        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 60
        [EPA-HQ-OAR-2010-0505; FRL-9924-29-OAR]
        RIN 2060-AS49
        Oil and Natural Gas Sector: Definitions of Low Pressure Gas Well and Storage Vessel

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:
          On July 17, 2014, the Environmental Protection Agency (EPA) published proposed amendments to the new source performance standards (NSPS) for the Oil and Natural Gas Sector. One of the issues addressed in the proposed amendments was the EPA's proposed definition of “low pressure gas well.” A petitioner's timely submitted comment on the proposed amendments concerning the definition was, inadvertently, not made part of the record in the rulemaking docket and was, therefore, not available to be considered by the EPA when the agency finalized the definition of “low pressure gas well” in its December 19, 2014, final amendments to the NSPS. To correct the above mentioned procedural defect, the EPA is re-proposing its definition of “low pressure gas well” for notice and comment. The EPA is also soliciting comment on certain issues raised in the missed comment.
          We are also proposing to amend the NSPS to remove provisions concerning storage vessels connected or installed in parallel and to revise the definition of “storage vessel”. The EPA is granting reconsideration of the issue.

          DATES:

            Comments. Comments must be received on or before April 22, 2015.

            Public Hearing. If the EPA holds a public hearing, the EPA will keep the record of the hearing open for 30 days after completion of the hearing to provide an opportunity for submission of rebuttal and supplementary information. If requested by March 30, 2015, we will hold a public hearing on April 7, 2015, from 1:00 p.m. (Eastern Standard Time) to 5:00 p.m. (Eastern Standard Time) at the U.S. Environmental Protection Agency building located at 109 T.W. Alexander Drive, Research Triangle Park, NC 27711. Please contact Ms. Virginia Hunt of the Sector Policies and Programs Division (E143-01), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0832; to request a hearing, register to speak at the hearing or to inquire as to whether or not a hearing will be held. The last day to pre-register in advance to speak at the hearing will be April 6, 2015. Additionally, requests to speak will be taken the day of the hearing at the hearing registration desk, although preferences on speaking times may not be able to be fulfilled. If you require the service of a translator or special accommodations such as audio description, we ask that you pre-register for the hearing, as we may not be able to arrange such accommodations without advance notice. The hearing will provide interested parties the opportunity to present data, views or arguments concerning the proposed action. The EPA will make every effort to accommodate all speakers who arrive and register. Because this hearing is being held at a U.S. government facility, individuals planning to attend the hearing should be prepared to show valid picture identification to the security staff in order to gain access to the meeting room. Please note that the REAL ID Act, passed by Congress in 2005, established new requirements for entering federal facilities. If your driver's license is issued by Alaska, American Samoa, Arizona, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Montana, New York, Oklahoma or the state of Washington, you must present an additional form of identification to enter the federal building. Acceptable alternative forms of identification include: Federal employee badges, passports, enhanced driver's licenses and military identification cards. In addition, you will need to obtain a property pass for any personal belongings you bring with you. Upon leaving the building, you will be required to return this property pass to the security desk. No large signs will be allowed in the building, cameras may only be used outside of the building and demonstrations will not be allowed on federal property for security reasons. The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing. Verbatim transcripts of the hearing and written statements will be included in the docket for the rulemaking. The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearing to run either ahead of schedule or behind schedule. Again, a hearing will not be held on this rulemaking unless requested. A hearing needs to be requested by March 30, 2015. Please contact Ms. Virginia Hunt of the Sector Policies and Programs Division (E143-01), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0832.

          ADDRESSES:
          Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2010-0505, by one of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.
          • Email: a-and-r-docket@epa.gov. Include Docket ID No. EPA HQ-OAR-2010-0505 in the subject line of the message.
          • Fax: (202) 566-9744. Attention Docket ID No. EPA HQ-OAR 2010-0505.
          • Mail: Environmental Protection Agency, EPA Docket Center (EPA/DC), Mailcode 28221T, Attention Docket ID No. OAR-2010-0505, 1200 Pennsylvania Ave. NW., Washington, DC 20460.
          • Hand/Courier Delivery: EPA Docket Center, Room 3334, EPA WJC West Building, 1301 Constitution Avenue NW., Washington, DC 20004. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

            Instructions. Direct your comments to Docket ID Number EPA-HQ-OAR-2010-0505. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. (See section I.C. below for instructions on submitting information claimed as CBI.) The www.regulations.gov Web site is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you submit an electronic comment through www.regulations.gov, the EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. If you send an email comment directly to the EPA without going through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. Electronic files should avoid the use of special characters or any form of encryption and be free of any defects or viruses. For additional information about the EPA's public docket, visit the EPA Docket Center homepage at: www.epa.gov/epahome/dockets.htm. The petitioners need not resubmit their previous comment, which will be considered before the EPA takes final action on today's re-proposal. However, the EPA welcomes additional comments and/or information the petitioners may wish to provide.

            Docket. The EPA has established a docket for this rulemaking under Docket ID No. EPA-HQ-OAR-2010-0505. All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the EPA Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA Docket Center is (202) 566-1742.

          FOR FURTHER INFORMATION CONTACT:

          Mr. Bruce Moore, Sector Policies and Programs Division (E143-05), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telephone number: (919) 541-5460; facsimile number: (919) 685-3200; email address: moore.bruce@epa.gov.

        SUPPLEMENTARY INFORMATION:
        I. General Information
        A. Does this reconsideration action apply to me?
        Categories and entities potentially affected by today's action include:

            Category
            NAICS code 1

            Examples of regulated entities

            Industry
            211111
            Crude Petroleum and Natural Gas Extraction.

            211112
            Natural Gas Extraction.

            221210
            Natural Gas Distribution.

            486110
            Pipeline Distribution of Crude Oil.

            486210
            Pipeline Transportation of Natural Gas.

            Federal government
            Not affected.

            State/local/tribal government
            Not affected.

            1 North American Industry Classification System.

        This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult either the air permitting authority for the entity or your EPA regional representative as listed in 40 CFR 60.4 (General Provisions).
        B. How do I obtain a copy of this document and other related information?

        In addition to being available in the docket, an electronic copy of this action is available on the World Wide Web (WWW). Following signature by the EPA Administrator, a copy of this proposed action will be posted at the following address: http://www.epa.gov/airquality/oilandgas/actions.html.

        C. What should I consider as I prepare my comments for the EPA?
        We seek comment only on the aspects of the final NSPS for the Oil and Natural Gas Sector specifically identified in this proposed rule. We are not opening for reconsideration any other provisions of the NSPS at this time.
        Do not submit CBI to the EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI contained on a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comments that includes information claimed as CBI, you must submit a copy of the comments that does not contain the information claimed as CBI for inclusion in the public docket. If you submit a CD-ROM or disk that does not contain CBI, clearly mark the outside of the disk or CD-ROM as not containing CBI. Information not marked as CBI will be included in the public docket and the EPA's electronic public docket without prior notice. Information marked as CBI will not be disclosed except in accordance with the procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the following address: OAQPS Document Control Officer (C404-02), OAQPS, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina, 27711, Attention Docket ID No. EPA-HQ-OAR-2010-0505.
        II. Background
        A. Low Pressure Gas Wells

        On August 23, 2011 (76 FR 52758), the EPA proposed the Oil and Natural Gas Sector NSPS (40 CFR part 60, subpart OOOO). Among the elements of the proposed rule were provisions for reduced emission completion (REC), also known as “green completion” of hydraulically fractured gas wells. In the proposal, the EPA solicited comment on situations where conducting an REC would be infeasible. Several commenters highlighted technical issues that prevent the implementation of an REC on what they referred to as “low pressure” gas wells because of the lack of the necessary reservoir pressure to flow at rates appropriate for the transportation of solids and liquids from a hydraulically fractured gas well completion against additional back-pressure which would be caused by the REC equipment. Based on our analysis of the public comments received, we determined that there are certain wells where an REC is infeasible because of the characteristics of the reservoir and the well depth that will not allow the flowback to overcome the gathering system pressure due to the additional back pressure imposed by the REC surface equipment. On August 16, 2012, the EPA published the final NSPS (see 77 FR 49490). Based on comments received in response to our solicitation at proposal, we provided at § 60.5375(f) of the 2012 final NSPS that “low pressure gas wells” (i.e., those wells for which an REC would not be feasible because of a combination of well depth, reservoir pressure and flow line pressure) would not be required to meet the requirements for recovery of gases and liquids required under § 60.5375(a), except as provided in § 60.5375(f)(2) which subjects wildcat, delineation and low pressure gas wells to requirements for combustion of flowback emissions and to the general duty to safely maximize resource recovery and minimize releases to the atmosphere required under § 60.5375(a)(4). Under the NSPS, low pressure wells are treated the same as exploratory and delineation wells (i.e., they are not required to perform an REC). We also added a definition of “low pressure gas well” in the final rule that is based on a mathematical formula that takes into account a well's depth, reservoir pressure and flow line pressure. Section 60.5430 defines low pressure gas well as “a well with reservoir pressure and vertical well depth such that 0.445 times the reservoir pressure (in psia) minus 0.038 times the vertical well depth (in feet) minus 67.578 psia is less than the flow line pressure at the sales meter.”
        Following publication of the 2012 final NSPS, a group of petitioners, led by the Independent Petroleum Association of America (IPAA), representing independent oil and natural gas owners and operators, submitted a joint petition for administrative reconsideration of the 2012 NSPS. The petitioners questioned the technical merits of the low pressure well definition and asserted that the public had not had an opportunity to comment on the definition because it was added in the final rule. The petitioners expressed concern that the formula adopted in the 2012 NSPS was based on “questionable assumptions” and “sparse data” and will “exclude from its scope many gas wells drilled in formations that historically have been recognized as `low pressure.'” In the view of the petitioners, “the 2012 definition has the potential to directly affect many smaller producers, who are less likely to be able to bear the costs of implementing costly RECs.” 1
           However, the administrative petition did not identify which assumptions were questionable and why, or what additional data the petitioners consider necessary to support the EPA's “low pressure gas well” definition.

            1 Letter from James D. Elliott, Spilman, Thomas & Battle PLLC, to Lisa P. Jackson, EPA Administrator, October 15, 2012; Petition for Administrative Reconsideration of Final Rule “Oil and Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews,” 77 FR 49490 (August 16, 2012).

        On March 24, 2014, the petitioners submitted to the EPA a suggested alternative definition 2
           for consideration. The petitioners' definition is based on the fresh water hydrostatic gradient of 0.433 pounds per square inch per foot (psi/ft). The petitioners assert that this approach is straightforward and has been recognized for many years in the oil and natural gas industry and by governmental agencies and professional organizations. As expressed in the paper submitted by the petitioners, the alternative definition for consideration by the EPA, as stated by the petitioners, would be “a well where the field pressure is less than 0.433 times the vertical depth of the deepest target reservoir and the flow-back period will be less than three days in duration.”

            2 Email from James D. Elliott, Spilman, Thomas & Battle PLLC, to Bruce Moore, EPA, March 24, 2014.

        On July 17, 2014, the EPA proposed clarifying amendments to the gas well completion provisions of the NSPS. In the July proposal, we expressed concern that the IPAA alternative definition is too simplistic and may not adequately account for the parameters that must be considered when determining whether an REC would be feasible for a given hydraulically fractured gas well. We expressed disagreement with the petitioners' assertion that the EPA definition is too complicated and that it would pose difficulty or hardship for smaller operators. However, we agreed with the petitioners that the public should have been provided an opportunity to comment on the 2012 definition of “low pressure gas well,” and we re-proposed the 2012 definition for notice and comment in the July 17, 2014, proposal. In addition, we solicited comment on the alternative definition suggested by the petitioners.
        On August 18, 2014, prior to the close of the public comment period for the July 17, 2014, proposal, the IPAA, on behalf of the independent oil and natural gas owner and operator petitioners, submitted a comment to the EPA via the email address to the Air and Radiation Docket provided in the proposed rule. This timely submitted comment addressed the following: (1) Clarification that the petitioners' primary concern is that the EPA's definition would require REC to be performed on marginally cost-effective wells, and not that the calculation required by the EPA's definition would impose a hardship; (2) whether it was the petitioners' burden to justify the assumptions on which the EPA's definition was based; (3) accuracy of the Turner equation used in the development of the EPA's definition; (4) technical derivation of the petitioners' definition; and (5) relationship between low pressure gas wells and EPA's stages of flowback as proposed in the July 17, 2014, proposal.
        The EPA published final amendments in the Federal Register at 79 FR 79018 on December 31, 2014, which finalized the definition of “low pressure gas well” unchanged from the 2012 definition. Subsequent to the December 31, 2014, publication of the final amendments, the EPA became aware that the comment submitted by the IPAA was not made part of the record in the docket and, thus, was not available to be considered by the EPA in its decision-making process prior to finalizing the amendments.
        B. Storage Vessels Connected in Parallel

        In the December 31, 2014, final rule, the EPA had finalized amendments to the NSPS to address, among other issues, the affected facility status of storage vessel affected facilities that are removed from service and storage vessels being returned to service. The final action included amendments related to storage vessels “connected in parallel” or “installed in parallel.” As we explained in the final rule preamble (see 79 FR 79027, December 31, 2014), “Although we believe it is an unlikely occurrence, we note that, when two or more storage vessels receive liquids in parallel, the total throughput is shared between or among the parallel vessels and, in turn, this causes the PTE of each vessel to be a fraction of the total PTE.” To address such isolated occurrences where storage vessels are installed or connected to reduce PTE and, therefore, avoid being subject to subpart OOOO, we amended the NSPS to address situations in which two or more storage vessels could be installed or connected in parallel which could, in some cases, lower the PTE of the individual storage vessels to levels below the 6 tons per year (tpy) applicability threshold provided in § 60.5365(e). Specifically, we amended § 60.5365(e)(4) to provide that a storage vessel that is being placed into service, and is connected in parallel with a storage vessel affected facility, is immediately subject to the same requirements as the affected facility with which it is being connected in parallel. We also amended the definitions for “returned to service” and “storage vessel” in § 60.5430 to provide that two or more storage vessels connected in parallel are considered equivalent to a single storage vessel with throughput equal to the total throughput of the storage vessels connected in parallel.
        Following publication of the December 2014 final rule, we became aware that the terms “connected in parallel” and “installed in parallel” inadvertently include in storage vessels beyond those we attempted to address as described above. On February 19, 2015, the Gas Processors Association (GPA) submitted a petition for administrative reconsideration of the December 31, 2014, amendments. The GPA asserted that “it is quite common for multiple storage vessels to be situated next to each other and connected in parallel. Sometimes the storage vessels are operated in parallel, sometimes they are operated in series, and sometimes they are operated one-at-a-time with the connecting valves closed.” The GPA further asserted that this configuration has existed for decades and that “this language potentially has large impacts to how our members evaluate affected facility status.”
        For the reasons discussed above, we are proposing to remove the regulatory provisions relative to storage vessels “installed in parallel” or “connected in parallel.” Instead, we solicit comment on other approaches to help avoid or discourage installation or operation of storage vessels that would unnecessarily reduce the potential to emit (PTE) of a single storage vessel.
        III. Today's Action
        In this action, the EPA is re-proposing for notice and comment the same definition of “low pressure gas well” that was finalized in 2012 and re-proposed in the July 17, 2014, proposal. In addition, as in the 2014 proposal, we are soliciting comment on the petitioners' alternative definition as presented above. We note that the EPA has now made the comment submitted by the IPAA on August 18, 2014, part of the record in the docket; therefore, it is not necessary for the IPAA to resubmit this comment in response to this proposed rule. However, the EPA welcomes the submittal of any additional comments by the petitioners and other interested parties. We are in the process of evaluating the IPAA comments. In this proposal, we solicit further comments on both the EPA proposed definition and on the IPAA alternative definition. We seek comment on (1) gas wells that are not considered “low pressure gas wells” based on the re-proposed EPA definition, but for which RECs are technically infeasible, and the specific well characteristics or other technical factors that make RECs technically infeasible; (2) gas wells that are considered “low pressure gas wells” based on the IPAA alternative definition, but for which RECs could be performed; and (3) specific well parameters or drilling techniques that should be considered in determining whether an REC would be technically feasible and how these factors could be used to define “low pressure gas well.”
        With regard to storage vessels, in response to the GPA petition and in light of the considerations discussed above, we are proposing to amend the NSPS provisions relative to storage vessels “installed in parallel” or “connected in parallel.” Specifically, we are proposing to amend § 60.5365(e) to remove language related to storage vessels “installed in parallel” or “connected in parallel.” We are also proposing to amend the definitions of “returned to service” and “storage vessel” in § 60.5430 to remove language pertaining to storage vessels connected in parallel. We solicit comment on other approaches to help avoid or discourage installations or operations of storage vessels that would unnecessarily reduce the PTE of a single storage vessel.
        IV. Statutory and Executive Order Reviews

        Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

        A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review
        This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.
        B. Paperwork Reduction Act (PRA)
        This action does not impose an information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0673. This action does not change the information collection requirements previously finalized and, as a result, does not impose any additional burden on industry.
        C. Regulatory Flexibility Act (RFA)
        I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This action is a reconsideration of an existing rule and imposes no new impacts or costs.
        D. Unfunded Mandates Reform Act (UMRA)
        This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.
        E. Executive Order 13132: Federalism
        This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
        F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

        This action does not have tribal implications as specified in Executive Order 13175. This action is a reconsideration of an existing rule and imposes no new impacts or costs. Thus, Executive Order 13175 does not apply to this action.
        G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks
        The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.
        H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
        This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
        I. National Technology Transfer and Advancement Act (NTTAA)
        This rulemaking does not involve technical standards.
        J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations
        The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations because it does not affect the level of protection provided to human health or the environment. This action is a reconsideration of an existing rule and imposes no new impacts or costs.

          List of Subjects in 40 CFR Part 60
          Administrative practice and procedure, Air pollution control, Environmental protection, Intergovernmental relations, Reporting and recordkeeping.

          Dated: March 17, 2015.
          Gina McCarthy,
          Administrator.

        For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be amended as follows:

          PART 60—STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

        1. The authority citation for part 60 continues to read as follows:

          Authority:
          42 U.S.C. 7401, et seq.

          Subpart OOOO—Standards of Performance for Crude Oil and Natural Gas Production, Transmission and Distribution

        2. Section 60.5365 is amended by revising paragraph (e) to read as follows:

          § 60.5365
          Am I subject to this subpart?

          (e) Each storage vessel affected facility, which is a single storage vessel located in the oil and natural gas production segment, natural gas processing segment or natural gas transmission and storage segment, and has the potential for VOC emissions equal to or greater than 6 tpy as determined according to this section by October 15, 2013 for Group 1 storage vessels and by April 15, 2014, or 30 days after startup (whichever is later) for Group 2 storage vessels, except as provided in paragraphs (e)(1) through (4) of this section. The potential for VOC emissions must be calculated using a generally accepted model or calculation methodology, based on the maximum average daily throughput determined for a 30-day period of production prior to the applicable emission determination deadline specified in this section. The determination may take into account requirements under a legally and practically enforceable limit in an operating permit or other requirement established under a Federal, State, local or tribal authority.
          (1) For each new, modified or reconstructed storage vessel receiving liquids pursuant to the standards for gas well affected facilities in § 60.5375, including wells subject to § 60.5375(f), you must determine the potential for VOC emissions within 30 days after startup of production.
          (2) A storage vessel affected facility that subsequently has its potential for VOC emissions decrease to less than 6 tpy shall remain an affected facility under this subpart.
          (3) For storage vessels not subject to a legally and practically enforceable limit in an operating permit or other requirement established under Federal, state, local or tribal authority, any vapor from the storage vessel that is recovered and routed to a process through a VRU designed and operated as specified in this section is not required to be included in the determination of VOC potential to emit for purposes of determining affected facility status, provided you comply with the requirements in paragraphs (e)(3)(i) through (iv) of this section.
          (i) You meet the cover requirements specified in § 60.5411(b).
          (ii) You meet the closed vent system requirements specified in § 60.5411(c).
          (iii) You maintain records that document compliance with paragraphs (e)(3)(i) and (ii) of this section.
          (iv) In the event of removal of apparatus that recovers and routes vapor to a process, or operation that is inconsistent with the conditions specified in paragraphs (e)(3)(i) and (ii) of this section, you must determine the storage vessel's potential for VOC emissions according to this section within 30 days of such removal or operation.
          (4) For each new, reconstructed, or modified storage vessel with startup, startup of production, or which is returned to service, affected facility status is determined as follows: If a storage vessel is reconnected to the original source of liquids or is used to replace any storage vessel affected facility, it is a storage vessel affected facility subject to the same requirements as before being removed from service, or applicable to the storage vessel affected facility being replaced immediately upon startup, startup of production, or return to service.

        3. Section 60.5430 is amended by revising the definitions of “Returned to Service” and “Storage Vessel” to read as follows:

          § 60.5430
          What definitions apply to this subpart?

            Returned to service means that a Group 1 or Group 2 storage vessel affected facility that was removed from service has been:
          (1) Reconnected to the original source of liquids or has been used to replace any storage vessel affected facility; or
          (2) Installed in any location covered by this subpart and introduced with crude oil, condensate, intermediate hydrocarbon liquids or produced water.

            Storage vessel means a tank or other vessel that contains an accumulation of crude oil, condensate, intermediate hydrocarbon liquids, or produced water, and that is constructed primarily of nonearthen materials (such as wood, concrete, steel, fiberglass, or plastic) which provide structural support. A well completion vessel that receives recovered liquids from a well after startup of production following flowback for a period which exceeds 60 days is considered a storage vessel under this subpart. A tank or other vessel shall not be considered a storage vessel if it has been removed from service in accordance with the requirements of § 60.5395(f) until such time as such tank or other vessel has been returned to service. For the purposes of this subpart, the following are not considered storage vessels:

          (1) Vessels that are skid-mounted or permanently attached to something that is mobile (such as trucks, railcars, barges or ships), and are intended to be located at a site for less than 180 consecutive days. If you do not keep or are not able to produce records, as required by § 60.5420(c)(5)(iv), showing that the vessel has been located at a site for less than 180 consecutive days, the vessel described herein is considered to be a storage vessel from the date the original vessel was first located at the site. This exclusion does not apply to a well completion vessel as defined in this section.
          (2) Process vessels such as surge control vessels, bottoms receivers or knockout vessels.
          (3) Pressure vessels designed to operate in excess of 204.9 kilopascals and without emissions to the atmosphere.

      [FR Doc. 2015-06593 Filed 3-20-15; 8:45 am]
      BILLING CODE 6560-50-P


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 600
        [Docket No. 041029298-5084-02; I.D. 052004A]
        RIN 0648-AS38
        Magnuson-Stevens   Act   Provisions;  Fishing  Capacity  Reduction Program;  Pacific  Coast Groundfish Fishery;  California,  Washington,  and Oregon Fisheries for  Coastal  Dungeness Crab and Pink Shrimp; Industry Fee System for Fishing Capacity Reduction Loan

          AGENCY:
          National   Marine   Fisheries   Service   (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule.

          SUMMARY:
          NMFS  re-proposes  regulations  to implement  an industry  fee  system  for  repaying a $35,662,471 Federal loan.  The  loan financed most of the cost of  a  fishing  capacity reduction program in the Pacific Coast groundfish fishery. The industry  fee  system imposes fees on the  value  of  future  groundfish  landed in the trawl portion  (excluding whiting catcher-processors) of the Pacific  Coast  groundfish  fishery.  It also  imposes  fees on coastal Dungeness crab and pink shrimp landed in the California, Washington, and Oregon fisheries for coastal Dungeness crab and pink  shrimp. This  action's  intent  is  to  implement  the  industry  fee system.

          DATES:
          Written  comments  on this proposed rule must be received by May 9, 2005.

          ADDRESSES:
          You   may  submit  comments  by  any  of   the following methods:
          • E-mail: 0648-AS38@noaa.gov. Include in the subject line the following identifier: Pacific Coast Groundfish Buyback RIN 0648-AS38. E-mail comments,  with  or  without  attachments,  are limited to 5 megabytes.
          • Federal e-Rulemaking Portal: http://www.regulations.gov.
          • Mail:   Michael   L.  Grable,  Chief,  Financial  Services Division, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910-3282.
          • Fax: (301) 713-1306.

          Comments involving the burden-hour  estimates  or  other  aspects of the collection-of-information  requirements  contained  in  this proposed  rule should be submitted in writing to Michael L. Grable, at the  above address, and to David Rostker, Office of Management and Budget (OMB), by  e-mail  at David_Rostker@omb.eop.gov or      by     fax     to 202-395-7285.
          Copies  of  the  Environmental  Assessment,  Regulatory  Impact   Review (EA/RIR)  and  Initial  Regulatory  Flexibility Analysis (IRFA) for the fee collection system may be obtained from  Michael  L.  Grable,  at  the above address.

          FOR  FURTHER  INFORMATION  CONTACT:
          Michael L. Grable, (301) 713-2390.

        SUPPLEMENTARY INFORMATION:
        I. Background
        Section  312(b)-(e)  of the Magnuson-Stevens  Fishery  Conservation  and Management Act (16 U.S.C.  1861a(b)  through  (e))  (Magnuson-Stevens  Act) generally  authorized  fishing  capacity reduction programs. In particular, section 312(d) of the Magnuson-Stevens  Act authorized industry fee systems for repaying fishing capacity reduction loans  which finance program costs.
        Subpart  L  of  50  CFR  part  600  contains  the framework  regulations (framework regulations) generally implementing sections  312(b)-(e)  of the Magnuson-Stevens Act.
        Sections  1111 and 1112 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1279f and 1279g),  generally  authorized  fishing capacity reduction loans.
        Section 212 of Division B, Title II, of  Public Law 108-7 (section 212) specifically authorized a $46 million program (groundfish program) for that portion of the limited entry trawl fishery  under  the  Pacific  Coast Groundfish   Fishery   Management   Plan  whose  permits,  excluding  those registered to whiting catcher-processors,  were  endorsed  for  trawl  gear operation (reduction fishery). Section 212 also authorized a fee system for repaying  the  reduction  loan partially financing the groundfish program's cost. The fee system includes  both the reduction fishery and the fisheries for California, Washington, and  Oregon  coastal  Dungeness  crab  and pink shrimp  (fee-share  fisheries).  Section 501(c) of Division N, Title V,  of Public  Law  108-7  (section  501(c))  appropriated  $10  million  to partially  fund the groundfish program's  cost.  Public  Law  107-206 authorized a  reduction  loan  with a ceiling of $36 million to finance the groundfish program's cost.

        Section 212 required NMFS to  implement  the  groundfish  program  by  a public  notice  in  the Federal Register. NMFS published the groundfish program's initial  public  notice  on May 28, 2003 (68 FR 31653) and final notice on July 18, 2003 (68 FR 42613).  Background information on the groundfish program are published in these notices.

        The  groundfish  program's maximum cost was $46 million,  of  which  $10 million was funded by an appropriation and $36 million by a reduction loan. Voluntary participants  in the groundfish program relinquished, among other things, their fishing permits  in  the  reduction  fishery,  their  fishing permits or licenses in the fee- share fisheries, their fish catch histories in both the reduction and fee-share fisheries, and their vessels' worldwide fishing  privileges.  These  relinquishments  were  in return for reduction payments whose amounts the participants' reduction bids determined.
        On  July  18,  2003,  NMFS  invited  reduction bids from  the  reduction fishery's permit holders. The bidding period  opened on August 4, 2003, and closed  on  August  29,  2003. NMFS scored each bid's  amount  against  the bidder's past ex-vessel revenues  and,  in  a reverse auction, accepted the bids  whose  amounts  were the lowest percentages  of  the  revenues.  This created  reduction contracts  whose  performance  was  subject  only  to  a successful referendum about the fee system required to repay the reduction loan.
        Bid offers totaled $59,786,471. NMFS accepted bids totaling $45,662,471. The next lowest  scoring  bid  would have exceeded the groundfish program's maximum cost. The accepted bids  involved 91 fishing vessels as well as 239 fishing permits and licenses (91 in  the  reduction  fishery,  121  in  the fee-share fisheries, and 27 other Federal permits).
        In  accordance  with the section 212 formula, NMFS allocated portions of the $35,662,471 reduction  loan amount to the reduction fishery and to each of the six fee share fisheries, as follows:
        1. Reduction fishery, $28,428,719; and
        2. Fee-share fisheries:
        a. California coastal Dungeness crab fishery, $2,334,334;
        b. California pink shrimp fishery, $674,202;
        c. Oregon coastal Dungeness crab fishery, $1,367,545;
        d. Oregon pink shrimp fishery, $2,228,845;
        e. Washington coastal Dungeness crab fishery, $369,426; and
        f. Washington pink shrimp fishery, $259,400.
        Each of these portions became  reduction  loan  subamounts  repayable by fees from each of the seven subamount fisheries involved.
        NMFS  next held a referendum on the fee system. The reduction  contracts would have  become void unless the majority of votes cast in the referendum approved the  fee  system.  On  September  30, 2003, NMFS mailed ballots to referendum voters in the reduction fishery and in each of the six fee-share fisheries. The voting period opened on October  15,  2003,  and  closed  on October  29, 2003. NMFS received 1,105 responsive votes. In accordance with the section  212  formula,  NMFS  weighted the votes from each of the seven fisheries. Over 85 percent of the weighted  votes  approved the fee system. This successful referendum result removed the only condition  precedent  to reduction contract performance.
        On   November   4,   2003,  NMFS  published  another Federal Register document (68  FR  62435)  advising the public that NMFS would, beginning on December 4, 2003, tender the  groundfish  program's  reduction payments to the 91 accepted bidders. On December 4, 2003, NMFS required all accepted bidders to permanently stop all further fishing with the reduction vessels and permits. Subsequently, NMFS:
        1.   Disbursed   $45,662,471   in  reduction  payments  to  91  accepted bidders;
        2. Revoked the relinquished Federal permits;
        3. Advised California, Oregon, and  Washington  about  the  relinquished state permits or licenses;
        4. Arranged with the National Vessel Documentation Center for revocation of the reduction vessels' fishery trade endorsements; and
        5.  Notified  the U.S. Maritime Administration to restrict placement  of the reduction vessels  under  foreign registry or their operation under the authority of foreign countries.
        On November 16, 2004, NMFS published  a Federal Registerdocument (69 FR 67100) proposing regulations to implement  an  industry fee system for repaying the reduction loan (proposed fee regulations).
        Due  to  the  extensive  changes requested by the public on the original proposed fee regulations, NMFS  modified  and  is  now re-proposing the fee system.
        II. Summary of Comments and Responses

          Comment   1: One   comment   stated  that   the   term “reduction fishery” as defined in the proposed  fee regulations may be ambiguous. This comment noted that the reduction fishery  fleet  may fish,  under both a limited entry trip limit and an open access trip limit, for all  groundfish  species.  The  comment asked if the fee applies to all reduction fishery landings regardless  of  whether  the  landed  fish  were caught  under  the  limited  entry  trip  limit  or  the  open  access trip limit.

          Response: The fee applies to all groundfish species in the reduction  fishery regardless of the nature of the trip limits under  which the species were caught.
        Under the  proposed  fee  regulations'  definition  of  “reduction fishery”, the reduction fishery species are “all  species in... the limited entry trawl fishery under the Federal Pacific Coast  Groundfish Fishery  Management  Plan that is conducted under permits, excluding  those registered to whiting catcher-processors, which are endorsed for trawl gear operation.”
        The fee must be paid for all species which are:
        1. Reduction fishery species;
        2. Caught under permits  which  are  endorsed  for  trawl gear operation (except permits registered to whiting catcher-processors); and,
        3.  Caught  by  limited  access  permit holders, regardless  of  whether species are caught under limited access or open access permits.

          Comment  2: One  comment  concerned  the  proposed  fee regulations'  failure to exercise a section  212  option  under  which  the States    of   California,    Oregon,    and    Washington    would    have “collected” the fees. The proposed fee regulations partly based this on some  of  the states' authority to “collect” these fees expiring in a few years  while  fee  collection itself will continue for 30 years. The commenter believed this was  insufficient  justification for not exercising  this  option  because state statutory provisions  are  commonly extended beyond their “sunset”  period  if  the  provisions are still being used.

          Response: NMFS continues to believe that exercising  the statutory option for the states  to  “collect”  the fees is not feasible. NMFS reached this conclusion because, among other reasons:
        1. The state systems sometimes:
        a. Assess and collect fees based on pounds rather than on dollars,
        b. Do not assess or collect fees at the point of fish sale, and/or
        c. Involve quarterly fee disbursements;
        2.   One   state's   legislation   regarding   this   option  authorizes participation  of  a state agency different from the one administering  the existing state system (and might require amendment);
        3. One state's legislation  regarding  this  option expires in less than two years;
        4. All states indicated that the funding and staffing  required for this option  during  the reduction loan's 30-year term would be problematic  for them; and

        5.  The  states'   collection   systems   are  dissimilar  and,  without significant   modification,  might  not  promote  efficient   and   uniform groundfish program fee collection.

          Comment  3: One  comment  stated that interest should not have accrued on reduction loan principal between  the  time  of  the loan's disbursement and the industry fee system's implementation because  the fish sellers  had  no  opportunity  to  pay  the  fee  during  this interim. The commenter  stated  that  NMFS'  Financial  Services  Division had  verbally advised  him  that  the  interest  would  not  accrue during  this  interim period.

          Response: The Financial Services  Division neither advised nor had the authority to advise this commenter that  the interest would not accrue during this interim period.

          Comment 4: One comment suggested that  NMFS  use the state vessel identification number as the identifier to track vessels  delivering fee fish to ensure the proper fees are being collected.

          Response: NMFS does not now propose any particular  means of identifying  or  tracking  vessels  delivering  fee  fish. NMFS will use whatever  available  vessel  identifiers  best allow, in the  circumstances involved, NMFS to match fish sellers with fish buyers and, where necessary, audit fee payments, collection, deposits, and disbursements.

          Comment 5: One comment requested  NMFS  to annually notify all  fish  sellers  and  fish  buyers  of  the fee rate applicable  to  the reduction  fishery  and  to  each  of the fee-share  fisheries  during  the succeeding year.

          Response: NMFS does  not  believe annual notifications are necessary.  Instead, in accordance with the  framework regulations' section 600.1013(d), NMFS will, at least 30 days before  the  effective date of any fee  or  of  any fee rate change, publish a Federal  Registerdocument establishing  the  date  from  and after which the fee or fee rate change is effective. NMFS will at the same  time  and  by  U.S.  mail  also individually  notify  each affected fish seller and fish buyer of whom NMFS has notice.

          Comment 6: One comment questioned the requirement for each fish buyer to maintain  a  segregated  account  for  the  sole  purpose  of depositing and disbursing collected fee revenue.

          Response: Because the groundfish program will involve many smaller fish buyers and because the amount of fees each collects will often be  relatively  smaller  than in other fishing capacity reduction programs, NMFS has modified the proposed rule to remove the requirement to maintain a segregated account, as long as they maintain separate subaccounts for these fees within operating accounts  which  may also be used for other purposes. The  subaccounts  must include provision to  separately  account  for  fees collected as a result of fish bought from the reduction fishery and/or from each  of  the  fee-share  fisheries.  NMFS  now  proposes  to  require  all groundfish  program  fish  buyers  to  establish  and  maintain  accounting policies which  will allow NMFS, where necessary, to accurately audit their fee collection, deposit, and disbursement activities.

          Comment  7: One  comment  stated that the requirement for collected  fee  revenue  to be deposited weekly  would  be  burdensome  and instead suggested monthly deposits as an alternative.

          Response: Because the fee amounts which groundfish program fish buyers collect will often  be relatively smaller than in other fishing capacity reduction programs, NMFS agrees with this comment and now proposes monthly, rather than weekly, fee deposits.

          Comment 8: One comment  requested  that  fish  buyers  be permitted to disburse collected fees to NMFS up to 14 days after the end of each month  rather than being required to do so on the last business day of each month.

          Response: Because so many smaller fee collections will be involved,  NMFS  agrees  with this  comment  and  now  proposes  to  permit disbursement up to 14 days  after  the end of each month rather than on the last  business  day of each month. Moreover,  to  further  reduce  the  fee disbursement burden  on  small  fish  buyers, NMFS now also proposes not to require  any  disbursement  to  NMFS of deposited  fees  until  either  the deposited fees total at least $100  or  the 14th day after the end of  the  calendar year in which the fees were  deposited,  whichever  comes first.

          Comment 9: One comment stated that annual reporting is not needed, since  monthly settlement sheets are required that provide the same information.

          Response: NMFS  agrees with this comment and now proposes to dispense with annual reporting.  NMFS, however, will monitor this and if subsequent experience demonstrates a  need to revise this requirement, NMFS shall do so.

          Comment 10: To prevent  delays  in  NMFS'  internal  mail system,  one  comment  requested that NMFS establish a separate post office box for receiving fee deposits and reports.

          Response: This  is  unnecessary  because the proposed fee regulations require fish buyers to send collected fees  and  reports  to  a special lockbox which NMFS will establish for this sole purpose. A separate lockbox will prevent these remittances from being intermixed with any other materials.
        III. Proposed Regulations
        NMFS  has completed the groundfish program except for the implementation of a fee system, which this action proposes to implement.
        The terms defined in section 600.1000 of the framework regulations apply to   the   groundfish    program    except    for   the   definitions   for “borrower” and “fee fish.” The definition for these two  terms  have  been  refined  to account for fee  share  fisheries.  The proposed refined definitions are found in section 600.1102. If this rule is adopted, the new definitions would, for purposes of the groundfish program, supersede the definition for these terms found in section 600.1000.
        Section 600.1013 of the framework  regulations  govern  the  payment and collection of fees under a fee system for any program.
        Under  section  600.1013,  the  first ex-vessel buyers (fish buyers)  of post-reduction fish subject to a fee  system  (fee  fish) must withhold the fee from the trip proceeds which the fish buyers would  otherwise have paid to the parties (fish sellers) who harvested and first sold  the fee fish to the  fish  buyers.  Fish  buyers  calculate  the  fee  to  be collected  by multiplying  the  applicable  fee  rate times the fee fish's full  delivery value. Delivery value is the fee fish's  full  fair market value, including all in-kind compensation or other goods or services  exchanged  in  lieu of cash.
        Fish  buyers  collect  the fee when they withhold it from trip proceeds, and fish sellers pay the fee  when the fish buyers withhold it. Fee payment and fee collection is mandatory,  and  there  are substantial penalties for failing  to  pay  and  collect  fees  in  accordance  with  the  applicable regulations.
        The  framework  regulations'  section  600.1014  governs   fish  buyers' depositing  and  disbursing to NMFS the fees which they have collected  for any program as well  as  their  keeping  records  of,  and reporting about, collected  fees.  Paragraph  (j)  of  section  600.1014 also provides  that regulations  implementing specific program may vary  the  section  600.1014 provisions  if   NMFS   believes  this  is  necessary  to  accommodate  the circumstances of, and practices in, a specific reduction fishery.

        Under section 600.1014(a)-(d), fish buyers must, no less frequently than at the end of each business  week, deposit collected fees in segregated and Federally insured accounts until,  no  less  frequently  than  on  the last business  day  of  each  month,  they  disburse  all  collected fees in the accounts to a lockbox which NMFS has specified for this purpose. Settlement sheets  must  accompany  these  disbursements.  Fish buyers  must  maintain specified fee collection records for at least three  years  and  send  NMFS annual reports of fee collection and disbursement activities.
        After  evaluating  comments  received  in  response  to the proposed fee regulations, however, NMFS now proposes in the instance of  the  groundfish program   to   depart   from  some  of  the  section  600.1014  provisions, chiefly:
        1.  Segregated  bank  accounts  will  not  be  required  for  depositing collected fees;
        2. Collected fee deposits will be monthly rather than weekly;
        3. Fish buyers may disburse  deposited  fees up to 14 days after the end of each month rather than having to do so on  the last business day of each month;
        4.  Fish  buyers do not have to disburse deposited  fees  at  all  until either their total  reaches  $100 or the 14th day after the end of each calendar year, whichever comes first; and
        5. Fish buyers do not have to submit annual fee collection, deposit, and disbursement reports.
        Accordingly,  the  proposed  fee   regulations   now  restate,  for  the groundfish program, the entirety of the framework regulations'  at  section 600.1014(a)-(d).  NMFS  also  proposes  that  section  600.1014(e)  of  the framework   regulations  no  longer  applies  to  the  groundfish  program. Additionally,  NMFS proposes that sections 600.1014(f)-(j) will continue to apply, in their entirety, to the groundfish program.
        All parties interested in this proposed action should carefully read the following framework  regulations  sections,  whose  detailed provisions, as this action proposes to modify them, apply to the fee  system  for repaying the groundfish program's reduction loan:
        1. § 600.1012;
        2. § 600.1013;
        3. § 600.1014;
        4. § 600.1015;
        5. § 600.1016; and
        6. Applicable portions of § 600.1017.
        Section  212  provides an option for NMFS to enter into agreements  with California, Washington, and Oregon regarding groundfish program fees in the fee-share fisheries.  While  this  would  not involve actual fee collection (because both section 312(d) of the Magnuson-Stevens  Act and the framework regulations require fish buyers to collect the fee), it  would  allow  fish buyers   to   use   existing   state   systems   for   post-collection  fee administration.
        After all three states enacted legislation which would have allowed them to function in this capacity, NMFS evaluated the feasibility  of exercising the  section 212 option. As previously noted, however, NMFS concluded  that exercising  this  option  was  not  feasible.  NMFS reached this conclusion because, among other reasons:
        1. The state systems sometimes:
        a. Assess and collect fees based on pounds rather than on dollars,
        b. Do not assess or collect fees at the point of fish sale, and/or
        c. Involve quarterly fee disbursements;
        2.   One   state's   legislation   regarding   this  option   authorizes participation of a state agency different from the  one  administering  the existing state system (and might require amendment);
        3.  One  state's  legislation regarding this option expires in less than two years;
        4. All states indicated  that the funding and staffing required for this option during the reduction loan's  30-year  term  would be problematic for them; and
        5.   The  states'  collection  systems  are  dissimilar   and,   without significant   modification,   might   not  promote  efficient  and  uniform groundfish program fee collection.
        Accordingly, NMFS decided that the section 212 option is not feasible at this time and will not propose to exercise this option.
        NMFS intends to enter into landing and  permit  data  sharing agreements with the States of California, Oregon, and Washington in order  for NMFS to receive landing and permit information. This will allow NMFS to ensure full groundfish program fee payment, collection, deposit, and disbursement under the framework rule provisions.
        NMFS  proposes,  in  accordance  with the framework regulations' section 600.1013(d),  to establish the initial  fee  applicable  to  the  reduction fishery and to each fee-share fishery. After NMFS has adopted a final rule, NMFS will separately  mail  notification to each individual fish seller and fish buyer affected of whom NMFS  then  has notice. Until implementation of the final rule, fish sellers and fish buyers  do  not have to either pay or collect the groundfish program fee. Upon implementation  of the final rule, the  initial  fee  rate  for  the  reduction  fishery and for each  of  the fee-share fisheries would be:
        1. Reduction fishery, 5 percent; and
        2. Fee share fisheries:
        a. California coastal Dungeness crab, 1.24 percent,
        b. California pink shrimp, 5 percent,
        c. Oregon coastal Dungeness crab, 0.55 percent,
        d. Oregon pink shrimp, 3.75 percent,
        e. Washington coastal Dungeness crab, 0.16 percent, and
        f. Washington pink shrimp, 1.50 percent.
        The rates are percentages of delivery value. See section 600.1000 of the framework  regulations  for the definition of “delivery  value” and  for  the definition of  other  terms  relevant  to  the  proposed  fee regulation.
        Each disbursement  of  the $35,662,471 principal amount of the reduction loan began accruing interest  as of the date of each such disbursement. The interest rate is a fixed 6.97 percent,  and will not change during the term of the reduction loan.
        Classification
        The Assistant Administrator for Fisheries,  NMFS,  determined  that this proposed  rule is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws.

        In compliance  with the National Environmental Policy Act, NMFS prepared an EA for the final  notice  implementing  the  groundfish  program. The EA discussed  the  impact of the groundfish program on the natural  and  human environment and resulted  in  a  finding  of  no significant impact. The EA considered the implementation of this fee collection  system,  among  other alternatives.  Therefore,  this  proposed action has received a categorical exclusion from additional analysis. NMFS will provide a copy of the EA upon request (see ADDRESSES).

        This  proposed  rule  has been determined  to  be  not  significant  for purposes of Executive Order  12866.  NMFS  prepared  an  RIR  for the final notice implementing the groundfish program. NMFS will provide a copy of the RIR upon request (see ADDRESSES).

        NMFS  prepared  an  IRFA  as  required  by section 603 of the Regulatory Flexibility Act, that describes the impact this  proposed rule, if adopted, would have on small entities. NMFS will provide a  copy  of  the  IRFA upon request (see ADDRESSES). A summary of the IRFA follows:
        1.  Description  of Reasons for Action and Statement of Objective  and Legal Basis
        Section 212 authorized  a $46 million fishing capacity reduction program for  reduction fishery. Section  212  also  authorized  a  fee  system  for repaying  the  reduction  loan partially financing the groundfish program's cost. The fee system includes  both the reduction fishery and the fee share fisheries.

        Section 501(c) appropriated $10 million to partially fund the groundfish program's cost. Public Law 107-206  authorized  a  reduction loan for financing up to $36 million of the groundfish program's cost.  Pursuant  to section  212,  NMFS  implemented  the  groundfish program, except for a fee system, on July 18, 2003 (68 FR 42613).  This  action  now  proposes  a fee system for the groundfish program.
        2. Description of Small Entities to Which the Rule Applies
        The  Small Business Administration (SBA) has defined any fish harvesting businesses  that  is  independently owned and operated, not dominant in its field of operation, and  with annual receipts of $3.5 million or less, as a small entity. In addition,  processors with 500 or fewer employees involved in related industries such as canned and cured fish and seafood or prepared fresh fish and seafood are also considered small entities. According to the SBA's  definition  of  a small entity,  virtually  all  of  the  groundfish program's approximate 1,800  fish sellers are small entities. This includes 172 fish sellers in the reduction  fishery  and  over 1,600 fish sellers in the six fee-share fisheries. Most of the groundfish  program's  fish buyers also are small entities.
        3. Description of Recordkeeping and Compliance Costs
        Please see collection-of-information requirements listed hereafter.
        4. Duplication or Conflict with Other Federal Rules
        This rule does not duplicate or conflict with any Federal rules.
        5. Description of Significant Alternatives Considered
        NMFS  considered  three  alternatives to the proposed action. The  first alternative was the status quo.  Under  this alternative, there would be no fee system and the fish sellers and fish  buyers  would not have to pay and collect a fee. This alternative was, however, contrary  to  the  groundfish program's statutory authority and was rejected.
        The second alternative was the statutorily mandated industry fee  system without  state involvement. Under this alternative, the fish buyers of  fee fish would  withhold  the  fee  from  the  trip proceeds. Fish buyers would calculate the fee to be collected by multiplying  the  applicable  fee rate times the fee fish's full delivery value. This is the preferred alternative because  the  groundfish program's statutory authority mandates fee payment and collection.
        The third alternative  was  the statutorily mandated industry fee system with state involvement. This alternative  is  the  same as described in the second  alternative  except  that  the  States of California,  Oregon,  and Washington would, in conjunction with their  own state tax and fee systems, assume   some   of   the   fish   buyers'  fee  deposit  and   disbursement responsibilities. This alternative  would  have reduced compliance costs to individual  businesses,  both  fish  buyers  and   sellers.  However,  this alternative was not chosen because some states:
        1. Assess and collect the state taxes and fees based  on  pounds  rather than on dollars,
        2.  Do  not  assess  or collect their taxes or fees at the point of fish sale, and
        3. Involve quarterly fee disbursements.
        In addition, one state's  legislative  authority  to participate in this alternative collection authorizes participation of a state agency different than  the one administering the existing state system and  another  state's legislative  authority  to  participate in this alternative expires in less than two years (even though fee collection continues for 30 years).
        Furthermore, all states indicated  that state funding and staffing under this alternative for the reduction loan's 30-year term would be problematic for them.
        Finally,  the states' collection systems  are  dissimilar  and,  without significant  modification,   might   not   promote  efficient  and  uniform groundfish program fee collection.
        6.  Steps the Agency Has Taken to Mitigate  Negative  Effects  of  the Action
        NMFS has  changed  aspects of the framework regulations' fee deposit and disbursement requirements to reduce the impact on small entity fish buyers. NMFS proposes to require  monthly  fee  deposits  as  opposed to the weekly deposits previously required. NMFS also will allow a 14  day  grace  period from  the  end  of  each  month  for  fish  buyers  to disburse deposit fee principal to NMFS. If the deposit fee principal totals  less than $100, the fish  buyers  need not disburse the deposit fee principal until  it  totals $100 or more, or  until the 14th day after the end of the calendar year in which the fees were deposited, whichever comes first.  Furthermore, NMFS proposes to eliminate annual reporting requirements.
        This  proposed  rule   contains  collection-of-information  requirements subject  to the Paperwork Reduction  Act  (PRA).  OMB  has  approved  these information  collections  under  OMB  control  number 0648-0376. NMFS estimates  that  the  public reporting burden for these  requirements  will average:
        Two hours for submitting a monthly fish buyer settlement sheet; and
        Two hours for making  a  fish  buyer/fish  seller  report when one party fails to either pay or collect the fee.
        These  response  estimates include the time for reviewing  instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collection.

        Send comments regarding  this  burden  estimate,  or any other aspect of this  data collection, including suggestions for reducing  the  burden,  to both NMFS and OMB (see ADDRESSES).
        Notwithstanding  any  other  provision  of law, no person is required to respond to, and no person is subject to a penalty  for  failure  to  comply with,  an  information  collection  subject  to the requirements of the PRA unless that information collection displays a  currently  valid OMB control number.
        NMFS  has  determined  that  this  proposed  rule will not significantly affect  the  coastal  zone  of  any  state  with an approved  coastal  zone management  program. This determination was submitted  for  review  by  the States of Washington, Oregon, and California.

          List of Subjects in 50 CFR Part 600
          Fisheries, Fishing capacity reduction, Fishing permits, Fishing vessels, Intergovernmental   relations,   Loan   programs  business,  Reporting  and recordkeeping requirements.

          Dated: April 5, 2005.
          Rebecca Lent,
          Deputy  Assistant Administrator for  Regulatory  Programs,  National Marine Fisheries Service.

        For the reasons  in  the preamble, the National Marine Fisheries Service proposes to amend 50 CFR part 600 as follows:

          PART 600—MAGNUSON-STEVENS ACT PROVISIONS

        1. An authority citation  for  part  600  subpart  M is added to read as follows:

          Authority:
          5  U.S.C.  561, 16 U.S.C. 1801 et seq., 16 U.S.C. 1861a(b) through (e),  46  App. U.S.C. 1279f and 1279g, section 144(d) of Division B of Pub. L. 106-554, section 2201 of Pub. L.   107-20,   section  205  of  Pub.  L.  107-117,   Pub.   L. 107-206, and Pub. L. 108-7.

        2. In § 600.1102  the  section heading is revised and text is added to read as follows:

          § 600.1102
          Pacific       Coast Groundfish Fee.
          (a) Purpose. This section implements the fee for repaying the  reduction   loan   financing  the  Pacific  Coast  Groundfish  Program authorized  by  section  212  of  Division  B,  Title  II,  of  Public  Law 108-7  and  implemented   by   a   final   notification   in  the Federal Register (July 18, 2003; 68 FR 42613).
          (b) Definitions. Unless otherwise defined in this section, the terms defined in § 600.1000 expressly apply to this section. The  following  terms  have the following meanings for the purpose of  this section:

            Borrower means,  individually  and  collectively,  each post-reduction fishing permit holder and/or fishing vessel owner fishing in the reduction fishery, in any or all of the fee share fisheries, or in both the reduction fishery and any or all of the fee share fisheries.

            Deposit fee principal means all collected fee revenue that a fish buyer has deposited in  the  account required by paragraph (j)(1) of this section.

            Fee  fish means  all fish  legally  harvested  from  the reduction fishery during the period in  which  any portion of the reduction fishery's subamount is outstanding and all fish  harvested from each of the fee  share fisheries during the period in which any  portion  of  each  fee share fishery's subamount is outstanding.

            Fee-share fisheries means the California, Washington, and Oregon fisheries for coastal Dungeness crab and pink shrimp.

            Fee-share  fishery  subaccount means  each  of  the  six subaccounts  of the groundfish program fund subaccount in which each of the six fee-share fishery subamounts are accounted for.

            Reduction  fishery  subaccount means the subaccount of the groundfish program fund subaccount in which the reduction fishery subamount is accounted for.

            Subamount means each  portion  of  the  reduction  loan's original  principal  amount which is allocated to the reduction fishery and to each of the fee share fisheries.
          (c) Reduction  fishery. The  reduction  fishery  for  the groundfish  program  includes  all  species  in,  and  that portion of, the limited  entry  trawl  fishery  under the Federal Pacific Coast  Groundfish Fishery Management Plan that is conducted  under  permits,  excluding those registered to whiting catcher-processors, which are endorsed for trawl gear operation.
          (d) Reduction loan amount. The reduction loan's  original principal amount is $35,662,471.
          (e) Subamounts. The  subamounts  of  the  reduction loan amount are:
          (1) Reduction fishery, $28,428,719; and
          (2) Fee-share fisheries:
          (i) California coastal Dungeness crab fee-share fishery, $2,334,334,
          (ii) California pink shrimp fee-share fishery, $674,202,
          (iii) Oregon coastal Dungeness crab fee-share fishery, $1,367,545,
          (iv) Oregon pink shrimp fee-share fishery, $2,228,845,
          (v)  Washington  coastal  Dungeness  crab  fee-share  fishery, $369,426, and
          (vi) Washington pink shrimp fee-share fishery, $259,400.
          (f) Interest accrual inception. Interest began accruing on each portion of the reduction loan amount on and from the  date  each  such portion was disbursed.
          (g) Interest rate. The reduction loan's interest rate is 6.97 percent.  This  is  a  fixed rate of interest for the full term of the reduction loan's life.
          (h) Repayment term. For  the  purpose  of determining fee rates, the reduction loan's repayment term shall be 30 years  from March 1, 2004,  but each fee shall continue for as long as necessary to fully  repay each subamount.
          (i) Reduction loan repayment. The borrower shall repay the reduction loan in accordance with § 600.1012.
          (j) Fee  payment  and collection. (1) Fish sellers in the reduction fishery and in each of  the fee-share fisheries shall pay the fee applicable   to   each  such  fishery's  subamount   in   accordance   with § 600.1013.
          (2) Fish buyers  in  the  reduction fishery and in each of the fee-share fisheries  shall  collect  the fee  applicable  to  each  such  fishery  in accordance with § 600.1013.
          (k) Fee collection,  deposits,  disbursements,  records,  and reports. Fish  buyers  in the reduction fishery and in each of the fee share fisheries shall deposit and disburse, as well as keep records for and submit  reports  about,  the  fees  applicable  to  each  such  fishery  in accordance with § 600.1014, except that:
          (1) Deposit accounts. Each  fish  buyer that this section requires to collect a fee shall maintain an account at  a federally insured financial institution for the purpose of depositing collected  fee  revenue and  disbursing  the  deposit  fee principal directly to NMFS in accordance with paragraph (k)(3) of this section.  The fish buyer may use this account for other operational purposes as well, but  the  fish  buyer  shall ensure that  the  account  separately  accounts  for  all  deposit  fee  principal collected  from  the  reduction  fishery and from each of the six fee-share fisheries. The fish buyer shall separately  account for all fee collections as follows:
          (i) All fee collections from the reduction  fishery  shall  be accounted for in a reduction fishery subaccount,
          (ii)  All  fee  collections  from  the  California pink shrimp fee-share fishery  shall be accounted for in a California  shrimp  fee-share  fishery subaccount,
          (iii) All  fee  collections  from  the California coastal Dungeness crab fishery  shall  be  accounted for in a California  crab  fee-share  fishery subaccount,
          (iv) All fee collections  from  the Oregon pink shrimp fee-share fishery shall   be   accounted   for  in  an  Oregon   shrimp   fee-share   fishery subaccount,
          (v) All fee collections from the Oregon coastal Dungeness crab fee-share fishery  shall  be accounted  for  in  an  Oregon  crab  fee-share  fishery subaccount,
          (vi) All fee collections  from  the  Washington  pink  shrimp  fee-share fishery  shall  be  accounted  for in a Washington shrimp fee-share fishery subaccount, and
          (vii) All fee collections from  the  Washington  coastal  Dungeness crab fishery  shall  be  accounted  for  in a Washington crab fee-share  fishery subaccount;
          (2) Fee collection deposits. Each  fish  buyer,  no  less frequently  than  at  the  end of each month, shall deposit, in the deposit account established under paragraph  (k)(1)  of this section, all collected fee revenue not previously deposited that the fish buyer collects through a date  not  more  than two calendar days before the  date  of  deposit.  The deposit fee principal may not be pledged, assigned, or used for any purpose other than aggregating  collected  fee revenue for disbursement to the fund in accordance with paragraph (k)(3)  of  this  section.  The  fish buyer is entitled,  at  any  time, to withdraw interest (if any) on the deposit  fee principal, but never the deposit fee principal itself, for the fish buyer's own use and purposes;
          (3) Deposit fee principal disbursement. Not later than the 14th calendar  day  after  the last calendar day of each month, or more frequently if the amount in the  account exceeds the account limit for insurance purposes, the fish buyer shall  disburse to NMFS the full deposit fee principal then in the deposit account,  provided  that  the deposit fee principal  then  totals  $100  or  more. If the deposit fee principal  then totals less than $100, the fish buyer  need  not  disburse  the deposit fee principal  until  either  the  next  month  during  which  the deposit  fee principal  then  totals  $100  or more, or not later than the 14thcalendar day after the last calendar  day  of any year in which the deposit fee principal has not since the last required  disbursement totaled $100 or more,  whichever  comes first. The fish buyer shall  disburse  deposit  fee principal by check  made payable to the groundfish program fund subaccount. The fish buyer shall  mail  each  such check to the groundfish program fund subaccount lockbox that NMFS establishes  for  the  receipt  of  groundfish program  disbursements. Each disbursement shall be accompanied by the  fish buyer's settlement  sheet  completed  in  the  manner  and  form which NMFS specifies. NMFS will, before fee payment and collection begins, specify the groundfish  program  fund  subaccount  lockbox and the manner and  form  of settlement  sheet.  NMFS  will  do this by means  of  the  notification  in § 600.1013(d). NMFS' settlement  sheet instructions will include provisions for the fish buyer to specify the  amount  of  each disbursement which was disbursed from the reduction fishery subaccount and/or  from each of the six fee-share fishery subaccounts;
          (4) Records maintenance. Each fish buyer shall maintain, in a secure and  orderly  manner  for a period of at least three years from the   date  of  each  transaction  involved,   at   least   the   following information:
          (i)  For  all  deliveries of fee fish that the fish buyer buys from each fish seller include:
          (A) The date of delivery,
          (B) The fish seller's identity,
          (C)  The  weight,  number,  or  volume  of  each  species  of  fee  fish delivered,
          (D) Information  sufficient  to specifically identify the fishing vessel which delivered the fee fish,
          (E) The delivery value of each species of fee fish,
          (F) The net delivery value of each species of fee fish,
          (G) The identity of the payor to whom the net delivery value is paid, if different than the fish seller,
          (H) The date the net delivery value was paid,
          (I) The total fee amount collected as a result of all fee fish, and
          (J) The total fee amount collected  as a result of all fee fish from the reduction  fishery  and/or all fee fish from  each  of  the  six  fee-share fisheries; and
          (ii) For all collected fee deposits to, and disbursements of deposit fee principle from, the deposit account include:
          (A) The date of each deposit,
          (B) The total amount deposited,
          (C) The total amount  deposited  in  the  reduction  fishery  subaccount and/or in each of the six fee-share fishery subaccounts,
          (D) The date of each disbursement to the Fund's lockbox,
          (E) The total amount disbursed,
          (F)  The  total  amount  disbursed from the reduction fishery subaccount and/or from each of the six fee-share fishery subaccounts, and
          (G) The dates and amounts  of  disbursements to the fish buyer, or other parties, of interest earned on deposits; and
          (5) Annual report. No fish buyer needs to submit an annual report about fee fish collection activities unless, during the course of an audit under § 600.1014(g),  NMFS requires a fish buyer to submit such a report or reports.
          (l) Other provisions. The  reduction loan is, in all other respects,  subject  to  the  provisions  of  § 600.1012  through applicable       portions       of      § 600.1017,       except § 600.1014(e).

      [FR Doc. 05-7063 Filed 4-7-05; 8:45 am]
      BILLING CODE 3510-22-S