        DEPARTMENT OF THE INTERIOR
        Fish and Wildlife Service
        50 CFR Part 17
        Endangered and Threatened Wildlife and Plants; 90-day Finding for a Petition To List the Mountain Quail as Threatened or Endangered

          AGENCY:
          Fish and Wildlife Service, Interior.

          ACTION:
          Notice of 90-day petition finding.

          SUMMARY:

          We, the U.S. Fish and Wildlife Service (Service), announce a 90-day finding on a petition to list the mountain quail (Oreortyx pictus) under the Endangered Species Act (Act) of 1973, as amended. We find the petition does not present substantial scientific or commercial information indicating that listing this species may be warranted.

          DATES:
          The finding announced in this document was made on January 10, 2003.

          ADDRESSES:
          The complete file for this finding is available for inspection, by appointment, during normal business hours at the U. S. Fish and Wildlife Service, Snake River Fish and Wildlife Office, 1387 South Vinnell Way, Suite 368, Boise, ID 83709.

          FOR FURTHER INFORMATION CONTACT:

          Bob Ruesink, Supervisor, Snake River Fish and Wildlife Office (see
            ADDRESSES section) (telephone: 208/378-5243; facsimile: 208/378-5243; electronic mail: Bob_Ruesink@fws.gov).

        SUPPLEMENTARY INFORMATION:
        Background

        Section 4(b)(3)(A) of the Endangered Species Act of 1973, as amended (Act) (16 U.S.C. 1531 et seq.), requires that we make a finding on whether a petition to list, delist, or reclassify a species presents substantial scientific or commercial information to demonstrate that the petitioned action may be warranted. This finding is to be based on all information available to us at the time we make the finding. To the maximum extent practicable, this finding is to be made within 90 days of our receipt of the petition, and the notice of the finding is to be published promptly in the Federal Register. Our standard for substantial information within the Code of Federal Regulations (CFR) with regard to a 90-day petition finding is “that amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted” (50 CFR 424J). If we find that substantial information was presented, we are required to promptly commence a review of the status of the involved species, if one has not already been initiated under our internal candidate assessment process.

        On March 28, 2000, we received a petition, dated March 15, 2000, from Rob Kavanaugh, Idaho Watersheds Project, Committee for Idaho's High Desert, and the Spokane Audubon Society requesting that the mountain quail (Oreortyx pictus), occurring in the northern and western Great Basin, the Interior Columbia Basin, and lands west to the Cascade Crest within Washington and Oregon, be listed as a threatened or endangered distinct population segment (DPS) under the Act (Kavanaugh et al. 2000). The petition clearly identified itself as such and contained the names and addresses of the petitioners.
        Accompanying the petition was information related to the taxonomy, life history, demographics, translocations, genetics, habitats, threats, and the past and present distribution of mountain quail. The petitioners contend that mountain quail populations occurring in the proposed DPS have sustained a dramatic range contraction caused by extensive loss of riparian habitats, loss of woody vegetation associated with riparian habitats, loss of interfacing upland shrub habitats, loss of plant species diversity, and simplification of habitats. The petitioners claim that 80 to 90 percent of riparian habitats essential to the mountain quail in arid interior lands have been lost, fragmented, or altered. This is in contrast to the more humid coastal forests of Oregon, Washington, and California, where mountain quail populations are more abundant and widespread due to broad areas of continuous habitat. In order to determine if substantial information is available to indicate that the petitioned action may be warranted, we have reviewed the following: the subject petition, literature cited in the petition, information provided by recognized experts or agencies cited in the petition, and information otherwise available in Service files.

        This 90-day petition finding is made in accordance with a settlement agreement that requires us to complete a finding by January 15, 2003 (Committee for Idaho's High Desert et al. v. Badgley et al. (Civ. No. 01-1834-JO)).
        The petitioner's request is to list mountain quail populations found throughout historically occupied portions east of the Cascade Crest in Washington and Oregon, historically occupied portions of western Idaho, and historically occupied portions east of the California/Nevada border south to the proximate vicinity of the Palmetto Mountains of southwestern Nevada.

        Mountain quail are members of the family of New World quail, Odontophorinae, within the Order Galliformes (Gutierrez et al. 1983). They were first described as Ortyx picta by D. Douglas in 1829, but the type specimen was lost and the type locality is unknown (Gutierrez and Delehanty 1999).

        Five subspecies of mountain quail recognized by the American Ornithological Union have been described using phenotypic appearances and geographical residency (Gutierrez and Delehanty 1999, Vogel and Reese 2002). The five subspecies by geographical areas are: Oreortyx pictus pictus, a resident in mountain regions of extreme western Nevada, the western side of the Cascade Range in southern Washington and south to the Sierra Nevada and inner Coast Ranges of California; O. p. palmeri, found in the western Coast Range from Washington south to San Luis Obispo County, California; O. p. eremophilus, a resident from the southern Sierra Nevada and central and southern Coast Ranges of California south through the Transverse Peninsular, Mexico; O. p. russelli, found in the Little San Bernardino Mountains, California; and O. p. confinis, a resident on northern Baja California, Mexico, primarily Sierra Juarez and Sierra San Pedro Mountains (Gutierrez and Delehanty 1999).
        Although these five subspecies are recognized by the American Ornithological Union, these designations are considered ambiguous. No quantitative estimates of morphological variation have been published, and genetic validity of these subspecies distinctions has not been substantiated through any peer-reviewed published studies. Gutierrez and Delehanty (1999) stated that these designations are based on “poorly defined comparative and ill-marked plumage characters; therefore, both subspecies and subspecies range are considered dubious.” Genetic analysis is needed to clearly establish whether there is subspecies designation across the geographic range of mountain quail (Vogel and Reese 2002).
        The mountain quail is the largest North American quail north of Mexico (Gutierrez and Delehanty 1999). Males are slightly larger than females (264 to 308 millimeters (10.5 to 11.5 inches) in length and approximately 235 grams (7.6 ounces) in weight), but size is not a reliable indicator of sex. The sexes are monomorphic (similar in appearance). An adult's plumage consists of white side bars and a chestnut throat-patch with black, below a brilliant slate-blue head and neck. The mountain quail also has a long slender straight head plume composed of two feathers.

        Mountain quail occur in shrub-dominated communities that vary across habitat types throughout the range of the species (Vogel and Reese 1995, Gutierrez and Delehanty 1999). These habitats include chaparral, mixed desert scrub of the Mojave Desert, and early successional-stage shrub vegetation following fire, logging, and other disturbances. In the drier eastern portions of its range, mountain quail are normally found in steeper slope areas along riparian corridors consisting of mountain and riparian shrub communities. Within all habitat types, mountain quail are notable for their seasonal migrations between breeding and wintering areas (Vogel and Reese 1995, Delehanty 1997). These migrations vary from significant altitudinal migrations of up to 80 kilometers (50 miles) among populations that summer at high elevation (i.e., Sierra Nevada, Cascade Range), to short altitudinal movements in low-elevation coastal areas to escape winter snows.

        On the basis of several food habit studies summarized by Vogel and Reese (1995) and Gutierrez and Delehanty (1999), we know that mountain quail eat primarily plant material throughout the year. Invertebrate animal matter makes up approximately 0 to 5 percent of the diet, although young mountain quail up to 8 weeks of age eat up to 20 percent animal matter (ants, beetles, and other invertebrates). Plant material consumed includes perennial seeds, fruits, flowers, and leaves, annual forbs and legumes, and mushrooms. Gutierrez (1980) describes the mountain quail as a “sequential specialist” that concentrates on food resources as they become seasonally available and abundant. The species uses diverse food-capturing methods, including digging for subterranean bulbs of some plants (e.g., Lithophragma spp., Brodiaea spp.), and climbing shrubs and trees for fruits and seeds.
        Similar to other quail species, mountain quail are able to breed at 1 year of age, although reproduction is dependent upon the condition of breeding birds and is strongly influenced by winter/spring rainfall. Pair formation is thought to occur during late winter and early spring with nesting normally occurring from March to July, depending upon local climate, altitude, and latitude (Gutierrez and Delehanty 1999). Both male and female form incubation patches. Mountain quail are unique in that females often lay two clutches averaging 11 to 12 eggs, with male birds incubating the first clutch and females the second. This phenomenon is termed simultaneous multi-clutching (Delehanty 1997). The incubation period averages 24 days (range 23 to 25 days) and estimates of nest success from a limited number of studies averaged over 55 percent (Vogel and Reese 1995). Substantial evidence suggests that males incubate and then brood recently hatched young (Delehanty 1997, Pope 2002). Many mountain quail coveys are assumed to be family groups comprised of adults and juveniles that remain together until the next year's breeding season.
        Mountain quail are presumed to be short-lived and subject to high levels of predation similar to other New World quail. On the basis of limited data, sex ratios are assumed to be nearly 1:1 for adults (Vogel and Reese 1995). Because mountain quail inhabit dense habitats and rugged terrain, populations can vary annually. Population surveys are difficult to conduct, and long-term population size and density studies are lacking. Data from the few studies conducted over the years have revealed mountain quail densities ranging from 9 to 54 birds/100 hectares (ha) (9 to 54 birds/247 acres (ac)) at four study sites in northern California, 21 birds/100 ha (21 birds/247 ac) in coastal California, and 30 birds/100 ha (30 birds/247 ac) and 28 birds/100 ha (28 birds/247 ac) on Klamath Mountains and Sierra Nevada sites, respectively (as summarized by Vogel and Reese 1995).

        Accipiters, particularly Cooper's hawk (Accipiter cooperi), sharp-shinned hawk (Accipiter striatus), and the northern goshawk (Accipiter gentilis), are major predators of adult and young mountain quail (Gutierrez and Delehanty 1999, Vogel and Reese 2002). Other known predators include great horned owl (Bubo virginianus), coyote (Canis latrans), bobcat (Lynx rufus), gray fox (Urocyon cinereoargenteus), and rattlesnake (Crotalus spp.). Significant predation occurs on chicks during several days following hatching and when coveys are limited to habitats near water (Vogel and Reese 1995).

        Rangewide, mountain quail are distributed in five western states, including California, Washington, Oregon, Nevada, and Idaho, as well as Baja Norte, Mexico (Gutierrez and Delehanty 1999, Crawford 2000). They are also found in small disjunct populations as introduced birds on Vancouver Island, British Columbia, and on several islands within the San Juan Islands of Washington (Vogel and Reese 1995, Gutierrez and Delehanty 1999). Vogel and Reese (1998) quote R.D. Mallette (date unknown) that in the early 1970s, mountain quail were “widely distributed over approximately 45 percent of the state [California] in suitable habitat in the mountainous areas from Mexico to the Oregon borders.” Within the United States, California contains the largest populations and the widest distribution of this species. Mountain quail are legally hunted in many counties of California (California Department of Fish and Game 2002).
        In Nevada, the historic range of mountain quail in the Great Basin is poorly understood, with very little information available on their native distribution (Vogel and Reese 1995, Gutierrez and Delehanty 1999, Crawford 2000). Several authors, quoted by Vogel and Reese (1995), reported that mountain quail were common on both slopes of the Sierra Nevada mountains (including Nevada) in the 1920s and “a sparse resident in the mountainous areas of western Nevada.” Guitierrez and Delehanty (1999) report that mountain quail occupy spur ranges of the eastern Sierra Nevada Range in western Nevada and are found in the higher foothill areas to the Sierra Crest where suitable habitat occurs. They also occur as small, scattered populations in the “Toiyobe, Desatoya, Jackson, and Santa Rosa Ranges of northern Nevada.” In addition, Vogel and Reese (2002) present anecdotal evidence of mountain quail releases in the State, beginning in the 1870s and continuing into the 1930s or early 1940s.
        Since the 1940s, hunter surveys and harvest reports indicate that populations have undergone local extinctions throughout their historic range in Nevada (Brennan 1994). From the 1950s to the 1980s, extensive range fires, invasive plants, reservoir construction, and livestock overgrazing have impacted or eliminated large areas of mountain quail habitat and as a consequence, mountain quail numbers and distribution have declined in many areas of Nevada. However, based on recent Nevada Division of Wildlife (NDOW) surveys, mountain quail have remained stable in the eastern Sierra Nevada mountains of Nevada (Vogel and Reese 2002). Since 1986, NDOW has released mountain quail into areas that they believe historically supported mountain quail, currently contain mountain quail, and/or sustain suitable habitat. From 1986 to 2002, a total of 1,293 birds have been translocated to Nye, Churchill, Pershing, Washoe, Elko, and Lander counties in Nevada (Vogel and Reese 2002). All of these mountain quail were captured from outside the petitioned DPS at the China Lakes Naval Air Weapons Station in the Mojave Desert of California (Vogel and Reese 2002).

        In Idaho, general information regarding the native distribution of mountain quail is ambiguous, although some evidence suggests mountain quail were present prior to European settlement. Three studies cited in Vogel and Reese (2002) describe possible archeological evidence of mountain quail in Idaho prior to the 1800s. Gruhn (1961) documented one specimen of mountain quail from bones in Wilson Butte Cave, Jerome County, south-central Idaho; Murphey (1991) reported a possible mountain quail pictograph found at the Jarbidge rock site, Jerome County, southwestern Idaho; and Rudolph (1995) identified mountain quail bones from the Hetrick site in the Weiser River Valley, Washington County. The pictograph is an abstract rendition that portrays a gallinaceous-like bird with prominent barring on the side of the body, heavy bill and feet, and top-knot, which is short and curved over the top of the head as in California quail (Callipepla californica) (Crawford 2000). The mountain quail bone material was identified using comparative techniques of bones known to be mountain quail. The possible mountain quail bone material collected from these two archaeological sites may be positively verified by protein synthesis analysis and dated using radiometric techniques (Miller, Faunal Analysis and CRM Services, pers. comm. 2002). Crawford (2000) suggests that these birds may represent remnant populations from Pleistocene glaciation.
        Today, mountain quail in Idaho occur at the extreme northeastern edge of their range-wide distribution. Mountain quail were translocated successfully in Idaho beginning in the late 1800s (Crawford 2000, Vogel and Reese 2002). For example, as summarized by Crawford (2000), mountain quail were translocated to Kootenai County using birds captured from western Washington in 1897. Other mountain quail were translocated to Ada, Owyhee, and Lincoln counties in the 1920s, although the origin of these birds is generally unknown. Mountain quail were present in the 1930s throughout the central and southwestern areas of Idaho (Vogel and Reese 1998). In the 1950s, they were still found along riparian areas in central and southwestern Idaho, but overall numbers had declined since the 1930s, particularly in Nez Perce and Latah counties. Various causes of decline have been identified. Vogel and Reese (1998) cited a paper by T.B. Murray (1938) that suggested that drought and habitat alterations reduced mountain quail numbers by more than 50 percent in western Idaho, and that suitable food and cover were also reduced by more than 50 percent from the turn of the century until the 1930s.
        During the 1980s, numbers declined steadily, and the only remaining populations that exist now are in the lower Salmon and Snake River drainages and the foothill and mountain areas of the Boise River drainage (Robertson 1989). Although mountain quail have been infrequently sighted in these areas since the 1980s, recent mating call surveys in several areas of the Boise River drainage found no evidence of their presence (Kniesel 2002). The hunting season for mountain quail in Idaho was closed in 1984.

        The first recorded information on mountain quail in Oregon was of a specimen collected in 1806 by Reubin Field, a member of the Lewis and Clark expedition (Jackle et al. 2002, Pope 2002). During the same expedition, two other mountain quail were collected near Rooster Rock State Park, Multnomah County, along the Columbia River. Mountain quail translocations began as early as 1860 in the Pacific Northwest, with one reference that all mountain quail in the Willamette Valley of Oregon resulted from introductions (Crawford 2000). These translocations, combined with natural and subsequent movement patterns, may have accounted for more recent (post-1900) distributions of mountain quail in many parts of eastern Oregon and into western Idaho (Jackle et al. 2002). Vogel and Reese (1995) reported that historically mountain quail occupied more extensive areas in Oregon than they did in the early 1900s, primarily because of the “open burns and logged-over areas that have replaced enormous areas of the original dense forest of the Pacific Northwest.” Recently logged areas in the Cascades, Coast Range, and Klamath mountains provide excellent shrub habitat for mountain quail and may have allowed some populations on the west slope of the Cascades to expand their range (Vogel and Reese 1995). Gabrielson and Jewett (1940), as referenced by Vogel and Reese (1995), reported mountain quail in suitable habitat throughout the Coast and Cascade Ranges and the Rogue, Umpqua, and Willamette valleys of western Oregon. In contrast, populations in eastern Oregon occupy riparian shrub habitats that have declined from historic levels. Current data indicate that mountain quail are found in low densities in Union, Wallowa, Wasco, and Wheeler counties, and are moderately abundant in Crook, Deschutes, Grant, Jefferson, and Klamath Counties (Vogel and Reese 2002).

        Crawford (2000) concludes that the distribution and abundance of mountain quail remained relatively constant during the mid-twentieth century throughout Oregon. But within the past 25 years, populations outside of the early historic distribution have suffered substantial declines, whereas populations in the Coast and Cascade Ranges of Oregon continue to remain abundant. These downward trends in populations have prompted Pope (2002) and Jackle et al. (2002) to undertake comparative studies by of populations found west of the Cascade Crest (which are stable or abundant) with populations found in central and eastern Oregon. Both studies have demonstrated that an effective restoration effort for mountain quail is feasible using wild birds trapped in western Oregon and released in central and eastern Oregon. However, translocations programs will be more effective when evaluated through post-release monitoring. Oregon still maintains a hunting season in western and northeastern Oregon for mountain quail.
        In Washington, following translocations of mountain quail from the 1860s to the early 1900s, historical accounts reported mountain quail west of the Cascade Mountains and in the Blue Mountains in southeastern Washington (Crawford 2000). Mountain quail are currently found throughout portions of western Washington with the strongest population found on the Olympic Peninsula (Washington Department of Wildlife (WDW) 1993; Ware, Washington Department of Fish and Wildlife, pers. comm. 2002). They have been recorded in the past in Mason, Kitsap, Pierce, King, Thurston, Clark, Skamania, Garfield, Columbia, Asotin, and Walla Walla Counties, although the precise delineation of the species's distribution is poorly understood (WDW 1993) and they may be extirpated from Asotin, Garfield, and Columbia Counties (Ware pers. comm. 2002). As noted in Crawford (2000), translocations also took place on Whidbey Island, San Juan Island, and elsewhere in Washington.
        Little evidence suggests that mountain quail were native to Washington (WDW 1993, Vogel and Reese 1995). Vogel and Reese (1995), in their research on the topic of native status, found that many authors believed that the Columbia River was the northern limit of the species' range, and that mountain quail were introduced to Washington. Birds from multiple sources were translocated into Washington resulting in mixing of various subspecies. Current distributions in western Washington have remained stable, but populations in eastern Washington have been in a severe decline, as reported by Vogel and Reese (2002). Washington maintains a hunting season for mountain quail in the western part of the State only.

        The petitioners requested that we list those populations of mountain quail east of the Cascade Crest and Sierra Mountain Ranges within Washington, Oregon, Idaho, and Nevada as a threatened or endangered DPS of the species under the Act. Under our DPS policy (61 FR 4722; February 7, 1996), we use three elements to assess whether a population under consideration for listing may be recognized as a DPS: (1) A population segment's discreteness from the remainder of the taxon; (2) the population segment's significance to the taxon to which it belongs; and (3) “[t]he population segment's conservation status in relation to the Act's standards for listing (i.e., is the population segment, when treated as if it were a species, endangered or threatened?).” If we determine that a population being considered for listing may represent a DPS, then the level of threat to the population is evaluated on the basis of the five listing factors established by the Act to determine if listing it as either threatened or endangered may be warranted.
        A population segment of a vertebrate species may be considered discrete if it satisfies either of the following conditions. The first condition is whether the species' population is markedly separated, or isolated, from other populations of the same taxon “as a consequence of physical, physiological, ecological, or behavioral factors.” When these four factors are evaluated, “[q]uantitative measures of genetic or morphological discontinuity may provide evidence of this separation.” The second condition, which does not apply here, is whether the population segment be “delimited by international governmental boundaries within which differences in control of exploitation, management of habitat, conservation status, or regulatory mechanisms exist that are significant in light of section 4(a)(1)(D) of the Act.”
        In determining the discreteness, or isolation, of mountain quail populations found within the proposed DPS, one of the factors we consider is physical separation from the rest of the taxon. The petitioners did not provide substantial information, either through text description, map attachments, or references in the petition, to demonstrate that the populations of mountain quail along the western border of the proposed DPS are physically isolated from nearby eastern populations in Oregon and Nevada.
        Although mountain quail are associated with separate locations within the proposed DPS on a landscape consisting of various mountain ranges and intervening valleys, they are able to move between these areas (Gutierrez and Delehanty 1999; Pope, Oregon State University, pers. comm. 2002). No physical barrier appears to exist that would preclude the movement of birds across this landscape and hypothetical boundary separating the petitioned and non-petitioned areas and prevent mountain quail populations from intermixing. For example, the current distribution of mountain quail, as depicted in the petition, shows contiguous distribution between California and Nevada, and also between Oregon and California. Exceptions to this continuity exist: some populations in the extreme eastern range of mountain quail are presently disjunct from natural exchange with mountain quail outside the petitioned area. For example, current distributions of mountain quail are disjunct in some areas of Idaho and northern Nevada. However, when we consider the proposed DPS boundaries as delineated by the petitioners, there is a blend of both disjunct populations and continuous population areas that do not meet the discreteness standard under our DPS policy.

        Further complicating the question of discreteness is the documented translocation of mountain quail from areas outside and within the proposed DPS geographical area during the past 130 years (Vogel and Reese 1995, 1998; Jobanek 1997; Crawford 2000; Jackle et al. 2002). Crawford (2000) in his review of the subject found documented releases of mountain quail in western Idaho and throughout Oregon and Washington. Vogel and Reese (2002) in their review of Nevada found anecdotal evidence that “sportsmen, ranchers, and miners released mountain quail across the state beginning in the 1870s and continuing to the 1930s or early 40s.” In their review of the distribution of 18 species of gallinaceous birds of North America, Aldrich and Duvall (1955) noted that mountain quail were native to the Pacific coastal region of the extreme western United States. They state that mountain quail were established after introductions into the mountains of eastern Washington, western Idaho, eastern Oregon, and central Nevada.

        During the past 20 years, information addressing translocations of mountain quail by State agencies has been better documented than it had been in prior years. For example, a total of 1,293 mountain quail have been released in Nevada counties, including Nye, Churchhill, Pershing, Washoe, Elko, and Lander, since 1986 (Vogel and Reese 2002). All birds were captured at the China Lakes Naval Weapons Station, Mojave Desert, California, an area that is outside and west of the proposed DPS geographical area. In Oregon, 75 mountain quail were captured in the western Cascade Mountain Range of southwestern Oregon and translocated into northeastern Oregon between 1997 and 1999, partly to assess breeding range movements of both resident and translocated mountain quail (Pope 2002). Additionally, a total of 209 mountain quail were translocated to three separate locations in central Oregon in 2001 using birds that were captured in western Oregon (Jackle et al. 2002) as part of a restoration plan.

        The DPS policy states that genetic information may be used to provide evidence of separation. The numerous historic and recent translocation efforts as discussed above may have lead to genetic homogenization of mountain quail. Assessing evidence of genetic separation among either historic or current populations of mountain quail is likely to be complicated by past translocation efforts. No comprehensive genetic evaluation for discreteness of mountain quail rangewide or within in the proposed DPS is currently available. Also, the petitioners submit that the genetic differentiation of mountain quail subspecies or populations has not been adequately tested, and refer to unpublished preliminary data that indicate no genetic differences exist among mountain quail in western North America (Kavanaugh et al. 2000).
        Additionally, in evaluating information regarding translocations, it is difficult to discern which are introductions, reintroductions, or supplementations of existing mountain quail populations. “Introduction” has been used to define the release of a species in a new range, “reintroduction” refers to release of a species into historical range that is no longer inhabited by that species, and “supplementation” is release of the species into currently inhabited range (Vogel and Reese 2002). Given the history of translocations of mountain quail, it is currently difficult to clearly identify the historical native range of the species. The petitioners make no attempt to distinguish between the species' potential native or introduced ranges.
        Two other factors to consider with regard to discreteness or isolation of a population are the behavioral and morphological aspects. Delehanty (1997) initiated a study to determine behavioral differences and similarities in male and female mountain quail. He also examined and was successful at developing a method to determine genetic detectability of sex using microsatellite fragments from undegraded DNA. He concluded that many behavioral displays are universal among both sexes of mountain quail, while some are particular only to males. These behaviors were observed by Delehanty (1997) in captive-reared birds and in wild populations at sites in the eastern Sierra Nevada of east central California, western Nevada, and in the Mojave Desert of southern California. He further confirmed the monomorphic plumage and size characteristics of mountain quail from known geographical places. The study served to demonstrate that behavioral and morphological aspects are not limiting factors in reproduction when translocation is considered. These conclusions were further confirmed by Pope and Crawford (2001) in controlled studies of wild populations of mountain quail when 75 birds were translocated from the Cascades of southwestern Oregon to Hells Canyon National Recreation Area in northeastern Oregon. The petitioners did not provide evidence to document whether mountain quail within the proposed DPS exhibit any unique behavioral or morphological traits. No information is presented in the petition, nor is any available in Service files, to indicate that any physical, genetic, behavioral, morphological, physiological, or ecological differences between mountain quail that occur in the proposed DPS and those found outside of it.
        In summary, to make a DPS determination, we examined the physical, physiological, ecological, and behavioral factors and considered the complicating nature of past translocation efforts. Since there are no international government boundaries of significance, this condition for a finding of discreteness was not considered in reaching this determination. Neither the information presented in the petition nor that available in Service files presents substantial scientific or commercial information to demonstrate that the DPS, as proposed for mountain quail by the petitioners, is discrete from the remainder of the taxon. Accordingly, we are unable to define a listable entity of mountain quail within those areas of Washington, Oregon, Idaho, and Nevada as described in the petition. Therefore, we did not address the second element for determining a DPS, which is the potential significance of discrete populations of mountain quail to the remainder of the taxon. Finally, since no DPS of mountain quail can be defined at this time, we did not evaluate its status as endangered or threatened on the basis of either the Act's definitions of those terms or the factors in section 4(a) of the Act.
        Petition Finding
        We have reviewed the petition, obtainable literature cited in the petition, other pertinent literature, and information available in Service files, and we have consulted with State and Federal agency biologists. After our review, we find the petition does not present substantial information to indicate that the petitioned action is warranted. This finding is based on the following: (a) Insufficient information exists to enable us to determine whether the mountain quail in the proposed DPS are separated from other mountain quail throughout the range of the taxon; (b) complicating information about past translocations of mountain quail currently precludes clearly determining the native historical distribution of the species; and (c) evidence is insufficient to demonstrate that genetic, morphological, ecological, or behavioral differences exist among extant mountain quail populations.
        References Cited

        A complete list of all references cited herein is available upon request from the Snake River Basin Fish and Wildlife Office (see ADDRESSES).
        Author

        The primary author of this notice is Rich Howard, U.S. Fish and Wildlife Service, Snake River Fish and Wildlife Office (see ADDRESSES).
        Authority:

        The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).

          Dated: January 10, 2003.
          Marshall P. Jones, Jr.,
          Director, Fish and Wildlife Service.

      [FR Doc. 03-1283 Filed 1-21-03; 8:45 am]
      BILLING CODE 4310-55-P


        DEPARTMENT OF TRANSPORTATION
        Office of the Secretary
        49 CFR Part 26
        [Docket OST-2000-7639]
        RIN 2105-AC88
        Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs; Memorandum of Understanding With the Small Business Administration; Uniform Forms and Other Revisions

          AGENCY:
          Office of the Secretary, DOT.

          ACTION:
          Notice of proposed rulemaking.

          SUMMARY:
          The Department of Transportation (DOT or the Department) is proposing revisions to the Department's regulations for its Disadvantaged Business Enterprise (DBE) program (49 CFR part 26). In its final DBE rule the Department reserved publication of a uniform reporting form and a uniform certification application form for a later date. This document proposes those forms. In addition, this document proposes implementation procedures for a Memorandum of Understanding (MOU) between DOT and the U.S. Small Business Administration (SBA). The MOU streamlines certification procedures for participation in SBA's 8(a) Business Development (8(a) BD) and Small Disadvantaged Business (SDB) programs, and DOT's DBE program for small and disadvantaged businesses. Finally, this document proposes substantive changes to several provisions, including: Personal net worth, retainage, the size standard, proof of ethnicity, confidentiality, proof of economic disadvantage, and DBE credit for trucking firms.

          DATES:
          Comments should be received no later than June 7, 2001.  Late-filed comments will be considered to the extent practicable.

          ADDRESSES:
          Interested persons should send comments to Docket Clerk, Docket No. OST-2000-7639, Department of Transportation, 400 7th Street, SW., Room PL-401, Washington, DC 20590. We request that, in order to minimize burdens on the docket clerk's staff, commenters send three copies of their comments to the docket. Commenters wishing to have their submissions acknowledged should include a stamped, self-addressed postcard with their comments. The docket clerk will date stamp the postcard and return it to the commenter. Comments will be available for inspection at the above address from 10:00 a.m. to 5:00 p.m., Monday through Friday, except Federal holidays.

          FOR FURTHER INFORMATION CONTACT:

          Laura A. Aguilar, Attorney, Office of Environmental, Civil Rights, and General Law, Department of Transportation, 400 7th Street, SW., Room 10102, Washington, DC 20590, phone numbers (202) 366-0365 (voice), (202) 366-9170 (fax), (202) 755-7687 (TDD), laura.aguilar@ost.dot.gov (e-mail).

        SUPPLEMENTARY INFORMATION:
        Background

        On February 2, 1999, the Department published a final rule revising its Disadvantaged Business Enterprise (DBE) program. The new regulations (49 CFR part 26) replaced 49 CFR part 23, except for the airport concessions regulations. In shaping the final rule, the Department responded to 600 comments on its December 1992 Notice of Proposed Rulemaking (NPRM), and 300 comments on its May 1997 Supplemental Notice of Proposed Rulemaking (SNPRM). The Department also participated in the Clinton Administration's review of affirmative action programs and listened carefully to Congressional debate during the reauthorization of the Department's DBE program in the Transportation Equity for the 21st Century (TEA-21). The final rule also incorporates requirements set forth in the Supreme Court's June 1995 decision in Adarand v. Peña. The result is a narrowly tailored program that provides a “level playing field” for small socially and economically disadvantaged businesses.

        There are three different parts addressed in this document. The first part addresses uniform forms. In the final rule, the Department stated that it would develop a single reporting form and a standard DOT application form for DBE eligibility. The Department did not want to delay the issuance of the final rule, so it reserved the date on which the uniform form requirements would go into effect. This document addresses both of these forms. The second part addresses the implementation of a Memorandum of Understanding (MOU) between the DOT and the Small Business Administration (SBA). The MOU streamlines certification procedures for participation in SBA's 8(a) Business Development (8(a) BD) and Small Disadvantaged Business (SDB) programs and DOT's DBE program. The final part proposes substantive changes to several provisions, including: personal net worth, retainage, proof of ethnicity, confidentiality, proof of economic disadvantage, and DBE credit for trucking firms.
        A. Forms
        1. Reporting Form
        In the preamble to the February 2, 1999, final DBE rule, the Department adopted the suggestion of having one standard reporting form. We believe it will reduce administrative burdens for recipients, particularly those who receive funds from more than one DOT operating administration (OA). We are now addressing the format and substance of the uniform reporting form. We are also proposing that recipients report DBE program data to the concerned OA semi-annually. The concerned OA is the DOT agency from which the recipient received Federal funds. See § 26.21(a). For example, a recipient of Federal Highway funds must submit a report to the Federal Highway Administration (FHWA). If a recipient receives funds from more than one OA, it must submit a separate report to each OA. Finally, we are proposing a three-year retention requirement for basic program data. We are requesting comment on the content and format of the standard form. To assist commenters in formulating responses, we are publishing a proposed form in the NPRM that would become appendix B to 49 CFR part 26.
        The proposed reporting form requires that information concerning both awards or commitments and attainments of DBE participation be reported. The rule requires recipients to have a mechanism to verify that the work committed and awarded to DBEs is actually performed by DBEs. See 49 CFR 26.37(b). The preamble to the final rule explains that recipients should keep a running tally of the extent to which, on each contract, performance matched promises. However, we recognize that in many instances the awards and commitments reported will not correspond to the attainments reported on the same form within a single fiscal year. For example, if a contract is awarded to a DBE in January 2001, the award would be reflected in the report for that period. However, the contract would likely not be completed for many years. Therefore, the actual achievement section in that report could not reflect the achievements on that contract. Instead, the report will reflect attainments on contracts completed during the reporting period. It is essentially a “snap-shot” of a recipient's progress towards the participation of DBEs in its DBE program and not a determinative factor as to whether or not DBE goals are being met and programs are successful.
        In the attainments section, recipients would report the actual number and dollar amounts of payments made to DBEs during the reporting period. This section is also in keeping with the mandate of 49 CFR 26.55(a), which specifies “(w)hen a DBE participates in a contract, you count only the value of the work actually performed by the DBE toward DBE goals.”
        Currently, Federal Aviation Administration (FAA) recipients submit annual reports while Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) recipients submit quarterly reports. The December 1992 NPRM proposed that recipients report DBE program data quarterly to the appropriate OA. Again, the appropriate OA is the DOT agency (FAA, FHWA and/or FTA) from which the recipient receives Federal funding. The OA's believe that quarterly reporting is often too burdensome for recipients. This is especially true for smaller recipients with only one contract over a long period of time. Requiring quarterly reports in that instance would result in unnecessary repetition of information. Therefore, we are proposing semi-annual reporting. This will allow the Department to adequately monitor the extent to which recipients are meeting DBE goals while not overly burdening smaller recipients with redundant reporting requirements.
        Reports would be due to a recipient's OA on June 1 and December 1 each year. The June 1 report would include information from October 1 through March 31. The December 1 report would include information from April 1 through September 30. Since the majority of recipients set goals based on a fiscal year, we believe that these dates will assist them in setting their overall goals which must be submitted to the OA by August 1 of each year.
        In keeping within the parameters suggested by commentators during the SNPRM, we are proposing that recipients retain information relating to basic program data for three years.
        2. Uniform Application Form
        In the preamble to the final rule, the Department adopted a single, uniform, nationwide form that all recipients must use without modification for DBE eligibility. We are now addressing the substance of the uniform application form and requirements. Although recipients must use the uniform application form without modification, we recognize that some States have additional statutory and/or regulatory requirements. Therefore, recipients may supplement the uniform application form with a one to two page attachment containing the additional certification requirements. We are requesting comment on the content of the standard form. To assist commenters in formulating responses, we are publishing a proposed form in this NPRM that would become appendix F to 49 CFR part 26.
        In developing the proposed form, we started with FHWA's Region 5 Certification Application. We asked a few recipients who receive financial assistance from FHWA, FAA, and FTA to comment on the content and format of the application. We are attempting to balance the need for a complete form and the desire to simplify the application. We urge commenters to think about what must be contained in the application and what may be reserved for an on-site review.
        We are working closely with representatives from the SBA in developing a uniform application form to be used by both agencies. The MOU is designed to streamline the application process for SBA's 8(a) BD and SDB programs and DOT's DBE program. We believe that having a joint uniform application form will make it easier for small businesses to apply for certification for programs from both agencies. It is our hope that with the comments received on the proposed form in appendix F will be able to issue the joint DOT/SBA certification application form in the final rule.
        B. Memorandum of Understanding
        1. Background
        The SBA's 8(a) BD and SDB programs and DOT's DBE program share many common certification requirements. Therefore, on November 23, 1999, the former Secretary of Transportation, Rodney Slater, signed a Memorandum of Understanding (MOU) with Aida Alvarez, the former Administrator of the SBA, the purpose of which is to develop common application procedures that will streamline the certification process for the respective programs. This streamlined process is designed to reduce administrative costs and to provide more opportunities for small businesses owned and controlled by socially and economically disadvantaged individuals. It also establishes procedures for the efficient transfer of information among SBA, DOT, and DOT recipients, and for the consideration of certification appeals.

        We are issuing this NPRM to amend 49 CFR part 26 to establish new or revised responsibilities for DOT recipients created by the MOU. The MOU and these proposed changes do not alter the program requirements. For example, women are not presumed disadvantaged in SBA's programs. Therefore a woman-owned DBE will still have to show disadvantage to qualify for SBA's 8(a) BD and SDB programs. Similarly, an SBA-certified firm must still undergo an on-site review before receiving DBE certification.
        The current DBE regulations allow recipients the flexibility to accept certifications for 8(a) BD or SDB-certified firms in lieu of conducting its own certification process or to require the firm to go through part or all of its own application process. See 49 CFR 26.67 (c). Under the MOU, recipients would be required to accept and recognize 8(a) BD and SDB certifications in lieu of requiring the applicant firm to fill out the recipient's own application. However, the applicant firm must still meet all the part 26 requirements. For example, a firm must meet the DOT statutory gross receipts cap, currently $17,420,000, see 65 FR 52470 (August 29, 2000). Based on the information gained from the on-site review, including documentation that the firm meets DOT eligibility criteria, a DOT recipient may deny certification to a firm that the SBA certified.
        As stated in the previous section, we are working with representatives from the SBA in developing a joint certification application form. We anticipate that the joint application form will contain a main section with common requirements and have three additional parts for 8(a) BD, SDB and DBE certification. The applicant would need to complete the main section of the application only once. Then the applicant would fill out the program specific part for each program for which the applicant is applying. We believe that the joint application form will simplify the application process for new applicants.
        For SBA-certified firms seeking DBE certification, we are proposing the following procedures. An SBA-certified firm may submit its certification package to the applicable DOT recipient or it may request that the SBA forward the certification package to the DOT recipient. Pursuant to the MOU, the SBA will forward the package to the DOT recipient within thirty days after receipt of the firm's request. If necessary, the recipient may request additional information from the applicant or from the SBA. If requested from the SBA, the additional information will be transferred within 45 days after receipt of the request. The recipient will then make an independent certification decision based on the SBA application package, any additional information provided and an on-site review. If the SBA conducted an on-site review, the DOT recipient may rely on SBA's report of the on-site review in lieu of conducting its own on-site review. 49 CFR 26.83(k) requires a recipient to make decisions on applications of certification within 90 days of receiving from the applicant firm all information required under part 26. If a firm applies for DBE certification pursuant to the MOU, the recipient is required to make a decision within 90 days of receiving all the required information, whether it is from the applicant or the SBA.
        Recipients are not required to process an application for certification from an SBA-certified firm having its principal place of business outside the state unless there is a report of a “home state” on-site review on which the recipient may rely. This helps the problem of costly out-of-state visits.
        If a recipient denies certification to a firm certified by the SBA, it must notify the SBA in writing. The notification must include the reason for denial. A recipient may simply send a copy of the denial letter to the SBA. Similarly, when a recipient decertifies a firm certified by the SBA, it must notify the SBA in writing. Again, the notification must include the reason for denial. A copy of the denial letter is sufficient notification.
        An SBA-certified firm that is denied DBE certification or whose eligibility is removed by a DOT recipient is entitled to the same appeal rights as DBE firms. Such a firm may make an administrative appeal to the Department pursuant to part 26. The Department will notify the SBA, in writing, when DOT takes an action on an appeal that results in or confirms a loss of DBE eligibility to any SBA-certified firm. The notice will include the reasons for the Department's decision, including specific references to the evidence in the record that supports each reason for the decision.
        If a DBE-certified firm is seeking SBA certification, it may request, in writing, that the applicable DOT recipient forward a copy of its application to the SBA. If a recipient receives such a request, it must forward the application package to the SBA within 30 days of receiving the request. Under the MOU, the recipient will be required to pay the copying and transmittal fees. We are requesting comment on the impact this will have on recipients. If the SBA requests additional information, the recipient must forward the requested information within 45 days of receiving the request.
        Recipients would also be required to provide appropriate assistance to SBA-certified firms, including information pertaining to the DBE application process, filing locations, required information and status of the application.
        C. Additional Changes
        1. Personal Net Worth
        Section 26.67 requires each individual whose ownership and control are relied upon for DBE certification to submit a signed, notarized statement of personal net worth (PNW), with appropriate supporting documentation. The Department received a number of questions about what documentation is appropriate for recipients to require in ascertaining the PNW of owners of DBE firms. In the preamble to the final rule correction (see 49 FR 34569 (June 11, 1999)), the Department recommended using the SBA's form as a model. SBA requires completion of a two-page form, supported by two years of personal and business tax returns. The Department wanted to remain flexible while encouraging recipients to use forms that are not unduly lengthy, burdensome or intrusive. The Department did not require recipients to use the SBA form verbatim but encouraged them to use a form of similar length and content, including collecting and retaining two years of an individuals' personal and business tax returns.
        The final rule explicitly requires that the personal financial information be kept confidential. Nevertheless, the Department has continued to receive comments concerning the intrusiveness of collecting personal tax returns. We understand the justifiable privacy concerns associated with collecting personal income tax information. However, we must also ensure that the integrity of the program is maintained. Recipients must have a tool to ensure that non-disadvantaged persons do not participate in the program.

        Therefore, we are proposing an alternative option with regard to supporting documentation. Recipients must still require an individual whose ownership and control are relied upon for DBE certification to certify that he or she has a personal net worth that does not exceed $750,000. Applicants could still submit a signed, notarized statement of PNW, with appropriate documentation. Alternatively, the applicant could submit a signed, notarized statement from a certified public accountant (CPA) attesting that the CPA has examined his or her personal net worth pursuant to § 26.67(a)(2)(iii) and determined that his or her personal net worth does not exceed $750,000. This second option would eliminate the need for the applicant to provide personal income tax information to the DOT recipient for purposes of PNW.
        Under either method, the determination of an individual's PNW should follow certain requirements specified in the final rule. For example, the rule requires that an individual's ownership in the applicant firm be excluded. With the exception of one proposed change discussed below, the requirements remain the same. However, we are making the wording and format of the current language clearer and easier to read.
        We are proposing a change with respect to vested pension plans, Individual Retirement Accounts, 401(k) accounts, and other retirement savings or investment programs in which the assets cannot be distributed to the individual at the present time without significant adverse tax or interest consequences. We are proposing that PNW would include only the present value of such assets, less the tax and interest penalties that would accrue if the asset were distributed at the present time. An alternative method would be to exclude such assets from the personal net worth calculation. We are requesting comment on this issue.
        2. Retainage
        As the Department noted in the preamble to the February 1999 final rule, delays in payment have long been one of the most significant barriers to the competitiveness, and in some cases the viability, of small subcontractors. One of the delays in payment about which subcontractors have been most concerned is payment of retainage. Often, subcontractors have told us, they finish all their work on a contract months or years before the end of the project on which the prime contractor is working, but the prime contractor does not pay them fully until after the recipient has paid retainage to them at the end of the entire project. To help surmount this barrier, the final rule requires prime contractors to pay retainage to subcontractors promptly after the subcontractors satisfactorily complete their work.
        Many states and other recipients have responded very creatively to this provision, taking such steps as making incremental payments to contractors or eliminating retainage altogether. Where recipients have not taken such steps, however, prime contractors have complained that the requirement to pay subcontractors fully before the recipient pays retainage to the prime contractor is a financial hardship on prime contractors.
        In order to address the prime contractors' concerns, without diminishing the benefit of the existing provision to subcontractors, the Department is proposing to require recipients to take one of three approaches. First, a recipient could eliminate retainage entirely, neither retaining funds from prime contractors nor permitting prime contractors to hold retainage from subcontractors. Second, a recipient could decide not to retain funds from prime contractors, but give prime contractors discretion to hold retainage from subcontractors. In this case, the recipient would require prime contractors to pay subcontractors in full after satisfactory completion of the subcontractor's work. Third, the recipient could hold retainage from prime contractors, but make incremental inspections and approvals of the prime contractor's work at various stages of the project (sometimes called “mini-finals”). The recipient would pay the prime contractor the portion of the retainage based on these approvals. The prime contractor, in turn, would be required to promptly pay all retainage owed to the subcontractor for satisfactory completion of the approved work. None of these three approaches is new. All are being employed successfully by DOT recipients today.
        We are defining “prompt” as no later than thirty days. Based on our experience in program review thirty days was the most common length of time suggested by recipients. We think that this is a sensible amount of time. We seek comment on these approaches and on any other ideas commenters may have concerning this matter.
        3. Size Standard
        One of the purposes of the DBE rule is to make it possible for small firms to grow. This includes the opportunity for subcontractors to become able to compete as prime contractors. To be able to perform prime contracts, companies often need to be larger and have more resources than they had as subcontractors. Frequently, firms who are attempting to grow will perform both prime contracts and subcontracts. This may create a dilemma for DBE firms in some cases. In order to work as prime contractors, firms may need to grow beyond the limits of the SBA size standards applicable to their subcontracting field. If they do, then recipients may decertify them because they are no longer small businesses. A number of firms have expressed the concern that this situation penalizes success and impedes achievement of an important objective of the DBE program.

        We emphasized in the preamble to the final rule and a recent Question and Answer that recipients should not totally decertify a firm because it exceeds the size standard for one or more of its activities. Under § 26.65(a), if a firm meets the size standard for one type of work (e.g., as a general contractor), it should continue to be certified and receive DBE credit for that type of work, even if it has exceeded the size standard for another type of work (e.g., as a specialty subcontractor). In that case, of course, the firm could not remain eligible and receive DBE credit for this type of activity.
        The Department seeks comment on whether we should make any modifications of the rule to address further the situations of firms that work as both prime contractors and subcontractors.
        4. Proof of Ethnicity
        We are proposing minor modifications to § 26.61(c) and § 26.63(a) to address concerns raised by both DBEs and recipients regarding issues related to group membership. There have been a few documented instances of individuals attempting to fraudulently participate in the DBE program by falsely asserting to be a member of one of the groups benefiting from the rebuttable presumption of social and economic disadvantage as outlined in § 26.67(a). For this reason, many recipients seek to obtain evidence of group membership that goes beyond an oral statement or “checking off a box on a form.” At the same time, recipients are concerned that if they request additional evidence from some individuals but not others, they could be accused of discrimination in the certification process. In response to both of these concerns, we are proposing that recipients obtain a signed and notarized statement of group membership from all persons who claim to own and control a firm applying for DBE certification and whose ownership and control are relied upon for DBE certification.

        A signed, notarized statement should be considered sufficient proof of ethnicity. The recipient should not ask for additional evidence unless it has a well founded reason to doubt the veracity of the owner. We emphasize that great care must be taken in looking behind the individual's assertion of membership in one of the groups designated in § 26.67(a). As a recipient, if you have reason to believe that the owner of a firm seeking certification has misrepresented his/her group membership, then further information can and must be collected. However, you must inform that person, in writing, of your reasons for doubting his or her statement and your need for additional documentary evidence. Such instances should be the exception, not the rule. It is our expectation that requiring a written record justifying the need for additional information will help to reduce the number of unnecessary requests.
        Even where additional documentation is necessary, care should be taken to ensure that particular ethnic group members are not forced to meet a higher level of proof than members of other groups. For example, many recipients accept a driver's license or a birth certificate as adequate proof of group membership. These forms of identification always indicate gender and sometimes indicate the race of the holder, however they often do not designate whether or not an individual is Hispanic or Native American. In some instances, members of these groups have been required to provide not one, but several types of additional proof of ethnicity simply because their driver's license did not indicate their race. Such actions could constitute a violation of the nondiscrimination provisions of 49 CFR parts 21 and 26 and of Title VI of the Civil Rights Act of 1964.
        A driver's license or a birth certificate may be adequate types of proof of ethnicity. However, in cases where the required proof does not indicate specific races, such as Hispanic or Native American, the applicant should only be required to provide the same level of proof as members of other groups. For example, if a birth certificate is adequate for one group, then only a single piece of evidence may be required from members of other groups. Such single piece of evidence might include naturalization papers, Indian tribal roll, tribal voter registration certificate, a letter from a community group, educational institution, religious leader, or government agency stating that the individual is a member of the claimed group, or a letter from the individual setting forth specific reasons for believing himself/herself to be a member of the designated group.
        5. Confidentiality
        A common complaint of DBEs is that there are insufficient protections for the confidentiality of their business information. When DBEs submit significant amounts of information to recipients for certification purposes, firms are concerned that, through state Freedom of Information Act (FOIA) requests or discovery in state or Federal court proceedings, their confidential information will be released to the public. We believe that this concern is justified, and we believe that the concern that confidential documents may become public can act as a deterrent to program participation by some potential DBEs. For this reason, we are amending the confidentiality section of the regulation to parallel the existing, tighter confidentiality provision of § 26.67 concerning personal net worth information. Under the proposed provision, recipients would not be authorized to release confidential business information in any circumstance without the submitter's written consent.
        6. Economic Disadvantage
        In appendix E to part 26, “Individual Determinations of Social and Economic Disadvantage”, we are proposing to remove paragraph (B)(2) under “Economic Disadvantage”. This paragraph requires that in the case of applications by individuals to be considered socially and economically disadvantaged, the applicant submit personal financial information for his or her spouse. This is inconsistent with the way the Department's personal net worth provisions under § 26.67 work in the case of applicants who are members of a group presumed to be economically and socially disadvantaged. In order to remove this inconsistency, we are deleting the paragraph in question.
        7. Credit for Trucking Firms
        In the final rule, after reviewing comments and the contrasting practices of a number of recipients, the Department decided to count credit for the participation of DBE trucking companies only with respect to trucks that DBEs themselves owned and operated. This was intended to prevent a situation in which, for example, a DBE trucking company owned only one truck or a few trucks and leased the services of a larger number of non-DBE truckers, claiming credit for them as well. The Department believed that this practice was contrary to the general principle that DBE credit should be counted only for work that DBEs themselves perform.
        Since we issued the rule, a number of people have said to us that this provision works an unnecessary hardship on DBE trucking companies and is difficult for recipients to administer. Some have suggested, as a middle ground, allowing credit for twice the number of trucks actually owned by the DBE (i.e., if a DBE owned one truck, and leased another from a non-DBEs, it could get credit for both). The Department seeks comment on whether this provision should be modified and, if so, how.
        Regulatory Analyses and Notices
        Executive Order 12866 and DOT Regulatory Policies and Provisions
        This proposed rule is not a significant regulation under either Executive Order 12866 and DOT Regulatory Policies and Provisions. The proposal will not impose any new costs on recipients or contractors. It simply would make administrative adjustments concerning existing provisions and assist contractors by implementing the SBA-DOT MOU.
        Regulatory Flexibility Act Analysis
        The Department certifies that this proposed rule, if made final, would not have significant economic effects on a substantial number of small entities. While the proposal affects small entities, it does not have a significant economic impact on anyone.
        Paperwork Reduction Act
        This proposed rule also contains information collection requirements. As required by the Paperwork Reduction Act of 1995 (the PRA, 44 U.S.C. 3507(d)), the Department will submit these requirements to the Office of Information And Regulatory Affairs of the Office of Management and Budget for review.
        As noted elsewhere in this preamble, the Department adopted the suggestion of having one standard reporting form in the February 2, 1999, final DBE rule. The proposed Uniform Semi-Annual Report of DBE Awards or Commitments and Achievements form is contained in Appendix B of this NPRM. At the present time, the Department has an information collection item approved under the Paperwork Reduction Act. This is for a quarterly DBE data report from recipients to DOT (OMB No. 2105-0510). This approval expires July 31, 2001. Under the NPRM, the frequency of reporting would change from four times a year to twice a year, which would reduce the burden involved.

        The February 2, 1999, final DBE rule also adopted a single, uniform, nationwide certification application form. Part 26 requires firms applying for DBE certification to provide information to recipients to allow them to make eligibility decisions. Currently, an applicant firm may be required to fill out different applications for FAA, FHWA and FTA recipients. The Department believes that requiring one uniform application will reduce the paperwork burden. The proposed Uniform Certification Application form is contained in appendix F of this NPRM.

        Individuals and organizations may submit comments on the information collection elements of this NPRM by September 5, 2001 and should direct them to the DOT docket specified at the beginning of the NPRM. According to OMB's regulations implementing the PRA (5 CFR 1320.8(b)(2)(vi)), an agency may not conduct or sponsor, and a person need not respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this information will be published in the Federal Register after it is approved by OMB.
        Federalism
        The Department has determined that this proposed rule, if made final, would not have Federalism impacts sufficient to warrant preparation of a Federalism assessment.

          List of Subjects in 49 CFR Part 26
          Administrative practice and procedure, Airports, Civil rights, Government contracts, Grant-programs—transportation, Mass transportation, Minority businesses, Reporting and record keeping requirements.

          Issued this 26th day of April, 2001, at Washington, DC.
          Norman Y. Mineta,
          Secretary of Transportation.

        For the reasons set forth in the preamble, the Department proposes to amend 49 CFR part 26 as follows:

          PART 26—PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS
          1. The authority citation for 49 CFR part 26 continues to read as follows:

            Authority:
            23 U.S.C. 324; 41 U.S.C. 2000d, et seq.; 49 U.S.C. 1615, 47107, 47113, 47123; Pub. L. 105-178, sec. 1101(b), 112 Stat. 107, 113.

          2. Amend § 26.5 by adding a definition of “DOT/SBA MOU Memorandum of Understanding or MOU” after “DOT-assisted contract” and by adding a definition of “SBA certified firm” after “Small Business Administration” to read as follows:

            § 26.5
            What do the terms in this part mean?

              DOT/SBA Memorandum of Understanding or MOU, refers to the agreement signed on November 23, 1999, between the Department of Transportation (DOT) and the Small Business Administration (SBA) streamlining certification procedures for participation in SBA's 8(a) Business Development (8(a) BD) and Small Disadvantaged Business (SDB) programs, and DOT's Disadvantaged Business Enterprise (DBE) program for small and disadvantaged businesses.

              SBA certified firm refers to firms that have a current, valid certification from or recognized by the SBA under the 8(a) BD or SDB programs.

            3. Amend § 26.11 by adding paragraph (a) to read as follows:

            § 26.11
            What records to recipients keep and report?
            (a) You must use the reporting form provided in Appendix B to this part without change or revision.

            4. Revise § 26.29 to read as follows:

            § 26.29
            What prompt payment mechanisms must recipients have?
            (a) You must establish, as part of your DBE program, a contract clause to require prime contractors to pay subcontractors for satisfactory performance of their contracts no later than thirty days from receipt of each payment you make to the prime contractor.
            (b) You must ensure prompt and full payment of retainage from the prime contractor to the subcontractor within thirty days after the subcontractor's work is satisfactorily completed. You must use one of the following methods to comply with this requirement:
            (1) You may decline to hold retainage from prime contractors and prohibit prime contractors from holding retainage from subcontractors.
            (2) You may decline to hold retainage from prime contractors and require a contract clause obligating prime contractors to make prompt and full payment of any retainage kept by prime contractor to the subcontractor within a specific number of days after the subcontractor's work is satisfactorily completed.
            (3) You may hold retainage from prime contractors and provide for prompt and regular incremental acceptances of portions of the prime contract, pay retainage to prime contractors based on these acceptances, and require a contract clause obligating the prime contractor to pay all retainage owed to the subcontractor for satisfactory completion of the accepted work within a specific number of days after your payment to the prime contractor.
            (c) For purposes of this section, a subcontractor's work is satisfactorily completed when all the tasks called for in the subcontract have been accomplished and documented as required by the recipient. When a recipient has made an incremental acceptance of a portion of a prime contract, the work of a subcontractor covered by that acceptance is deemed to be satisfactorily completed.
            (d) Your DBE program must provide appropriate means to enforce the requirements of this section. These means may include appropriate penalties for failure to comply, the terms and conditions of which you set. Your program may also provide that any delay or postponement of payment among the parties may take place only for good cause, with your prior written approval.
            (e) You may also establish, as part of your DBE program, any of the following additional mechanisms to ensure prompt payment:
            (1) A contract clause that requires prime contractors to include in their subcontracts language providing that prime contractors and subcontractors will use appropriate alternative dispute resolution mechanisms to resolve payment disputes. You may specify the nature of such mechanisms.
            (2) A contract clause providing that the prime contractor will not be reimbursed for work performed by subcontractors unless and until the prime contractor ensures that the subcontractors are promptly paid for the work they have performed.
            (3) Other mechanisms, consistent with this part and applicable state and local law, to ensure that DBEs and other contractors are fully and promptly paid.
            5. Revise § 26.61 (c) to read as follows:

            § 26.61
            How are burdens of proof allocated in the certification process?

            (c) You must rebuttably presume that members of the designated groups identified in § 26.67(a) are socially and economically disadvantaged. This means they do not have the burden of proving to you that they are socially and economically disadvantaged. In order to obtain the benefit of the rebuttable presumption, individuals must submit a signed, notarized statement that they are a member of one of the groups in § 26.67(a). Applicants do have the obligation to provide you information concerning their economic disadvantage (see § 26.67).

            6. Revise § 26.63(a) to read as follows:

            § 26.63
            What rules govern group membership determinations?
            (a)(1) If, after reviewing the signed notarized statement of membership in a presumptively disadvantaged group (see § 26.61(c)), you have a well founded reason to question the individual's claim of membership in that group, you must require the individual to present additional evidence that he or she is a member of the group.
            (2) You must provide the individual a written explanation of your reasons for questioning his or her group membership and a written request for additional evidence as outlined in paragraph (b) of this section.
            (3) In implementing this section, you must take special care to ensure that you do not impose a disproportionate burden on members of any particular designated group. Imposing a disproportionate burden on members of a particular group could violate § 26.7(b) of this part and/or Title VI of the Civil Rights Act of 1964 and 49 CFR part 21.

            7. Amend § 26.67 as follows:
            a. Revise paragraph (a)(2);
            b. Remove and reserve paragraph (c), the revision reads as follows:

            § 26.67
            What rules determine social and economic disadvantage?
            (a) * * *
            (1) * * *
            (2)(i) You must require each individual owner of a firm applying to participate as a DBE (except a firm applying to participate as a DBE airport concessionaire) whose ownership and control are relied upon for DBE certification to certify that he or she has a personal net worth that does not exceed $750,000.
            (ii) You must require each individual who makes this certification to support it with the individual's choice of either of the following:
            (A) A signed, notarized statement of personal net worth, with appropriate supporting documentation. This statement and documentation must not be unduly lengthy, burdensome, or intrusive; or
            (B) A signed, notarized statement from a certified public accountant (CPA) attesting that the CPA has examined the individual's personal net worth and determined, consistent with the provisions of this section and generally accepted accounting standards, that the individual's personal net worth does not exceed $750,000.
            (iii) In determining an individual's net worth, you or the individual's CPA must observe the following requirements:
            (A) Exclude an individual's ownership interest in the applicant firm;
            (B) Exclude the individual's equity in his or her primary residence (except any portion of such equity that is attributable to excessive withdrawals from the applicant firm).
            (C) For an Alaska Native, include assets and income from sources other than an Alaska Native Corporation but exclude any of the following that the individual receives from any Alaska Native Corporation: Cash (including cash dividends on stock received from an ANC) to the extent that it does not, in the aggregate, exceed $2,000 per individual per annum; stock (including stock issued or distributed by an ANC as a dividend or distribution on stock); a partnership interest; land or an interest in land (including land or an interest in land received from an ANC as a dividend or distribution on stock); and an interest in a settlement trust.
            (D) Do not use a contingent liability to reduce an individual's net worth.
            (E) With respect to assets held in vested pension plans, Individual Retirement Accounts, 401(k) accounts, or other retirement savings or investment programs in which the assets cannot be distributed to the individual at the present time without significant adverse tax or interest consequences, include only the present value of such assets, less the tax and interest penalties that would accrue if the asset were distributed at the present time.

            (iv) Notwithstanding any provision of Federal or state law, you must not release an individual's personal net worth statement nor any documentation supporting it to any third party without the written consent of the submitter. Provided, that you must transmit this information to DOT in any certification appeal proceeding under § 26.89 in which the disadvantaged status of the individual is in question.

            8. Amend § 26.83 by revising paragraph (c)(7)(i) to read as follows:

            § 26.83
            What procedures do recipients follow in making certification decisions?

            (c) * * *
            (7) Require potential DBEs to complete and submit an appropriate application form, unless the potential DBE is an SBA certified firm applying pursuant to the DOT/SBA MOU.
            (i) You must use the application form provided in Appendix F to this part without change or revision. However, you may provide in your DBE program, with the approval of the concerned operating administration, for supplementing the form by requesting additional information not inconsistent with this part.

            9. Add a new § 26.84 to read as follows:

            § 26.84
            How do recipients process applications submitted pursuant to the DOT/SBA MOU?
            (a) When an SBA-certified firm applies for certification pursuant to the DOT/SBA MOU, you must accept the certification applications, forms and packages submitted by a firm to the SBA for either the 8(a) BD or SDB programs, in lieu of requiring the applicant firm to complete your own application forms and packages. The applicant may submit the package directly, or may request that the SBA forward the package to you. Pursuant to the MOU, the SBA will forward the package within thirty days.
            (b) If necessary, you may request additional relevant information from the SBA. The SBA will provide this additional material within forty-five days of your written request.
            (c) Before certifying a firm based on its 8(a) BD or SDB certification, you must conduct an on-site review of the firm (see § 26.83(c)(1)). If the SBA conducted an on-site review, you may rely on the SBA's report of the on-site review. In connection with this review, you may also request additional relevant information from the firm.
            (d) Unless you determine, based on the on-site review and information obtained in connection with it, that the firm does not meet the eligibility requirements of subpart D of this part, you must certify the firm.
            (e) You are not required to process an application for certification from an SBA-certified firm having its principal place of business outside the state(s) in which you operate unless there is a report of a “home state” on-site review on which you may rely.
            (f) You are not required to process an application for certification from an SBA-certified firm if the firm does not provide products or services that you use in your DOT-assisted programs or airport concessions.
            10. Redesignate § 26.85 as § 26.86. In newly redesignated § 26.86, redesignate paragraphs (b) and (c) as paragraphs (c) and (d), respectively, and add a new paragraph (b) to read as follows:

            § 26.86
            What rules govern recipients' denials of initial requests for certification?

            (b) When you deny DBE certification to a firm certified by the SBA, you must notify the SBA in writing. The notification must include the reason for denial.

            11. Add a new § 26.85 to read as follows:

            § 26.85
            How do recipients respond to requests from DBE-certified firms or the SBA made pursuant to the DOT/SBA MOU?
            (a) Upon receipt of a signed, written request from a DBE-certified firm, you must transfer to the SBA a copy of the firm's application package. You must transfer this information within thirty days of receipt of the request.
            (b) If necessary, the SBA may make a written request to the recipient for additional materials (e.g., the report of the on-site review). You must provide a copy of this material to the SBA within forty-five days of the additional request.
            (c) You must provide appropriate assistance to SBA-certified firms, including providing information pertaining to the DBE application process, filing locations, required documentation and status of applications.
            12. Amend § 26.87 by redesignating paragraphs (h) through (j) as paragraphs (i) through (k) and by adding a new paragraph (h) to read as follows:

            § 26.87
            What procedure does a recipient use to remove a DBE's eligibility?

            (h) When you decertify a DBE firm certified by the SBA, you must notify the SBA in writing. The notification must include the reason for denial.

            13. Amend § 26.89 by revising paragraphs (a)(1) and (f)(7) to read as follows:

            § 26.89
            What is the process for certification appeals to the Department of Transportation?
            (a)(1) If you are a firm that is denied certification or whose eligibility is removed by a recipient, including SBA-certified firms applying pursuant to the DOT/SBA MOU, you may make an administrative appeal to the Department.

            (f) * * *
            (7) The Department provides written notice of its decision to you, the firm, and the complainant in an ineligibility complaint. A copy of the notice is also sent to any other recipient whose administrative record or decision has been involved in the proceeding (see paragraph (d) of this section). The Department will also notify the SBA in writing when DOT takes an action on an appeal that results in or confirms a loss of eligibility to any SBA-certified firm. The notice includes the reasons for the Department's decision, including specific references to the evidence in the record that supports each reason for the decision.

            14. In § 26.109, revise paragraph (a)(2) to read as follows:

            § 26.109
            What are the rules governing information, confidentiality, cooperation, and intimidation or retaliation?
            (a) * * *
            (1) * * *
            (2) Notwithstanding any provision of Federal or state law, you must not release information that may be reasonably be construed as confidential business information to any third party without the written consent of the firm that submitted the information. This includes applications for DBE certification and supporting documentation. However, you must transmit this information to DOT in any certification appeal proceeding under § 26.89 in which the disadvantaged status of the individual is in question.

            15. Add Appendix B to part 26 to read as follows:
            BILLING CODE 4910-62-P

          Appendix B to Part 26—Uniform Reporting Requirements Form

          EP08MY01.180

          EP08MY01.181

          16. In Appendix E, under Economic Disadvantage, remove and reserve section (B)(2).
          17. Add a new Appendix F to read as follows:
          Appendix F to Part 26—Uniform Certification Application Form

          EP08MY01.182

          EP08MY01.183

          EP08MY01.184

          EP08MY01.185

          EP08MY01.186

          EP08MY01.187

          EP08MY01.188

          EP08MY01.189

          EP08MY01.190

          EP08MY01.191

      [FR Doc. 01-11317 Filed 5-7-01; 8:45 am]
      BILLING CODE 4910-62-C