working in partnership with business, universities, communities, and workers to: Build for the future and promote U.S. competitiveness in the global marketplace by strengthening and safeguarding the Nation's economic infrastructure; Keep America competitive with cutting-edge science and technology and an unrivaled information base; and Provide effective management and stewardship of our Nation's resources and assets to ensure sustainable economic opportunities. The Commerce mission statement, containing our three strategic themes, provides the vehicle for understanding Commerce's aims, how they interlock, and how they are to be implemented through our programs. Working collectively, the bureaus of the Department (including the Office of the Secretary) developed this mission statement, with the intent that it serve as both a statement of Departmental philosophy and as the guiding force behind the Department's programs. The importance that this mission statement and these strategic themes have for the Nation is amplified by the vision they pursue for America's communities, businesses, and families. Commerce is the smallest Cabinet agency, yet our presence is felt, and our contributions are found, in every State. The DOC touches Americans, daily, in many ways--we make possible the weather reports that all of us hear every morning; we facilitate the technology that all of us use in the workplace and in the home each day; we support the development, gathering, and transmitting of information essential to competitive business; we make possible the diversity of companies and goods found in America's (and the world's) marketplace; and we support environmental and economic health for the communities in which Americans live. The DOC has a clear and powerful vision for itself, for its role in the Federal Government, and for its roles supporting the American people, now and in the future. We confront the intersection of trade promotion, civilian technology, economic development, sustainable development, and economic analysis, and we want to provide leadership in these areas for the Nation. As a Department, we aspire to provide programs and services that serve our country's businesses, communities, and families, as initiated and supported by the President and the Congress. We are dedicated to making those programs and services as effective as possible, while ensuring that they are being delivered in the most cost-effective ways. We seek to function in close concert with other agencies having complementary responsibilities so that our collective impact can be most powerful. We seek to meet the needs of our customers quickly and efficiently, with programs, information, and services they require and deserve. As a permanent part of the Federal Government, but serving an Administration and Congress that can vary with election results, we seek to serve the unchanging needs of the Nation, according to the priorities of the President and the Congress. We are able to do this effectively by functioning in accordance with the legislation that undergirds our programs and by working closely with the President and the committees in Congress, which have programmatic and financial oversight for our programs. In his 1996 State of the Union message, the President said: ``Now we move to an age of technology, information, and global competition. These changes have opened vast new opportunities, but they have also presented us with stiff challenges.'' The Vice President has sounded a similar call: ``Americans also understand that in a global economy, the only way to maintain America's competitive edge is to lead the world in innovation and new technologies. Investments in science and technology mean better jobs, higher wages, and a growing economy.'' In the 1997 State of the Union address, the President said: ``Over the last four years, we have brought new economic growth by investing in our people, expanding our exports, cutting our deficits, creating over 11 million new jobs, a four-year record.... We face no imminent threat, but we do have an enemy. The enemy of our time is inaction.'' He continued: ``To prepare America for the 21st century, we must harness the powerful forces of science and technology to benefit all Americans.'' Again, in the 1998 State of the Union message, the President said: Rarely have Americans lived through so much change, in so many ways, in so short a time. Quietly, but with gathering force, the ground has shifted beneath our feet as we have moved into an Information Age, a global economy, a truly new world.... As we enter the 21st century, the global economy requires us to seek opportunity not just at home, but in all the markets of the world. We must shape this global economy, not shrink from it..... Today, record high exports account for fully one-third of our economic growth. I want to keep them going, because that's the way to keep America growing and to advance a safer, more stable world. President Clinton, in the 1999 State of the Union message, said If we ... invest in our people, our communities, our technology, and lead in the global economy--then we will begin to meet our historic responsibility to build a 21st century prosperity for America. These words embody the mission of the DOC: to help keep America as the world's technology leader; to help American companies compete globally; to enable communities to conquer economic challenges; to stimulate the growth of high-pay, high-quality jobs; to preserve and protect the environment and our natural resources, as well as safeguard the public from the adverse impacts of undesirable environmental changes; and to provide information, which is vital to ensuring sound business and policy decisions. Commerce promotes and expedites American exports, helps nurture business contacts abroad, protects U.S. firms from unfair foreign competition, and makes how-to-export information accessible to small and mid-sized companies throughout the Nation, thereby ensuring that U.S. market opportunities span the globe. Commerce encourages development in every community, clearing the way for private-sector growth by building or rebuilding economically deprived and distressed communities. We promote minority entrepreneurship to establish businesses that frequently anchor neighborhoods and create new job opportunities. We work with the private sector to enhance competitive assets. As the Nation looks to revitalize its industries and communities, Commerce works as a partner with private entities to build America with an eye on the future. Through technology, research and development, and innovation, we are making sure America continues to prosper in the short-term, while also [[Page 63912]] helping industries prepare for long-term success. Commerce's considerable information capacities help businesses understand clearly where our national and world economies are going, and take advantage of that knowledge by planning the road ahead. Armed with this information, businesses can undertake the new ventures, investments, and expansions that make our economy grow. The capacity for managing the Nation's assets and resources is another key policy driver for Commerce, an essential one in our ability to help the Nation succeed in the future. These activities--ranging from protecting our fisheries to controlling the radio frequency spectrum to protecting intellectual property--affect the economy directly. The DOC has instituted programs and policies that lead to cutting- edge, competitive, and better paying jobs. We work every day to boost exports, to deregulate business, to help smaller manufacturers battle foreign competition, to advance the technologies critical to our future prosperity, to invest in our communities, and to fuse economic and environmental goals. The DOC is American business' surest ally in job creation, serving as a vital resource base, a tireless advocate, and its Cabinet-level voice. The Department's Regulatory Plan directly tracks these policy and program priorities, only a few of which involve regulation of the private sector by the Department. Responding to the Administration's Regulatory Philosophy and Principles The vast majority of the Department's programs and activities do not involve regulation. Of the Department's 12 primary operating units, only five--the Bureau of Export Administration (BXA), the International Trade Administration (ITA), the Economic Development Administration, the National Oceanic and Atmospheric Administration (NOAA), and the Patent and Trademark Office--plan significant preregulatory or regulatory actions for this Regulatory Plan year. Only two of these operating units, BXA and NOAA, have a regulatory action rising to the level of the most important of the Department's significant regulatory actions planned for the Regulatory Plan year. Though not principally a regulatory agency, the DOC has long been a leader in advocating and using market-oriented regulatory approaches in lieu of traditional command-and-control regulations when such approaches offer a better alternative. All regulations are designed and implemented to maximize societal benefits while placing the smallest possible burden on those being regulated. The DOC is also refocusing on its regulatory mission by taking into account, among other things, the President's regulatory principles. To the extent permitted by law, all preregulatory and regulatory activities and decisions adhere to the Administration's statement of regulatory philosophy and principles, as set forth in section 1 of Executive Order 12866. Moreover, we have made bold and dramatic changes, never being satisfied with the status quo. Over the past seven years we have emphasized, initiated, and expanded programs that work in partnership with the American people to secure the Nation's economic future. At the same time we have downsized, cut regulations, closed offices, and eliminated programs and jobs that are not part of our core mission. The bottom line is that, after much thought and debate, we have made many hard choices needed to make this Department ``state of the art.'' The Secretary has prohibited the issuance of any regulation that discriminates on the basis of race, religion, gender, or any other suspect category and requires that all regulations be written in simple, plain English and be understandable to those affected by them. The Secretary also requires that the Department afford the public the maximum possible opportunity to participate in Departmental rulemakings, even where public participation is not required by law. Improving the Regulatory Environment for Small Business The DOC remains committed to its goal of providing small businesses with the least burdensome regulatory environment possible. While we believe small business should remain free from the constraints of regulation whenever possible, the Department realizes that there are times where these entities must be subject to regulation of some kind. But in all cases where small businesses will be affected by DoC regulations, we make every effort to provide them with all relevant and necessary information at the earliest possible time, while making representatives of the Department available to discuss any problems or questions that may arise in complying with these regulations. Additionally, the Department remains committed to providing small businesses with the greatest amount of warning prior to the issuance of any regulation that could affect them directly or indirectly. Within the Department, the two agencies that regulate activities of small business are the National Oceanic and Atmospheric Administration (NOAA) and the Bureau of Export Administration (BXA). Both NOAA and BXA have taken numerous actions to comply with the Departmental goal of providing small businesses with the least burdensome regulatory environment, while working with small business to ensure that when regulations are issued, small businesses are informed as early as possible and prepared to meet regulatory requirements. National Oceanic and Atmospheric Administration When NOAA issues regulations that impact small business, NOAA Special Agents and officers begin an information outreach campaign to educate the regulated community on the new or amended regulations. This outreach campaign involves boarding vessels and visiting fish dealers to explain the new regulations and answer questions regarding compliance. Special Agents and officers educate the regulated community on the technical aspects of the regulations and the conservation value of the management plan and regulations. It has long been NOAA's practice to answer inquiries by small entities whenever appropriate in the interest of administering statutes and regulations. Inquiries are received via telephone, mail, and electronic mail; during public hearings, town hall meetings, and workshops held by NOAA throughout the year; and in the day-to-day interactions that small entities have with NOAA personnel. As a result, NOAA answers tens of thousands of inquiries from small entities each year. NOAA also issues written warnings rather than penalties for many minor violations. Since March 1996, NOAA has issued approximately 1,216 written warnings. In addition, NOAA has a Summary Settlement System that allows violators, including small entities, to choose not to contest an alleged violation and to pay a reduced penalty within a specified time period following receipt of the Summary Settlement Notice. Since March 1996, approximately 708 Summary Settlement offers were extended by NOAA. [[Page 63913]] NOAA has also established a Fix-It Notice (FIN) program for the reduction or waiver of civil penalties under several of the natural resource protection statutes NOAA enforces, including the Marine Mammal Protection Act, the Endangered Species Act, and the Magnuson-Stevens Fishery Conservation and Management Act. Under the FIN program, dozens of minor, first-time violations that are of a technical nature and do not have a direct natural resource impact, receive a FIN, which allows the violation to be corrected in lieu of a penalty. The FIN identifies the violation and allows the violator a specified amount of time to fix the violation. At this time, there are over 130 types of violations that have been included in the FIN program. NOAA's Civil Administrative Penalty Schedule has been amended to reflect the FIN program. Since March 1996, approximately 348 Fix-It Notices were issued in lieu of penalties, many to small entities. The FIN program has helped NOAA achieve compliance and has elicited a positive response from the regulated community, which includes small entities. Bureau of Export Administration BXA administers a classification and advisory opinion program. Under the Export Administration Regulations (EAR), which set the criteria for export of dual-use items, commercial items with potential military or weapons proliferation applications, an exporter has the responsibility of classifying the item it seeks to export to determine if an export license is required. In light of this responsibility, BXA has established a program whereby an exporter can ask BXA whether the item is subject to the EAR and, if so, the correct classification of that item. Further, for a given end-use, end-user, or destination, BXA will advise an exporter whether an export license is required, or likely to be granted. BXA has continually used technological advances in order to provide information and customer service to those entities that may be affected by BXA activities. Through its Fax-on-Demand system, BXA enables exporters to access useful information by facsimile 24 hours a day, and this service has been expanded to provide over 60 documents, including recent regulatory changes, upcoming workshops, useful points of contact, and a wide variety of other competitiveness and trade-related information. BXA also uses its broadcast subscription and broadcast e- mail services, known as netFacts, combined with its longstanding facsimile service, First Facts, to provide regular and timely updates regarding regulatory and policy changes and other items of interest to exporters. In addition, BXA spends a great deal of time educating industry about the export control provisions of the EAR. BXA has an extensive outreach program, conducting seminars throughout the United States and overseas. For example, as a standard part of the seminar, BXA provides a set of guidelines, Export Management System Guidelines, to assist firms in ensuring that their exports and export decisions are consistent with the EAR. The EAR also contain ``Know Your Customer'' guidelines and ``red flag'' indicators, designed to assist exporters in complying with regulatory requirements. The BXA Web site offers those with Internet access to a wide range of export control information, including frequently asked questions, free access to the full text of Export Administration Regulations, and links to other government sites. BXA's Simplified Network Application Process (SNAP) allows submission of license applications and classification requests through the Internet. Description of Agency Regulations National Oceanic and Atmospheric Administration The National Oceanic and Atmospheric Administration (NOAA) establishes and administers Federal policy for the conservation and management of the Nation's oceanic, coastal, and atmospheric resources. It provides a variety of essential environmental services vital to public safety and to the Nation's economy, such as weather forecasts and storm warnings. It is a source of objective information on the state of the environment. NOAA plays the lead role in achieving the Departmental goal of promoting stewardship by providing assessments of the global environment. Recognizing that economic growth must go hand-in-hand with environmental stewardship, the Commerce Department, through NOAA, conducts programs designed to provide a better understanding of the connections between environmental health, economics, and national security. Commerce's emphasis on ``sustainable fisheries'' is saving fisheries and confronting short-term economic dislocation, while boosting long-term economic growth. The Department of Commerce is where business and environmental interests intersect, and the classic debate on the use of natural resources is transformed into a ``win-win'' situation for the environment and the economy. Three of NOAA's major components, the National Marine Fisheries Service (NMFS), the National Ocean Service (NOS), and the National Environmental Satellite, Data, and Information Service (NESDIS), exercise regulatory authority. NMFS oversees the management and conservation of the Nation's marine fisheries, protects marine mammals, and promotes economic development of the U.S. fishing industry. NOS assists the coastal states in their management of land and ocean resources in their coastal zones, including estuarine research reserves; manages the Nation's national marine sanctuaries; monitors marine pollution; and directs the national program for deep-seabed minerals and ocean thermal energy. NESDIS administers the civilian weather satellite program and licenses private organizations to operate commercial land-remote sensing satellite systems. The Administration is committed to an environmental strategy that promotes sustainable economic development and rejects the false choice between environmental goals and economic growth. The intent is to have the Government's economic decisions be guided by a comprehensive understanding of the environment. The DOC, through NOAA, has a unique role in promoting stewardship of the global environment through effective management of the Nation's marine and coastal resources and in monitoring and predicting changes in the Earth's environment, thus linking trade, development, and technology with environmental issues. NOAA has the primary Federal responsibility for providing sound scientific observations, assessments, and forecasts of environmental phenomena on which resource management and other societal decisions can be made. In the environmental stewardship area, NOAA's goals include: rebuilding U.S. fisheries by refocusing policies and fishery management planning on increased scientific information; increasing the populations of depleted, threatened, or endangered species of marine mammals by implementing recovery plans that provide for their recovery while still allowing for economic and recreational opportunities; promoting healthy coastal ecosystems by ensuring that economic development is managed in [[Page 63914]] ways that maintain biodiversity and long-term productivity for sustained use; and modernizing navigation and positioning services. In the environmental assessment and prediction area, goals include: modernizing the National Weather Service; implementing reliable seasonal and interannual climate forecasts to guide economic planning; providing science-based policy advice on options to deal with very long-term (decadal to centennial) changes in the environment; and advancing and improving short-term warning and forecast services for the entire environment. Magnuson-Stevens Act Rulemakings Magnuson-Stevens Fishery Conservation and Management Act (Magnuson- Stevens Act) rulemakings concern the conservation and management of fishery resources in the U.S. 3-to-200-mile Exclusive Economic Zone (EEZ). Among the several hundred rulemakings that NOAA plans to issue in the Regulatory Plan year, a number of the preregulatory and regulatory actions will be significant. The exact number of such rulemakings is unknown, since they are usually initiated by the actions of eight regional Fishery Management Councils (FMCs) that are responsible for preparing fishery management plans (FMPs) and FMP amendments, and for drafting implementing regulations for each managed fishery. Once a rulemaking is triggered by an FMC, the Magnuson-Stevens Act places stringent deadlines upon NMFS by which it must exercise its rulemaking responsibilities. Most of these rulemakings will be minor, involving only the opening or closing of a fishery under an existing FMP. While no one Magnuson-Stevens Act rulemaking is among the Department's most important significant regulatory actions, and, therefore, none is specifically described below, the sum of these actions, and a few of the individual actions themselves, are highly significant. The Magnuson-Stevens Act, which is the primary legal authority for Federal regulation to conserve and manage fishery resources, establishes eight regional FMCs, responsible for preparing FMPs and FMP amendments. NMFS issues regulations to implement FMPs and FMP amendments. FMPs address a variety of fishery matters, including depressed stocks, overfished stocks, gear conflicts, and foreign fishing. One of the problems that FMPs may address is preventing overcapitalization (preventing excess fishing capacity) of fisheries. This may be resolved by limiting access to those dependent on the fishery in the past and/or by allocating the resource through individual transferable quotas, which can be sold on the open market to other participants or those wishing access. Quotas set on sound scientific information, whether as a total fishing limit for a species in a fishery or as a share assigned to each vessel participant, enable stressed stocks to rebuild. Other measures include staggering fishing seasons or limiting gear types to avoid gear conflicts on the fishing grounds, and establishing seasonal and area closures to protect fishery stocks. NMFS favors the concept of framework FMPs where applicable. Such FMPs provide ranges, boundaries, and decision rules within which NMFS can change management measures without formally amending the FMP. Further, consistent with the recommendations on improving regulatory systems, which accompany the Report of the National Performance Review, NMFS favors using market-oriented approaches in managing fisheries. Open- access fisheries are destined to have too many people investing too much money in vessels and equipment. Access controls (e.g., a limited number of permits) represent a rational approach for managing fishery resources; they can be used to control fishing mortality levels and to prevent overfishing, economic dissipation, and subsequent economic and social dislocation. Of course overall quotas will need to be set based on the best scientific information available as to such things as stock status and optimum yields. The FMCs provide a forum for public debate and, using the best scientific information available, make the judgments needed to determine optimum yield on a fishery-by-fishery basis. Optional management measures are examined and selected in accordance with the national standards set forth in the Magnuson-Stevens Act. This process, including the selection of the preferred management measures, constitutes the development, in simplified form, of an FMP. The FMP, together with draft implementing regulations and supporting documentation, is submitted to NMFS for review against the national standards set forth in the Magnuson-Stevens Act, in other provisions of the Act, and other applicable laws. The same process applies to amending an existing approved FMP. The Magnuson-Stevens Act contains ten national standards against which fishery management measures are judged. NMFS has supplemented the standards with guidelines interpreting each standard, and is currently in the process of updating and adding to those guidelines. One of the national standards requires that management measures, where practicable, minimize costs and avoid unnecessary duplication. Under the guidelines, NMFS will not approve management measures submitted by an FMC unless the fishery is in need of management. Together, the standards and the guidelines correspond to many of the Administration's principles of regulation as set forth in section 1(b) of Executive Order 12866. One of the national standards establishes a qualitative equivalent to the Executive Order's net benefits requirement--one of the focuses of the Administration's statement of regulatory philosophy as stated in section 1(a) of the Order. Licensing of Private Commercial Remote-Sensing Satellite Systems NOAA/NESDIS is planning to issue a second proposed rule to revise its existing procedures governing the licensing of private commercial Earth remote-sensing space systems under title II of the Land Remote Sensing Policy Act of 1992, 15 U.S.C. 5601 et seq. (1992 Act). Title II of the 1992 Act requires that any person subject to the jurisdiction or control of the United States obtain a license from the Secretary of Commerce before operating a private remote-sensing space system. The authority to issue licenses has been delegated to the Administrator of NOAA and redelegated to the Assistant Administrator for Satellite and Information Services. On July 10, 1987, NOAA published final regulations implementing title IV of the Land Remote Sensing Act of 1984 (the 1984 Act) setting forth the procedural requirements for obtaining a license. In 1988, the Radio Television News Directors Association filed a Petition for Rulemaking requesting NOAA to reopen these regulations in light of the President's January 5, 1988, Decision Directive encouraging commercial space development. On January 18, 1989, NOAA responded to this Petition, agreeing to reopen the regulations and incorporate certain principles favorable to commercial development that were consistent with the Directive. See 54 FR 1945. Shortly thereafter, Congress began to review the 1984 Act and, on October 28, 1992, enacted the 1992 Act, which repealed and succeeded the 1984 Act. [[Page 63915]] The 1992 Act made significant changes to the 1984 Act, particularly with regard to the latter's requirement that all unenhanced data must be provided on a nondiscriminatory basis. The 1992 Act also provided for judicial review of certain licensing and enforcement actions. NOAA has issued ten licenses under the regime established in the 1992 Act. On March 9, 1994, the President issued a policy decision to ``support and enhance U.S. competitiveness in the field of remote sensing space capabilities, while at the same time protecting U.S. interests in national security and international obligations.'' This established a number of policies that promote an appropriate balance between these interests. Specifically, the President's policy announced the goal of enhancing U.S. competitiveness in a market that is projected to be worth approximately $2 billion worldwide by the year 2000, while at the same time addressing the national security concerns brought up by other Government agencies. The President's policy covers foreign access to remote-sensing systems, technology, products, and data. It states that there is a presumption that systems whose capabilities are already available in the global marketplace will be ``favorably considered.'' It also elaborated eight more conditions that are to be applied to any license. The most significant of these conditions are: (1) During periods when national security or international obligations and/or foreign policies may be compromised, as defined by the Secretary of Defense or the Secretary of State, respectively, the Secretary of Commerce may, after consultation with the appropriate agencies, require the licensee to limit data collection and/or distribution by the system to the extent necessitated by the given situation. Decisions to impose such limits only will be made by the Secretary of Commerce in consultation with the Secretary of Defense or Secretary of State, as appropriate. Disagreements between Cabinet Secretaries may be appealed to the President; (2) That the licenses are not subject to foreign ownership, above a specified threshold, without the explicit permission of the Secretary of Commerce; and (3) Licensees must notify the U.S. Government of their intent to enter into significant or substantial agreements with new foreign customers. Interested agencies are to be given advance notice of such agreements to allow them to review the proposed agreement in light of national security, international obligations, and foreign policy concerns. The President's policy stated that the definition of a significant or substantial agreement, as well as the time frames and other details of this process, were to be defined by the Commerce Department in regulations. On December 4, 1995, a Notice of Inquiry and Request for Public Comment was published in the Federal Register, wherein NOAA sought public comment to decide whether, and to what extent, the 1987 regulations needed revision in light of the President's policy and the 1992 Act, and if so, which issues should be addressed. NOAA received seven sets of comments. Additionally, NOAA held a public hearing at the Department of Commerce on June 14, 1996, at which it received additional input from interested parties. The main theme that emerged at the public hearing was the need for transparency and predictability in the regulations. On November 3, 1997, NOAA issued a proposed rule to revise its remote- sensing licensing procedures. The proposed regulations would update the 1987 regulations to reflect the above-described intervening events and information gathered through the public process, as well as the experience gained during recent licensing procedures. The intent of the proposed regulations would be to help promote the development of the commercial remote-sensing industry by keeping Government oversight to the minimum necessary to ensure protection of U.S. national security and foreign policy interests and by making that role predictable and transparent to the affected applicants and licensees. An underlying premise is that the long-term national security and foreign policy interests of the United States are best served by helping the U.S. industry lead this emerging market. The November 3, 1997, proposed regulations incorporate the basic regulatory principle that any restrictions on a licensee, including those required for national security and foreign policy purposes, must be the least burdensome possible to achieve the stated objective. Further, the proposed rule would establish a notice mechanism for allowing up to 49 percent foreign ownership in the licensee and monitoring domestic investment, so that control of the remote-sensing system could not be transferred without a formal amendment to the license. As required by the President's 1994 policy, the rule sought to define what foreign agreements are significant or substantial and must be submitted for review. Agency actions under the regulation would be reviewable by an administrative law judge. On April 1, 1998, NOAA held a public meeting to listen to public comments on the proposed regulations. The public comment period ended the next day. NOAA received 18 sets of substantive comments on the proposed regulations. As a result of the extensive public comments received on the November 3, 1997, proposed rule and at the April 1, 1998, public hearing, NOAA has determined it appropriate to revise its proposal and seek further public comment. Bureau of Export Administration The Bureau of Export Administration (BXA) promotes U.S. national and economic security and foreign policy interests by managing and enforcing the Department's security-related trade and competitiveness programs. BXA plays a key role in challenging issues involving national security and nonproliferation, export growth, and high technology. The Bureau's continuing major challenge is combating the proliferation of weapons of mass destruction while furthering the growth of U.S. exports, which are critical to maintaining our leadership in an increasingly competitive global economy. BXA strives to be the leading innovator in transforming U.S. strategic trade policy and programs to adapt to the changing world. Major Programs and Activities The Export Administration Regulations (EAR) provide for export controls on dual use goods and technology (primarily commercial goods that have potential military applications) not only to fight proliferation, but also to pursue other national security, short supply, and foreign policy goals (such as combating terrorism). Simplifying and updating these controls in light of the end of the Cold War has been a major accomplishment of BXA. BXA is also responsible for: Enforcing the export control and antiboycott provisions of the Export Administration Act (EAA), as well as other statutes such as the Fastener Quality Act. The EAA is enforced through a variety of administrative, civil, and criminal sanctions. [[Page 63916]] Analyzing and protecting the defense industrial and technology base, pursuant to the Defense Production Act and other laws. As the Defense Department increases its reliance on dual-use high technology goods as part of its cost-cutting efforts, ensuring that we remain competitive in those sectors and sub-sectors is critical to our national security. Helping Ukraine, Kazakstan, Belarus, Russia, and other newly emerging countries develop effective export control systems. The effectiveness of U.S. export controls can be severely undercut if ``rogue states'' or terrorists gain access to sensitive goods and technology from other supplier countries. Working with former defense plants in the Newly Independent States to help make a successful transition to profitable and peaceful civilian endeavors. This involves helping remove unnecessary obstacles to trade and investment and identifying opportunities for joint ventures with U.S. companies. Assisting U.S. defense enterprises to meet the challenge of the reduction in defense spending by converting to civilian production and by developing export markets. This work assists in maintaining our defense industrial base as well as preserving jobs for U.S. workers. BXA's two principal operating units, Export Administration and Export Enforcement, as well as its Office of Administration, have undergone significant reorganization and downsizing in recent years in order to meet the goals of reforming and streamlining the export control system, as recommended by the National Performance Review (NPR) and the Trade Promotion Coordinating Committee. BXA is also an NPR Reinvention Laboratory. Chemical Weapons Convention BXA plans to issue a final rule that will make effective the proposed rule published July 21, 1999. The purpose of the regulation is to implement the provisions of the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction (Chemical Weapons Convention) and the Chemical Weapons Convention Implementation Act of 1998, requiring private facilities to submit information on certain activities involving toxic chemicals, and to make certain private facilities subject to periodic inspection by the Organization for the Prohibition of Chemical Weapons (OPCW), the international organization created to administer the Convention and to monitor compliance by States Parties. On April 25, 1997, the United States ratified the Chemical Weapons Convention, just prior to the entry into force of the Convention on April 29, 1997. The Convention bans the development, production, stockpiling, or use of chemical weapons and prohibits States Parties from assisting or encouraging anyone to engage in a prohibited activity. The Convention provides for declaration and inspection of all States Parties' chemical weapons and facilities. To fulfill its arms control and non-proliferation objectives, the Convention also establishes a comprehensive verification scheme and requires the declaration and inspection of facilities that produce, process, or consume certain lists or Scheduled chemicals, some of which have significant commercial applications. The United States has declared its chemical weapons and chemical weapons production and storage facilities to the OPCW, and is in the process of destroying its chemical weapons stockpiles. In order to be in compliance with its obligations as a State Party to the Convention, the United States also must establish the declaration and inspection program for private facilities engaged in activities involving Scheduled chemicals. The Chemical Weapons Convention Implementation Act of 1998, enacted on October 21, 1998, authorized the United States to require the U.S. chemical industry and other private entities to submit declarations, notifications, and other reports and also to provide access for on-site inspections, in order that the United States may comply with its obligations under the Convention. On June 25, 1999, the President issued Executive Order 13128, which directs the Commerce Department to issue regulations. The BXA's discretion in drafting the declaration forms and formulating the reporting requirements is limited by the Convention requirements. The OPCW issued forms for States Parties to use in submitting declarations. In drafting the declaration forms and the CWCR, BXA has consistently made the reporting requirements as narrow as possible to ensure that only information required to be declared to the OPCW or necessary to ensure that U.S. aggregate Schedule 1 activities are below the one metric ton limit set forth in the Convention is to be reported to BXA. For certain reporting requirements that are currently subject to national discretion, BXA has adopted the minimum requirements consistent with a reasonable reading of the Convention, keeping in mind its purposes and objectives. _______________________________________________________________________ DOC--Bureau of Export Administration (BXA) ----------- FINAL RULE STAGE ----------- 18. CHEMICAL WEAPONS CONVENTION REGULATIONS Priority: Other Significant Legal Authority: 22 USC 6701 et seq; EO 13128 CFR Citation: 15 CFR 710 et seq Legal Deadline: None Abstract: The final rule will make effective the proposed rule published July 21, 1999. The purpose of the regulation is to implement the provisions of the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction (Chemical Weapons Convention) and the Chemical Weapons Convention Implementation Act of 1998, requiring private facilities to submit information on certain activities involving toxic chemicals, and to make certain private facilities subject to periodic inspection by the Organization for the Prohibition of Chemical Weapons (OPCW), the international organization created to administer the Convention and to monitor compliance by States Parties. Statement of Need: On April 25, 1997, the United States ratified the Chemical Weapons Convention, just prior to the entry into force of the Convention on April 29, 1997. The Convention bans the development, production, stockpiling, or use of chemical weapons and prohibits States Parties from assisting or encouraging anyone to engage in a prohibited activity. The Convention provides for declaration and inspection of all States Parties' chemical weapons and chemical weapons production facilities, and oversees the destruction [[Page 63917]] of such weapons and facilities. To fulfill its arms control and non- proliferation objectives, the Convention also establishes a comprehensive verification scheme and requires the declaration and inspection of facilities that produce, process, or consume certain lists or ``Schedules'' chemicals, some of which have significant commercial applications. The United States has declared its chemical weapons and chemical weapons production and storage facilities to the OPCW, and is in the process of destroying its chemical weapons stockpiles. In order to be in compliance with its obligations as a State Party to the Convention, the United States also must establish the declaration and inspection program for private facilities engaged in activities involving ``Scheduled'' chemicals. Summary of Legal Basis: The Chemical Weapons Convention Implementation Act of 1998, enacted on October 21, 1998, authorized the United States to require the U.S. chemical industry and other private entities to submit declarations, notifications and other reports and also to provide access for on-site inspections, in order that the United States may comply with its obligations under the Convention. On June 25, 1999, the President issued Executive Order 13128, which directs the Commerce Department to issue regulations. Alternatives: The Bureau of Export Administration's (BXA) discretion in drafting the declaration forms and formulating the reporting requirements is limited by the Convention requirements. The OPCW has issued forms for States Parties to use in submitting declarations. In drafting the declaration forms and the CWCR, BXA has consistently made the reporting requirements as narrow as possible to ensure that only information required to be declared to the OPCW or necessary to ensure that U.S. aggregate Schedule 1 activities are below the one metric ton limit set forth in the Convention is to be reported to BXA. Other States Parties, such as Canada, have imposed much broader reporting requirements on their industries, with the government taking on the responsibility of determining the information that must be forwarded to the OPCW. In addition, there are certain declaration requirements of the Convention that are subject to interpretation. Until the Conference of States Parties establishes clear rules for these requirements, States Parties may use their national discretion to implement them. National discretion generally means a reasonable interpretation of the requirement. For such reporting requirements currently subject to national discretion, BXA has adopted the minimum requirements consistent with a reasonable reading of the Convention, keeping in mind its purposes and objectives. Anticipated Cost and Benefits: Benefits from the regulation include increased national security and economic growth and stability in a safe and secure environment. State Party obligations under the Convention include imposition of restrictions on trade with non-States Parties. Over 120 countries, including the United States' major trading partners accounting for most of U.S. chemical exports, are States Parties to the Convention. The U.S. chemical industry, therefore, will also benefit from the United States' ratification of the Convention and compliance with its requirements because its trade with other States Parties will not be subject to CWC trade restrictions. The costs of the regulation will include: (1) the cost to industry of preparing data declarations and reports and preparing for and receiving inspections; and (2) the cost to government of processing the declarations and reports, assisting industry to prepare for inspections, and escorting OPCW inspection teams. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ Proposed Rule 64 FR 39193 07/21/99 Final Rule 10/00/99 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses, Governmental Jurisdictions Government Levels Affected: Federal Agency Contact: Hillary Hess Director, Regulatory Policy Division Department of Commerce Bureau of Export Administration 2096/MS 2705 14th & Pennsylvania Ave., N.W. Washington, DC 20230 Phone: 202 482-2440 Fax: 202 482-3355 Email: [email protected] RIN: 0694-AB06 _______________________________________________________________________ DOC--National Oceanic and Atmospheric Administration (NOAA) ----------- PROPOSED RULE STAGE ----------- 19. LICENSING OF PRIVATE REMOTE-SENSING SATELLITE SYSTEMS Priority: Other Significant Legal Authority: 15 USC 5601 et seq CFR Citation: 15 CFR 960.1 et seq Legal Deadline: None Abstract: The proposed regulations would update the 1987 regulations to reflect the intervening events and information gathered through the public process, as well as the experience gained during recent licensing procedures. The intent of the regulations is to facilitate the development of the U.S. commercial remote-sensing industry and thus promote the collection and widespread availability of Earth remote- sensing data, while preserving essential U.S. national security interests and international obligations. An underlying premise is that the long-term national security and foreign policy interests of the United States are best served by helping the U.S. industry to lead this emerging market. Statement of Need: On July 10, 1987, NOAA published final regulations implementing Title IV of the Land Remote Sensing Act of 1984 (the 1984 Act), setting forth the procedural requirements for obtaining a license. In 1988, the Radio Television News Directors Association filed a Petition for Rulemaking requesting NOAA to reopen these regulations in light of the President's January 5, 1988, [[Page 63918]] Decision Directive encouraging commercial space development. On January 18, 1989, NOAA responded to this Petition, agreeing to reopen the regulations and incorporate certain principles favorable to commercial development that were consistent with the Directive. See 54 FR 1945. Shortly thereafter, Congress began to review the 1984 Act and, on October 28, 1992, enacted the 1992 Act, which repealed and succeeded the 1984 Act. The 1992 Act made significant changes to the 1984 Act, particularly with regard to the latter's requirement that all unenhanced data must be provided on a nondiscriminatory basis. The 1992 Act also provided for judicial review of certain licensing and enforcement actions. On November 3, 1997, NOAA issued a Notice of Proposed Rulemaking (NPRM) revising its procedures governing the licensing of private commercial Earth remote-sensing space systems under title II of the Land Remote Sensing Policy Act of 1992, 15 U.S.C. 5601 et seq. (1992 Act). On April 1, 1998, NOAA held a public meeting to listen to public comments on the proposed regulations. The public comment period ended the next day. NOAA received 24 sets of public comments to the November 3, 1997, NPRM from a wide range of interests in industry, the media, academia, government, and the foreign policy community. The major substantive issues raised can be summarized under the following categories: (1) control, ownership, and investment; (2) national security concerns and international obligations concerns; (3) review of foreign agreements; (4) confidentiality of information; and (5) the interagency memorandum of understanding. As a result of the extensive public comments received on the November 3, 1997, proposed rule and at the April 1, 1998, public hearing, NOAA has determined it appropriate to revise its proposal and seek further public comment. This revised NPRM incorporates changes in each of the areas addressed by the comments, with the most significant changes in the area of foreign ownership, control, and investment. Specifically, the revised rule focuses more closely on ``control'' over the operations of the system. The revised rule has also been harmonized with existing regulations addressing foreign ownership and control. This revised NPRM also incorporates and facilitates NOAA's enforcement program, which will be key to protecting vital national security interests once the high-resolution systems become operational. Summary of Legal Basis: Title II of the 1992 Act requires that any person subject to the jurisdiction or control of the United States obtain a license from the Secretary of Commerce before operating a private remote-sensing space system. The authority to issue licenses has been delegated to the Administrator of NOAA and redelegated to the Assistant Administrator for Satellite and Information Services. Alternatives: The November 3, 1997, proposed regulations incorporate the basic regulatory principle that any restrictions on a licensee, including those required for national security and foreign policy purposes, must be the least burdensome possible to achieve the stated objective. The fundamental goal of the proposed rule was to support and enhance U.S. industrial competitiveness in the field of remote-sensing space capabilities, while at the same time protecting U.S. national security and foreign policy interests. The measures included in the proposed rule are those necessary to protect U.S. interests. The alternatives to the measures proposed would be the establishment of national security and foreign policy controls that would hinder or prevent growth of the commercial market or allowing unrestricted commercial operations that could harm U.S. national security and foreign policy interests. The final regulations will achieve this goal. Anticipated Cost and Benefits: The intent of the regulations is to help promote the development of the commercial remote-sensing industry by keeping Government oversight to the minimum necessary to ensure protection of U.S. national security and foreign policy interests and by making that role predictable and transparent to the affected applicants and licensees. An underlying premise is that the long-term national security and foreign policy interests of the United States are best served by helping the U.S. industry to lead this emerging market. Failure to provide a regulatory regime that nurtures and fosters the development of this high-skilled, high-wage industry is likely to result in the United States losing not only its advantage in this technology, but also a great percentage of the projected growth in economic value of this industry. The costs of the licensing procedures would be borne, for the most part, by the Federal Government and would not be significant. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ Notice of Inquir60 FR 62054 12/04/95 Notice of Public61 FR 24480 05/14/96 NPRM 62 FR 59317 11/03/97 Notice of Public63 FR 10785 03/05/98 Revised NPRM 11/00/99 Final Rule 04/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: Federal Agency Contact: Charles Wooldridge Licensing Coordinator Department of Commerce National Oceanic and Atmospheric Administration NOAA/NESDIS Silver Spring, MD 20910 Phone: 301 713-2024 RIN: 0648-AC64 BILLING CODE 3510-BW-F [[Page 63919]] DEPARTMENT OF DEFENSE (DOD) Statement of Regulatory Priorities Background The Department of Defense (DoD) is the largest Federal department consisting of 3 military departments (Army, Navy, and Air Force), 9 unified combatant commands, 14 Defense agencies, and 7 DoD field activities. It has over 1,360,000 military personnel and 700,000 civilians assigned as of May 31, 1999, and over 500 military installations and properties in the continental United States, U. S. territories, and foreign countries. The overall size, composition, and dispersion of the Department of Defense, coupled with an innovative regulatory program, presents a challenge to the management of the Defense regulatory efforts under Executive Order 12866 ``Regulatory Planning and Review'' of September 30, 1993. Because of its diversified nature, DoD is impacted by the regulations issued by regulatory agencies such as the Departments of Energy, Health and Human Services, Housing and Urban Development, Labor, Transportation, and the Environmental Protection Agency. In order to develop the best possible regulations that embody the principles and objectives embedded in Executive Order 12866, there must be coordination of proposed regulations among the regulating agencies and the affected Defense components. Coordinating the proposed regulations in advance throughout an organization as large as DoD is straightforward, yet a formidable undertaking. DoD is not a regulatory agency but occasionally issues regulations that have an impact on the public. These regulations, while small in number compared to the regulating agencies, can be significant as defined in Executive Order 12866. In addition, some of DoD's regulations may impact the regulatory agencies. DoD, as an integral part of its program, not only receives coordinating actions from the regulating agencies, but coordinates with the agencies that are impacted by its regulations, as well. The regulatory program within DoD fully incorporates the provisions of the President's priorities and objectives under Executive Order 12866. Promulgating and implementing the regulatory program throughout DoD presents a unique challenge to the management of our regulatory efforts. Coordination Interagency DoD annually receives regulatory plans from those agencies that impact the operation of the Department through the issuance of regulations. A system for coordinating the review process is in place, regulations are reviewed, and comments are forwarded to the Office of Management and Budget. The system is working in the Department, and the feedback from the Defense components is most encouraging since they are able to see and comment on regulations from the other agencies before they are required to comply with them. The coordination process in DoD continues to work as outlined in Executive Order 12866. Internal Through regulatory program points of contact in the Department, we have established a system that provides information from the Vice President and the Administrator of the Office of Information and Regulatory Affairs (OIRA) to the personnel responsible for the development and implementation of DoD regulations. Conversely, the system can provide feedback from DoD regulatory personnel to the Administrator, OIRA. DoD continues to refine its internal procedures, and this ongoing effort to improve coordination and communication practices is well received and supported within the Department. Overall Priorities The Department of Defense needs to function at a reasonable cost, while ensuring that it does not impose ineffective and unnecessarily burdensome regulations on the public. The rulemaking process should be responsive, efficient, cost-effective, and both fair and perceived as fair. This is being done at a time when there is a significant ongoing downsizing in the Department and it must react to the contradictory pressures of providing more services with fewer resources. The Department of Defense, as a matter of overall priority for its regulatory program, adheres to the general principles set forth in Executive Order 12866 as amplified below. Problem Identification Congress typically passes legislation to authorize or require an agency to issue regulations and often is quite specific about the problem identified for correction. Therefore, DoD does not generally initiate regulations as a part of its mission. Conflicting Regulations Since DoD does not plan to issue any significant regulations this year, the probability of developing conflicting regulations is low. Conversely, DoD is impacted to a great degree by the regulating agencies. From that perspective, DoD is in a position to advise the regulatory agencies of conflicts that appear to exist using the coordination processes that exist in the DoD and other Federal agency regulatory programs. It is a priority in the Department to communicate with other agencies and the affected public to identify and proactively pursue regulatory problems that occur as a result of conflicting regulations both within and outside the Department. Alternatives DoD will identify feasible alternatives that will obtain the desired regulatory objectives. Where possible, the Department encourages the use of incentives to include financial, quality of life, and others to achieve the desired regulatory results. Risk Assessment Assessing and managing risk is a high priority in the DoD regulatory program. The Department is committed to risk prioritization and an ``anticipatory'' approach to regulatory planning which focuses attention on the identification of future risk. Predicting future regulatory risk is exceedingly difficult due to rapid introduction of new technologies, side effects of Government intervention, and changing societal concerns. These difficulties can be mitigated to a manageable degree through the incorporation of risk prioritization and anticipatory regulatory planning into DoD's decisionmaking process which results in an improved regulatory process and increases the customer's understanding of risk. Cost-Effectiveness One of the highest priority objectives of DoD is to obtain the desired regulatory objective by the most cost-effective method available. This may or may not be through the regulatory process. When a regulation is required, DoD considers incentives for innovation to achieve desired results, consistency in the application of the regulation, predictability of the activity outcome (achieving the expected results), and the costs for regulation development, enforcement, and compliance. These will include costs to the public, Government, and regulated entities, using the best available data or parametric analysis methods, in the [[Page 63920]] cost-benefit analysis and the decisionmaking process. Cost-Benefit Conducting cost-benefit analyses on regulation alternatives is a priority in the Department of Defense so as to ensure that the potential benefits to society outweigh the costs. Evaluations of these alternatives are done quantitatively or qualitatively or both, depending on the nature of the problem being solved and the type of information and data available on the subject. DoD is committed to considering the most important alternative approaches to the problem being solved and providing the reasoning for selecting the proposed regulatory change over the other alternatives. Information-Based Decisions The Defense Department uses the latest technology to provide access to the most current technical, scientific, and demographic information in a timely manner through the world-wide communications capabilities which are available on the ``information highway.'' Realizing that increased public participation in the rulemaking process improves the quality and acceptability of regulations, DoD is committed to exploring the use of Information Technology (IT) in rule development and implementation. IT provides the public with easier and more meaningful access to the processing of regulations. Furthermore, the Department endeavors to increase the use of automation in the Notice and Comment Rulemaking process in an effort to reduce time pressures in the regulatory process. Performance-Based Regulations Where appropriate, DoD is incorporating performance-based standards that allow the regulated parties to achieve the regulatory objective in the most cost-effective manner. Outreach Initiatives DoD endeavors to obtain the views of appropriate State, local, and tribal officials and the public in implementing measures to enhance public awareness and participation both in developing and implementing regulatory efforts. Historically, this has included such activities as receiving comments from the public, holding hearings, and conducting focus groups. This reaching out to organizations and individuals who are affected by or involved in a particular regulatory action remains a significant regulatory priority of the Department and, we feel, results in much better regulations. Coordination DoD has enthusiastically embraced the coordination process between and among other Federal agencies in the development of new and revised regulations. Annually, DoD receives regulatory plans from key regulatory agencies and has established a systematic approach to providing the plans to the appropriate policy officials within the Department. Feedback from the DoD components indicates that this communication among the Federal agencies is a major step forward in improving regulations and the regulatory process, as well as in improving Government operations. Minimize Burden In the regulatory process, there are more complaints concerning burden than anything else. In DoD, much of the burden is in the acquisition area. Over the years, acquisition regulations have grown and become burdensome principally because of legislative action. But, in coordination with Congress, the Office of Federal Procurement Policy, and the public, DoD is initiating significant reforms in acquisition so as to effect major reductions in the regulatory burden on personnel in Government and the private sector. The Department of Defense has made a commitment to the Vice President, as a high impact agency under the National Partnership for Reinventing Government, to reduce paper transactions by 50 percent by the year 2000. The composite of all paperless contracting transactions must be increased to 64 percent in Fiscal Year 2000 in order to meet the 50 percent reduction goal. As of August 1999, DoD's composite of all paperless contracting is 67 percent. DoD implemented a multi-year strategy for reducing the paperwork burden imposed on the public. This plan shows that DoD has met and will exceed the goals set forth in the Paperwork Reduction Act. One significant reduction in the burden imposed on the public is planned as a result of the review of the information collection requirement in support of the solicitation phase of the Department of Defense acquisition process. The information collection requirement pertains to information that an offeror must submit to DoD in response to DoD solicitations, not covered by another Office of Management and Budget (OMB) clearance. DoD reviewed the information being collected under this requirement and reduced the number of respondents, as well as the number of actions, to reflect fiscal year 1998 data available in the DoD database. As a result of these reviews, DoD plans to reduce the burden hours imposed on the public under this information collection requirement by an estimated 18.4 million hours per year. Another significant decrease is planned for the Department's largest information collection and will result from a reduction in contractor data requirements. This program change will decrease the burden in excess of 7.3 million hours. The combined total burden reduction in the Department's two largest information collections will decrease DoD's burden on the public by 21 percent from the actual FY 1998 year end total. This is the first time that the Department's total burden has dropped below 100 million hours. It is the goal of the Department of Defense to impose upon the public the smallest burden viable, as infrequently as possible, and for no longer than absolutely necessary. Plain Language Ensuring that regulations are simple and easy to understand is a high regulatory priority in the Department of Defense. All too often, the regulations are complicated, difficult to understand, and subject to misinterpretation, all of which can result in the costly process of litigation. The objective in the development of regulations is to write them in clear, concise language that is simple and easy to understand. DoD recognizes that it has a responsibility for drafting clearly written rules that are reader-oriented and easily understood. Rules will be written for the customer using natural expressions and simple words. Stilted jargon and complex construction will be avoided. Clearly written rules will tell our customers what to do and how to do it. DoD is committed to a more customer-oriented approach and uses Plain Language rules thereby improving compliance and reducing litigation. The Department will adhere to the timetable established in the President's memorandum of June 1, 1998, regarding Plain Language in Government Writing, for incorporation of plain writing techniques in official documents. In summary, the rulemaking process in DoD should produce a rule that addresses an identifiable problem, implements the law, incorporates the President's policies defined in Executive Order 12866, is in the public interest, is consistent with other rules [[Page 63921]] and policies, is based on the best information available, is rationally justified, is cost-effective, can actually be implemented, is acceptable and enforceable, is easily understood, and stays in effect only as long as is necessary. Moreover, the proposed rule or the elimination of a rule should simply make sense. Specific Priorities For this regulatory plan, there are three specific DoD priorities, all of which reflect the established regulatory principles. In those areas where rulemaking or participation in the regulatory process is required, DoD has studied and developed policy and regulation which incorporate not only the provisions of the President's priorities and objectives under the Executive order but also the National Performance Review, dated September 1993. DoD has focused its regulatory resources on the most serious environmental, health, and safety risks. Perhaps most significant is that each of the three priorities described below promulgates regulations to offset the resource impacts of Federal decisions on the public or to improve the quality of public life such as those regulations concerning wetlands, acquisition, and health care delivery. Preserve Quality and Quantity of Wetlands During FY 2000, the U.S. Army Corps of Engineers is not proposing any significant regulations as defined by Executive Order 12866. The Office of the Assistant Secretary of the Army (Civil Works) and the Corps will propose and complete two regulations initiated as part of the President's August 24, 1993, Wetlands Protection Plan and the President's 1995 Regulatory Reinvention Initiative. The wetlands protection plan provides for a fair, flexible, and effective approach to protecting America's wetlands through both regulatory and nonregulatory mechanisms. The regulatory reinvention initiative reinforced those provisions and included additional regulatory reform and streamlining provisions. During 2000, the Corps will propose and finalize two regulations pursuant to its authorities under section 404 of the Clean Water Act and section 10 of the Rivers and Harbors Act of 1899. The first regulation will establish an administrative appeal process whereby permit applicants and landowners can appeal Corps jurisdiction determination decisions. This regulation was proposed on July 19, 1995, with a similar regulation on permit denials and declined permits. The permit denial appeal regulation was finalized on March 9, 1999, and became effective on August 6, 1999. The administrative appeal process will increase fairness to applicants and landowners in the permitting process by establishing a recourse to Corps permit denials, declined permits, and jurisdiction determined decisions without pursuing litigation. The process will also provide for interested party involvement when the Corps reconsiders a previous denial or declined permit. The second regulation will be to clarify the scope of analysis that the Corps has responsibility for under the Endangered Species Act (ESA). The Corps scope of analysis for the National Environmental Policy Act and the National Historic Preservation Act is established in 33 CFR part 325, appendices B and C, respectively. This regulation will adopt the Corps ESA scope of analysis consistent with the ESA, the ESA regulations, and the Corps authorities. Reform Defense Acquisition The Department continues its efforts to reengineer its acquisition system to achieve its vision of an acquisition system which is recognized as being the smartest, most efficient, most responsive buyer of best value goods and services which meet the warfighter's needs from a globally competitive base. To achieve this vision, the Department will focus in the acquisition regulations arena during this next year on implementing and institutionalizing initiatives which may include additional changes to existing, and recently modified, regulations to ensure that we are achieving the outcomes we desire (continuous process improvement). The Department will focus on reengineering the process by which it acquires services, focusing on the use of performance-based work statements. The Department also intends to improve its use of electronic commerce/electronic data interchange. The Department is committed to acquisition reform and continues to make significant improvements in this area, consistent with the National Performance Review and Executive Order 12866. DoD is leading the following initiatives to reform the acquisition process, which include, integrating commercial and military facilities, and expanding the ability to buy commercial products and expanding the use of commercial procedures. Integration of commercial and military facilities is critical to enable the Department to capitalize on and access commercial technology, and generate funds for modernization, all within a balanced-budget environment. In addition to the need to integrate commercial and military facilities, the Department must expand the use of commercial procedures. Acquisition Reform's Commercial Practices Initiative is geared to providing learning opportunities on key techniques, strategies and negotiating/pricing tools used in the commercial business environment. Modern, technology-based learning methods and enterprise models of change management are available to meet the needs for both individual and team training. Based on the knowledge gained, the workforce will be enabled to adopt best practices, implement reforms, and understand better how to work with commercial businesses, including ones that are not themselves accustomed to doing business with DoD. DoD continuously reviews its supplement to the Federal Acquisition Regulation (FAR) and continues to lead Governmentwide efforts to simplify the following acquisition processes: Rewrite of FAR part 45, Government Property. The goals of the FAR part 45 rewrite are to reduce contractor and Government costs to manage property in the possession of contractors by streamlining recordkeeping requirements; to eliminate requirements to track, report, and inventory property valued at $5,000 or less during contract performance; to eliminate oversight for items valued under $1,000,000 where the contractor assumes liability for loss, damage, or destruction of property; to replace five inventory schedules with a single inventory disposal schedule; and to shorten screening times prior to disposal. The FAR part 45 rewrite also encourages the dual use of Government property introducing commercial rental practices and reducing property rental costs. Rewrite of various FAR cost principles. The goal of this initiative is to determine whether certain FAR cost principles are still relevant in today's business environment, whether they place an unnecessary administrative burden on contractors and the Government, and whether they can be streamlined or simplified. Review of FAR guidance pertaining to progress payments and other related financing policies. The goal of this initiative is to simplify the progress payments process; to minimize the burdens imposed on contractors and [[Page 63922]] contracting officers; and to expand the use of performance- based payments or commercial financing payments. Rewrite FAR part 25, International Acquisition. The goal of this initiative is to clarify and simplify the complex, interrelated laws and agreements which govern international trade. Revise policy on the applicability of cost accounting standards. The goal of this initiative is to modify and streamline the applicability of the Federal cost accounting standards. Revise policy on the use of the Governmentwide commercial purchase card. The goal of this initiative is to increase the use of the purchase card for small dollar purchases. Revise policy to expand the use of the procedures in FAR part 12, Acquisition of Commercial Items. The goal of this initiative is to expand the use of streamlined procedures for the acquisition of commercial items. Develop FAR and DFARS guidance on the use of price based acquisition. The goal of this initiative is to move away from the use of cost as a basis for contracting to acquisition on the basis of price, to the maximum extent practicable. The use of price will reduce the administrative burden for both Government and industry and result in lower overhead rates. Improve Health Care Delivery in the Defense Department The Department of Defense is able to meet its dual mission of wartime readiness and peacetime health care by operating an extensive network of medical treatment facilities. This network includes DoD's own military treatment facilities supplemented by civilian health care providers, facilities, and services under contract to DoD through the TRICARE program. TRICARE is a major health care initiative designed to improve the management and integration of DoD's health care delivery system. The program's goal is to increase access to health care services, improve health care quality, and control health care costs. TRICARE builds upon the original CHAMPUS program by offering two additional options, Prime and Extra. The Prime enrollment offers an HMO-like option; and two options that do not require enrollment: Extra is a preferred provider-like option while Standard is a fee for service option (formally known as CHAMPUS). Like the old CHAMPUS program, under TRICARE, DoD continues to share the cost of civilian health care with its eligible beneficiaries when services are not available in the military medical treatment facility. DoD will be testing a variety of alternative health care delivery approaches to providing care for our over-65 beneficiaries. In addition to the ongoing TRICARE Senior Prime demonstration project allowing beneficiaries over the age of 65 the ability to enroll in the TRICARE HMO option, the Department plans to test additional approaches including a limited pharmacy demonstration, a Federal Employees Health Benefits Program (FEHBP) demonstration, and a TRICARE Senior Supplement demonstration. These demonstration projects are conducted under the authority of title 10, chapter 55, section 1092. The principal health-related regulatory publications of the Department are based on CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services (32 CFR part 199). CHAMPUS regulations are comprehensive and address issues such as: eligibility, benefits, authorized providers, claims payment, appeals procedures, and the health care delivery options available under TRICARE. DoD coordinates changes to CHAMPUS regulations with the Departments of Transportation (U. S. Coast Guard), Health and Human Services (Public Health Service), and Commerce (National Oceanic and Atmospheric Administration) whose beneficiaries are also eligible for CHAMPUS. Revisions in the TRICARE/CHAMPUS Program's statutory base or DoD initiatives to improve the program may result in amendments to the regulation. DoD's regulatory priorities for the upcoming year include: promulgation of regulations governing TRICARE Prime enrollment for families of E-4 and below; modifications to reimbursement for beneficiaries who have other health insurance that is primary to TRICARE; implementing a TRICARE incentive payment program modeled after the Medicare Incentive payment program; and modifying payment rates for providers who practice in remote locations in Alaska. BILLING CODE 5001-10-F [[Page 63923]] DEPARTMENT OF EDUCATION (ED) Statement of Regulatory and Deregulatory Priorities The Department supports States, local communities, and institutions of higher education, and others to improve education nationwide. The Department's roles include leadership and financial support for education to agencies, institutions, and individuals in situations where there is a national interest; monitoring and enforcing of civil rights in the area of education; and supporting research, evaluation, and dissemination of findings to improve the quality of education. ED works in partnership with parents, neighborhoods, schools, colleges, educators, business leaders, communities, and States across the country. Since the announcement of President Clinton's ``Regulatory Reinvention Initiative'' on March 4, 1995, the Department has conducted a comprehensive review of its programs, legislation, and implementing regulations to enhance partnerships, increase flexibility, and improve accountability. In response to this initiative, the Department has eliminated or simplified most of its regulations--including the elimination of 2/3 of the regulations applicable to elementary and secondary education programs. The Department has accomplished these results through a departmentwide effort that recognizes that students and educational partners are best served by regulations that focus on critical steps and results, allow as much flexibility as possible consistent with statutory and program goals, and impose the least possible burden. As part of its regulatory reinvention efforts and in response to the President's memorandum of June 1, 1998, on ``Plain Language in Government Writing,'' the Department also seeks to draft all of its regulations and related documents clearly and concisely in plain language, so that potential program beneficiaries will better understand benefits and requirements. Woven throughout the Department's reinvention is a commitment to provide quality customer service in the spirit of continuous improvement to assure that we are truly ``putting people first.'' The Department listens to our customers to identify their needs and incorporates their suggestions into program goals and strategies. In order to provide information and support enhanced exchange, the Department instituted 1-800-USA-LEARN to connect our customers to a ``one-stop-shopping'' center for information about departmental programs and initiatives; 1-800-4FED-AID for information on student aid; and an on-line library of information on education legislation, research, statistics, and promising programs. Internet address: http://www.ed.gov. More than 10,000 people take advantage of these resources every week. The Department has forged effective partnerships with customers and others to develop policies, regulations, guidance, technical assistance, and compliance approaches. The Department has an impressive record of successful communication and shared policy development with affected persons and groups, including parents, representatives of State and local government, institutions of higher education, school administrators, teachers, students, special education and rehabilitation service providers, professional associations, advocacy organizations, business, and labor. In particular, the Department continues to seek greater and more useful customer participation in its rulemaking activities through the use of consensual rulemaking and new technology. When rulemaking is determined to be absolutely necessary, customer participation is essential and sought at all stages--in advance of formal rulemaking, during rulemaking, and after rulemaking is completed in anticipation of further improvements through statutory or regulatory changes. The Department has expanded its outreach efforts through the use of satellite broadcasts, electronic bulletin boards, and teleconferencing. For example, the Department invites comments on all proposed rules through the Internet. The Department is streamlining information collections, reducing burden on information providers involved in ED programs, and making information maintained by the Department easily available to the public. Coordinating similar information collections across programs may be one approach to reduce overlapping and inconsistent paperwork requirements. To the extent permitted by statute, regulations will be revised to eliminate barriers that inhibit coordination across programs (such as by creating common definitions), to reduce the frequency of reports, and to eliminate unnecessary data requirements. ED has reduced the information collection burden imposed on the public by 14.7 percent in fiscal year (FY) 1996, by 11 percent in FY 1997, and by more than 5 percent in FY 1998. Our goal for FY 1999 is a further 5 percent reduction. The Department's Principles for Regulating, developed in October 1994 during planning to implement the Improving America's Schools Act of 1994, determine when and how it will regulate. Through aggressive application of the following principles, the Department has eliminated outdated or unnecessary regulations and identified situations in which major programs could be implemented without any regulations or with only limited regulations. Principles for Regulating The Department will regulate only if regulating improves the quality and equality of services to the Department's customers, learners of all ages. The Department will regulate only when absolutely necessary and then in the most flexible, most equitable, and least burdensome way possible. Whether to Regulate: When essential to promote quality and equality of opportunity in education. When a demonstrated problem cannot be resolved without regulation. When necessary to provide legally binding interpretation to resolve ambiguity. Not if entities or situations to be regulated are so diverse that a uniform approach does more harm than good. How to regulate: Regulate no more than necessary. Minimize burden and promote multiple approaches to meeting statutory requirements. Encourage federally funded activities to be integrated with State and local reform activities. Ensure that benefits justify costs of regulation. Establish performance objectives rather than specify compliance behavior. Encourage flexibility so institutional forces and incentives achieve desired results. Regulatory and Deregulatory Priorities for the Next Year Higher Education Amendments of 1998 Legislation reauthorizing the Higher Education Act has been a Department priority in 1999. To the extent regulations were determined to be necessary, they were developed through regulatory negotiation with the participation of interested parties. Three of the most significant regulations [[Page 63924]] needed to implement the new legislation are listed as the Department's priorities in the 1999 Regulatory Plan. The State Vocational Rehabilitation Services Program The State Vocational Rehabilitation (VR) Services Program is a $2.5 billion program that provides funds to State VR agencies to assist individuals with disabilities to achieve employment. These regulations would amend the existing program regulations in 34 CFR part 361 to implement various changes in recently enacted statutes. _______________________________________________________________________ ED--Office of Postsecondary Education (OPE) ----------- PROPOSED RULE STAGE ----------- 20. GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE PROGRAMS (GEAR UP) Priority: Other Significant Legal Authority: 20 USC 1070a-21 et seq CFR Citation: 34 CFR 694 Legal Deadline: None Abstract: These regulations are needed to implement section 403 of the Higher Education Amendments of 1998 (Pub. L. 105-244, enacted October 7, 1998), establishing GEAR UP, a program designed to give more low-income students the skills, encouragement, and preparation needed to pursue postsecondary education, and to strengthen academic programs and student services at participating schools. Statement of Need: These regulations are necessary to implement new legislation. In developing the regulations, the Department will seek to minimize regulatory burden and maximize flexibility. Summary of Legal Basis: Pub. L. 105-244, enacted October 7, 1998. Alternatives: In implementing the legislation, the Department will consider whether there are any appropriate alternatives. Anticipated Cost and Benefits: The Department will consider anticipated costs and benefits in developing these regulations. Risks: These regulations would not address a risk to public health, safety, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 11/00/99 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: David Condon Department of Education Office of Postsecondary Education 400 Maryland Avenue, SW. Washington, DC 20202 Phone: 202 502-7676 RIN: 1840-AC82 _______________________________________________________________________ ED--Office of Special Education and Rehabilitative Services (OSERS) ----------- PROPOSED RULE STAGE ----------- 21. THE STATE VOCATIONAL REHABILITATION SERVICES PROGRAM (SECTION 610 REVIEW) Priority: Other Significant Legal Authority: 29 USC 711(C) CFR Citation: 34 CFR 361 Legal Deadline: None Abstract: These regulations are needed to implement changes made by the Rehabilitation Act Amendments of 1998, the Reading Excellence Act, and the Carl D. Perkins Vocational and applied Technology Education Act Amendments of 1998. Statement of Need: These regulations are necessary to implement new legislation. The Department is also completing its review of these regulations under section 610(c) of the Regulatory Flexibility Act. In developing the regulations, the Department will seek to reduce regulatory burden and increase flexibility to the extent possible. Summary of Legal Basis: Pub. L. 105-220, enacted August 7, 1998. Alternatives: In addition to implementing the new legislation, the purpose of reviewing these regulations is to determine whether there are appropriate alternatives. Anticipated Cost and Benefits: Existing regulatory provisions may be eliminated or improved as a result of this review. Risks: These regulations would not address a risk to public health, safety, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 12/00/99 Regulatory Flexibility Analysis Required: Undetermined Small Entities Affected: No Government Levels Affected: None Agency Contact: Beverlee Stafford Director, Planning, Policy, and Evaluation Services Department of Education Office of Special Education and Rehabilitative Services Room 3014 Switzer Building 400 Maryland Ave. SW Washington, DC 20202-2531 Phone: 202 205-8299 RIN: 1820-AB50 BILLING CODE 4000-01-F [[Page 63925]] DEPARTMENT OF ENERGY (DOE) Statement of Regulatory Priorities The Department makes vital contributions to the Nation's welfare through its extraordinary scientific and technical capabilities in energy research, environmental remediation, and national security. The Department's mission is to: Enhance the Nation's energy security by developing and deploying clean and affordable energy supplies and by improving the energy efficiency of our economy; Ensure a safe and reliable nuclear weapons stockpile and reduce the global nuclear danger; Clean up former nuclear weapons sites and address the complex challenge of disposing of nuclear wastes; and Leverage science and technology to advance fundamental knowledge and our country's competitiveness with stronger partnership with the private sector. The Department of Energy's 1999 regulatory plan reflects the Department's continuing commitment to enhance safety, cut costs, reduce regulatory burden, and increase responsiveness to the public. While not primarily a major Federal regulatory agency, the Department's regulatory activities are essential to achieving its critical mission. Energy Efficiency Program for Consumer Products and Commercial Equipment During fiscal year 1999, the Department made substantial progress with the high priority standards rulemakings (i.e., clothes washers, fluorescent lamp ballasts, water heaters, and residential central air conditioning and central air conditioning heat pumps). In November 1998, the Department published a supplemental advance notice of proposed rulemaking for clothes washers. A proposed rule for distribution transformer test procedures was published in November 1998. The Department's rulemaking activities related to energy efficiency standards and determinations have been categorized as high, medium, or low priority. The schedules in this regulatory plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions reflect priorities established with significant input from the public. The standards rulemakings incorporate the process improvements established in July 1996, including more workshops to collect public input and new, more transparent forecasting models developed with the help of industry experts, including manufacturers. During fiscal year 2000, the Department expects to publish final rules for clothes washer, fluorescent lamp ballast, and residential water heater efficiency standards, and to propose efficiency standards for residential central air conditioners and residential heat pumps. The Department expects to begin preparation of efficiency standards for commercial air conditioners and commercial heat pumps, furnaces and boilers, and commercial water heaters. Proposed rules for test procedures for these commercial products should be published by the early part of fiscal year 2000. Additional information and timetables for these actions are presented below. Information concerning the medium priority and low priority standards rulemakings and the test procedures rulemakings can be found in the Department's regulatory agenda, which appears elsewhere in this issue of the Federal Register. Nuclear Safety Regulations The Department is committed to openness and public participation as it addresses one of its greatest challenges--managing the environment, health, and safety risks posed by its nuclear activities. A key element in the management of these risks is to establish the Department's expectations and requirements relative to nuclear safety and to hold its contractors accountable for safety performance. The 1988 Price- Anderson Amendments Act revisions to the Atomic Energy Act of 1954 (AEA) provide for the imposition of civil and criminal penalties for violations of DOE nuclear safety requirements. As a result, new nuclear safety requirements were initiated with the publication of four notices of proposed rulemaking for review and comment in 1991. The Department's nuclear safety procedural regulations (10CFR Part 820) were published as a final rule in 1993. Substantive DOE nuclear safety requirements were issued as 10 CFR Parts 830 and 835 (Parts 830 and 835) in 1994 and 1993, respectively. On November 4, 1998, DOE published an amendment to 10 CFR Part 835 to revise Part 835 based on a comprehensive evaluation of the Department's radiation protection program. In August 1995, the Department published a notice of limited reopening of the comment period to request public comments on the remaining Part 830 and 10 CFR Part 834 (Part 834) rulemakings. The Department has substantially completed the comment resolution process and has addressed the major issues raised by the Defense Nuclear Facilities Safety Board and is engaged in a dialog with the Environmental Protection Agency concerning its comments on Part 834. The Department recently established an integrated safety management initiative to ensure that safety activities at a DOE site or facility are integrated and appropriate for the work and hazards. One outcome of this initiative, incorporated as part of the contract reform final rule published on June 27, 1997, requires contractors to manage and perform work in accordance with a documented safety management system that ensures that environment, safety and health are integrated into all phases of work. The Department intends to ensure that its nuclear safety regulations (1) are consistent with the integrated safety management process and (2) avoid duplication and counterproductive efforts. The Department expects to complete an interim final rulemaking to accomplish this goal on Parts 830 and 834 by January 1, 2000. Chronic Beryllium Disease Protection Program The AEA gives the Department the authority to prescribe regulations as it deems necessary to govern any activity authorized by the AEA, specifically including standards to protect health and minimize danger to life or property (42 U.S.C. 2201(i)(3) and (p)). In addition, section 19 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 668) and Executive Order 12196, ``Occupational Safety and Health Programs for Federal Employees,'' (5 U.S.C. 7902 note), require Federal agencies to establish comprehensive occupational safety and health programs for their employees. The Department has a long history of beryllium use because of the element's broad application to many nuclear operations and processes. Beryllium metal and ceramics are used in nuclear weapons, as nuclear reactor moderators or reflectors, and as nuclear reactor fuel element cladding. Inhalation of beryllium dust or particles may cause chronic beryllium disease (CBD) and beryllium sensitization. CBD is a chronic, often debilitating, and potentially fatal lung condition. Beryllium sensitization is a condition in which a person's immune system becomes highly responsive (allergic) to the presence of beryllium in the body. [[Page 63926]] Based on the number of confirmed cases of CBD and the expected future increase in the number of workers potentially exposed to beryllium during decontamination and decommissioning activities, the Department has concluded that there is a compelling need for a chronic beryllium disease prevention program rule to meet its obligation to establish and maintain an effective occupational safety and health program to protect its employees and other workers at DOE facilities. In 1996, the Department surveyed its contractors to characterize the extent of beryllium usage, the types of tasks involving beryllium usage, the controls in place for each task, the estimated number of workers exposed during each task, and the estimated exposure levels associated with each task. To supplement the data obtained from the survey, the Department published a Federal Register notice on December 30, 1996, requesting scientific data, information, and views relevant to a new Departmental beryllium health standard (61 FR 68725). This was followed by two Beryllium Public Forums held in Albuquerque, New Mexico and Oak Ridge, Tennessee in January 1997. The Department established the Beryllium Rule Advisory Committee (BRAC) in June 1997, to advise the DOE on issues pertinent to the proposed rulemaking. The BRAC, which consisted of a diverse set of stakeholders and recognized experts from DOE, other Federal agencies, industry, labor, medicine, and academia, explored issues and generated recommendations for consideration in the development of a chronic beryllium disease prevention rule. As an interim measure to protect workers from the hazards of beryllium, the Department issued an administrative directive in July 1997, to establish a chronic beryllium disease prevention program (CBDPP) that enhances the existing worker protection program. On December 3, 1998, the Department published a notice of proposed rulemaking (NPRM) for public comment in the Federal Register (63 FR 66940) proposing regulations for a CBDPP, at10 CFR Part 850. This proposed regulation is expected to reduce the number of workers at DOE facilities exposed to beryllium, minimize the levels of and potential for exposure to beryllium, and establish medical surveillance requirements to ensure early detection and treatment of disease. The Department is now considering the comments and data from interested parties submitted to the beryllium docket and other information relevant to the development of the final CBDPP rule. The Department expects to complete final action on Part 850 rulemaking by December 1999. Polygraph Examination Program In Presidential Decision Directive (PDD) 61, Department of Energy Counterintelligence Program, dated February 11, 1998, the President instructed DOE to develop and implement specific measures to enhance protection of the highly sensitive and classified information at its facilities, including implementation of a polygraph program. A counterintelligence-scope polygraph examination both serves as a means to deter unauthorized disclosures of classified information and provides a means for possible early detection of disclosures to enable DOE to take steps promptly to prevent further harm to the national security. Although the Employee Polygraph Protection Act (EPPA) generally prohibits the use of polygraph examinations in private employment settings, it specifically allows for DOE, in the performance of its counterintelligence function, to administer polygraph examinations to expert, consultant or contractor employees of DOE in connection with atomic energy defense activities. As an initial step toward developing and implementing a polygraph examination program, the Department issued an internal directive, DOE Notice 472.2, Use of Polygraph Examinations, that establishes a polygraph requirement for Federal employees who occupy or seek to occupy certain sensitive positions at DOE. As a second step, the Department issued a notice of proposed rulemaking on August 18, 1999, (64 FR 45062) to expand the polygraph examination program to cover all employees, contractors as well as Federal employees, who are in positions with access to the most sensitive categories of classified information and materials. Applicants for such positions would be covered as well. The Department expects to issue a final rule this November. Regulatory Reform In June 1998, the President directed agencies to use plain language in regulations issued after January 1, 1999. In response to this initiative, the Department has conducted training on the elements of plain language to its major regulatory offices. The Department's rule that protects whistleblowers at our facilities was rewritten in plain language and published on March 15, 1999 (64 FR 12861, Contractor Employee Protection Program, 10 CFR Part 708). The Department is also using plain language in drafting new rules and major revisions to existing rules. _______________________________________________________________________ DOE--Energy Efficiency and Renewable Energy (EE) ----------- PROPOSED RULE STAGE ----------- 22. ENERGY EFFICIENCY STANDARDS RULEMAKINGS AND DETERMINATIONS FOR HIGH PRIORITY CONSUMER PRODUCTS AND COMMERCIAL EQUIPMENT Priority: Economically Significant. Major under 5 USC 801. Unfunded Mandates: Private Sector Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 42 USC 6295 CFR Citation: 10 CFR 430 Legal Deadline: Final, Statutory, January 1, 1992, (fluorescent lamp ballasts and water heaters). Final, Statutory, January 1, 1994, (central air conditioners and heat pumps). Final, Statutory, May 14, 1996, (clothes washers). Abstract: The Energy Policy and Conservation Act (EPCA), as amended, establishes initial energy efficiency standard levels for most types of major residential appliances and generally requires DOE to undergo two subsequent rulemakings, at specified times, to determine whether the current standard for a covered product should be amended. This is the initial review of the statutory standards for fluorescent lamp ballasts, water heaters and central air conditioners and heat pumps. This is [[Page 63927]] the second review of the standard for clothes washers. Statement of Need: These rulemakings are required by statute. Experience has shown that the choice of residential appliances and commercial equipment being purchased by both builders and building owners is generally based on the initial cost rather than on life-cycle cost. Thus, the law requires minimum energy efficiency standards for appliances to eliminate inefficient appliances and equipment from the market. Summary of Legal Basis: The Energy Policy and Conservation Act (EPCA), as amended, establishes initial energy efficiency standard levels for most types of major residential appliances and certain types of commercial equipment and generally requires DOE to undergo rulemakings, at specified times, to determine whether the standard for a covered product should be made more stringent. Alternatives: The statute requires DOE to conduct rulemakings to review standards and to revise standards to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. In making this determination, the Department conducts a thorough analysis of alternative standard levels, including the existing standard, based on criteria specified by statute. The process improvements that were recently announced (61 FR 36974, July 15, 1996) further enhance the analysis of alternative standards. For example, DOE will ask stakeholders and private sector technical experts to review its analyses of the likely impacts, costs, and benefits of alternative standard levels. In addition, the Department will solicit and consider information on non-regulatory approaches for encouraging the purchase of energy efficient products. Anticipated Cost and Benefits: The specific costs and benefits for these rulemakings have not been established because the final standard levels have not been determined. Nevertheless, existing appliance standards are projected to save 23 quadrillion Btu's of energy from 1993 to 2015, resulting in estimated consumer savings of $1.7 billion per year in the year 2000 and estimated annual emission reductions of 107 million tons of carbon dioxide and 280 thousand tons of nitrogen oxides in the year 2000. Under the existing standards, the discounted energy savings for consumers are 2.5 times greater than the up-front price premium paid for the appliance. Risks: Without appliance efficiency standards, energy use will continue to increase with resulting damage to the environment caused by atmospheric emissions. Enhancing appliance energy efficiency reduces atmospheric emissions of carbon dioxide and nitrogen oxides. Establishing standards that are too stringent could result in excessive increases in the cost of the product, possible reductions in product utility and may place an undue burden on manufacturers that could result in a loss of jobs or other adverse economic impacts. Timetable: _______________________________________________________________________ 1904-AA67 (Clothes Washers) ANPRM 11/14/1994 (59 FR 56423) Supplemental ANPRM 11/18/1998 (63 FR 64343) Workshop 12/15/1998 NPRM 12/00/1999 Final Action 07/00/2000 1904-AA75 (Fluorescent Lamp Ballasts) ANPRM 09/28/1990 (55 FR 39624) NPRM 03/04/1994 (59 FR 10464) Impact Workshop 03/18/1997 Reissue NPRM 11/00/1999 Final Action 06/00/2000 1904-AA76 (Water Heaters) ANPRM 09/28/1990 (55 FR 39624) NPRM 03/03/1994 (59 FR 10464) Workshop 07/23/1999 Reissue NPRM 12/00/1999 Final Action 07/00/2000 1904-AA77 (Central Air Conditioners and Heat Pumps) ANPRM 09/08/1993 (58 FR 47326) Screening Workshop 06/30/1998 Supplemental ANPRM 11/00/1999 NPRM 04/00/2000 Final Action 12/00/2000 Regulatory Flexibility Analysis Required: No Government Levels Affected: State, Local Additional Information: Due to the Department's limited staff and financial resources, regulatory actions related to energy efficiency standards have been categorized as high, medium, and low priority based on significant input from the public. This action is a high priority, and the Department is working actively on this action. Agency Contact: Edward Pollock Acting Director, Office of Codes and Standards Department of Energy Conservation and Renewable Energy 1000 Independence Avenue SW. Washington, DC 20585 Phone: 202 586-9127 RIN: 1904-AA67 _______________________________________________________________________ DOE--Defense and Security Affairs (DSA) ----------- FINAL RULE STAGE ----------- 23. POLYGRAPH EXAMINATION PROGRAM Priority: Other Significant Legal Authority: 42 USC 2201; 42 USC 7254 CFR Citation: 10 CFR 709; 10 CFR 710; 10 CFR 711 Legal Deadline: None Abstract: This action would establish regulations for the use of polygraph examinations for certain DOE and contractor employees, applicants for employment, and other individuals assigned or detailed to Federal positions at DOE. The regulations would describe the categories of individuals who would be eligible for polygraph testing and controls for the use of such testing and for the prevention of unwarranted intrusion into the privacy of individuals. Statement of Need: The Department has broad responsibilities to direct the development, use, and control of atomic energy. This includes the responsibility to protect sensitive and classified information and materials involved in the design, production, and maintenance of nuclear weapons. A counterintelligence-scope polygraph examination program would deter unauthorized disclosure of classified information. It would also provide a means for early detection of disclosures allowing the Department to act promptly to prevent further harm to the national security. [[Page 63928]] Summary of Legal Basis: The Atomic Energy Act of 1954 (AEA), as amended, assigns to DOE certain atomic energy defense production and clean-up obligations that are discharged at various DOE-owned, contractor-operated installations around the country. Section 161 of the AEA authorizes DOE to adopt rules necessary to carry out those functions. Alternatives: The Department could continue to rely on purely subjective evaluations of random interviews. Anticipated Cost and Benefits: It is estimated that the polygraph examination program would cost approximately one million dollars annually. The use of polygraph testing would strengthen the Department's ability to protect against the disclosure of information and materials that could harm national defense and security. Risks: By acting as a deterrent, this program would reduce the risk of unauthorized disclosure of information that could harm national security. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 45062 08/18/99 Final Action 11/00/99 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Agency Contact: Douglas Hinckley Program Director Department of Energy Office of Counterintelligence 1000 Independence Avenue SW. Washington, DC 20585 Phone: 202 586-5901 RIN: 1992-AA24 _______________________________________________________________________ DOE--Departmental and Others (ENDEP) ----------- FINAL RULE STAGE ----------- 24. NUCLEAR SAFETY MANAGEMENT Priority: Other Significant Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 42 USC 2201; 42 USC 7191 CFR Citation: 10 CFR 830 Legal Deadline: None Abstract: This action will add regulations under 10 CFR 830 to establish nuclear safety management requirements for the Department's nuclear facilities. These requirements stem from the Department's obligations to assure adequate protection and to hold contractors who manage and operate these facilities accountable and responsible for safe operations. Quality assurance requirements were issued in 1994. Additional nuclear safety management requirements are expected to be issued by January 1, 2000. Statement of Need: The purpose of this rule is to ensure that the Department's obligation to protect health and safety is fulfilled and to provide, if needed, a basis for the imposition of civil and criminal penalties consistent with the Price-Anderson Amendments Act of 1988. This action is consistent with the Department's commitment to the issuance of nuclear safety requirements using notice and comment rulemaking. Summary of Legal Basis: Under the Atomic Energy Act of 1954, as amended, the Department of Energy has the authority to regulate activities at facilities under its jurisdiction. The Department is committed to honoring its obligation to ensure the health and safety of the public and workers affected by its operations. Alternatives: The Department could continue to impose nuclear safety requirements through directives made applicable to DOE contractors through the terms of their contracts. Anticipated Cost and Benefits: The incremental costs of the proposed rules should be minimal because contractors are currently bound by comparable contractual obligations. Full compliance by contractors with nuclear safety standards will result in substantial societal benefits. Risks: This rulemaking should reduce the risk of nuclear safety problems by clarifying safety requirements applicable to DOE contractors and improving compliance. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 56 FR 64316 12/01/91 Second NPRM 60 FR 45381 08/31/95 Final Action 01/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Agency Contact: Richard L. Black Director, Office of Nuclear Safety and Policy Standards Department of Energy 1000 Independence Avenue SW. Washington, DC 20585 Phone: 301 903-3465 RIN: 1901-AA34 _______________________________________________________________________ DOE--ENDEP 25. RADIATION PROTECTION OF THE PUBLIC AND THE ENVIRONMENT Priority: Other Significant Legal Authority: 42 USC 2201; 42 USC 7191 CFR Citation: 10 CFR 834 Legal Deadline: None Abstract: This action would add a new 10 CFR 834 to DOE's regulations establishing a body of rules setting forth the basic requirements for ensuring radiation protection of the public and environment in connection with DOE nuclear activities. These requirements stem from the Department's ongoing effort to strengthen the protection of health, safety, and the environment from the nuclear and chemical hazards posed by these DOE activities. Major elements of the proposal included a dose limitation system for protection of the public; requirements for liquid discharges; reporting and monitoring requirements; and residual radioactive material requirements. [[Page 63929]] Statement of Need: The purpose of this rule is to ensure that the Department's obligation to protect health and safety is fulfilled and to provide, if needed, a basis for the imposition of civil and criminal penalties consistent with the Price-Anderson Amendments Act of 1988. This action is consistent with the Department's commitment to the issuance of nuclear safety requirements using notice and comment rulemaking. Summary of Legal Basis: Under the Atomic Energy Act of 1954, as amended, the Department of Energy has the authority to regulate activities at facilities under its jurisdiction. The Department is committed to honoring its obligation to ensure the health and safety of the public and workers affected by its operations and the protection of the environs around its facilities. Alternatives: The Department could continue to impose nuclear safety requirements through directives made applicable to DOE contractors through the terms of their contracts. Anticipated Cost and Benefits: The incremental costs of the proposed rules should be minimal because contractors are currently bound by comparable contractual obligations. Full compliance by contractors with nuclear safety standards will result in substantial societal benefits. Risks: This rulemaking should reduce the risk of nuclear safety problems by clarifying safety requirements applicable to DOE contractors and improving compliance. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 58 FR 16268 03/25/93 Second NPRM 60 FR 45381 08/31/95 Final Action 12/00/99 Regulatory Flexibility Analysis Required: No Government Levels Affected: Federal Agency Contact: Andrew Wallo III Director, Air, Water and Radiation Division Department of Energy Office of Environmental Guidance 1000 Independence Avenue SW. Washington, DC 20585 Phone: 202 586-4996 RIN: 1901-AA38 _______________________________________________________________________ DOE--ENDEP 26. CHRONIC BERYLLIUM DISEASE PREVENTION PROGRAM Priority: Other Significant Legal Authority: 42 USC 2201; 42 USC 7191 CFR Citation: 10 CFR 850 Legal Deadline: None Abstract: This action will add requirements for the control of occupational exposures to beryllium at DOE and DOE contractor facilities and operations. This action reflects the Department's ongoing commitment to strengthen the protection of health, safety, and the environment from the hazards posed by its facilities. Statement of Need: The purpose of this rule is to ensure that the Department's obligation to provide a safe and healthy workplace is fulfilled. Summary of Legal Basis: Under the Atomic Energy Act of 1954, as amended, the Department of Energy has the authority to regulate activities at facilities under its jurisdiction. The Department is committed to honoring its obligation to ensure the health and safety of workers and the public affected by its operations. Alternatives: The Department could continue to impose health and safety requirements through directives made applicable to DOE contractors through the terms of their contracts. Anticipated Cost and Benefits: The incremental costs of the proposed rule should be minimal. Full compliance with these requirements will enhance occupational health and safety at certain DOE facilities. Risks: This rulemaking would reduce the risk of an occupational hazard by clarifying worker protection program requirements applicable to DOE contractors. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 66940 12/03/98 Final Action 12/00/99 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Agency Contact: C. Rick Jones Director, Office of Worker Protection Programs and Hazards Management Department of Energy 19901 Germantown Road Germantown, MD 20874-1290 Phone: 301 903-6061 RIN: 1901-AA75 BILLING CODE 6450-01-F [[Page 63930]] DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) Statement of Regulatory and Deregulatory Priorities The Department of Health and Human Services is the United States Government's principal agency for protecting the health of all Americans and for providing essential human services, especially for those who are least able to help themselves. To carry out its multiple responsibilities, the Department works through ten major operating divisions which manage over 300 programs. This spectrum of activities includes: Medicare (health insurance for elderly and disabled Americans) Medicaid (health insurance for low-income people) Medical and social science research Preventing outbreaks of infectious disease, including immunization services Assuring food and drug safety Financial assistance for low-income families Child support enforcement Improving maternal and infant health Head Start (pre-school education and services) Preventing child abuse and domestic violence Substance abuse treatment and prevention Services for older Americans, including home-delivered meals Comprehensive health services delivery for American Indians and Alaska Natives HHS is the largest grant-making agency in the Federal Government, providing some 60,000 grants per year. The Medicare program is the nation's largest health insuror, handling more than 900 million claims per year. The Department works closely with State and local governments, and many HHS-funded services are provided by State- or local-government agencies, or through private-sector grantees. HHS programs, in addition to the services they deliver, provide for equitable treatment of beneficiaries nationwide, and they enable the collection of national health and other data. For the foreseeable future, the Department's regulatory priorities, as reflected in the specific Plan entries that follow, involve: Continuing implementation of Medicare-restructuring provisions of the Balanced Budget Act of 1997; new measures reflecting the President's food-safety initiative; several undertakings to assure the safety and efficacy of prescription drugs, biologics and medical devices; and persisting efforts to assure an equitable organ-donation system in the Nation. Underlying the Department's efforts to move forward in these areas in FY 2000 and beyond, there endures the policy framework instituted by the President's Executive Order 12866, Regulatory Planning and Review. Under the principles set out in this Order, and in the context of the Administration's subsequent regulatory reform initiatives, the Department assures that its rulemakings emphasize performance standards and market incentives over prescriptive, command-and-control requirements; reflect the use of benefit-cost and risk assessment analyses, to achieve policy objectives in the most efficient manner possible; are developed in consultation with those most affected, especially our partners in the Federal system at the State and local levels; and focus specifically on clearly identified problems, avoiding overly broad, one-size-fits-all approaches to these problems. Efforts to comply with these principles have been a continuing HHS priority since 1993. The bulk of HHS's regulatory activity emanates from programs of the Food and Drug Administration and the Health Care Financing Administration. There follow statements of regulatory priorities pertaining to these two HHS components, followed by their Regulatory Plan entries. Food and Drug Administration The Food and Drug Administration's (FDA) regulatory strategy involves three main goals: (1) To reflect new technologies or programs that will benefit the public, affected industries, and the agency or further protect the public health; (2) to provide more information to consumers so that they may use FDA-regulated products more safely or effectively; and (3) to eliminate unnecessary burdens on industry. The following illustrative examples reflect the agency's efforts to carry out this strategy. On November 6, 1998, FDA published a final rule amending its regulations pursuant to an international agreement between the United States and the European Community. Under the terms of that agreement, the importing country authority may normally endorse good manufacturing practice (GMP) inspection reports for pharmaceuticals provided by the exporting authority determined by the importing authority to have an equivalent regulatory system. Likewise, the importing country authority may normally endorse medical device quality system evaluation reports and certain medical device product evaluation reports provided by conformity assessment bodies determined by the importing country authority to have equivalent assessment procedures. The Agency took this action to enhance its ability to ensure the safety and effectiveness of pharmaceuticals and medical devices through more efficient and effective utilization of its regulatory resources. On December 1, 1998, FDA issued regulations establishing requirements for the distribution of patient labeling for selected prescription human drug and biological products used primarily on an outpatient basis. The agency is requiring the distribution of patient labeling, called Medication Guides, for certain products that pose a serious and significant public health concern requiring distribution of FDA- approved patient medication information. The intent of this action is to improve public health by providing information necessary for patients to use their medications safely and effectively. FDA believes that this program will result in direct improvements in the safe and effective use of prescription medications. FDA promulgated new regulations on December 2, 1998, requiring pediatric studies of certain new and marketed drug and biological products. Most drugs and biologics have not been adequately tested in the pediatric subpopulation. As a result, product labeling frequently fails to provide directions for safe and effective use in pediatric patients. This rule will partially address the lack of pediatric use information by requiring that manufacturers of certain products provide sufficient data and information to support directions for pediatric use for the claimed indications. In a January 21, 1999 publication, the Agency proposed to permit the use on dietary supplements of health claims based on authoritative statements under the notification procedures in the Food and Drug Administration Modernization Act of 1997 (FDAMA). FDAMA permits nutrient content claims based on authoritative statements for both conventional foods and dietary supplements. In another rulemaking, the Agency has proposed to require safe handling statements on labels of shell eggs that have not been treated to destroy Salmonella microorganisms (July 6, 1999). FDA has also proposed to require that, when held by retail establishments, [[Page 63931]] shell eggs be stored and displayed under refrigeration at a temperature of 7.2 degrees C (45 degrees F) or less. FDA is taking these actions because of the number of outbreaks of foodborne illnesses and deaths caused by Salmonella Enteritidis that are associated with the consumption of shell eggs that have not been treated to destroy this pathogen. FDA, as directed by the Animal Drug Availability Act of 1996, has amended its new animal drug regulations to further define the term ``substantial evidence'' (July 28, 1999). The purpose of this final rule is to encourage the submission of new animal drug applications (NADAs) and supplemental NADAs for single ingredient and combination new animal drugs. The final rule also encourages dose range labeling. In multiple rulemakings on August 19, 1999, FDA proposed to amend the biologics regulations by removing, revising, or updating specific regulations applicable to blood and blood derivatives to be more consistent with current practices and to remove unnecessary or outdated requirements. These actions are part of FDA's ``Blood Initiative,'' in which FDA is reviewing and when appropriate revising its regulations, policies, guidances, and procedures related to blood and blood products, including blood derivatives. Health Care Financing Administration The Health Care Financing Administration (HCFA) has worked, and continues to work diligently, to provide guidance on the many provisions of the Balanced Budget Act legislation. We are developing additional appropriate regulations to address provisions that have not yet been implemented in their entirety. HCFA's focus during this coming fiscal year is diverse, encompassing payment issues, program integrity, the children's health insurance program, and managed care. Payment Issues Ambulance Fee Schedule The Balanced Budget Act of 1997 (BBA) requires the establishment of a fee schedule for ambulance services under the Medicare program. Policies are being developed through negotiated rulemaking. The negotiated rulemaking committee, representing varied public and private interests related to ambulance services, is scheduled to conclude in February 2000, after taking into account such factors as cost control, geographic and operational differences. We anticipate publication of the proposed rule as soon as practical thereafter. Prospective Payment Systems Home Health Agencies are currently being paid under an interim payment system in accordance with requirements of the BBA. As also required by the BBA, HCFA is in the process of developing a final rule to establish requirements for the new Home Health prospective payment system. The same legislation requires that we develop a prospective payment system for rehabilitation facilities, now being formulated as a proposed rule. We published a notice of proposed rulemaking on September 8, 1998 for a hospital outpatient prospective payment system, and are in the process of drafting a final rule that takes into consideration the comments that we received on the September 1998 document. Program Integrity Surety Bonds In addressing BBA requirements for certain providers and suppliers to furnish surety bonds in order to participate in the Medicare and Medicaid programs, we issued several Federal Register documents. Some dealt with surety bond submissions for home health agencies, and a notice of proposed rulemaking considered requirements for suppliers of durable medical equipment. Based on public response, we have decided to propose new, less burdensome regulations, and we are developing notices of proposed rulemaking to address the related issues. Plans include finalizing these rules during the fiscal year. Qualifications for Establishing and Maintaining Medicare Billing Privileges BBA and other laws require the furnishing of information and the identification of individuals or entities who furnish medical services to beneficiaries before payment can be made. We are particularly interested in ensuring that those who provide services to our beneficiaries are qualified to do so. In addition, we are responsible for protecting the Trust Funds by ensuring that any duplicate or overpayments are recouped. Through the gathering of information, and the use of unique identifiers for those that furnish services for which Medicare payment may be made, we can better protect our beneficiaries and public funds. We are developing a notice of proposed rulemaking to address the use of an information collection instrument that would provide to us the necessary information before we make a determination of whether a provider or supplier should be granted billing privileges. Children's Health Insurance Program (CHIP) Under this optional program, created as title XXI of the Social Security Act, under BBA, States may initiate and expand child health assistance to uninsured, low-income children. Because of the short timeframe between the enactment of the BBA and the effective date of the legislation, and our interest in ensuring that States could take advantage of the opportunity to better serve their vulnerable youthful populations, we developed guidance that permitted 54 States and territories to have approved CHIP plans. Thus, operation of the CHIP program has begun, prior to the completion of regulations, which are now nearing publication. Managed Care Medicare+Choice We published an interim final regulation implementing the Medicare+Choice program on June 26, 1998, and a final rule on February 17, 1999, addressing selected issues raised by commenters on the June regulation. The next final rule under development will be more comprehensive and will respond to all comments and implement other necessary changes. Medicaid Managed Care We published a notice of proposed rulemaking on September 29, 1998, addressing the BBA modifications of the Medicaid managed care programs. The publication proposed enhanced enrollee protections and emphasized the quality of health care delivered to Medicaid enrollees. The final rule, under development, will respond to public comments and make any appropriate revisions necessary to finalize the Medicaid Managed Care programs. Additional Regulations We continue to focus on the importance of updating physician payments. We published a final rule on November 2, 1999, addressing the updating of physician payments by Medicare, including a provision to change the method of determining malpractice insurance relative value units (RVUs) from the current charge-based system to a resource-based system. The rule continues the refinement of the practice expense RVUs that are transitioning from charge-based to resource-based, and addresses [[Page 63932]] new and revised procedure codes for the year 2000. _______________________________________________________________________ HHS--Office of the Secretary (OS) ----------- FINAL RULE STAGE ----------- 27. STANDARDS FOR PRIVACY OF INDIVIDUALLY INDENTIFIABLE HEALTH INFORMATION Priority: Economically Significant. Major under 5 USC 801. Unfunded Mandates: State, Local or Tribal Governments Legal Authority: 42 USC 1320d-2; 42 USC 1320d-4; PL 104-191, sec 264 CFR Citation: 45 CFR 160; 45 CFR 164 Legal Deadline: Final, Statutory, February 21, 2000. Abstract: The proposed rule would implement part of the Administrative Simplification requirements of Public Law 104-191 by establishing standards for health plans, health care clearinghouses and certain health care providers to protect the privacy of individually identifiable health information. Statement of Need: The Health Insurance Portability and Accountability Act of 1996 (HIPAA) (PL 104-191) requires the Department to issue final standards for the privacy of individually identifiable health information by February 21, 2000. The confidentiality of such information is currently unprotected. The standards will establish protections applicable to medical records created by health care providers, hospitals, health plans and health care clearinghouses that are either transmitted or maintained electronically, and the paper printouts created from these records. Summary of Legal Basis: The Health Insurance Portability and Accountability Act of 1996 (HIPAA) (PL 104-191) directed the Department to issue several standards to facilitate the electronic exchange of information with respect to financial and administrative transactions. It also directed the Department to develop and submit to the Congress recommendations for privacy legislation. In addition, if Congress did not enact legislation governing privacy standards with respect to individually identifiable health information by August 21, 1999, HIPAA directed the Department to promulgate final regulations containing such standards by February 21, 2000. This proposed rule will enable the Department to solicit public comment and issue final regulations in order to satisfy the statutory requirement. Alternatives: The Department is required by statute to issue final regulations by February 21, 2000. Therefore, no alternatives to regulatory action have been considered. Anticipated Cost and Benefits: Estimates of the economic impact that will stem from this rule will be made available after all public commentary has been received and analyzed. Risks: This proposed rule provides an important opportunity for interested parties to comment on many complex privacy policies prior to implementation of a significant new set of regulatory requirements. Failure to publish this proposed rule would jeopardize the Department's ability to meet the statutory deadline. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 59967 11/03/99 Final Action 02/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses, Governmental Jurisdictions, Organizations Government Levels Affected: State, Local, Tribal, Federal Agency Contact: Roxanne Gibson Senior Administrative Assistant Department of Health and Human Services Office of the Secretary Room G-322A, Attention: Privacy-P 200 Independence Avenue SW. Washington, DC 20201 Phone: 202 260-5083 RIN: 0991-AB08 _______________________________________________________________________ HHS--Food and Drug Administration (FDA) ----------- PROPOSED RULE STAGE ----------- 28. HEARING AIDS; PROFESSIONAL AND PATIENT LABELING; CONDITIONS FOR SALE Priority: Other Significant. Major status under 5 USC 801 is undetermined. Unfunded Mandates: State, Local or Tribal Governments Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 21 USC 351; 21 USC 352; 21 USC 360d; 21 USC 371; 21 USC 360j(e) CFR Citation: 21 CFR 801.420; 21 CFR 801.421 Legal Deadline: None Abstract: FDA is considering revising its present regulation governing the labeling and conditions for sale of hearing aids. The present rule requires an examination by a physician before purchase of a hearing aid, but permits an informed adult to waive that requirement. There is some evidence that this waiver provision is being misused. Statement of Need: FDA has become aware of changes in the nature of the causes of hearing loss and the technology of hearing aids that necessitate reconsideration of the regulations governing the types of testing needed before a hearing aid purchase and the labeling for health professionals and patients. In the past, hearing loss often was caused by medically treatable conditions. Today, medical and/or surgical intervention will correct hearing loss in only 5 to 10 percent of the cases. Therefore, there may be less of a need for medical evaluation. FDA believes, however, that patients should receive proper testing in order for a hearing aid to be effective. Summary of Legal Basis: Under 21 USC 360j(e), FDA has the authority to restrict the sale, [[Page 63933]] distribution, or use of a medical device, if FDA determines that, without such restrictions, there cannot be reasonable assurance of its safety and effectiveness. Under 21 USC 352, FDA has the authority to require that the labeling of a medical device include adequate directions for use. Alternatives: FDA considered applying the rule only to first time purchasers of hearing aids. FDA believes, however, that this would not adequately protect present users of inappropriate or unneeded hearing aids. FDA also considered requiring additional tests, but has preliminarily determined to list these tests as recommended only in order to provide additional flexibility. Anticipated Cost and Benefits: FDA has estimated the costs of the mandatory testing required by the rule would add an additional $24.8 million to $51.7 million depending upon the assumptions concerning present practices. On the average, FDA estimates that this would add about $24 to the cost of a hearing aid. FDA expects that the benefits from the rule would include: (1) Improving the quality of life of hearing aid users; (2) avoiding the cost of inappropriate hearing aid purchase; (3) reducing doctor visits for hearing aid evaluations; (4) lowering treatment costs due to early detection of serious conditions; and (5) encouraging the dissemination of accurate information concerning the benefits and limitations of hearing aids. Risks: If the hearing aid purchaser inappropriately waives the medical evaluation requirement under the existing rule, treatable causes of hearing loss may go undetected. Many purchasers who have not had proper testing before a hearing aid purchase will forego the use of a hearing aid because the one purchased does not adequately improve their hearing ability. At this time, FDA believes that many hearing impaired people who may benefit from a hearing aid do not purchase one because they fear that they will not benefit from one due to inaccurate information. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 58 FR 59695 11/10/93 ANPRM Comment Period End 01/10/94 NPRM 03/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: State Additional Information: Previously reported under RIN 0905-AE46. Agency Contact: Joseph M. Sheehan Chief, Regulations Staff Department of Health and Human Services Food and Drug Administration HFZ-215 Center for Devices and Radiological Health 1350 Piccard Drive Rockville, MD 20850 Phone: 301 827-2974 RIN: 0910-AA39 _______________________________________________________________________ HHS--FDA 29. LABELING FOR HUMAN PRESCRIPTION DRUGS; REVISED FORMAT Priority: Other Significant. Major status under 5 USC 801 is undetermined. Unfunded Mandates: Undetermined Reinventing Government: This rulemaking is part of the Reinventing Government effort. It will revise text in the CFR to reduce burden or duplication, or streamline requirements. Legal Authority: 21 USC 321; 21 USC 331; 21 USC 351; 21 USC 352; 21 USC 353; 21 USC 355; 21 USC 358; 21 USC 360; 21 USC 360b; 21 USC 360gg to 360ss; 21 USC 371; 21 USC 374; 21 USC 379e CFR Citation: 21 CFR 201 Legal Deadline: None Abstract: The proposed regulation would amend the regulations governing the format and content of professional labeling for human prescription drug and biologic products, 21 CFR 201.56 and 201.57. The proposal would require that professional labeling include a section containing highlights of prescribing information and a section containing an index to prescribing information, reorder currently required information and make minor changes to its content, and establish minimum graphical requirements for professional labeling. The proposal would also eliminate certain unnecessary statements that are currently required to appear on prescription drug labels and move certain information to patient labeling. Statement of Need: The current format and content requirements in sections 201.56 and 201.57 were established to help ensure that labeling includes adequate information to enable health care practitioners to prescribe drugs safely and effectively. However, various developments in recent years, such as technological advances in drug product development, have contributed to an increase in the amount, detail, and complexity of labeling information. This has made it harder for practitioners to find specific information and to discern the most critical information in product labeling. FDA took numerous steps to evaluate the usefulness of prescription drug labeling for its principal audience and to determine whether, and how, its format and content can be improved. The agency conducted focus groups and a national survey of office-based physicians to ascertain how prescription drug labeling is used by health care practitioners, what labeling information is most important to practitioners, and how professional labeling should be revised to improve its usefulness to prescribing practitioners. Based on the concerns cited by practitioners in the focus groups and physician survey, FDA developed and tested two prototypes of revised labeling formats designed to facilitate access to important labeling information. Based on this testing, FDA developed a third revised prototype that it made available to the public for comment. Ten written comments were received on the prototype. FDA also presented the revised prototype at an informal public meeting held on October 30, 1995. At the public meeting, the agency also presented the background research and provided a forum for oral feedback from invited panelists and members of the audience. The panelists generally supported the prototype. [[Page 63934]] The proposed rule attempts to establish format and content requirements for prescription drug labeling that incorporate information and ideas gathered during this process. Summary of Legal Basis: The agency has broad authority under sections 502, 505, and 701 of the Federal Food, Drug, and Cosmetic Act (the act)(21 USC 352, 355, 371) and section 351 of the Public Health Service Act (42 USC 262) to regulate the content and format of prescription drug labeling to help ensure that products are safe and effective for their intended uses. A major part of FDA's efforts regarding the safe and effective use of drug products involves FDA's review, approval, and monitoring of drug labeling. Under section 502(f)(1) of the act, a drug is misbranded unless its labeling bears ``adequate directions for use'' or it is exempted from this requirement by regulation. Under section 201.100 (21 CFR 201.100), a prescription drug is exempted from the requirement in section 502(f)(1) only if, among other things, it contains the information required, in the format specified, by sections 201.56 and 201.57. Under section 502(a) of the act, a drug product is misbranded if its labeling is false or misleading in any particular. Under section 505(d) and 505(e) of the act, FDA must refuse to approve an application and may withdraw the approval of an application if the labeling for the drug is false or misleading in any particular. Section 201(n) of the act provides that in determining whether the labeling of a drug is misleading, there shall be taken into account not only representations or suggestions made in the labeling, but also the extent to which the labeling fails to reveal facts that are material in light of such representations or material with respect to the consequences which may result from use of the drug product under the conditions of use prescribed in the labeling or under customary usual conditions of use. These statutory provisions, combined with section 701(a) of the act and section 351 of the Public Health Service Act, clearly authorize FDA to promulgate a regulation designed to help ensure that practitioners prescribing drugs (including biological products) will receive information essential to their safe and effective use in a format that makes the information easier to access, read, and use. Alternatives: The alternatives to the proposal include not amending the content and format requirements in sections 201.56 and 201.57 at all, or amending them to a lesser extent. The agency has determined that although drug product labeling, as currently designed, is useful to physicians, many find it difficult to locate specific information in labeling, and some of the most frequently consulted and most important information is obscured by other information. In addition, the agency's research showed that physicians strongly support the concept of including a summary of the most important prescribing information, an index and numbering system that permits specific information to be easily located, and other proposed requirements, such as the requirement for a minimum type size. Thus, the agency believes that the proposed requirements will greatly facilitate health care practitioners' access and use of prescription drug and biological labeling information. Anticipated Cost and Benefits: The expected benefits from the proposed rule include reduced time needed for health care professionals to read or review labeling for desired information, increased effectiveness of treatment, and a decrease in adverse events resulting from avoidable drug-related errors. For example, the proposed revised format is expected to significantly reduce the time spent on reading labeling by highlighting often used information at the beginning of labeling and facilitating access to detailed information. The potential costs associated with the proposed rule include the cost of redesigning labeling for previously approved products to which the proposed rule would apply and submitting the new labeling to FDA for approval. In addition, one-time and ongoing incremental costs would be associated with printing the longer labeling that would result from additional required sections. These costs would be minimized by applying the amended requirements only to newer products and by staggering the implementation date for previously approved products. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 01/00/00 NPRM Comment Period End 04/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: Undetermined Additional Information: Legal Authority continued: 42 USC 216; 42 USC 241; 42 USC 262; 42 USC 264 Agency Contact: Lee D. Korb Regulatory Counsel, Regulatory Policy Staff Department of Health and Human Services Food and Drug Administration Suite 3037 (HFD-7) Center for Drug Evaluation and Research 1451 Rockville Pike Rockville, MD 20852 Phone: 301 594-2041 Fax: 301 827-5562 Nancy M. Ostrove Division of Drug Marketing, Advertising, and Communications Department of Health and Human Services Food and Drug Administration HFD-40 Center for Drug Evaluation and Research 5600 Fishers Lane Rockville, MD 20857 Phone: 301 827-2828 RIN: 0910-AA94 _______________________________________________________________________ HHS--FDA 30. PHARMACY AND PHYSICIAN COMPOUNDING OF DRUG PRODUCTS Priority: Other Significant. Major status under 5 USC 801 is undetermined. Unfunded Mandates: Undetermined Legal Authority: 21 USC 331; 21 USC 351; 21 USC 352; 21 USC 353a; 21 USC 355; 21 USC 360; 21 USC 371 CFR Citation: 21 CFR 216 Legal Deadline: None [[Page 63935]] Abstract: Section 503A of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 353a) describes the circumstances under which compounded drugs may qualify for exemption from three requirements of the act: (1) That a drug be manufactured according to current good manufacturing practice, (2) that a drug have adequate directions for use, and (3) that a marketing application be approved by FDA before a new drug product is introduced for sale (i.e., sections 501(a)(2)(B), 502(f)(1), and 505 of the act (21 U.S.C. 351(a)(2)(B), 352(f)(1), and 355)). To qualify for the exemption, a pharmacist or physician must meet the following statutory conditions for compounding: (1) There usually must be a prescription for an identified individual patient before compounding. (2) Compounding before receiving a prescription is allowed only under limited circumstances. (3) Prescriptions may not be solicited and certain types of advertising are not permitted. (4) The quantity of drugs that may be shipped out of state is limited and may vary depending on whether the compounder is located in a state that has entered into a memorandum of understanding (MOU) with FDA. (5) Drug products may only be compounded using a bulk drug substance (which is essentially the active ingredient) that is listed in the United States Pharmacopoeia (USP) or National Formulary (NF); or a bulk drug substance that is a component of an FDA-approved drug product; or a bulk drug substance that is listed in the regulation as one that FDA has found to be suitable for compounding. (6) The bulk drug substance must be made in a facility registered with FDA and the bulk drug substance must be accompanied by a certificate of analysis. (7) Limited quantities of copies of commercially manufactured drug products may be compounded in special circumstances. (8) Drug products may not be compounded if they are listed in a regulation as having been removed from the market or had their FDA-approval withdrawn because they were found to be not safe or not effective. (9) Drug products that are listed in the regulations as ``demonstrably difficult to compound'' may not be compounded. The regulations will amplify and explain the statutory requirements as well as execute tasks Congress assigned FDA in section 503A. This proposed rule will be one of several rulemakings implementing section 503A. Related regulatory initiatives are described below: FDA has issued a final rule listing drug products that may not be compounded because they were found to be not safe or not effective and were removed from the market or had their FDA approval withdrawn. FDA has also issued a proposed rule and is preparing a final rule listing drugs that are not the subject of a USP or NF monograph, and are not components of an FDA-approved drug product but are suitable for compounding. FDA is currently preparing a proposed rule listing those drugs that are demonstrably difficult to compound and are not allowed to be compounded. FDA has published a Federal Register notice announcing the availability of a draft MOU between FDA and state boards of pharmacy. Statement of Need: Pharmacy compounding can provide substantial benefits to the public health. It can give to patients, who are allergic to inactive ingredients found in commercially available drug products, versions of those drug products from which the allergenic ingredient has been omitted. Patients who have difficulty taking a commercially available drug product may obtain a compounded version of the drug product in a different dosage form. Pharmacy compounding can also enable physicians to access certain drugs that are not commercially available. Just as compounded drugs may present significant benefits to health, they can also present significant risks. Compounded drugs are generally not evaluated by FDA for safety or effectiveness. They are not made according to current good manufacturing practices and have generally not been tested for strength, quality, or purity. Stability testing, to establish the useful shelf life of the products, has generally not been performed on compounded drug products. Compounders have made illicit copies of FDA-approved drug products, threatening the integrity of the drug approval process. FDA is attempting to maximize the public health benefits of pharmacy compounding, while minimizing the potential threat to the public health. Summary of Legal Basis: Section 127 of the Food and Drug Administration Modernization Act of 1997 (FDAMA) adds section 503A to the act. Sections 503A(b)(1)(A)(i)(III) and (d)(2) direct FDA to publish regulations establishing a list of drugs that are suitable for compounding. Section 503A(b)(1)(C) directs FDA to publish in the Federal Register a list of drug products that have been withdrawn or removed from the market because such drug products or components of such drug products have been found to be unsafe or not effective. Section 503A(b)(1)(D) directs FDA to define the term ``compound regularly or in inordinate amounts'' relating to compounding drug products that are essentially copies of a commercially available drug product. Section 503A(b)(3)(A) directs FDA to develop a list of drug products that may not be compounded because they are demonstrably difficult to compound. Efficient enforcement of section 503A would benefit from publication of a substantive rule that interprets and applies the statutory language. Alternatives: Section 127 of FDAMA directs FDA to develop regulations, so no alternatives to regulations have been considered. FDA has considered a wide range of options and approaches within the framework of a regulation. FDA has convened and consulted the Pharmacy Compounding Advisory Committee, which consists of representatives of the United States Pharmacopoeia, the National Association of Boards of Pharmacy, and a consumer organization, as well as members of the pharmacy and pharmaceutical manufacturing industries, physicians and academics. Anticipated Cost and Benefits: FDA has not yet quantified the costs and benefits of any regulatory approach. FDA has not been significantly involved in the regulation of pharmacy compounding, and does not have any economic data on the industry at this time. Responses to the NPRM will be important in determining the costs and benefits of any regulation. Risks: None. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 03/00/00 Regulatory Flexibility Analysis Required: Yes [[Page 63936]] Small Entities Affected: Businesses Government Levels Affected: Federal, State Additional Information: See RINs 0910-AB57, 0910-AB5 Agency Contact: Wayne H. Mitchell Regulatory Counsel, Regulatory Policy Staff Department of Health and Human Services Food and Drug Administration Suite 3057 (HFD-7) Center for Drug Evaluation and Research 1451 Rockville Pike Rockville, MD 20852 Phone: 301 594-2041 Fax: 301 827-5562 RIN: 0910-AB58 _______________________________________________________________________ HHS--FDA 31. CGMPS FOR BLOOD AND BLOOD COMPONENTS: NOTIFICATION OF CONSIGNEES AND TRANSFUSION RECIPIENTS RECEIVING BLOOD AND BLOOD COMPONENTS AT INCREASED RISK OF TRANSMITTING HCV INFECTION Priority: Economically Significant. Major under 5 USC 801. Unfunded Mandates: Undetermined Legal Authority: 21 USC 321; 21 USC 331; 21 USC 351; 21 USC 352; 21 USC 353; 21 USC 355; 21 USC 360; 21 USC 371; 21 USC 374; 42 USC 216; 42 USC 262; 42 USC 263; 42 USC 263a; 42 USC 264; 42 USC 300aa-25 CFR Citation: 21 CFR 606; 21 CFR 610 Legal Deadline: None Abstract: This rulemaking is one of a number of actions being taken to amend the biologics regulations to remove, revise, or update the regulations applicable to blood, blood components, and blood derivatives. These actions are based on a comprehensive review of the regulations performed by FDA, and are also based on reports by the U.S. House of Representatives Committee on Government Reform and Oversight, Subcommittee on House Resources and Intergovernmental Relations, the General Accounting Office, and the Institute of Medicine, as well as public comments. In this rulemaking, FDA will propose to amend the biologics regulations to require that blood establishments prepare and follow written procedures for appropriate action when it is determined that blood and blood components pose an increased risk for transmitting hepatitis C virus (HCV) infection because they have been collected from a donor who, at a later date, tested repeatedly reactive for evidence of HCV. Statement of Need: In the Federal Register of October 23, 1998 (63 FR 56198), FDA announced the availability of guidance, which updated previous guidance, providing recommendations for donor screening and further testing for antibodies to HCV, notification of consignees, transfusion recipient tracing and notification, and counseling by physicians regarding transfusion with blood components at increased risk for transmitting HCV (often called ``lookback''). While available evidence indicates that blood establishments are following these recommendations, FDA believes that regulations should be codified, consistent with the previous recommendations, to assure there is clear enforcement authority in case deficiencies in an establishment's lookback program are found and to provide clear instructions for continuing lookback activities. Summary of Legal Basis: The Public Health Service Act (21 USC 216 et seq.) and the Federal Food, Drug, and Cosmetic Act (21 USC 321 et seq.) authorize FDA to regulate biological products and to ensure that the products are safe, pure, potent, and effective. The Public Health Service Act also contains the authority under which FDA can promulgate regulations to prevent the spread of communicable diseases. These regulations would assure that appropriate action is taken when blood components have been transfused which may potentially be capable of transmitting HCV, that persons who have been transfused with such blood components are notified so that they receive proper counseling and treatment, and to help prevent the further transmission of HCV. Alternatives: FDA has considered permitting the continued voluntary compliance with the recommendations that have already issued. However, the ability of FDA to enforce appropriate lookback procedures would be unclear. In addition, because lookback will remain appropriate for the foreseeable future, FDA believes that the procedures should be clearly established in the regulations. Anticipated Cost and Benefits: FDA is in the process of analyzing the costs related to the rulemaking. Monetary burdens will be associated to the tracing of previous donations of donors, identifying the recipients of these previous blood donations, and notifying these recipients, as appropriate. FDA believes these costs will be more than compensated by the public health benefits, including benefits related to the notification of past transfusion recipients who may be unaware that they may be infected with HCV. Risks: FDA believes there are minimum risks posed by requiring that appropriate lookback procedures for HCV be prepared and followed. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 02/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: None Additional Information: See RIN 0910-AB26. Agency Contact: Steven F. Falter Director, Regulations and Policy Staff Department of Health and Human Services Food and Drug Administration Suite 200N (HFM-17) Center for Biologics Evaluation and Research 1401 Rockville Pike Rockville, MD 20852-1448 Phone: 301 827-6210 Email: [email protected] RIN: 0910-AB76 _______________________________________________________________________ [[Page 63937]] HHS--FDA 32. CURRENT GOOD MANUFACTURING PRACTICE IN MANUFACTURING, PACKING, OR HOLDING DIETARY SUPPLEMENTS Priority: Other Significant Legal Authority: 21 USC 342; 21 USC 371; 21 USC 374; 42 USC 264 CFR Citation: 21 CFR 111 Legal Deadline: None Abstract: The Food and Drug Administration (FDA) announced in an advance notice of proposed rulemaking (ANPRM) of February 6, 1997, its plans to consider developing regulations establishing current good manufacturing practice (CGMP) for dietary supplements and dietary supplement ingredients. The ANPRM was published in order for FDA to solicit comments on whether it should initiate action to establish CGMP regulations and if so, what constitutes CGMP for these products. FDA announced that this effort was in response to the section of the Federal Food, Drug, and Cosmetic Act (the act) that provides authority to the Secretary of Health and Human Services to promulgate CGMP regulations and to a submission from the dietary supplement industry asking that FDA consider an industry-proposed CGMP framework as a basis for CGMP regulations. The ANPRM also responds to concerns that such regulations are necessary to ensure that consumers are provided with dietary supplement products which are not adulterated or misbranded, which have the identity and provide the quantity of dietary ingredients declared in labeling, and which meet the quality specifications that the supplements are represented to meet. Statement of Need: FDA is considering whether to develop regulations establishing current good manufacturing practice (CGMP) for dietary supplements and dietary supplement ingredients for several reasons. First, FDA is concerned that some firms may not be taking appropriate steps during the manufacture of supplement products to ensure that products are properly formulated and not adulterated. There have been cases of misidentified ingredients harming consumers using dietary supplements. FDA is also aware of products or ingredients that contain potentially harmful contaminants or ingredients because of apparently inadequate manufacturing controls and quality control procedures. The agency believes that a system of CGMP or other preventive manufacturing controls may be the most effective and efficient way to ensure that these products will not be adulterated during the manufacturing process. Summary of Legal Basis: If CGMP regulations were adopted by FDA, failure of a manufacturer to implement and follow CGMP would render the dietary supplement or dietary supplement ingredients of that manufacturer adulterated under section 402(g) of the act. Alternatives: The two principal alternatives to comprehensive CGMP are end-product testing and Hazard Analysis Critical Control Points (HACCP). In the ANPRM, FDA asked for public comment on approaches to ensuring that dietary supplements and dietary supplement ingredients are not adulterated during the manufacturing process. The agency asked whether HACCP may be a more effective approach than a comprehensive CGMP, and whether different approaches may be better able to address the needs of the broad spectrum of firms that conduct one or more distinct operations, such as the manufacture of finished products, or solely the distribution and sale of finished products at the wholesale or retail level. FDA will consider the information it received in response to the ANPRM and from other sources, such as public meetings and small business outreach meetings, in its consideration of whether CGMP or other approaches are most appropriate. Anticipated Cost and Benefits: A comprehensive CGMP (or other system of ensuring the safety of dietary supplements and dietary supplement ingredients) would permit more effective and efficient oversight by Federal, State, and local governments. It would place primary responsibility for ensuring that these products are not adulterated on the manufacturer/distributor by requiring that they develop and implement a rational, scientific-based system to control their manufacturing process. FDA anticipates that costs to industry generated by implementing a comprehensive manufacturing process, whether CGMP or other plan, would be offset in four ways: (1) by reducing the amount of supplement-associated illnesses or adverse events; (2) by increasing public confidence in dietary supplements marketed in the United States; (3) by enabling U.S. supplements companies to compete more effectively in the world market; and (4) by decreasing the number of future product recalls. Risks: Any potential for consumers to be provided adulterated (contaminated with industrial chemicals, pesticides, microbial pathogens, or dangerous misidentified ingredients or toxic components of ingredients) products must be considered a very serious risk because of the possibility that such contamination could be widespread, affecting whole segments of the population, causing some severe long-term effects and even loss of life. Dietary supplements are used by a large segment of the American public. Moreover they are often used by segments of the population that are particularly vulnerable to adulterated products, such as the elderly, young children, pregnant and nursing women, and persons who may have serious illnesses or are taking medications that may adversely interact with dietary supplement components. FDA has adopted or proposed manufacturing controls for a number of foods and commodities that present potential health hazards to consumers if not processed properly, including seafood, juice products, and fruits and vegetables and it is appropriate that FDA consider whether manufacturing controls are necessary to assure consumers that dietary supplements are not adulterated during the manufacturing process. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 62 FR 5700 02/06/97 ANPRM Comment Period End 06/06/97 NPRM 09/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: Undetermined [[Page 63938]] Agency Contact: Karen Strauss Consumer Safety Officer Department of Health and Human Services Food and Drug Administration 200 C Street, S.W. (HFS-456) Washington, DC 20204 Phone: 202 205-5372 Fax: 202 260-8957 Email: [email protected] RIN: 0910-AB88 _______________________________________________________________________ HHS--FDA ----------- FINAL RULE STAGE ----------- 33. FRUIT AND VEGETABLE JUICES: DEVELOPMENT OF HACCP AND LABEL WARNING STATEMENTS FOR JUICES Priority: Economically Significant. Major under 5 USC 801. Legal Authority: 21 USC 321 et seq; 42 USC 264 CFR Citation: 21 CFR 120 Legal Deadline: None Abstract: The Food and Drug Administration (FDA) announced in an advance notice of proposed rulemaking of August 4, 1994, its plans to consider the development of regulations establishing requirements for a new comprehensive food safety assurance program that would be based on the principles of Hazard Analysis Critical Control Points (HACCP). The new food safety program would respond to new challenges, such as new food processing and packaging technologies, new food distribution and consumption patterns, exposure to industrial chemicals and chemical waste, the increasing importation of foods, new microbial pathogens, and resource constraints. Current information shows that the most serious of these challenges is presented by food-borne pathogens. The number of recognized food-borne pathogens has broadened considerably, as has the awareness of long-term complications from certain food-borne illnesses--such as arthritis, heart disease, and kidney and neurological damage. To meet such challenges, FDA intends to shift the focus of its food safety assurance program away from periodic visual inspection and end-product testing and toward prevention of food safety risks and problems, utilizing the state-of-the-art HACCP preventive approach. A first step was taken when FDA published a HACCP regulation for fish and fishery products on December 18, 1995. Consistent with FDA's HACCP efforts, USDA published a HACCP regulation for meat and poultry on July 25, 1996. FDA proposed on April 24, 1998 to adopt a HACCP regulation for the processing of juice. The agency simultaneously proposed to require a warning statement on the labels or in labeling for juice products that have not been processed to reduce, control, or eliminate the presence of harmful bacteria. Such labeling would serve to reduce the risk of food-borne illness, pending development of a final HACCP rule for juice. As part of the development of the HACCP proposal, FDA considered information obtained during agency HACCP pilot activities, and comments and scientific and technological information relating to fresh juices provided during and after an agency public meeting on juice held on December 16 and 17, 1996. On July 8, 1998, the agency finalized the warning statement requirement. FDA held two technical scientific workshops, one November 12, 1998, in Lake Alfred, Florida and the other November 29, 1998, in Irvine, California, to discuss and clarify issues related to the implementation of the agency's rule requiring a warning statement for certain juice products. The workshops addressed citrus juice production and the methods for measuring and validating such systems. On December 8 and 9, 1998, the National Advisory Committee on Microbiological Criteria for Foods (NACMCF) met to consider performance criteria for fresh juice. FDA specifically requested the NACMCF to make recommendations about the efficacy of surface treatments in ensuring the safety of citrus juices. Statement of Need: FDA is adopting regulations that would establish requirements for a new comprehensive food safety assurance program for both domestically produced and imported fruit and vegetable juices that would be based on the principles of Hazard Analysis Critical Control Points (HACCP). FDA intends to adopt a juice HACCP regulation because there have been a number of outbreaks of illnesses associated with juice products, including some directly affecting children, and because the agency believes that a system of preventive controls is the most effective and efficient way to ensure that these products will be safe. Summary of Legal Basis: Failure of a processor to have and implement a HACCP system will render the food products of that processor adulterated under section 402(a)(4) of the Federal Food, Drug, and Cosmetic Act. Whether a processor's actions are consistent with ensuring the safety of food will be determined through an evaluation of the overall implementation of the firm's HACCP system. Alternatives: The two principal alternatives to HACCP are end-product testing and comprehensive current good manufacturing practices (CGMPs). FDA has concluded, based on information available at this time, that these alternatives lack the distinct advantages of a HACCP-based approach. End-product testing does not address the root causes of food safety problems, is not preventive by design, and requires that a large number of samples be analyzed to ensure product integrity. CGMPs are not practical because they are plant-wide operating procedures and do not concentrate on the identification and prevention of food hazards. Anticipated Cost and Benefits: In general terms, HACCP focuses on prevention and is designed to prevent the occurrence of hazards affecting food; HACCP permits more effective and efficient oversight by Federal, State, and local governments; and HACCP appropriately places primary responsibility for ensuring food safety on the food manufacturer/distributor to analyze, in a rational, scientific manner, its production processes in order to identify critical control points and establish critical limits and monitoring procedures. FDA anticipates that costs to industry generated by implementation of HACCP would be offset in four ways: (1) by reducing the amount of food-borne illnesses (for example, total illness reduction benefits estimated to result from FDA's HACCP-based requirements for seafood regulation are between $15 and $75 million per year); (2) by increasing public confidence in the Nation's food supply; (3) by enabling U.S. food companies to compete more effectively in the world market (for example, current recommendations of the Codex [[Page 63939]] Alimentarius Commission's Committee on Food Hygiene encourage the use of the HACCP system, and the European Community (EC) has begun to require that foods produced within the EC be processed under HACCP requirements); and (4) by decreasing the number of future product recalls. Risks: Any potential for contamination of the food supply with industrial chemicals or microbial pathogens must be considered a very serious risk because of the possibility that such contamination could be widespread, affecting whole segments of the population, causing some severe long- term effects and even loss of life. FDA made a decision to adopt a HACCP-based approach to regulate seafood, based on a considerable body of literature and expertise in this area. Likewise, FDA has reviewed current information on hazards associated with unprocessed juice, and intends to propose that processors use HACCP in the manufacture of certain juice products. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 59 FR 39888 08/04/94 ANPRM Comment Period End 12/02/94 Economic Analysis for Juice HACCP and Labeling PRIA 05/01/1998 (63 FR 24254) PRIA Comment Period End 06/22/1998 HACCP for Juice NPRM 04/24/1998 (63 FR 20450) NPRM Comment Period End 08/07/1998 NPRM Comment Period Reopened 12/17/1998 (63 FR 69579) NPRM Reopened Comment Period End 01/19/1999 Final Action 04/00/2000 Label Warning Statements for Juice Notice of Intent 08/28/1997 (62 FR 45593) NPRM 04/24/1998 (63 FR 20496) NPRM Comment Period End 06/21/1998 Final Action 07/08/1998 (63 FR 37029) Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: Federal Additional Information: Previously reported under RIN 0905-AE60. Agency Contact: Shellee Anderson Consumer Safety Officer Department of Health and Human Services Food and Drug Administration HFS-306 Center for Food Safety and Applied Nutrition 200 C Street SW. Washington, DC 20204 Phone: 202 205-5023 Email: [email protected] RIN: 0910-AA43 _______________________________________________________________________ HHS--FDA 34. SHELL EGGS: WARNING, NOTICE AND SAFE HANDLING LABELING STATEMENTS AND REFRIGERATION REQUIREMENTS Priority: Other Significant. Major status under 5 USC 801 is undetermined. Legal Authority: 21 USC 321; 42 USC 264 CFR Citation: 21 CFR 101.17(g); 21 CFR 115.50; 21 CFR 16.5 Legal Deadline: None Abstract: There have been numerous foodborne outbreaks of salmonellosis, principally due to Salmonella Enteritidis (SE), that have been traced to the consumption of temperature abused and/or undercooked shell eggs. The Food and Drug Administration has received petitions from Rose Acres Farm, Inc., and the Center for Science in the Public Interest that request, in part, that FDA establish safe handling statements for shell eggs. FDA intends to propose to require safe handling statements on labeling of shell eggs that have not been treated to destroy Salmonella microorganisms that may be present. In accordance with amendments to the Egg Products Inspection Act, USDA published on August 27, 1998, a final rule to require that shell eggs be stored at an ambient temperature of 7.2 degrees Celsius (45 degrees Fahrenheit). However, the USDA rulemaking does not include refrigeration at retail. FDA intends to propose regulations to mandate that shell eggs be stored for retail sale at 7.2 degrees Celsius (45 degrees Fahrenheit) or less. FDA is proposing this measure to ensure that shell eggs are handled in a manner to decrease the possible growth of any SE that may be present in shell eggs. All of these actions are intended to reduce the occurrence of illnesses and deaths associated with the consumption of improperly cooked shell eggs. Statement of Need: FDA is adopting regulations as part of the farm-to-table food safety system for shell eggs that would establish refrigeration requirements for shell eggs held at retail and labeling requirements instructing egg preparers and consumers on safe handling of shell eggs. FDA intends to adopt these regulations because of the continued reports of outbreaks of foodborne illness and death caused by SE that are associated with the consumption of shell eggs, and because the agency believes that these measures can have an immediate effect in significantly reducing the risk of foodborne illness due to consumption of SE contaminated shell eggs. Further, these measures can be implemented while FDA and FSIS continue to develop their comprehensive farm-to-table food safety system. Summary of Legal Basis: FDA's legal basis to require refrigeration of shell eggs derives from sections 402(a)(4), and 701(a) of the Federal Food, Drug and Cosmetic Act (FDCA) (21 U.S.C.342(a)(4) and 371(a)) and sections 311, 361, and 368 of the Public Health Service Act (PHSA) (42 U.S.C. 243, 264, and 271) that relate to communicable disease. Under section 402(a)(4) of the act, a food is adulterated if it is prepared, packed, or held in insanitary conditions whereby it may have been contaminated with filth or may have been rendered injurious to health. Numerous scientific reports describe how refrigeration helps to maintain the egg's natural defenses against degradation and slows the growth of any SE present. Under section 701(a) of the act, FDA is authorized to issue regulations for the efficient enforcement of the act. Thus, a regulation that prohibits food from being held under insanitary conditions would provide for efficient enforcement. FDA's legal authority to require label statements on food products derives from sections 201(n), 403(a)(1), and 701(a) of the FDCA (21 U.S.C. 321(n), 343(a)(1), and 371(a)), and sections 311, 361, and 368 of the Public Health Service Act (PHSA) (42 U.S.C. 243, 264, and 271) that relate to communicable disease. Under section 403(a)(1) of the FDCA, a food is misbranded if its labeling is false or [[Page 63940]] misleading in any particular. Section 201(n) of the FDCA provides that in determining whether labeling is misleading, the agency shall take into account the extent to which the labeling fails to reveal facts that are material with respect to consequences that may result from use of the product under conditions of use prescribed in the labeling or under customary or usual conditions. The fact that shell eggs may contain illness causing bacteria and that there are measures that consumers can take to protect themselves from illness is material information and, therefore, must be provided in labeling to ensure that the product is not misbranded. Alternatives: There are several alternatives to requiring refrigeration and safe handling instructions for shell eggs. The five principal alternatives include: (1) No new regulatory action, (2) labeling only, (3) refrigeration only, (4) Hazard Analysis Critical Control Point (HACCP) for shell eggs, and (5) in-shell pasteurization. FDA had concluded, based on information available at this time, that relying on current safeguards (option 1) would not greatly reduce the number of illnesses from SE in shell eggs. Even though the benefits from either labeling alone or refrigeration alone (options 2 and 3) exceed the costs, the combined benefits of refrigeration and labeling are much greater than either taken separately. FDA believes that a HACCP-like program (option 4) is currently not feasible. However, FDA is evaluating whether in the future, a HACCP-like program including possibly in-shell pasteurization, may be necessary to further ensure the safety of shell eggs. In-shell pasteurization (option 5) would greatly reduce SE, but FDA believes other interventions between farm-to-table could reduce SE at lower cost. Anticipated Cost and Benefits: The benefits from requiring safe handling labeling and the refrigeration of shell eggs at 7.2 degrees C (45 degrees F) come from reducing SE-related illness. FDA used the results of the USDA SE risk assessment for one estimate of the baseline risk and the CDC Salmonella surveillance data for another estimate of the baseline. FDA also used the risk assessment model to estimate the expected reduction in illnesses attributed to the requirements. The range (5th to 95th percentile) of estimated annual benefits for the USDA SE risk assessment baseline was $87 million to $6.6 billion, with a median of $700 million. The range (5th to 95th percentile) of estimated annual benefits for the CDC surveillance baseline was $50 million to $1.7 billion, with a median of $300 million. The benefits are large, although FDA estimates that 95 percent of shell eggs are already held at ambient temperatures of 7.2 degrees C (45 degrees F) or less. The costs of the proposed rule are the sum of the costs of changes in manufacturing practices--labeling and refrigeration--and changes in consumer practices--egg preparation and consumption. The costs of labeling are the sum of administrative compliance, inventory disposal, and label redesign costs. FDA anticipates that the total labeling cost for a 6-month compliance period to be a one-time cost of approximately $18 million. The total cost included administrative costs of $280,000, inventory disposal costs of $3 million, and label redesign costs of $15 million. The refrigeration costs will be the cost of the additional equipment required for all establishments to maintain an ambient temperature of 7.2 degrees C (45 degrees F). The anticipated costs per establishment range from close to zero for small equipment upgrades to $6,000 for a large new refrigerator. For all establishments, the range (5th to 95th percentile) of anticipated one-time refrigeration costs was $7 million to $228 million, with a median of $31 million. FDA also considered as a part of the cost the change in consumer behaviors. The anticipated annual costs to consumers to change the way eggs are prepared and consumed ranged (5th to 95th percentile) from $2 million to $20 million, with a median of $10 million. The median total costs of the proposed rule--the sum of the costs of labeling, refrigeration, and changes in consumer practices--are about $60 million in the first year and $10 million per year thereafter. Risks: Any potential for growth of SE in shell eggs must be considered a very serious risk because of the possibility that such growth could be widespread, affecting whole segments of the population, causing some severe long-term effects and even loss of life. FDA made a decision to adopt refrigeration and labeling requirements for shell eggs based on a considerable body of evidence, literature, and expertise in this area. This decision was also based on the USDA Risk Assessment and the identified effects associated with refrigeration and labeling. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 63 FR 27502 05/19/98 ANPRM Comment Period End 08/17/98 Economic Analysis for Refrigeration and Labeling of Shell Eggs NPRM 07/06/1999 (64 FR 36492) NPRM Comment Period End 09/20/1999 (64 FR 36492) Final Action 04/00/2000 Refrigeration and Labeling of Shell Eggs NPRM 07/06/1999 (64 FR 36492) NPRM Comment Period End 09/20/1999 (64 FR 36492) Final Action 04/00/2000 Regulatory Flexibility Analysis Required: No Small Entities Affected: Businesses Government Levels Affected: Federal, State Agency Contact: Geraldine A. June Consumer Safety Officer Department of Health and Human Services Food and Drug Administration HFS-158 Center for Food Safety and Applied Nutrition, 200 C Street SW Washington, DC 20204 Phone: 202 205-5099 Email: [email protected] RIN: 0910-AB30 _______________________________________________________________________ HHS--Health Care Financing Administration (HCFA) ----------- PROPOSED RULE STAGE ----------- 35. MEDICARE PROGRAM; QUALIFICATIONS FOR ESTABLISHING AND MAINTAINING MEDICARE BILLING PRIVILEGES (HCFA-6002-P) Priority: Economically Significant. Major under 5 USC 801. Unfunded Mandates: Undetermined Legal Authority: 42 USC 1302; 42 USC 1395hh CFR Citation: 42 CFR 424; 42 CFR 489 Legal Deadline: None [[Page 63941]] Abstract: This proposed rule would establish a requirement that all providers and suppliers (other than physicians who have entered into a private contract with a beneficiary) complete an enrollment form and submit specified information to us and to periodically revalidate the enrollment information to receive and maintain billing privileges in the Medicare program. The information must clearly identify the provider or supplier and its place of business, provide documentation that it is qualified to perform the services for which it is billing, and assure that it is not currently excluded from the Medicare program. If we determine the information submitted is incomplete, invalid, or insufficient to meet Medicare requirements, we would reject, deny, inactivate, or revoke billing privileges. Any deliberate concealment or misrepresentation of material information would subject the provider or supplier to liability under civil and criminal laws. Statement of Need: The Medicare program is currently the principal payer for health care for 39.2 million enrolled beneficiaries. Under section 1802 of the Act, a beneficiary may obtain health services from any institution, agency, or person qualified to participate in Medicare. Some qualifications to participate are specified in statute, such as in sections 1819, 1834, 1861, 1866, and 1891 of the Act. Many more are in our regulations, especially at 42 CFR subchapter E, which concerns standards and certification requirements. Summary of Legal Basis: Because we are intending to use the form HCFA 855 as the principal information collection instrument, we provide the following information about the data request on the forms. In addition to the legal authority cited, the following additional cites grant us the authority to collect the information required to complete the form HCFA 855: Section 1814(a) of the Act states that payment for services furnished to an individual may only be made to providers and only if a written request is filled in such a form and manner as the Secretary may prescribe. Sections 1815 and 1833(e) of the Act authorize the Secretary to withhold Medicare payments until the provider or supplier furnishes such information as may be necessary to determine amounts due. Section 1866(a)(1) of the Act establishes provider agreement requirements, including a requirement not to charge the beneficiary if the provider would have been entitled to Medicare payment had the provider compiled with procedural requirements. Alternatives: If this rule is not published, we would weaken our authority to prevent fraudulent or abusive providers and suppliers from billing the Medicare program. Anticipated Cost and Benefits: This is an administrative initiative that may result in Medicare program saving but at this time those savings are inestimable. We believe the probable costs providers or suppliers would incur as a result of this rule would be negligible. Risks: This rule will potentially improve the information and documentation collection used to determine if a provider or supplier should be granted billing privileges. This rule will promote compliance with Medicare requirements, and also prevent abuse of the Medicare program and inappropriate uses of Medicare funds by ensuring that payment is made only for services furnished by qualified individuals or entities by requiring that the providers and suppliers of those services prove their qualifications and identity. If the provider or supplier failed to meet the requirements or submit the required information, we would not enroll them in the Medicare program or we would remove them if they were currently in the program. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 02/00/00 Regulatory Flexibility Analysis Required: No Government Levels Affected: None Additional Information: Formerly known as HCFA-1023- Agency Contact: Michael Collett CHPP Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-6121 RIN: 0938-AH73 _______________________________________________________________________ HHS--HCFA 36. PROSPECTIVE FEE SCHEDULE FOR AMBULANCE SERVICES (HCFA-1002-NR) Priority: Other Significant Unfunded Mandates: Private Sector Legal Authority: PL 105-33, sec 4531(b) CFR Citation: 42 CFR 410 Legal Deadline: Final, Statutory, January 1, 2000. Abstract: The Balanced Budget Act of 1997 requires that the Secretary establish a fee schedule for ambulance services through negotiated rulemaking. The fee schedule is to be effective beginning with services furnished on or after January 1, 2000. In addition to setting the payment rates, the Secretary is to ensure that the aggregate amount of payment made for ambulance services in 2000 may not exceed the amount of payment that would have been made absent the fee schedule. This is a cap on payment, not a budget neutrality adjustment. The Secretary is to consult with national organizations representing individuals and entities that furnish and regulate ambulance services and share relevant data with these organizations. This provision will be met through the negotiated rulemaking process. Statement of Need: The establishment of this fee schedule is required by section 4531 of the BBA. In so doing through the negotiated rulemaking process, a fairer payment system will be implemented that is consistent with the services furnished and that takes into account the variations caused by regional and operational differences among ambulance companies. [[Page 63942]] Summary of Legal Basis: Section 4531 of the BBA requires the establishment of this fee schedule. Alternatives: Because section 4531 of the BBA requires the establishment of this fee schedule, no alternatives to this regulation exist. Anticipated Cost and Benefits: There is an anticipated savings of $65 million that will be attributed to the savings that would have occurred if the HCFA proposed regulation published on June 17, 1997 at 62 FR 32715 had been implemented in final. This savings derived from the proposal to pay for ambulance services furnished, rather than paying for the more expensive advanced life support (ALS) level of service solely because an ALS vehicle was used even if no ALS service was furnished. Benefits include establishing a fee schedule that will be commensurate with the services furnished, and that will take into account the regional and operational variations in providing ambulance services. The current reasonable charge/reasonable cost systems do not result in a fair geographic variation in payment allowances, since some areas receive 2 to 3 times the payment of other areas for the same services. Risks: Failing to implement the Medicare ambulance fee schedule would perpetuate an inequitable payment system that sometimes overpays and other times underpays for this critical aspect of medical care. The current system also has unintentional incentives to provide inefficient ambulance services in some areas, and inadequate ambulance services in areas of low population. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ Notice of Intent64 FR 3474ate 01/22/99 NPRM 05/00/00 Regulatory Flexibility Analysis Required: Undetermined Government Levels Affected: Undetermined Agency Contact: Nancy Edwards Center for Health Plans and Providers Department of Health and Human Services Health Care Financing Administration C5-06-27 7500 Security Boulevard Baltimore, MD 21244-1850 Phone: 410 786-4531 Email: [email protected] RIN: 0938-AI72 _______________________________________________________________________ HHS--HCFA 37. MEDICARE PROGRAM: PROSPECTIVE PAYMENT SYSTEM FOR INPATIENT REHABILITATION HOSPITAL SERVICES (HCFA-1069-P) Priority: Economically Significant. Major under 5 USC 801. Legal Authority: PL 105-33, sec 4421 CFR Citation: None Legal Deadline: NPRM, Statutory, October 1, 2000. Abstract: This proposed rule will estalish requirements for the new prospective payment system for rehabilitation facilities as mandated by section 4421 of the BBA. Statement of Need: The BBA significantly changed the way we will pay for Medicare covered services furnished to a Medicare inpatient in a rehabilitation facility. The BBA requires payments to be based on the inpatient operating and capital costs of rehabilitation facilities and adjusted for: (1) Case mix using patient classification groups; (2) Area wages; (3) Inflation; (4) Outlier and special payments; and (5) Other factors necessary to reflect variations in costs of treatment. Total payments made under the system to rehabilitation facilities during fiscal years 2001 and 2002 are required to be equal to 98 percent of estimated payments that would have been made under the current TEFRA payment system. Outlier payments in a fiscal year may not exceed 5 percent of the total projected payments for the fiscal year. The BBA gives us considerable discretion in designing the prospective payment system. Payment rates are required to be based on payment units which may be defined as a discharge, a day of inpatient services, or another unit of payment defined by the Secretary. The case mix classification groups may be based on such factors as the Secretary deems appropriate such as impairment, age, related prior hospitalization, co-morbidities, and functional capability of the patient. The BBA mandates implementation of the prospective payment system on October 1, 2000. We thus plan on publishing a Notice of Proposed Rulemaking (NPRM) in February 2000. We are currently funding research on various aspects of the prospective payment system that will be thoroughly discussed in the NPRM. Summary of Legal Basis: Section 4421 of the BBA mandates the phase-in of a case mix prospective payment system for inpatient rehabilitation facilities (freestanding and units) for cost reporting periods beginning on or after October 1, 2000, with full implementation by October 1, 2002. Alternatives: None. Anticipated Cost and Benefits: Based on the results of implementation of other Medicare prospective payment systems, HCFA believes that the implementation of a prospective payment system, as the method to pay for the services furnished to Medicare beneficiaries who are inpatients in rehabilitation facilities, will yield significant savings to the Medicare program. However, we have not completed our analysis so we can't be more specific about the expected costs and benefits. Risks: Altering the method that we pay rehabilitation facilities for the services they furnish to Medicare inpatients has the potential to affect a beneficiary's access to care and the quality of care furnished to a beneficiary. Therefore, we will be implementing methods to monitor the effect of the prospective payment system on these two associated patient care concerns. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 02/00/00 Regulatory Flexibility Analysis Required: No [[Page 63943]] Small Entities Affected: Businesses, Organizations Government Levels Affected: None Agency Contact: Laurence Wilson Center for Health Plans and Providers Department of Health and Human Services Health Care Financing Administration C4-7-04 7500 Security Boulevard Baltimore, MD 21244-1850 Phone: 410 786-4603 RIN: 0938-AJ55 _______________________________________________________________________ HHS--HCFA 38. DME SURETY BONDS (HCFA-6006-P) Priority: Economically Significant Unfunded Mandates: Private Sector Legal Authority: PL 105-33, sec 4312(a) CFR Citation: 42 CFR 424.57 Legal Deadline: NPRM, Statutory, January 1, 1998. Abstract: This proposed rule would implement the provision of the Balanced Budget Act of 1997 that requires a Medicare supplier of durable medical equipment (DME) to furnish HCFA with a surety bond. Statement of Need: Section 4312(a) of the BBA `97 requires all suppliers of DME to obtain a surety bond for a minimum of $50,000. Drawing on our experience with the surety bond requirement for home health agencies, we have made extensive changes to an initial proposal published in the Federal Register in January 1998. Because of these changes, we decided to reissue this requirement as another notice of proposed rulemaking in order to give the public opportunity to comment. Summary of Legal Basis: Section 4312(1) of the BBA '97 amended section 1834(a) of the Social Security Act by adding a new paragraph (16). This new paragraph requires a DME supplier to provide the Secretary, on a continuing basis, with a surety bond of at least $50,000, as a condition of being issued or renewing a provider number. Section 1834(a)(16), as amended by section 4312(c) of the BBA '97, further provides that the Secretary may, at the Secretary's discretion, impose a surety bond on some or all providers or suppliers who furnish items or services under Medicare Part B other than physicians or other practitioners. We are adding to the current supplier standards set forth at 42 CFR 424.57 a stipulation that for every tax identification number for which a supplier billing number is issued, a DME supplier must obtain a surety bond. The surety bond must be in a form specified by the Secretary and in an amount of $50,000. Alternatives: If this rule is not published, we would not implement a provision of the BBA `97 related to surety bonds. Anticipated Cost and Benefits: Estimates of the economic impact (if any) that will stem from these rules have not yet been determined. Risks: This rule will potentially improve HCFA's ability to protect the Medicare Part B Trust Fund from losses resulting from unrecovered Medicare debts by durable medical equipment (DME) suppliers. Failure to publish this rule would deprive HCFA of a valuable tool in screening applications from potential DME suppliers. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 03/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: Undetermined Agency Contact: Charles Waldhauser Division of Provider/Supplier Enrollment Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244-1850 Phone: 410 786-6140 RIN: 0938-AJ64 _______________________________________________________________________ HHS--HCFA 39. HHA SURETY BOND (HCFA-6001-P) Priority: Economically Significant Unfunded Mandates: Private Sector Legal Authority: PL 105-33, sec 431ff; PL 105-33, sec 4724ff; PL 105-33, sec 1861(o)(8); PL 105-33, sec 1861(v)(1); PL 105-33, sec 1866(b)(2); PL 105-33, sec 1891(b); PL 105-33, sec 1902(a)(10)(D); PL 105-33, sec 1903(I); PL 105- 33, sec 1905(a)(7) CFR Citation: 42 CFR parts 413, 440, 441, 489 Legal Deadline: NPRM, Statutory, June 15, 2000. Abstract: This proposed rule would amend our regulations to require an HHA surety bond of $50,000. We would remove the 15 percent provision based on concerns expressed by the Congress, the home health industry, surety association representatives, and comments published in a report by the General Accounting Office. This rule would require that HHAs obtain a surety bond by October 1, 2000. Although the bond must be effective January 1, 1998, we are proposing not to hold sureties liable for excessive interim payments attributable to the implementation of the interim payment systems made between October 1, 1997 and September 30, 2000. Other suggestions recommended by GAO were to require a single $50,000 bond for both the Medicare and Medicaid programs and provide an exemption of those HHAs that demonstrate fiscal responsibility. However, these recommendations require Congressional action. The final recommendation was to eliminate the HHA's option for substituting a Treasury note, U.S. bond, or other Federal public debt obligation for a surety bond. We generally agree with these recommendations except for the elimination of substituting a Treasury note, etc., for a surety bond. Statement of Need: Home Health Care (skilled nursing, therapy, and related services provided to homebound beneficiaries) has been one of Medicare's fastest growing benefits in recent years. Between 1990 and 1997, spending increased from $3.7 billion to $17.8 billion, an average annual income increase of 26 percent. [[Page 63944]] This growth occurred because more beneficiaries used the services and more users received more home health care visits. Concurrent with the rise in spending was an increase in the number of home health agencies (HHA), which almost doubled from 1989 to 1997. Changes in practice patterns and the need for home health care have contributed to the greater use of this benefit, but inappropriate use and billing practices have added to Medicare's HHA spending as well. Concern about growth in spending, fraud and abuse, and inadequate oversight led the Congress and the Administration to implement a number of initiatives to better control Medicare's home health care costs. By implementing the BBA provisions, the Congress strengthened HCFA's ability to keep potentially problematic providers out of the Medicare program by codifying a $50,000 surety bond requirement and establishing other participation requirements. HCFA's use of a financial guarantee bond for the return of overpayments regardless of their source will ensure more scrutiny and benefits to the Medicare and Medicaid programs. Summary of Legal Basis: The BBA `97 requires each home health agency to secure a surety bond in order to participate in the Medicare and Medicaid programs. This requirement applies to all participating Medicare and Medicaid HHAs, regardless of the date participation began. Alternatives: If this rule is not published, we would not implement a provision of the Balanced Budget Act of 1997 related to fraud and abuse initiatives. Anticipated Cost and Benefits: The savings to Medicare and Medicaid that could result from this rule would be from any uncollected overpayments that could be collected from the surety companies responsible for the bond. The other benefit of the surety bond requirement is that it provides a deterrent to fraud and abuse. It is unclear how many HHAs would be affected but the impact is expected to be small. We believe that it is impossible to estimate the savings due to this regulation. Risks: Failure to publish this rule could jeopardize the trust funds for failure to collect overpayments under the Medicare and Medicaid programs. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 01/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Organizations Government Levels Affected: None Additional Information: RIN 0938-AJ08 in the October 1998 Unified Agenda provides information about rulemaking actions taken and withdrawn in 1998 concerning surety bond requirements for home health agencies. Agency Contact: Ralph Goldberg Center for Health Plans and Providers Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-4870 Email: [email protected] RIN: 0938-AJ81 _______________________________________________________________________ HHS--HCFA ----------- FINAL RULE STAGE ----------- 40. NATIONAL STANDARD HEALTH CARE PROVIDER IDENTIFIER (HCFA-0045-F) Priority: Other Significant. Major under 5 USC 801. Legal Authority: 42 USC 1320d-2 CFR Citation: 45 CFR 142 Legal Deadline: Final, Statutory, February 21, 1998. Abstract: This rule addresses the health care industry's need for a standardized provider identifier. It implements one of the requirements for administrative simplification in section 262 of the Health Insurance Portability and Accountability Act of 1996. A standard provider identifier will save the health insurance industry significant costs incurred in maintaining multiple identifier systems. Statement of Need: The Health Insurance Portability and Accountability Act of 1996(HIPAA) (P.L. 104-191) creates a new part C, entitled ``Administrative Simplification,'' to title XI of the Social Security Act. One of the standards for health identifiers that is mandated by part C is a standard unique health care provider identifier, to be used in the health care system. This final regulation announces the adoption of the National Provider Identifier (NPI) as the standard unique health care provider identifier. It also provides information on how health care providers will be assigned NPIs and defines the requirements of health plans, health care providers, and health care clearinghouses with respect to obtaining and using this standard. Implementation of the NPI and the other Administrative Simplification standards will increase the efficiency of the processing of standard transactions within the health care system. Summary of Legal Basis: Currently, health plans assign identification numbers to their member health care providers. Different health plans assign different numbers to the same health care providers. The identifiers are frequently not standard within a health plan or across health plans. This results in health care providers having different identification numbers for different health programs, often having multiple billing numbers issued within a single health program. This complicates the health care providers' claims submissions and other transactions and increases the costs incurred by health care providers in conducting those transactions. The Administrative Simplification provisions of HIPAA were designed to improve the efficiency and effectiveness of the health care system by encouraging the development of a health information system through the establishment of the standard unique health care provider identifier and other standards and requirements to facilitate the electronic transmission of certain health information. Alternatives: This final regulation announces the NPI as the standard unique health care provider identifier. The NPI is a 10-position all numeric identifier, with a check-digit in the tenth position. There is no intelligence in the number. This [[Page 63945]] design and our assignment strategy will allow more than 200 million NPIs to be issued. The NPI meets the principles established by the Department of Health and Human Services (HHS) for designation as a national standard. This final regulation defines ``health care provider'' in terms of the entities that will receive NPIs. Health care providers will be enumerated by a Federally-directed registry (the enumeration contractor). The enumeration contractor will use the National Provider System (NPS) to uniquely identify a health care provider and issue it an NPI. The NPS will be developed by HCFA. Health care providers must supply updates to their NPS data to the enumeration contractor within 30 days of the effective dates of the changes. The NPS will establish the National Provider File (NPF), which will contain information collected from health care providers in order to assign them NPIs. The NPS will assign a single, unique NPI to a health care provider. Upon the dissolution of an organization health care provider or the death of a individual health care provider, the NPS will deactivate the NPI that had been issued to that health care provider and will not assign a deactivated NPI to any other health care provider. The NPS will disseminate information from the NPF to users in accordance with the Privacy Act and the NPS System of Records. Anticipated Cost and Benefits: Our analysis of the costs and savings of the HIPAA Administrative Simplification standards is an aggregate impact of all the standards. Assessing the impact of each standard independently would inflate the costs and would yield inaccurate results. While each individual standard is beneficial, the standards as a whole have a synergistic effect on savings. A difficulty in this analysis was the fact that we have no historical experience in assessing the costs and benefits of such a sweeping change. The costs of implementing the standards specified in HIPAA are primarily one-time or short-term costs related to conversion. These costs will be incurred during the first 3 years of implementation. Benefits will accrue almost immediately, but will not exceed costs for health care providers until after the third year of implementation. After the third year, the benefits will continue to accrue into the fourth year and beyond. The impact analysis for the costs and benefits associated with all the Administrative Simplification standards indicates that the combined net savings for health plans and health care providers would amount to $1.5 billion dollars after 5 years. Risks: This rule will formally establish the standard for the unique health care provider identifier and will communicate the requirements for health plans, health care providers, and health care clearinghouses in implementing this standard. Failure to publish this rule would jeopardize the benefits of administrative simplification. Payers would continue to maintain their own system of enumerating providers, and providers would need to maintain systems to store the different identifiers. Additional costs would thus be incurred. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 25320 05/07/98 NPRM Comment Period End 07/06/98 Final Action 03/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: None Additional Information: HCFA-0045- Agency Contact: Patricia Peyton Office of Information Services Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard N3-20-05 Baltimore, MD 21224-1850 Phone: 410 786-1812 RIN: 0938-AH99 _______________________________________________________________________ HHS--HCFA 41. MEDICARE PROGRAM; MEDICARE+CHOICE PROGRAM (HCFA-1030-2-F) Priority: Other Significant Legal Authority: PL 105-33, section 400; 42 USC 1395w-21 to 1395w-27 CFR Citation: 42 CFR 422 Legal Deadline: None Abstract: This final rule responds to comments on the June 26, 1998 interim final rule that implemented the Medicare+Choice (M+C) program and makes revisions to those regulations where warranted. Statement of Need: Section 4001 of the Balanced Budget Act of 1997 (BBA) (Public Law 105- 33), enacted August 5, 1997, added sections 1851 through 1859 to the Social Security Act (the Act) to establish a new Part C of the Medicare program, known as the ``Medicare+Choice (M+C) Program.'' Under section 1851(a)(1) of the Act, every individual entitled to Medicare Part A and enrolled under Part B, except for individuals with end-stage renal disease, may elect to receive benefits through either the existing Medicare fee-for-service program or Part C M+C plan, if one is available where he or she lives. The M+C statute authorizes a variety of private health plan options for beneficiaries, including both the traditional managed care (such as those offered by health maintenance organizations (HMOs)) that traditionally have been offered under section 1876 of the Act, and new options that were not previously authorized. Among the alternatives authorized by the BBA are M+C coordinated care plans (including plans offered by health maintenance organizations, preferred provider organizations, and provider-sponsored organizations), M+C ``MSA'' plans, that is, a combination of a high deductible M+C health insurance plan and a contribution to an M+C medical savings account (MSA), and M+C private fee-for-service plans. The M+C program also introduced several other fundamental changes to the managed care component of the Medicare program. These changes include: Establishment of an expanded array of quality assurance standards and other consumer protection requirements; Introduction of an annual coordinated enrollment period, in conjunction with the distribution by HCFA of uniform, comprehensive information about M+C plans that is needed to promote informed choices of beneficiaries; Revisions in the way we calculate payment rates to M+C organizations [[Page 63946]] that will narrow the range of payment variation across the country and increase incentives for organizations to offer M+C plans in diverse geographic areas; and Establishment of requirements concerning provider participation procedures. As directed by the BBA, we published an interim final rule on June 26, 1998 to implement the M+C program. On February 17, 1999, we published a limited final rule that set forth selected changes to the interim final regulations. This more comprehensive final rule is necessary to respond to all comments on the interim final rule and implement other necessary changes. Issues discussed in this rule include eligibility, election, and enrollment policies; marketing requirements; access requirements; service area and benefit policy; quality improvement standards; payment rates, risk adjustment methodology and encounter data submission; provider participation rules; beneficiary appeals and grievances; contractual requirements; and preemption of State law by Federal law. This final rule also addresses comments on the M+C user fee interim final rule published on December 2, 1997 and on the provider-sponsored organization (PSO) interim final rule published April 1, 1998. Summary of Legal Basis: Sections 1851 through 1859 of the Social Security Act and the implementing regulations at 42 CFR 422 set forth a series of requirements for organizations that participate in the M+C program. The specific areas addressed by the different sections of the statute are as follows: Section 1851--Eligibility, election and enrollment Section 1852--Benefits and beneficiary protections Section 1853--Payment to M+C organizations Section 1854--Premiums Section 1855--Organizational and financial requirements for M+C organizations Section 1856--Establishment of standards Section 1857--Contracts with M+C organizations Section 1859--Definitions and miscellaneous provisions Part 422 establishes regulatory requirements based on these statutory provisions. Alternatives: Section 1856(b)(1) of the Act provided that in order to carry out the requirement to establish M+C standards by regulation, the Secretary was authorized to promulgate regulations that take effect on an interim basis, after notice and pending opportunity for public comment. Inherent to this provision is the Department's commitment to subsequent publication of a final rule that responds to those public comments. Thus, we believe we have no alternative other than to publish a comprehensive final rule concerning the M+C program standards. Anticipated Cost and Benefits: We do not anticipate that this final rule will implement any changes in the M+C program that will have a significant economic impact on M+C organizations or the general public. Where possible without negative effects on the care provided to M+C enrollees, we intend to make minor changes in the M+C regulations that would reduce the administrative burden on M+C organizations. Risks: Given that the payment rates for M+C organizations are set by the statute, and that we do not intend to impose any burdensome new requirements on M+C organizations, we do not believe that this final rule poses any risks of financial harm to M+C organizations of causing pull-outs from the M+C program that could negatively affect Medicare beneficiaries. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 34968 06/26/98 NPRM Comment Period End 09/24/98 Limited Final Ru64 FR 7968 02/17/99 Final Rule 02/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Tony Culotta Department of Health and Human Services Health Care Financing Administration Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-4661 RIN: 0938-AI29 _______________________________________________________________________ HHS--HCFA 42. MEDICARE PROGRAM; PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT SERVICES (HCFA-1005-F) Priority: Economically Significant. Major under 5 USC 801. Unfunded Mandates: Private Sector Legal Authority: PL 105-33, sec 4521; PL 105-33, sec 4522; PL 105-33, sec 4523; PL 99- 509, sec 9343(c) CFR Citation: 42 CFR 409.10; 42 CFR 410.2; 42 CFR 410.27; 42 CFR 410.28; 42 CFR 410.30; 42 CFR 411.15; 42 CFR 412.50; 42 CFR 413.118; 42 CFR 413.122; 42 CFR 413.124; 42 CFR 413.130; 42 CFR 413; 42 CFR 489.20; 42 CFR 1003.101 to 102; 42 CFR 1003.105 Legal Deadline: Final, Statutory, November 1, 1998. Abstract: The Balanced Budget Act of 1997 (BBA) (Public Law 105-33), enacted on August 5, 1997, provides for implementation of a Prospective Payment System (PPS) for hospital outpatient services (and for part B services furnished to inpatients who have no Part A coverage) furnished on or after January 1, 1999. In the proposed rule published on September 8, 1998, HCFA indicated that, although the statutory effective date for the outpatient prospective payment system is January 1, 1999, implementation of the system would be delayed because of year 2000 systems concerns. Demands on intermediary bill-processing systems and HCFA internal systems to become compliant for the year 2000 precluded making the major systems changes that are required to implement the prospective payment system. [[Page 63947]] This system will also apply to partial hospitalization services furnished by community mental health centers. The BBA also requires a new method for calculating beneficiary copayments for the hospital outpatient services included under the PPS. The PPS will consist of about 340 groups of services, called ``Ambulatory Payment Classifications'' or APCs, that are related clinically and in terms of their resource use. We will assign a group weight to each group, based on the median cost (operating and capital) of the services included in the group. We will convert the weights for each group to payment rates using a national conversion factor, taking into account group weights and the projected volume of services for each group. In addition, this rule would establish in regulations the requirements for designating certain entities as provider-based or as a department of a hospital. Statement of Need: As the Medicare statute was originally enacted, Medicare payment for hospital services (inpatient and outpatient) was based on hospital- specific reasonable costs attributable to serving Medicare beneficiaries. The law was later amended to limit payment to the lesser of a hospital's reasonable costs or to its customary charges. In 1983, section 601 of the Social Security Amendments of 1983 (Public Law 98- 21) completely revised the cost-based payment system for most hospital inpatient services by enacting section 1886(d) of the Social Security Act (the Act). This section provided for a PPS for acute inpatient hospital stays, effective with hospital cost reporting periods beginning on or after October 1, 1983. Although payment for most inpatient services became subject to PPS, hospital outpatient services continue to be paid based on hospital- specific costs which provided little incentive for hospital efficiency for outpatient services. At the same time, advances in medical technology and changes in practice patterns were bringing about a shift in the site of medical care from the inpatient to the outpatient setting. During the 1980's, the Congress took steps to control the escalating costs of providing outpatient care. The Congress amended the statute to implement across-the-board reductions of 5.8 percent and 10 percent to the amounts otherwise payable for hospital operating costs and capital costs, respectively, and legislated a number of different payment methods for specific types of hospital outpatient services. These methods included fee schedules for clinical diagnostic laboratory tests, orthotics, prosthetics, and durable medical equipment (DME); composite rate payment for dialysis for persons with end-stage renal disease; and payments based on blends of hospital costs in the rates paid in other ambulatory settings, such as separately certified ambulatory surgical centers (ASCs) or physician offices for certain surgery, radiology, and other diagnostic procedures. Nevertheless, Medicare payment for services performed in the hospital outpatient setting remains largely cost-based. Summary of Legal Basis: In section 9343 of the Omnibus Budget Reconciliation Act of 1986 (OBRA 1986) (Public Law 99-509) and in section 4151(b)(2) of the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), the Congress required the Secretary to develop a proposal to replace the current hospital outpatient payment system with a PPS and to submit a report to Congress on the system. In section 9343 of OBRA 1986, the Congress paved the way for development of a PPS by requiring hospitals to report claims for services under the HCFA Common Procedure Coding System (HCPCS), and by extending the prohibition against unbundling of hospital services under section 1862(a)(14) of the Social Security Act (the Act) to include outpatient services as well as inpatient services. HCPCS coding enabled us to determine what specific procedures and services were being billed, while the extension of the prohibition against unbundling ensured that all non-practitioner services provided to hospital outpatients would be billed only by the hospital not by an outside supplier, and therefore, would be reported on hospital bills and captured in the hospital outpatient data used in developing an outpatient PPS. The Secretary submitted a report to Congress on March 17, 1995. The report summarized the research HCFA conducted in searching for a way to classify outpatient services for purposes of developing an outpatient PPS. The report cited Ambulatory Patient Groups (APGs), developed by 3M-Health Information Systems under a cooperative grant with HCFA, as the most promising classification system for grouping outpatient services and recommended that the APG-like groups be used in designing a hospital outpatient PPS. The report also presented a number of options that could be used, once the PPS was in place, for addressing the issue of rapidly growing beneficiary copayment. As a separate issue we recommended that the Congress amend the provisions of the law pertaining to the blended payment methods for ASC surgery, radiology, and other diagnostic services to correct an anomaly that resulted in a less than full recognition of the amount paid by the beneficiary in calculating program payment (referred to as the formula-driven overpayment). The Balanced Budget Act of 1997 (BBA) (Public Law 105-33), enacted on August 5, 1997, contains a number of provisions that affect Medicare payment for hospital outpatient services. The purpose of this rule is to implement sections 4521, 4522, and 4523 of the BBA. Section 4521 of the BBA eliminates the formula-driven overpayment, effective for services furnished on or after October 1, 1997. Section 4522 extends the current cost reduction of 5.8% and 10% (applicable to hospital outpatient operating cost and hospital capital costs, respectively) through December 31, 1999. Section 4523 provides for implementation of a PPS for hospital outpatient services (and for part B services furnished to inpatients who have no part A coverage) furnished on or after January 1, 1999. This system will also apply to partial hospitalization services furnished by community mental health centers. Section 4523 also requires a new method for calculating beneficiary copayments for the hospital outpatient services included under the PPS. This rule would also implement section 9343(c) of the Omnibus Reconciliation Act of 1986, which prohibits Medicare payment for non- physician services furnished to a hospital outpatient by a provider or supplier other than a hospital, unless the services are furnished under an arrangement with a hospital. This section also authorizes HHS's Office of Inspector General to impose a civil money penalty against any individual or entity who knowingly or willfully presents a bill for non-physician or other bundled services not provided directly or under such an arrangement. The Secretary has the authority under the BBA to determine which services are included (with the exception of ambulance services and physical, occupational, and speech therapies, for which fee schedules are being separately created). We will continue to pay for laboratory services and for orthotics and prosthetics on their prospective fee schedules, and for [[Page 63948]] chronic dialysis using the composite rate. Alternatives: If this final rule were not published, we would not implement the Balanced Budget Act of 1997 provision mandating a prospective payment system for hospital outpatient services. In addition, there would be no relief for beneficiaries from the large coinsurance burdens that they have been bearing for outpatient services. Anticipated Cost and Benefits: The primary benefit of this rule is the elimination of a cost-based system, which provides little incentive for hospital efficiency for outpatient services. In addition, the regulation will provide considerable relief over time to beneficiaries from high coinsurance payments under the current system. Finally, the rules governing provider-based status will alleviate an important area of program abuse. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 47551 09/08/98 Correction Notic64 FR 35258 06/30/99 NPRM Comment Period End 07/30/99 Final Action 02/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: Businesses Government Levels Affected: None Additional Information: The April 1999 Unified Agenda erroneously reported this RIN as a completed action. Agency Contact: Janet Wellham Center for Health Plans and Providers Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-4510 RIN: 0938-AI56 _______________________________________________________________________ HHS--HCFA 43. SECURITY AND ELECTRONIC SIGNATURE STANDARDS (HCFA-0049-F) Priority: Economically Significant. Major under 5 USC 801. Legal Authority: PL 104-191; 42 USC 1320d-2 CFR Citation: 45 CFR 162 Legal Deadline: Final, Statutory, February 21, 1998. Abstract: This rule implements some of the requirements of the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act of 1996. It establishes standards for the security of health information and electronic signature use by health plans, health care clearing houses, and health care providers. These entities would use the security standard to develop and maintain the security of all electronic health information pertaining to an individual. The electronic signature standard is applicable only with respect to use with the specific transactions defined in the Health Insurance Portability and Accountability Act of 1996. Statement of Need: The Health Insurance Portability and Accountability Act of 1996 requires the Secretary of Health and Human Services to adopt security standards that require reasonable and appropriate administrative, technical and physical safeguards to (1) ensure the integrity and confidentiality of health information, (2) protect against any reasonably anticipated threats or hazards to the security or integrity of the information and protect against unauthorized uses or disclosures of the information.. Further, the Secretary, in coordination with the Secretary of Commerce, is to adopt standards specifying procedures for the electronic transmission and authentication of signatures with respect to certain transactions specified in HIPAA. This rule stipulates the requirements necessary to comply with the law. Summary of Legal Basis: The Administrative Simplification provisions of HIPAA require the Secretary to establish standards for the security of health information and electronic signature use by health plans, health care clearing houses, and health care providers. Alternatives: In the absence of federal regulations, the security of health care information in electronic form would be left to the private sector to develop. It is believed that this course of action would result in an extremely uneven level of protection (ranging from none to excessive) for electronic health information pertaining to individuals and make it difficult, if not impossible, to provide for privacy of this information. Anticipated Cost and Benefits: As the effect of any one of the HIPAA standards is affected by the implementation of other standards, it is misleading to discuss the impact of one standard by itself. Therefore, an Impact Analysis on the total effect of all the standards was published in the proposed rule concerning the national provider identifier (HCFA-0045-P) which was published on May 7, 1998 (63 FR 25320). Security protection for health care information is not a ``stand alone'' type requirement. Appropriate security protections will be a business enabler, encouraging the growth and use of electronic data interchange. The synergistic effect of the employment of the recommended security practices, procedures and technologies will enhance all aspects of HIPAA's Administrative Simplification requirements. Risks: The storage, handling and transmission of health information has long been a paper process. However, the transition from paper to electronic media has begun and is increasing at a rapid pace. This transition has brought on a significantly increased risk to the security and confidentiality of health information, particularly for information pertaining to individuals. This rule formally establishes a baseline set of requirements for security that must be adopted by health care providers, health plans and health care clearinghouses. Compliance with these requirements will greatly decrease risk to the security, integrity and confidentiality of health information pertaining to individuals. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 43242 08/12/98 Final Action 05/00/00 [[Page 63949]] Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: State, Local, Tribal, Federal Agency Contact: Barbara Clark Office of Information Services Department of Health and Human Services Health Care Financing Administration N2-14-10 7500 Security Boulevard Baltimore, MD 21244-1850 Phone: 410 786-3017 RIN: 0938-AI57 _______________________________________________________________________ HHS--HCFA 44. HEALTH INSURANCE REFORM: STANDARDS FOR ELECTRONIC TRANSACTIONS (HCFA-0149-F) Priority: Other Significant. Major under 5 USC 801. Legal Authority: 42 USC 1320d-2 CFR Citation: 45 CFR 162 Legal Deadline: Final, Statutory, February 21, 1998. Abstract: The rule puts in place code-set standards and standards for eight electronic transactions to be used by health plans, certain health care providers, and health care clearing houses. It would implement requirements for administrative simplification in section 262 of the Health Insurance Portability and Accountability Act of 1996. The standards will significantly reduce costs for processing health care transactions. Statement of Need: The Health Insurance Portability and Accountability Act of 1996, subtitle F of title II added to title XI of the Social Security Act a new part C, entitled ``Administrative Simplification.'' The purpose of this part is to improve the Medicare program under title XVIII of the Social Security Act and the Medicaid program under title XIX of the Act, and the efficiency and effectiveness of the health care system, by encouraging the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information. This regulation implements the requirements for standard transactions and code sets. Summary of Legal Basis: Part C of title XI consists of sections 1171 through 1179 of the Act. These sections define various terms and impose several requirements on HHS, health plans, health care clearinghouses, and certain health care providers. As established by Part C of title XI, section 1173 of the Act requires the Secretary to adopt standards for financial and administrative transactions, and data elements for those transactions, to enable health information to be exchanged electronically. Section 1173 of the Act requires the Secretary to establish standards for code sets for each data element for each health care transaction. The Secretary must also ensure that procedures exist for the routine maintenance, testing, enhancement and expansion of code sets. In order to codify this authority, we have proposed implementing regulations at 45 CFR 162. Alternatives: Alternatives to naming standards would be to leave the marketplace to determine the standards. Up to now, this has not been successful. There has been a steady increase in use of electronic data interchange in the health care market since 1993, and it is predicted there will be continued growth, even without national standards. However, the upward trend in electronic health care transactions will be enhanced by having national standards in place. Because national standards are not in place today, there continues to be a proliferation of proprietary formats in the health care industry. Proprietary formats are those that are unique to an individual business. Due to proprietary formats, business partners that wish to exchange information electronically must agree on which formats to use. Since most health care providers do business with a number of plans, they must produce electronic transactions in many different formats. Anticipated Cost and Benefits: The economic impact that will stem from this rule will result in an estimated net savings to health plans and health care providers of $1.5 billion during the first five years; use of the standards would continue to save the industry money. Risks: This regulation will standardize a set of administrative transactions in the health care industry. Not publishing this rule would see the continuing of the myriad of formats of these transactions and eliminate the anticipated $1.5 billion in savings due to simplification efforts. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 25277 05/07/98 NPRM Comment Period End 07/06/98 Final Action 01/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: None Agency Contact: Joy Glass Office of Information Systems Department of Health and Human Services Health Care Financing Administration N2-14-26 7500 Security Boulevard Baltimore, MD 21244-1850 Phone: 410 786-6125 RIN: 0938-AI58 _______________________________________________________________________ HHS--HCFA 45. NATIONAL STANDARD EMPLOYER IDENTIFIER (HCFA-0047-F) Priority: Economically Significant. Major under 5 USC 801. Legal Authority: PL 104-191; 42 USC 1320d-2 CFR Citation: 45 CFR 162 Legal Deadline: Final, Statutory, February 21, 1998. Abstract: This rule institutes the employer identification number (EIN) as the standard for identifying employers for [[Page 63950]] purposes of administrative simplification, as required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Use of one standard in the health care industry will reduce the cost of identifying employers in electronic health care transactions. Statement of Need: The Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) includes Subtitle F--Administrative Simplification, whose purpose is to improve the Medicare and Medicaid programs under the Social Security Act, and the efficiency and effectiveness of the health care system, by the establishment of standards and requirements for the electronic transmission of certain health information. This regulation establishes the standard for a unique employer identifier, as required by the Administrative Simplification provisions of P.L. 104-191. Summary of Legal Basis: The Administrative Simplification provisions of HIPAA require the Secretary of HHS to adopt a standard unique health identifier for each employer for use in the health care system and to specify the purposes for which a unique health identifier may be used. Alternatives: HHS examined several existing identifiers that might be adopted for the standard. In keeping with the requirements of HIPAA, because no standard setting organization had developed, adopted, or modified a standard for an employer identifier, HHS consulted with the National Uniform Billing Committee, the National Uniform Claim Committee, the Workgroup for Electronic Data Interchange and the American Dental Association in selecting this standard. HHS also relied on the recommendations of the National Committee on Vital and Health Statistics. Anticipated Cost and Benefits: As the effect of any one standard is affected by the implementation of other standards, it can be misleading to discuss the impact of one standard by itself. Therefore HHS did an impact analysis showing total costs and savings of all the HIPAA standards in the proposed rule concerning the national provider identifier (HCFA-0045-P), which can be found at 63 FR 25320. HHS determined that the requirements concerning the employer identifier would have a one time impact on those providers, clearinghouses, and health plans that have to convert to use the EIN, and on those employers that would have to disclose the EIN to covered entities. Risks: Failure to publish this rule would mean that no standard employer identifier would be established for use in the health care system. Lack of a standard employer identifier would decrease the savings in health care costs to be realized from administrative simplification. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 32784 06/16/98 NPRM Comment Period End 08/17/98 Final Action 03/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses Government Levels Affected: State Agency Contact: Mary Emerson Office of Information Services Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard N2-12-22 Baltimore, MD 21244 Phone: 410 786-7065 Email: [email protected] RIN: 0938-AI59 _______________________________________________________________________ HHS--HCFA 46. MEDICAID MANAGED CARE; REGULATORY PROGRAM TO IMPLEMENT CERTAIN MEDICAID PROVISIONS OF THE BALANCED BUDGET ACT OF 1997 (HCFA-2001-P) Priority: Other Significant. Major under 5 USC 801. Unfunded Mandates: State, Local or Tribal Governments Legal Authority: PL 105-33, sec 4701 to 4710 CFR Citation: 42 CFR 438; 42 CFR 430; 42 CFR 431; 42 CFR 434; 42 CFR 435; 42 CFR 438; 42 CFR 440; 42 CFR 447 Legal Deadline: None Abstract: This rulemaking establishes rules for Medicaid managed care programs which involve quality of care and services under Medicaid managed care programs. It implements certain provisions in sections 4701 through 4710 of the Balanced Budget Act of 1997 (BBA) (PL 105-33). Statement of Need: The BBA significantly modifies Medicaid managed care programs by providing a new State plan amendment vehicle for States to furnish managed health care to beneficiaries, enhanced enrollee protections, and an emphasis on the quality of health care delivered to Medicaid enrollees. Summary of Legal Basis: Section 1903(m) of the Social Security Act and implementing regulations at 42 CFR part 434 contain a number of requirements related to Medicaid managed care contracts. Among other things, the requirements relate to contract provisions involving enrollment and disenrollment in a Medicaid managed care organization (MCO), marketing, choice of health professionals within an MCO, quality assurance systems, grievance procedures, and plan solvency. Statutory amendments made by sections 4701 through 4710 of the BBA modify those requirements. To control cost while enhancing quality of care, States are increasingly delivering services to their Medicaid populations through Medicaid managed care organizations (MCOs) and other managed care arrangements. These arrangements vary according to the comprehensiveness of the services they provide and the degree to which they accept risk. Fully capitated plans contract on a risk basis to provide beneficiaries with a comprehensive set of covered services in return for a monthly capitation payment. In general, partially capitated plans provide a less than comprehensive set of services on a risk basis; services not included in the contract are reimbursed on a fee-for-service basis. In addition, some States implement a primary care case management (PCCM) system in which a Medicaid beneficiary selects or is [[Page 63951]] assigned to a single primary care provider that provides or arranges for all covered services and is reimbursed on a fee-for-service basis. Under each of these managed care arrangements, beneficiaries have a regular source of coordinated care and States have predictable, controlled spending per beneficiary. The BBA creates a new section of the Social Security Act relating to managed care arrangements. The new section 1932 establishes increased enrollee protections, quality assessment and performance improvement strategies for States, and enrollee rights and responsibilities. Alternatives: If this rule is not published, we would not implement many of the provisions in the Balanced Budget Act of 1997 related to Medicaid managed care. Anticipated Cost and Benefits: Estimates of the economic impact (if any) that will stem from these rules have not yet been completed. Risks: This rule will potentially improve the quality of health care provided to Medicaid managed care enrollees and provide States with new tools to become more effective purchasers of health care services. Failure to publish this rule would jeopardize broad-based improvement in the quality of care our beneficiaries receive and would deprive States of many tools that would improve their managed care programs. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 63 FR 52021 09/29/98 NPRM Comment Period End 11/30/98 Final Action 12/00/99 Regulatory Flexibility Analysis Required: Undetermined Small Entities Affected: Businesses, Organizations, Governmental Jurisdictions Government Levels Affected: Federal, Tribal, State, Local Agency Contact: Michael Fiore Center for Medicaid and State Operations Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-0623 RIN: 0938-AI70 _______________________________________________________________________ HHS--HCFA 47. HOME HEALTH PROSPECTIVE PAYMENT SYSTEM (HCFA-1059-P) Priority: Other Significant. Major under 5 USC 801. Legal Authority: PL 105-33, sec 4603 CFR Citation: 42 CFR ch IV Legal Deadline: NPRM, Statutory, October 1, 2000. Abstract: This final rule will establish requirements for the new prospective payment system (PPS) for home health agencies as governed by section 4603 of the Balanced Budget Act of 1997 (BBA) (PL 105-33). Statement of Need: The BBA significantly changed the way we pay for Medicare home health services. It requires the establishment of a facility-specific PPS and provides for interim steps until the PPS is established. Under the interim system HHAs will receive payment in accordance with section 4602 of the Balanced Budget Act of 1997. The interim payment system establishes two sets of cost limits for home health agencies. The long- standing home health per visit cost limits are reduced from 112 percent of the mean labor-related and non-labor per visit costs for freestanding agencies to 105 percent of the median. In addition, home health agency costs will be subject to an aggregate per-beneficiary cost limitation. For those providers with a cost report ending in Federal fiscal year 1994, the per-beneficiary cost limitation is based on a blend of costs (75 percent on 98 percent of the agency-specific costs and 25 percent on 98 percent of the standardized regional average of the costs for the agency's census region). For new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994, the per-beneficiary limitation will be the national median of the per-beneficiary limits for HHAs. Under the interim system, HHAs will be paid the lesser of 1) actual costs; 2) the per- visit limits; 3) the per-beneficiary limits. The result of the interim system will be to create a strong incentive for HHAs to reduce utilization to at least 1994 levels to fall within the aggregate cost limit. The interim payment system was effective 10/1/97 and will be in effect until prospective payment for home health agencies is implemented. Section 4603 of the BBA establishes section 1895 of the Social Security Act, which specifies the authority for the development of a prospective payment system for home health services effective 10/1/99, which will ultimately be based on units of payment, most likely episodes of care. In developing the PPS, the Secretary will consider an appropriate unit of service, the number of visits provided within the unit, and their cost. Payment for a unit of home health service will be modified by a case mix adjustor, set by the Secretary, to explain a significant amount of the variation in the cost of different units of service. The HHA would have the potential of profit or loss on each individual patient. Over many patients, the HHA would presumably make or lose money based on its ability to provide needed care effectively and efficiently. Summary of Legal Basis: Section 1861(v)(1)(A) of the Social Security Act requires the limits that comprise the interim system. Under this authority, HCFA has maintained limitations on home health agency per-visit costs since 1975. Additional statutory provisions specifically governing limitations applicable to home health agencies are contained at section 1861(v)(1)(L) of the Social Security Act. These limits will be replaced by the establishment of a prospective payment system as defined in section 4603 of the BBA that requires the Secretary to establish and implement the prospective payment system for home health services. Alternatives: Section 4603 of the BBA specifies the authority for the development of a prospective payment system for home health services effective 10/1/ 99. However, there is contingency language for the home health prospective payment system provided in BBA. If the Secretary for any reason does not establish and implement the [[Page 63952]] prospective payment system for home health services, the Secretary shall provide for a reduction by 15 percent of the per-visit cost limits and per-beneficiary limits, as those limits would otherwise be in effect on September 30, 2000. Anticipated Cost and Benefits: The Congress anticipates that the implementation of a PPS for home health services will achieve the combined benefits of establishing a system which will enable HCFA to find the provision of medically necessary HHA care to beneficiaries consistent with the HHA's own case mix and will also prevent the development of further unsustainable growth in HHA costs. The combined effects of the ``interim'' and final systems are required to achieve this result. Risks: The statutory contingency for reducing cost caps under the interim system by 15 percent, if the PPS is not timely implemented, is not the preferred method for achieving the desired savings because the interim system does not adjust fully for case mix, as the PPS is required to do. Therefore, the longer the delay in implementation of the PPS, the greater the potential disparity between the case mix of an individual HHA and its payments. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 58133 11/03/99 Final Action 03/00/00 Regulatory Flexibility Analysis Required: Undetermined Small Entities Affected: Businesses, Organizations Government Levels Affected: None Agency Contact: Robert Wardwell Center for Health Plans and Providers Department of Health and Human Services Health Care Financing Administration 7500 Security Boulevard Baltimore, MD 21244 Phone: 410 786-3254 RIN: 0938-AJ24 _______________________________________________________________________ HHS--HCFA 48. THE CHILDREN'S HEALTH INSURANCE PROGRAM: IMPLEMENTING THE BALANCED BUDGET ACT OF 1997 (HCFA-2006-P) Priority: Economically Significant. Major under 5 USC 801. Legal Authority: 42 USC 1396; PL 105-33 CFR Citation: 42 CFR 457 Legal Deadline: None Abstract: This rulemaking establishes rules for the new Children's Health Insurance Program (CHIP). It implements sections 4901 and 4911 of the Balanced Budget Act (BBA) of 1997. Statement of Need: The Balanced Budget Act of 1997 (PL 105-33) creates a new title XXI of the Social Security Act to establish a Children's Health Insurance Program that supplements the Medicaid program and enables States to create a new and unique health delivery system for low-income children. This regulation will codify a series of policy guidance that has been released to the States and other interested parties over the past two years. Summary of Legal Basis: As established by section 4901 of the BBA, the new title XXI of the Social Security Act authorizes $41 billion over the next 10 years for States to create separate Children's Health Insurance Programs to provide health care coverage to targeted low-income children. In order to receive reimbursement through an enhanced matching rate, States have three options in developing programs. They may expand existing Medicaid programs, create unique and separate children's health programs, or establish a combination of the two options. Within certain parameters set by the statute, States have flexibility to determine eligibility levels, develop benefit packages, and impose cost-sharing requirements. The statute also includes provisions for meeting strategic objectives, evaluation and data collection. In order to codify this authority, we have proposed implementing regulations at 42 CFR part 457. Alternatives: Federal payments under title XXI are based on State expenditures under approved plans that could be effective on or after October 1, 1997. The short time frame between the enactment of the BBA on August 5, 1997 and the availability of funding for States and territories required the Department to begin reviewing CHIP plans at the same time as it was issuing policy guidance to States on how to operate the CHIP program. The Department worked closely with States to disseminate as much information as possible, as quickly as possible, so States could begin to implement their new programs expeditiously. As a result, 54 States and territories have approved CHIP plans. Therefore, CHIP is now in operation prior to the completion of regulations. Anticipated Cost and Benefits: Estimates of the economic impact that will stem from this rule will be made available. Risks: This rule will formally establish the Department's policies and requirements related to the implementation of this program. It will provide States with needed information and also give them and other interested parties the opportunity to comment on the feasibility of implementing these policies. Failure to publish this rule would jeopardize our relationships with the States, advocates and providers because it would deprive them of many tools needed for establishing concrete programs. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 60881 11/08/99 Final Rule 06/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: Organizations Government Levels Affected: State, Local [[Page 63953]] Agency Contact: Cheryl Austein-Casnoff Department of Health and Human Services Health Care Financing Administration 200 Independence Avenue SW. Washington, DC 20201 Phone: 410 786-4196 RIN: 0938-AJ75 BILLING CODE 4150-04-F [[Page 63954]] DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) Statement of Regulatory Priorities The Regulatory Plan of the Department of Housing and Urban Development for Fiscal Year 2000 highlights priority regulations and policy initiatives directed towards the achievement of HUD's traditional goals of increasing the supply of affordable housing, ensuring equal opportunity for housing, promoting jobs and economic development, as well as its more recent goal of restoring the public's trust in HUD. These goals are embodied in HUD's mission and its strategic goals for Fiscal Year 2000. HUD approaches the new fiscal year with a renewed sense of commitment to its mission and goals, and greater accountability for its performance. HUD 2020 Management Reform was designed in 1997 with the objective of improving the overall administration of HUD's programs to enhance the delivery of HUD's services to local communities. HUD has made significant progress in achieving its reforms through the Department, as evidenced by the following. In a July 15, 1999 report issued by an independent organization, the National Academy of Public Administration (NAPA), HUD was cited as making major progress in improving its management performance and its planning to achieve the Department's strategic goals. In May 1999, HUD received its first clean audit in HUD history. HUD's Fiscal Year 1999 budget was the Department's best budget in a decade. In HUD's FY 1999 appropriations act, HUD received new Section 8 rental assistance vouchers for 90,000 low- and moderate-income families, and the appropriations also included landmark reforms for public and assisted housing. The increased budget for FY 1999, the clean audit, and the recognition of HUD's progress in management reform reflect a HUD that has been revitalized, has demonstrated significant progress in becoming a performance-oriented organization, and is restoring a reputation for credibility and competence. The improvements within HUD translate into improvements for HUD's constituents, such as better delivery of services and stronger partnerships with HUD's public and private partners. The improvements within HUD also translate into improved regulations and policy initiatives. Consistent with President Clinton's Executive order on Regulatory Planning and Review (E.O. 12866), HUD's approach to regulations is to refrain, as permitted by law, from top-down directives, and over-regulation. HUD's general approach is to establish the necessary legal parameters and guidance, include the appropriate oversight, and provide as much flexibility as possible for program implementation at the local level given local concerns and needs. However, where strong action is needed to ensure that HUD programs are serving the people they are intended to serve, HUD has taken such action, restoring public trust. Several priority regulations and policy initiatives implemented in Fiscal Year 1999 highlight these approaches to rulemaking. HUD's Mark-to-Market Program, implemented by a rule which became effective on October 13, 1998, is already assisting State and local housing agencies to maintain affordable housing stock throughout the nation. The program, which gets its name because rents permitted by HUD in privately owned subsidized housing are marked down to the competitive rent level prevailing in an area's rental housing, is designed to enable HUD and its State and local partners to more effectively use Federal subsidies to preserve the maximum amount of affordable housing under the project-based Section 8 program. The first comprehensive physical inspections of public housing, which got underway in Fiscal Year 1999, following implementation of the final rule on HUD's new Public Housing Assessment System (PHAS), rated 87 percent of the inspected housing good or excellent. The implementation of the PHAS marks the first time in HUD's history that all public housing properties will be physically inspected, as well as financially assessed using comprehensive and consistent assessment protocols. A Request for Proposals (RFP) issued by HUD on May 3, 1999, challenged public housing agencies (PHAs) to improve administration of the project-based Section 8 program by forming partnerships with private firms and nonprofit organizations experienced in property management and accounting. The RFP solicited proposals from PHAs to administer more than 20,000 project-based Section 8 contracts currently administered by HUD. The intended partnerships promoted by the RFP are expected to effectively enforce owner obligations to provide decent housing to residents by adding private sector expertise to a PHA's administration of the contract. HUD's Homebuyer Protection Initiative, announced in June 1999, is designed to protect consumers from buying HUD-insured homes with undetected defects. The initiative includes a consumer education campaign about appraisals and inspections conducted by HUD, calls for mandatory testing of all appraisers to determine qualifications to perform appraisals for HUD, requires more thorough and reliable appraisals for HUD-insured homes including mandatory disclosure of detected home defects, automated evaluation of appraisals, and stricter enforcement actions to suspend poorly performing appraisers. HUD's Consumer Protection Measures for elderly homeowners participating in HUD's Home Equity Conversion Mortgage (HECM) Insurance Program, was implemented by final rule issued on January 19, 1999. The rule is directed to protecting elderly homeowners from becoming liable for payment of excessive fees for third party provided services that are of little or no value to the homeowner. The rulemaking was prompted by concerns that some estate planning entities were charging what HUD considered exorbitant fees to elderly homeowners in transactions related to HECMs. HUD's new policy statement on RESPA -- the Real Estate Settlement Procedures Act -- is designed to save Americans millions of dollars a year by protecting them from excessive mortgage broker fees and by encouraging improved disclosure of mortgage broker fees and services. The statement, issued March 1, 1999, clarifies HUD's long-standing position dealing with fees paid to mortgage brokers, which is that the compensation a broker receives from a lender and from a borrower must be reasonable for the actual work performed. The fee disclosure called for in the policy statement is designed to make it easier for millions of homebuyers and families refinancing their mortgages to comparison shop for a home loan and save money on the fees they pay mortgage brokers to find and originate home loans. HUD's Native American Housing Initiative, implemented in March 1999, will enable tribal governments to create non-profit groups that can apply for a share of more than $1 billion in annual assistance under several major HUD programs. Because only local governments and non- profit groups are [[Page 63955]] eligible for funding under these programs, tribal governments have been unable to benefit from the programs, even though Indian reservations have high poverty and unemployment rates, as well as great housing needs. Under the initiative, the non-profit groups created by tribal governments will be eligible to apply for several funding sources to assist tribal governments in meeting their housing and community needs. HUD's Officer Next Door Program (issued by interim rule on July 2, 1999) is designed to help revitalize economically distressed areas, make communities safer and promote strong police-community ties. The program offers law enforcement officers a 50 percent discount on homes that were previously insured through the Federal Housing Administration and were then foreclosed when owners failed to make mortgage payments. The savings under the program provided to officers presents a significant incentive to move into neighborhoods in need of revitalization. The program builds on the success of community policing by turning the neighborhood officer into the good neighbor next door. In addition to these priority regulatory initiatives, Fiscal Year 1999 saw considerable headway made by HUD in implementing the program reforms called for by the Quality Housing and Work Responsibility Act of 1998, enacted on October 21, 1998 (commonly referred to as the ``Public Housing Reform Act''). The Public Housing Reform Act constitutes a substantial overhaul of HUD's public housing programs and also institutes important reforms in HUD's Section 8 assistance programs. The statute enacts into law many of the reforms proposed by Secretary Cuomo in his HUD 2020 Management Reform Plan for HUD's public housing and Section 8 programs. The Public Housing Reform Act is designed to transform public housing into a setting that encourages and rewards work, brings more working families into public housing, increases the availability of subsidized housing for very poor families, deconcentrates poverty, removes barriers that isolate low income residents, provides for the demolition of the largest failed public housing projects, and replaces these projects with new townhouse style developments through the HOPE VI program. The Public Housing Reform Act requires that many of its mandated reforms be implemented by rulemaking, including three negotiated rulemaking proceedings. Issuance of regulations to implement these reforms began early in Fiscal Year 1999, and HUD is well underway to completing the rulemakings required by the statute. On February 18, 1999, HUD issued its interim rule on the Public Housing Agency (PHA) Plans. The two PHA plans -- the 5-year Plan and the Annual Plan -- allow the PHA to describe its mission and long range goals and objectives and provide details about the PHA's immediate operations, programs and services, and the PHA's strategy for handling operational concerns and resident concerns and needs. On May 14, 1999, HUD issued its interim rule to provide for the complete merger of the Section 8 tenant-based certificate and voucher programs into a new Housing Choice Voucher Program. This single market- driven program will assist in making Section 8 tenant-based rental assistance more successful at helping low-income families obtain affordable housing and will increase housing choice for low-income families. Proposed rules already issued by HUD under the Public Housing Reform Act include rules pertaining to: Changes in admission and occupancy requirements for public and assisted housing; one-strike screening and eviction for drug abuse and other criminal activity in public and assisted housing; changes to the PHAS; Public Housing Drug Elimination Program formula allocation; required resident membership on the board of directors of a PHA or similar governing body; pet ownership in public housing; required conversion of developments from public housing stock; voluntary conversion of developments from public housing stock; Section 8 homeownership; public housing homeownership; and public housing agency consortia and joint ventures. HUD's objective is to complete the rulemakings on these subjects as close as possible to the beginning of the new fiscal year. HUD recognizes the importance of these changes, long sought by HUD and by its program partners, being implemented as quickly as possible. For Fiscal Year 2000, HUD's regulatory plan reflects a continuation of the priority regulations and policy initiatives implemented in Fiscal Year 1999. Where rulemaking is required, it is HUD's intent that regulations be used to strengthen protections of those most vulnerable and in need of protection (the elderly, persons with disabilities and other protected classes), to empower communities by increasing their responsibility to design and implement strategies to address housing and community needs, and to increase the supply of affordable housing. HUD's Regulatory Plan for Fiscal Year 2000 focuses on HUD's mission and strategic goals. The Departmental Mission: Promote adequate and affordable housing, economic opportunity, and a suitable living environment free from discrimination. To accomplish this mission, the Secretary has directed HUD to focus on the following strategic goals that are designed to reflect the core business of HUD: 1. Increase the availability of decent, safe, and affordable housing in American communities; 2. Ensure equal opportunity in housing for all Americans; 3. Promote self-sufficiency and asset development of families and individuals; 4. Improve community quality of life and economic vitality; 5. Restore public trust. HUD's regulatory priorities for Fiscal Year 2000 include all of the rulemakings required by the Public Housing Reform Act. In addition to these priorities, HUD highlights certain of the Public Housing Reform Act rules and other priority rules in its Plan description that follows. The regulatory priorities set forth in HUD's Regulatory Plan for Fiscal Year 2000, and all the regulations set forth in HUD's Semiannual Regulatory Agenda, are designed to implement HUD's mission and address the strategic goals. Regulatory Priorities Regulatory Action: Capital Fund Allocation, Operating Fund Allocation, and Section 8 Housing Certificate Fund Allocation These three rules, being developed through three separate negotiated rulemaking processes, will provide formula allocation for public housing agencies' capital needs, their operating needs, and their Section 8 tenant-based contract renewal needs. These three rules address the basic funding needs of public housing agencies. By developing these three significant funding rules through the negotiated rulemaking process, public housing agencies, public housing residents, and other affected and interested parties have a say in how to meet their future local needs, and how the funding should be allocated among the public housing agencies, given their needs. [Furthers Strategic Goals 1 and 4] [[Page 63956]] Regulatory Action: Uniform Physical Condition Standards and Physical Inspection Requirements for Certain HUD Housing; Administrative Process for Assessment of Insured and Assisted Properties This rule will establish for certain multifamily housing an administrative process by which (1) HUD will notify owners of HUD's assessment of the physical condition of their multifamily housing; (2) owners of multifamily housing will be provided an opportunity to seek technical review of HUD's physical condition assessment of their housing; and (3) HUD will notify owners of action to be taken where the housing is found not to be in compliance with HUD's uniform physical condition standards. [Furthers Strategic Goals 1 and 5] Regulatory Action: Resident Opportunities and Supportive Services Program This rule would provide for more active involvement by public housing residents in their community and geographical area by linking public housing residents to supportive services and resident empowerment activities, and establishing methods for assisting residents in becoming economically self-sufficient. This rule is important in reducing the isolation of low-income residents by promoting their involvement in key areas that affect their lives -- their housing and their communities. The rule is also important in promoting economic empowerment of public housing residents. [Furthers Strategic Goals 3 and 4] Regulatory Action: HOPE VI Program This rule will establish the legal parameters and guidance that will govern funding and eligible activities of HUD's HOPE VI Program, but under President Clinton's and HUD's regulatory principles allow HOPE VI grantees to develop, within those parameters, their own strategies to address public housing that is in severe distress. Consistent with new statutory requirements, the rule includes as an eligible activity appropriate homeownership downpayment assistance for displaced residents or other appropriate replacement homeownership activities. [Furthers Strategic Goals 1, 3 and 4] Regulatory Action: The Secretary of HUD's Regulation of Fannie Mae and Freddie Mac (Government Sponsored Entities) Through this rule, HUD will issue new housing goal levels for the purchase of mortgages by Fannie Mae and Freddie Mac (collectively, the Government Sponsored Entities, or GSEs) for calendar years 2000 through 2003. The new goals will provide strong incentives for the two enterprises to more fully address the housing finance needs for very low-, low- and moderate-income families and residents of underserved areas and, therefore, to more fully realize their public purposes. [Furthers Strategic Goals 2 and 3] _______________________________________________________________________ HUD--Office of the Secretary (HUDSEC) ----------- PROPOSED RULE STAGE ----------- 49. SECRETARY OF HUD'S REGULATION OF FANNIE MAE AND FREDDIE MAC: PURCHASE GOALS (FR-4494) Priority: Economically Significant. Major under 5 USC 801. Legal Authority: 12 USC 1451 et seq; 12 USC 1716-1723h; 12 USC 4501-4641; 28 USC 2641; 42 USC 3535(d); 42 USC 3601-3619 CFR Citation: 24 CFR 81 Legal Deadline: None Abstract: Through this rule, the Department is issuing new housing goal levels for the purchase of mortgages by Fannie Mae and the Freddie Mac (collectively, the Government Sponsored Enterprises, or GSEs) for calendar years 2000 through 2003. In accordance with the Federal Housing Enterprise Financial Safety and Soundness Act of 1992, this rule establishes new goal levels for purchasing of mortgages financing low- and moderate-income housing, special affordable housing, and housing in central cities, rural areas, and other underserved areas. This rule also clarifies HUD's guidelines for counting different types of mortgage purchases toward those goals, and provides greater public access to certain types of mortgage data in HUD's public use database. Statement of Need: Current regulations, published in 1995, establish the GSEs' housing goals for 1995-99. While the goals would remain effective beyond 1999 at 1999 levels, to avoid any lapse in coverage, the Secretary is establishing new goals to reflect current conditions. The new goals will provide strong incentives for the two enterprises to more fully address the housing finance needs for very low-, low- and moderate- income families and residents of underserved areas and thus, to realize more fully their public purposes. Such incentives are consistent with the Department's strategic objectives of increasing homeownership opportunities and the supply of affordable rental housing in the United States. Summary of Legal Basis: The Department is authorized to establish housing goals for the GSEs by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), which sets several parameters for the housing goals and provides other requirements for many of the issues addressed in this rule. Alternatives: The alternative of leaving the housing goals unchanged was considered. It was rejected because it failed to meet HUD's strategic objectives of increasing the supply of affordable rental housing and homeownership and promoting equal housing opportunities for those protected by the law. Anticipated Cost and Benefits: This rule will have the benefit of increasing the number of affordable housing units for low- and moderate-income families and underserved communities over the next four years (2000-03). However, there is no indication that focusing the GSEs' attention on the affordable lending market would be costly for the GSEs. In fact, HUD's analysis indicates that meeting the proposed housing goals will have little impact on the GSEs' financial returns or on the safety and soundness of GSE operations. Additionally, increased GSE activity in the affordable lending arena should not lead to significant crowding out of traditional portfolio lenders. [[Page 63957]] Risks: This rule poses no risk to public health, safety or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 11/00/99 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Janet Tasker Director, Office of Government Sponsored Enterprise Oversight Department of Housing and Urban Development Office of Housing Phone: 202 708-2224 Allen Fishbein Senior Advisor to the Assistant Secretary for Housing Sponsored Enterprise Oversight Department of Housing and Urban Development Office of Housing Phone: 202 708-3600 RIN: 2501-AC60 _______________________________________________________________________ HUD--Office of Housing (OH) ----------- PROPOSED RULE STAGE ----------- 50. UNIFORM PHYSICAL CONDITIONS AND PHYSICAL INSPECTION REQUIREMENTS FOR CERTAIN HUD MULTIFAMILY HOUSING; ADMINISTRATIVE PROCESS FOR ASSESSMENT OF INSURED AND ASSISTED PROPERTIES (FR-4452) Priority: Other Significant Legal Authority: 12 USC 1701-1715; 42 USC 3535(d) CFR Citation: 24 CFR 200 Legal Deadline: None Abstract: This rule will establish for certain multifamily housing administrative processes by which (1) HUD will notify owners of HUD's assessment of the physical condition of their multifamily housing; (2) the owners, under certain circumstances, will be provided an opportunity to seek technical review of HUD's physical condition assessment of the multifamily housing; and (3) HUD may take action where the housing is found not to be in compliance with the physical condition standards. The assessment of multifamily housing to ensure that it is a condition that is decent, safe and sanitary is an important mission of HUD. This rule helps HUD to achieve this mission. Statement of Need: HUD is responsible for ensuring that housing subsidized by HUD is in a condition that is decent, safe, sanitary and in good repair. Until implementation of HUD's 2020 Management Reform Plan, HUD never had an effective and comprehensive property assessment system. This system was established in 1998 and HUD's Real Estate Assessment Center is charged with the responsibility for assessing the properties in which HUD has an interest. In 1998, HUD established the Public Housing Assessment System, which provides for the assessment, among other things, of the physical condition of public housing. This rule will establish a process for the assessment of the physical condition for certain multifamily housing. Summary of Legal Basis: The Congress has charged HUD with the responsibility to ensure that housing assisted by HUD is in decent safe and sanitary condition (42 U.S.C. 1437, 42 U.S.C. 12702, 12 U.S.C. 1701-z-11). Alternatives: In 1998, HUD established uniform physical condition standards and uniform physical inspection requirements. Until that date, physical condition requirements applicable to housing assisted under various HUD programs were similar but not uniform. Additionally, there was no comprehensive oversight and assessment of the properties in HUD's portfolio. Inspection was left to owners and managers with infrequent oversight by HUD, and HUD was without important information on the condition of the housing in its portfolio. By establishing uniform physical condition standards, HUD seeks to bring consistency in physical condition standards for all HUD housing, to standardize the inspection to be undertaken to determine compliance with the standards, and to implement an electronically based inspection system to evaluate, rate and rank the physical condition of HUD housing in an objective manner as possible. Anticipated Cost and Benefits: HUD has undertaken the responsibility for initial physical inspection of the properties in its portfolio and determining the condition of these properties. The benefit to owners of the covered multifamily housing is the elimination of subjectivity in the physical condition analysis process. By having uniform physical condition standards and uniform physical inspection requirements, owners are subject to the same standards and the standards do not vary because the inspection by one HUD Office might differ from that conducted by another HUD Office. The benefit to residents is increased confidence that HUD is committed to providing decent, safe and sanitary housing. Risks: This rule poses no threat to public safety, health, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 11/00/99 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Kenneth Hannon Office of Multifamily Housing Department of Housing and Urban Development Office of Housing Phone: 202 708-3944 RIN: 2502-AH44 _______________________________________________________________________ HUD--Office of Public and Indian Housing (PIH) ----------- PROPOSED RULE STAGE ----------- 51. OPERATING FUND ALLOCATION FORMULA (FR-4425) Priority: Other Significant [[Page 63958]] Legal Authority: 42 USC 1437g(e); 42 USC 1437g(f); 42 USC 3535(d) CFR Citation: 24 CFR 990 Legal Deadline: Final, Statutory, October 1, 1999, Section 519(f) permits the Department to extend the effective date for up to 6 months. Abstract: This rule will implement a new formula system for allocating funds to public housing agencies for their operation and management of public housing. The new formula system is being developed through negotiated rulemaking procedures, as required by section 519 of the Quality Housing and Work Responsibility Act of 1998 (title V of Public Law 105- 276, approved October 21, 1998, 112 Stat. 2551; hereafter, ``Public Housing Reform Act''). That statute amended section 9 of the United States Housing Act of 1937 to require development of a new formula that would change the current method (the Performance Funding System) of determining the payment of operating subsidies to public housing agencies. The members of the negotiated rulemaking advisory committee include national housing associations, housing authorities, tenant and community organizations, public interest organizations and HUD. Committee meetings began in March 1999 and are continuing. Statement of Need: Section 519 of the Public Housing Reform Act requires HUD to develop this rule to govern funding of PHAs' operating and management needs. Summary of Legal Basis: Section 519 of the Public Housing Reform Act amending Section 9 of the U.S. Housing Act of 1937, codified at 42 USC 1437g. Alternatives: The Public Housing Reform Act requires that this new formula system be developed through negotiated rulemaking. Anticipated Cost and Benefits: The costs of the program as administered with one fund from which a PHA will fund all of its operating and management needs will be the same as under existing provisions. The benefits of having this new formula system developed through negotiated rulemaking is that it allows those entities and individuals directly affected -- public housing agencies and their residents -- to have a say in how the formula will operate, and consequently to help foster constructive, creative and acceptable solutions to difficult problems. Risks: This rule poses no threat to public safety, health, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ Notice 64 FR 5570 02/03/99 Notice Comment Period End 03/05/99 NPRM 12/00/99 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Stephen Sprague Acting Director, Funding and Financial Management Division Department of Housing and Urban Development Office of Public and Indian Housing Phone: 202 708-1872 RIN: 2577-AB88 _______________________________________________________________________ HUD--PIH 52. RESIDENT OPPORTUNITIES AND SUPPORTIVE SERVICES (FR-4525) Priority: Other Significant Legal Authority: 42 USC 1437-6; 42 USC 3535(d) CFR Citation: 24 CFR 964 Legal Deadline: None Abstract: This rule will implement section 538 of Quality Housing and Work Responsibility Act of 1998 (title V of Public Law 105-276, approved October 21, 1998, 112 Stat. 2461; hereafter, ``Public Housing Reform Act'') by adding the Resident Opportunities and Supportive Services (ROSS) program requirements to 24 CFR part 964. The purpose of the ROSS Program is to provide linkage of services to public housing residents, including supportive services and resident empowerment activities. Eligible activities include those related to physical improvements of a public housing development in order to provide space for supportive services of residents; work readiness including education, job training and counseling; and other activities designed to improve the economic self-sufficiency of residents. Statement of Need: The program established by section 538 of the Public Housing Reform Act is a permanent program. The regulations will provide the appropriate notice of the legal framework for the program, and clear and uniform criteria for program eligibility and participation. Summary of Legal Basis: Section 538 of the Public Housing Reform Act, amending title I of the U.S. Housing Act of 1937 (42 U.S.C. 1437z-6). Alternatives: As a program that authorizes the use of funds for resident supportive services, the ROSS Program could be administered by a notice of funding availability (NOFA), but a NOFA does not provide a long term legal framework for the program. Requirements established for a program by NOFA are generally limited to short-term funding initiatives and demonstration programs. A permanent program requires regulations. HUD, however, will develop regulations consistent with President Clinton's Executive order on Regulatory Planning and Review (E.O. 12866) to provide flexibility, the least burden, and performance incentives. Anticipated Cost and Benefits: The establishment of regulations will bring certainty to this funding program, and confirm its permanency. Although interested parties looked to the notice of funding availability, issued in Fiscal Year 1999, the first year of funding, to determine applicable requirements, the regulations when issued will provide the legal basis for the program. The certainty to be provided through issuance of regulations should reduce costs by providing longer term planning on the part of grantees. Risks: This rule poses no threat to public safety, health, or the environment [[Page 63959]] Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 01/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Paula Blunt Director, Customer Services and Amenities Division Department of Housing and Urban Development Office of Public and Indian Housing Phone: 202 619-8201 RIN: 2577-AC07 _______________________________________________________________________ HUD--PIH 53. HOPE VI PROGRAM (FR-4530) Priority: Other Significant Legal Authority: 42 USC 1437v; 42 USC 3535(d) CFR Citation: 24 CFR 000 Legal Deadline: None Abstract: This rule will establish regulations that will govern funding and eligible activities of HUD's HOPE VI Program. To date, HOPE VI has been operated from year to year as a demonstration program in accordance with authorization provided each year in appropriations bills. HOPE VI activities were funded and guided by notices of funding availability issued each fiscal year by HUD. The Quality Housing and Work Responsibility Act of 1998 (title V of Public Law 105-276, approved October 21, 1998, 112 Stat. 2585; hereafter, ``Public Housing Reform Act'') makes HOPE VI a permanent program. The regulations to be implemented for the HOPE VI program will include the provisions set out in section 535 of the Public Housing Reform Act. Statement of Need: With the establishment of a permanent framework for the HOPE VI Programs, regulations are necessary to establish certainty and consistency in the operation of HOPE VI funded projects as provided by the statute. The regulations will establish clear and uniform criteria for program eligibility and participation. Summary of Legal Basis: Section 535 of the Public Housing Reform Act (42 U.S.C. 1437v). Alternatives: The HOPE VI Program has been operated as a demonstration program and funded by a NOFA on a yearly basis, dependent upon continued authorization through appropriations bills. The permanent framework provided by the Public Housing Reform Act necessitates the establishment of a permanent legal framework for administration of the program. Anticipated Cost and Benefits: The establishment of regulations will bring certainty and permanency to the program, which has been lacking to date. Interested parties have looked to the notice of funding availability, issued annually, to determine applicable requirements. The certainty to be provided through issuance of regulations should reduce costs by providing longer term planning on the part of grantees. Risks: This rule poses no threat to public safety, health, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 06/00/00 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: Milan Ozdinec Director, Office of Urban Revitalization Department of Housing and Urban Development Office of Public and Indian Housing Phone: 202 401-8812 RIN: 2577-AC17 _______________________________________________________________________ HUD--PIH ----------- FINAL RULE STAGE ----------- 54. CAPITAL FUND ALLOCATION FORMULA (FR-4423) Priority: Other Significant Legal Authority: 42 USC 1437g(d); 42 USC 1437g(f); 42 USC 3535(d) CFR Citation: 24 CFR 905 Legal Deadline: Final, Statutory, October 1, 1999. Abstract: This rule will implement a new formula system for allocating funds to public housing agencies for their public housing program capital needs, whether related to development or modernization. The new formula system is being developed through negotiated rulemaking procedures, as required by section 519 of the Quality Housing and Work Responsibility Act of 1998 (title V of Public Law 105-276, approved October 21, 1998, 112 Stat. 2551; hereafter, ``Public Housing Reform Act''). That statute amended section 9 of the United States Housing Act of 1937 to require development of a single formula to replace the existing development and modernization funding methods. This rule will work in conjunction with a rule that replaces the existing framework for public housing development and modernization, found in 24 CFR parts 941 and 968. The members of the negotiated rulemaking advisory committee include national housing associations, housing authorities, tenant and community organizations, Fannie Mae, and HUD. Committee meetings began in April 1999 and concluded in August 1999. The Capital Fund formula in this rule fulfills the statute's mandate to include a mechanism to reward performance. It also provides for a replacement housing factor, in recognition that funding for this purpose will facilitate demolition of obsolete housing and allow public housing authorities (PHAs) to address some of the remaining housing needs in the affected communities. Statement of Need: Section 519 of the Public Housing Reform Act requires HUD to develop [[Page 63960]] this rule to govern funding of PHAs' public housing capital needs. Summary of Legal Basis: Section 519 of the Public Housing Reform Act amending Section 9 of the U.S. Housing Act of 1937 codified at 42 USC 1437g. Alternatives: The Public Housing Reform Act requires a formula system to be established by negotiated rulemaking. Anticipated Cost and Benefits: The costs of the program as administered with one fund from which a PHA will fund all of its capital needs will be the same as under existing provisions. However, the benefits of having just one funding mechanism for all such needs, and the provision of additional flexibility to PHAs to manage their physical assets will provide increased benefits to the PHAs. The additional consultation of residents built into the program will also benefit both tenants and the health of the public housing developments, through a stronger sense of involvement and commitment on the part of residents. Risks: This rule poses no threat to public safety, health, or the environment. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ NPRM 64 FR 49924 09/14/99 End NPRM Comment Period 10/14/99 Final Action 12/00/99 Regulatory Flexibility Analysis Required: No Small Entities Affected: No Government Levels Affected: None Agency Contact: William Flood Director, Office of Capital Improvements Department of Housing and Urban Development Office of Public and Indian Housing Phone: 202 708-1640 RIN: 2577-AB87 BILLING CODE 4210-01-F [[Page 63961]] DEPARTMENT OF THE INTERIOR (DOI) Statement of Regulatory Priorities The Department of the Interior (DOI) is the principal steward of our nation's natural resources and guardian of many of our priceless cultural resources. We serve as trustee to Native Americans and Alaska natives and also are responsible for relations with the island territories under United States jurisdiction. As part of our duties, we manage more than 450 million acres of Federal lands, approximately 3 billion acres of the Outer Continental Shelf, and more than 57,000 buildings. In carrying out our many responsibilities we are committed to creative ideas that: Ensure the long-term viability of our resources Protect the environment in which our resources are found Minimize negative effects and maximize benefits to the American people. The Department's bureaus and offices seek to ease the burdens imposed by regulations while increasing the protection of resources under their jurisdiction. Examples of this include: Establishing a community approach to maintaining the environmental systems that support native species and to preventing invasive species introductions. We expect this to reduce the rate at which individual species become threatened and endangered. This approach enlists the voluntary support of land owners to achieve environmental goals while potentially reducing the regulatory cost. Using performance-based regulations rather than process-based regulations. This gives local entities the options of using the most cost-effective method to meet the spirit and letter of the law while providing the best result for the specific instance and location. Incorporating scientific standards, where applicable, into regulations. Continuing to reduce the number of regulations and converting those that remain to plain language. This will improve the public's ability to understand regulatory requirements and will result in improved compliance. The Department's overall goal is to maintain or improve the quality of the environment while: Reducing the financial burden on the general public; Increasing the flexibility of the public to use the best means available to ensure that the laws are met; and Making regulations easy to understand and administer. This approach to improving regulations will help us better execute our mission and meet the requirements of our eight bureaus and the following objectives: Conserve, protect, and enhance the Nation's national parks, wilderness, and fish and wildlife resources; Manage, develop, and protect the quality of water resources; Promote economic opportunity and improve the trust assets of American Indians, Indian tribes, Alaska Natives, and people of the U.S. territories; Improve the Federal Government's relationship with State, local, tribal, and territorial governments; and Enhance America's ability to meet its needs for domestic energy and mineral resources. Major Regulatory Areas Among the Department's bureaus and offices, the Office of Surface Mining Reclamation and Enforcement (OSM) has the highest concentration of regulatory responsibilities. OSM, in partnership with the States and Indian tribes, has the responsibility for setting and enforcing environmental standards during coal mining and reclamation operations. OSM has implemented an innovative approach to facilitate the reclamation of abandoned mine lands by allowing the party conducting the reclamation to offset the cost of reclamation through the sale of coal extracted as an incidental part of the reclamation project. Other DOI bureaus rely on regulations to implement legislatively mandated programs by focusing on the management of natural resources and public or trust lands. Some of these regulatory activities include: Management of migratory birds and preservation of certain marine mammals and endangered species; Management of dedicated lands, such as national parks, wildlife refuges, and American Indian trust lands; Management of public lands open to multiple use; Leasing and oversight of development of Federal energy, minerals, and renewable resources; Management of revenues from American Indian and Federal minerals; Fulfillment of trust and other responsibilities pertaining to American Indian tribes; Natural resource damage assessments; and Management of financial and nonfinancial assistance programs. Regulatory Policy How DOI Regulatory Procedures Relate to the Administration's Regulatory Policies Within the requirements and guidance in Executive Orders 12866, 12612, and 12630, DOI's regulatory program seeks to: Fulfill all legal requirements as specified by statutes or court orders; Perform essential functions that cannot be handled by non- Federal entities; Minimize regulatory costs to society while maximizing societal benefits; and Operate programs openly, efficiently, and in cooperation with Federal and non-Federal entities. DOI bureaus have taken the initiative in working with other Federal agencies, non-Federal government agencies, and public entities to make our regulations easier to comply with and understand. Because regulatory reform is a continuing process that requires the participation of all affected parties, we strive continually to include affected entities in the decision making process and to issue rules more efficiently. To better manage and review the regulatory process, we have revised our internal rulemaking guidance. Results have included: Increased bureau awareness of and responsiveness to the needs of small businesses and better compliance with the Small Business Regulatory Enforcement Fairness Act (SBREFA); A Department-wide effort to evaluate the economic effects of rules and regulations that are planned; and Issuance of new guidance in the Departmental Manual to ensure the use of plain language in Government writing. We are committed to improving the regulatory process through the use of plain language. Simplifying regulations has resulted in a major rewrite of the regulations for onshore oil and gas leasing and operations in an easily understandable form that: (a) Puts previously published rules into one location in a logical sequence; (b) eliminates duplication by consolidating existing regulations and onshore orders and national notices to lessees; (c) incorporates industry standards by reference; and (d) implements performance standards in some of the operating regulations. Our regulatory process ensures that bureaus share ideas on how to reduce regulatory burden while meeting the requirements of the laws they enforce and improving their [[Page 63962]] stewardship of the environment and resources under their purview. Encouraging Responsible Management of the Nation's Resources The Department's mission is to protect and provide access to our Nation's natural and cultural heritage and to honor our trust responsibilities to tribes. We are committed to this mission and to applying laws and regulations fairly and effectively. The Department's priorities are compliance, enforcement, prevention, solving problems, and protecting public health and safety. To this end, our bureaus encourage users of public resources to adopt long-term strategies designed to meet current needs while preserving resources for future generations. An example of this is the ``no surprises'' policy of the U.S. Fish and Wildlife Service (FWS). This policy gives property owners an incentive to implement voluntary conservation measures for a proposed or candidate species, or a species likely to become a candidate or proposed in the near future. These property owners will receive assurances from FWS that additional conservation measures will not be required and additional land, water, or resource use restrictions will not be imposed should the species become listed in the future. This policy results in fewer fines, no ``surprises'' (in the form of unexpected fines) for conforming landowners, and better overall compliance with the Endangered Species Act. Minimizing Regulatory Burdens We are using the regulatory process to ease the burdens on various entities throughout the country. For instance, the Endangered Species Act (ESA) allows for the delisting of threatened and endangered species if they no longer need the protection of the ESA. We have has identified approximately 40 species for which delisting or downlisting (reclassification from endangered to threatened) may be appropriate. Experience has shown us that changing the planning process for land use and water development can reduce unnecessary delays and paperwork associated with agency decision making. For some projects, an improved planning process has dramatically reduced the time required for paperwork. We use performance standards in a variety of regulations. These allow the affected entity to choose the most economical method to accomplish a goal provided it meets the requirements of the regulations. An example of this is Minerals Management Service`s (MMS) proposed training rule, which will allow companies with operations in the Outer Continental Shelf (OCS) to select their own training courses or programs for employees. Currently MMS has a prescriptive program where employees working on the OCS must attend an MMS-certified school. The new rule will allow lessees and contractors to properly train the employees by any method they choose as long as the employees are competent. We anticipate that this will result in new and innovative training techniques and allow companies added flexibility in tailoring their training to employees' specific duties. Encouraging Public Participation and Involvement in the Regulatory Procedure Process One of the goals of Executive Order 12866 is to ensure that the public has adequate opportunities to participate in developing new regulations. Under this Administration, encouraging increased public participation in the regulatory process to make regulatory policies more responsive to our customers' needs is a priority. The Department is reaching out to communities to seek their input on a variety of regulatory issues. For example, every year the FWS establishes migratory bird hunting seasons in partnership with ``flyway councils,'' which are made up of State fish and wildlife agencies. As the process evolves each year, FWS holds a series of public meetings to give other interested parties, including hunters and other groups, adequate opportunity to participate in establishing the upcoming season's regulations. Similarly, the Bureau of Land Management (BLM) uses Resource Advisory Councils (RACs) made up of affected parties to help prepare regulations that it issues under the Rangeland Reform Act. We also encourage public consultation during the regulatory process. For example: OSM is continuing its outreach to interested groups to improve the substance and quality of rules and, to the greatest extent possible, achieve a consensus on regulatory issues; The Bureau of Indian Affairs is developing its roads program rule using the negotiated rulemaking process. Because of the importance of the roads program to the individual tribes and because of the varying needs of the tribal governments, the negotiated rulemaking process will result in a rule that better serves the diverse needs of the Native American community. The Future of DOI In compliance with the Government Performance and Results Act of 1993 (GPRA), we are preparing a revised comprehensive strategic plan to prepare DOI for the 21st century. The plan will cover the period from 2000 through 2005 and will be a stand-alone plan with the five Departmental goals supported by the bureau goals. It gives employees and managers clear goals and strategies to help the Department meet its mission and fulfill its commitment to the nation. We believe that this plan must evolve in response to the changing natural and human environments. For this reason, our bureaus have already begun their strategic plans to respond to those changes and to prepare for others that may take place in the future. A copy of DOI's current strategic plan (including updates that have been made during FY 1999) can be seen on our web site at this address: http://www.doi.gov/gpra/ Bureaus and Offices Within DOI The following brief descriptions summarize the regulatory functions of DOI's major regulatory bureaus and offices. Office of the Secretary, Office of Environmental Policy and Compliance The regulatory functions of the Office of Environmental Policy and Compliance (OEPC) stem from requirements under section 301(c) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA). Section 301(c) requires the development of natural resource damage assessment rules and the biennial review and revision, as appropriate, of these rules. Rules have been promulgated for the optional use of natural resource trustees to assess compensation for damages to natural resources caused by hazardous substances. OEPC is overseeing the study and possible promulgation of additional rules pursuant to section 301(c)(2) and the review and possible revision of the existing rules in compliance with section 301(c)(3). In undertaking DOI's responsibilities under section 301(c), OEPC is striving to meet three regulatory objectives: (a) That the minimum amount of regulation necessary be developed; (b) that the assessment process provide for tailoring to specific discharges or releases; and (c) [[Page 63963]] that the process not be considered punitive, but rather a system to achieve fair and just compensation for injuries sustained. Bureau of Indian Affairs The philosophy of the Bureau of Indian Affairs (BIA) is to encourage the development and management of human and other resources among American Indians and Alaska Natives, to encourage tribal assumption of BIA programs, and to fulfill trust and other responsibilities of the U.S. Government. BIA regulatory actions serve to balance its dual role as: (a) Advocate in assisting tribes and encouraging their participation in BIA programs and (b) trustee protecting and/or enhancing American Indian trust resources. Important BIA programs are promulgated through regulations, rather than informal guidelines, so that American Indians are aware of and have an opportunity to participate in the development of standards and procedures affecting them. BIA regulatory policies seek to accomplish the following: (a) Ensure consistent policies throughout American Indian country; (b) promote American Indian involvement in the operation, management, planning, and evaluation of BIA programs and services; (c) provide guidance to applicants for BIA services; and (d) govern the development of American Indian lands and provide for the protection of American Indian treaty and statutory rights. BIA's regulatory program is designed (a) to promote American Indian self-determination, (b) to provide American Indians and Alaska Natives with high-quality education and tribal development opportunities, (c) to meet BIA's trust responsibilities, and (d) to meet the needs of tribes and their members. Bureau of Land Management The Bureau of Land Management manages about 264 million acres of land surface and about 570 million acres of Federal mineral estate. These lands consist of extensive grasslands, forests, mountains, arctic tundra, and deserts. Resources on the lands include energy and minerals, timber, forage, wild horse and burro populations, habitat for fish and wildlife, wilderness areas, and archeological and cultural sites. BLM manages these lands and resources for multiple use and the sustained yield of renewable resources. Primary statutes under which the Agency must operate include: The Federal Land Policy and Management Act of 1976; the General Mining Law of 1872; the Mineral Leasing Act of 1920, as amended; the Recreation and Public Purposes Act; the Taylor Grazing Act; and the Wild, Free-Roaming Horses and Burros Act. The regulatory program mirrors statutory responsibilities and Agency objectives. Agency objectives include: Providing for a wide variety of public uses without compromising the long-term health and diversity of the land and without sacrificing significant natural, cultural, and historical resource values; Understanding the arid, semi-arid, arctic, and other ecosystems we manage and committing to using the best scientific and technical information to make resource management decisions; Understanding the needs of the public that use BLM-managed lands and providing them with quality service; Committing to recovering a fair return for using publicly owned resources and avoiding the creation of long-term liabilities for American taxpayers; and Resolving problems and implementing decisions in cooperation with other agencies, States, tribal governments, and the public. The regulatory program contains its own objectives. These include preparing regulations that: Are the product of coordination and consultation with all affected members of the public; Are understandable to the general public, especially those to whom they are directly applicable; and Are reviewed periodically to determine whether or not BLM still needs them and whether or not they need to be updated to reflect statutory and policy changes. Minerals Management Service The Minerals Management Service (MMS) has two major responsibilities: (1) Timely and accurate collecting, distributing, accounting for, and auditing of revenues owed by holders of Federal onshore, offshore, and tribal land mineral leases in a manner that meets or exceeds Federal financial integrity requirements and recipient expectations and (2) management of the resources of the Outer Continental Shelf in a manner that provides for safety, protection of the environment, and conservation of natural resources. These responsibilities are carried out under the provisions of the Federal Oil and Gas Royalty Management Act, the Minerals Leasing Act, the Outer Continental Shelf Lands Act, the Indian Mineral Leasing Act, and other related statutes. MMS's regulatory philosophy is to develop clear, enforceable rules that support the missions of each program. For the Offshore Program, MMS will issue final regulations implementing the Deep Water Royalty Relief Act. MMS will also publish a final rule to address financial responsibility under the Oil Pollution Act of 1990. MMS will continue to review rules and issue amendments in response to new technology and new industry practices. MMS also plans to continue its review of existing regulations and to issue rules to refine the royalty management regulations in chapter II of 30 CFR. Revisions to the royalty management regulations cover oil and gas valuation of Federal and Indian leases. The Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 will require numerous additional changes to the royalty management regulations, including the delegation of royalty collection and related activities to States. Office of Surface Mining Reclamation and Enforcement The Office of Surface Mining Reclamation and Enforcement (OSM) was created by the Surface Mining Control and Reclamation Act of 1977 (SMCRA) to ``strike a balance between protection of the environment and agricultural productivity and the Nation's need for coal as an essential source of energy.'' The principal regulatory provisions contained in title V of SMCRA set minimum requirements for obtaining a permit for surface coal mining operations, set standards for surface coal mining operations, require land reclamation once mining ends, and require rules and enforcement procedures to ensure that the standards are met. Under SMCRA, OSM serves as the primary enforcer of SMCRA until the States achieve ``primacy''; that is, until they demonstrate that their regulatory programs meet all the specifications in SMCRA and have regulations consistent with those issued by OSM. A primacy State takes over the permitting, inspection, and enforcement activities of the Federal Government. OSM then changes its role from regulating mining activities directly to overseeing and evaluating State programs. Today, 24 of the 27 key coal-producing States have primacy. In return for assuming primacy, States are [[Page 63964]] entitled to regulatory grants and to grants for reclaiming abandoned mine lands. In addition, under cooperative agreements, some primacy States have agreed to regulate mining on Federal lands within their borders. Thus, OSM regulates mining directly only in nonprimacy States, on Federal lands in States where no cooperative agreements are in effect, and on American Indian lands. SMCRA charges OSM with the responsibility of publishing rules as necessary to carry out the purposes of the Act. The most fundamental mechanism for ensuring that the purposes of SMCRA are achieved is the basic policy and guidance established through OSM's permanent regulatory program and related rulemakings. Its regulatory framework is developed, reviewed, and applied according to policy directives and legal requirements. Litigation by the coal industry and environmental groups is responsible for some of the rules now being considered by OSM. Others are the result of efforts by OSM to address areas of concern that have arisen during the course of implementing OSM's regulatory program, and one is the result of legislation. OSM has sought to develop an economical, safe, and environmentally sound program for the surface mining of coal by providing a stable and consistent regulatory framework. At the same time, however, OSM has recognized the need (a) to respond to local conditions, (b) to provide flexibility to react to technological change, (c) to be sensitive to geographic diversity, and (d) to eliminate burdensome recordkeeping and reporting requirements that over time have proved unnecessary to ensure an effective regulatory program. Major regulatory objectives regarding the mining of surface coal include: Continuing outreach activities with interested groups during the rulemaking process to increase the quality of the rulemaking process, improve the substance of the rules, and, to the greatest extent possible, reflect consensus on regulatory issues; Minimizing the recordkeeping and regulatory compliance burden during rulemaking; and Publishing final rules to implement the Energy Policy Act of 1992, Public Law 102-486. U.S. Fish and Wildlife Service The U.S. Fish and Wildlife Service has three basic mission objectives: To develop and apply an environmental stewardship ethic based on ecological principles and scientific knowledge of fish and wildlife; To guide the conservation, development, and management of the Nation's fish and wildlife resources; and To administer a national program to provide the public with opportunities to understand, appreciate, and wisely use fish and wildlife resources. These objectives are met through the following regulatory programs: Management of Service lands, primarily national wildlife refuges; Management of migratory bird resources; Conservation of certain marine mammals and endangered species; Allowance of certain activities that would otherwise be prohibited by law; and Administration of grant and assistance programs. The Service maintains a comprehensive set of regulations in the first category--those that govern public access, use, and recreation on more than 500 national wildlife refuges and in national fish hatcheries. These uses are authorized only if they are compatible with the purpose for which each area was established, are consistent with State and local laws where practical, and afford the public appropriate economic and recreational opportunity. These regulations are developed and continually reviewed for improvements, with a substantial amount of public input, and are typically of limited geographical interest. Management of migratory bird resources is covered by the second category of regulations, required by various international treaties. Annually, the Department issues a regulation on migratory bird hunting seasons and bag limits, developed in partnership with the States, American Indian tribal governments, and the Canadian Wildlife Service. Although issued annually, regulations such as these have been in existence for more than 50 years and have not significantly changed over that period of time. The regulations are necessary to permit migratory bird hunting that would otherwise be prohibited. Although recent declines in waterfowl populations have reduced the numbers of birds that may be harvested, the regulations generally do not change significantly from one year to another. The third category includes regulations to fulfill the statutory obligation to identify and conserve species faced with extinction. The basis for determining endangered species is limited by law to biological considerations, although priorities for allocating Service resources are established consistent with the President's policies (by directing the Service's efforts to species most threatened and those whose protection is of the most benefit to the natural resource). Included in this program are regulations to enhance the conservation of listed species and of marine mammals for which DOI has management responsibility. This program also contains regulations that provide guidance to other Federal agencies to assist them in complying with section 7 of the Endangered Species Act, which requires them not to conduct activities that would jeopardize the existence of endangered species or adversely modify critical habitat of listed species. In designating critical habitat, the Service considers biological information and economic and other impacts of the designation. Areas may be excluded from the designation where the benefits of exclusion outweigh the benefits of inclusion, provided that the exclusion will not result in the extinction of the species. The fourth category--the Service's regulatory program that permits activities otherwise prohibited by law--entails regulating possession, sale or trade, scientific research, and educational activities involving fish and wildlife and their parts or products. Generally, these regulations are supplemental to State protective regulations and cover activities that involve interstate or foreign commerce, which must comply with various laws and international obligations. The Service works continually with foreign and State governments, the affected industries and individuals, and other interested parties to minimize the burdens associated with Service-related activities. Easing these burdens through regulatory actions continues to balance possible benefits with adequate protection for the natural resource. Most of the regulatory activities are permissive in nature, and the concerns of the public generally center on technical issues. The last category--the Service's assistance programs--includes a limited number of regulations necessary to ensure that assistance recipients comply with applicable laws and Office of Management and Budget (OMB) Circulars. Regulations in this program help the affected parties to obtain assistance and to comply with [[Page 63965]] requirements imposed by Congress and OMB. National Park Service The National Park Service is dedicated to conserving the natural and cultural resources and values of the National Park System for the enjoyment, education, and inspiration of this and future generations. The Service is also responsible for managing a great variety of national and international programs designed to help extend the benefits of natural and cultural resource conservation and outdoor recreation throughout this country and the world. There are more than 375 units in the National Park System, including national parks and monuments; scenic parkways, preserves, trails, riverways, seashores, lakeshores, and recreation areas; and historic sites associated with important movements, events, and personalities of the American past. The National Park Service develops and implements park management plans and staffs the areas under its administration. It relates the natural values and historical significance of these areas to the public through talks, tours, films, exhibits, and other interpretive media. It operates campgrounds and other visitor facilities and provides, usually through concessions, lodging, food, and transportation services in many areas. The National Park Service also administers the following programs: The State portion of the Land and Water Conservation Fund, Nationwide Outdoor Recreation coordination and information and State comprehensive outdoor recreation planning, planning and technical assistance for the National Wild and Scenic Rivers System, and the National Trails System, natural area programs, the National Register of Historic Places, national historic landmarks, historic preservation, technical preservation services, Historic American Buildings survey, Historic American Engineering Record, and interagency archeological services. The National Park Service maintains regulations that help manage public use, access, and recreation in units of the National Park System. The Service provides visitor and resource protection to ensure public safety and prevent derogation of resources. The regulatory program develops and reviews regulations, maintaining consistency with State and local laws, to allow these uses only if they are compatible with the purpose for which each area was established. Bureau of Reclamation The Bureau of Reclamation's mission is to manage, develop, and protect water and related resources in an environmentally and economically sound manner in the interest of the American public. To accomplish this mission, Reclamation applies management, engineering, and scientific skills that result in effective and environmentally sensitive solutions. Reclamation projects provide for some or all of the following concurrent purposes: Irrigation water service, municipal and industrial water supply, hydroelectric power generation, water quality improvement, groundwater management, fish and wildlife enhancement, outdoor recreation, flood control, navigation, river regulation and control, system optimization, and related uses. The Bureau's regulatory program is designed to ensure that its mission is carried out expeditiously and efficiently. _______________________________________________________________________ DOI--Minerals Management Service (MMS) ----------- PROPOSED RULE STAGE ----------- 55. VALUATION OF OIL FROM INDIAN LEASES Priority: Other Significant. Major under 5 USC 801. Legal Authority: 25 USC 396 et seq; 25 USC 2101 et seq; 30 USC 181 et seq; 30 USC 351 et seq; 30 USC 1001 et seq; 30 USC 1701 et seq CFR Citation: 30 CFR 206 Legal Deadline: None Abstract: This rule would modify the regulations that establish royalty value for oil produced from Indian leases and create a new form for collecting value and value differential data. These changes would decrease reliance on oil posted prices and make Indian oil royalty valuation more consistent with the terms of Indian leases. Statement of Need: Current oil valuation regulations rely primarily on posted prices and prices under arm's-length sales to value oil that is not sold at arm's- length. Recently, posted prices have become increasingly suspect as a fair measure of market value. This rulemaking would modify valuation regulations to place substantial reliance on the highest of crude oil futures prices, major portion prices, or gross proceeds. It would eliminate any direct reliance on posted prices. This rulemaking would also add more certainty to valuation of oil produced from Indian leases. Summary of Legal Basis: The primary legal basis for this rulemaking is the Federal Oil and Gas Royalty Management Act of 1982, as amended, which defines the Secretary of the Interior's (1) authority to implement and maintain a royalty management system for oil and gas leases on Indian lands, and (2) trust responsibility to administer Indian oil and gas resources. Alternatives: We considered a range of valuation alternatives. Among these were: (1) Making minor adjustments to the current gross proceeds valuation method using spot prices; (2) using index-based prices with fixed adjustments for production from specific geographic zones; (3) relying on some type of field pricing other than posted prices; and (4) taking oil in-kind. We chose the higher of New York Mercantile Exchange (NYMEX) futures prices, major portion prices in the field or area, or gross proceeds received by the lessee or its affiliate. We chose NYMEX-based prices as one of three measures of value because NYMEX represents the price for a widely-traded domestic crude oil, there is little likelihood that any particular participant in NYMEX trading could affect the prices, and NYMEX prices are regarded by many experts to be the best available measure of oil market value. Anticipated Cost and Benefits: We estimate compliance with this rulemaking would cost the oil and gas industry approximately $46,000 annually. Additional costs to industry and MMS would be up-front computer programming and other administrative costs associated with processing the new form. The benefits of this rulemaking would be an estimated $3.6 million increase in annual royalties collected on oil produced from Indian leases. Additional benefits would include simplification and increased [[Page 63966]] certainty of oil pricing, reduced audit efforts, and reduced valuation determinations and associated litigation. Risks: The risk of not modifying current oil valuation regulations is that Indian recipients may not receive royalties based on the highest paid price or offered for the major portion of oil produced--a common requirement in most Indian leases. These modifications ensure that the Department fulfills its trust responsibilities for administering Indian oil and gas leases under governing mineral leasing laws, treaties, and lease terms. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 60 FR 65610 12/20/95 ANPRM Comment Period End 03/19/96 NPRM 63 FR 7089 02/12/98 NPRM Comment Per63 FR 17349d 04/09/98 NPRM Comment Period End 05/13/98 Supplementary NPRM 01/00/00 Comment Period End 03/00/00 Final Action 09/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses, Governmental Jurisdictions Government Levels Affected: Tribal Agency Contact: David S. Guzy Chief Rules and Publications Staff Department of the Interior Minerals Management Service MS 3021 P.O. Box 25165 Mail Stop 3021 Denver, CO 80225-0165 Phone: 303 231-3432 Fax: 303 231-3385 Email: David.G[email protected] RIN: 1010-AC24 _______________________________________________________________________ DOI--MMS ----------- FINAL RULE STAGE ----------- 56. VALUATION OF OIL FROM FEDERAL MINERAL LEASES Priority: Other Significant Legal Authority: 30 USC 181 et seq; 30 USC 351 et seq; 30 USC 1701 et seq; 30 USC 1001 et seq; 43 USC 1301 et seq; 43 USC 1331 et seq; 43 USC 1801 et seq CFR Citation: 30 CFR 206 Legal Deadline: None Abstract: This rule would modify the valuation procedures for non-arm's-length crude oil transactions and establish a new MMS form for collecting value differential data. These changes would decrease reliance on oil posted prices and assign a value to crude oil that better reflects market value. Statement of Need: Current oil valuation regulations rely primarily on posted prices and prices under arm's-length sales to value oil that is not sold at arm's length. Recently, posted prices have become increasingly suspect as a fair measure of market value. This rulemaking would modify valuation regulations to eliminate any direct reliance on posted prices. Summary of Legal Basis: The primary legal basis for this rulemaking is the Federal Oil and Gas Royalty Management Act of 1982, as amended, which defines the Secretary of the Interior's authority to implement and maintain a royalty management system for Federal oil and gas leases. Alternatives: We considered a range of valuation alternatives such as making minor adjustments to the current gross proceeds valuation method using futures prices adjusted for location and quality, using spot prices tabulated by various publications, using the P-plus market, and taking oil in-kind. As most recently proposed, we chose to retain the concept that, for true, outright, arm's length sales, gross proceeds generally represent royalty value. For non-arm's-length transactions in the most recent proposal, we chose three different methods for three distinct geographic areas. For production other than in California, Alaska, or the Rocky Mountain region, we chose to use appropriate spot prices because they result from market surveys of actual prices paid and received in the marketplace and thus form the basis for much of the way crude oil is marketed. We originally chose New York Mercantile Exchange (NYMEX) prices because they represent the price for a widely traded crude oil and there is little likelihood that any particular trading participant could affect the prices. However, we decided on spot prices because, when adjusted for location and quality, they essentially duplicate NYMEX prices, and this eliminates the need for one set of adjustments. For non-arm's-length transactions in the geographically isolated California and Alaska markets, we chose Alaska North Slope (ANS) spot prices. ANS spot prices represent large volumes of oil delivered into the California market, and many experts regard ANS spot prices as the best indicator of value for California and Alaska production. Finally, due to the lack of a reliable spot price in the Rocky Mountain region, we chose a series of benchmarks relying on the lessee's arm's-length sales and purchases, alternative spot prices, or a value determination by the Director. Anticipated Cost and Benefits: We estimate that compliance with this rulemaking would cost the oil and gas industry approximately $161,000 annually. The benefits of this rulemaking would be an estimated $66 million increase in annual royalties collected on oil produced from Federal leases. Additional benefits would include simplification and increased certainty of oil pricing reduced audit efforts, and reduced valuation determinations. These changes should also reduce litigation. Risks: The risk of not modifying current oil valuation regulations is that royalty recipients such as State and local governments and the U.S. Treasury would not receive royalties based on the true market value of oil produced from Federal leases. Timetable: _______________________________________________________________________ Action DFR Cite _______________________________________________________________________ ANPRM 60 FR 65610 12/20/95 ANPRM Comment Period End 03/19/96 NPRM 62 FR 3742 01/24/97 Comment Period E62 FR 7189 02/18/97 NPRM Comment Per62 FR 19966d 02/24/97 NPRM Comment Period End 03/25/97 Supplemental NPR62 FR 36030 07/03/97 Comment Period End 08/04/97 [[Page 63967]] NPRM Comment Per62 FR 49460d 09/22/97 Comment Period Extended 10/23/97 Comment Period E62 FR 55198 10/23/97 Supplementary NP63 FR 6113 02/06/98 Comment Period E63 FR 14057 03/24/98 Comment Period E63 FR 36868 07/08/98 Supplementary Pr63 FR 38355 07/16/98 Comment Period E63 FR 40073 07/27/98 Comment Period R64 FR 12267 03/12/99 Comment Period E64 FR 17990 04/13/99 Final Action 09/00/00 Regulatory Flexibility Analysis Required: Yes Small Entities Affected: Businesses, Governmental Jurisdictions Government Levels Affected: State Agency Contact: David S. Guzy Chief Rules and Publications Staff Department of the Interior Minerals Management Service MS 3021 P.O. Box 25165 Mail Stop 3021 Denver, CO 80225-0165 Phone: 303 231-3432 Fax: 303 231-3385 Email: David.G