[Federal Register Volume 70, Number 224 (Tuesday, November 22, 2005)]
[Proposed Rules]
[Pages 70566-70570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22806]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[OAR-2005-0153; FRL-7997-1]
RIN 2060-AJ71


Control of Air Pollution From New Motor Vehicles; Revisions to 
Motor Vehicle Diesel Fuel Sulfur Transition Provisions; and Technical 
Amendments to the Highway Diesel, Nonroad Diesel, and Tier 2 Gasoline 
Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed Rule.

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SUMMARY: The highway diesel fuel sulfur program, finalized in 2001, is 
resulting in the nationwide transition in 2006 of most diesel fuel from 
low-sulfur diesel (LSD) to ultra-low sulfur diesel (ULSD). Some in the 
diesel fuel production and distribution industries have indicated that 
they may be unable to complete the transition to ULSD by the current 
deadlines at the very furthest reaches the distribution system. In 
response, today's proposed action would make limited changes to the 
transition provisions for entities in the highway diesel distribution 
system. These proposed changes finely balance the concerns of the fuel 
industry with the critical need for ULSD to be available for 2007 
diesel vehicles and engines. The impacts of the recent hurricanes along 
the Gulf Coast of the U.S. are not a contributing factor in today's 
proposed action, and there would be no change in the June 1, 2006 start 
date for refiners to be producing ULSD (15 ppm sulfur).
    We propose to extend the ULSD implementation dates for terminals 
and retail outlets by 45 days. Thus, terminals would have until 
September 1, 2006 (vs. July 15) and retailers would have until October 
15, 2006 (vs. September 1) to complete their transitions to ULSD. We 
also propose that downstream of the refinery fuel slightly higher than 
15 ppm sulfur could temporarily be sold as ULSD. In addition, we 
propose to extend the beginning of the restriction on how much ULSD can 
be downgraded to higher sulfur fuel by 15 days, to October 15, 2006 to 
be consistent with the end of the proposed new transition dates. The 
rule also includes proposed corrections to the recordkeeping and 
reporting requirements under the highway diesel and also proposes 
several minor amendments to the highway diesel sulfur, nonroad diesel 
sulfur, and gasoline sulfur programs to correct errors or omissions in 
the regulations.

DATES: Written comments must be received by December 22, 2005. More 
information about commenting on this action may be found under Public 
Participation in SUPPLEMENTARY INFORMATION, below.

ADDRESSES: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the ``Public 
Participation'' heading of the SUPPLEMENTARY INFORMATION section of 
this document. This proposed rule and the accompanying direct final 
rule are available electronically on the day of publication from the 
Office of the Federal Register internet Web site listed below. 
Prepublication electronic copies of these notices are also available 
from the EPA Office of Transportation and Air Quality Web site listed 
below. This service is free of charge, except for any cost that you 
already incur for internet connectivity.
    Federal Register Web Site: http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (Either select desired date or use Search feature.)
    Office of Transportation and Air Quality Web Site: http://www.epa.gov/otaq/ (Look in ``What's New'' or under the specific 
rulemaking topic.)
    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc. may occur.
    EPA has established a docket for this action under Docket ID No. 
OAR-2005-0153. All documents in the docket are listed in the EDOCKET 
index at http://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material,

[[Page 70567]]

is not placed on the Internet and will be publicly available only in 
hard copy form. Publicly available docket materials are available 
either electronically in EDOCKET or in hard copy at the Air Docket, 
EPA/DC, EPA West, Room B102, 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 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Tad Wysor, Assessment and Standards 
Division, U.S. EPA, National Vehicle and Fuels Emission Laboratory, 
2000 Traverwood, Ann Arbor, MI 48105; telephone: (734) 214-4332, fax: 
(734) 214-4816, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: For further information, including the 
rationale, administrative requirements, statutory authority, and 
regulatory text for these technical amendments, please see the 
information provided in the direct final action that is located in the 
``Rules and Regulations'' section of this Federal Register publication.
    Public Participation: EPA solicits comments on all aspects of this 
proposal from all parties. Wherever applicable, full supporting data 
and detailed analysis should also be submitted to allow EPA to make 
maximum use of the comments. You may submit comments, identified by 
Docket No. OAR-2005-0153, by any of the following methods:
     Federal eRulemaking portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include Docket No. OAR-
2005-0153 in the subject line of the message.
     Fax: (202) 566-1741.
     Mail: U.S. Environmental Protection Agency, EPA West (Air 
Docket), 1200 Pennsylvania Avenue, NW., Room: B108; Mail Code: 6102T, 
Washington, DC 20460.
     Hand Delivery/Courier: EPA Docket Center (Air Docket), 
U.S. Environmental Protection Agency, 1301 Constitution Avenue, NW., 
Room: B108; Mail Code: 6102T, Washington, DC 20004.
    Instructions: Direct your comments to Docket ID No. OAR-2005-0153. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.epa.gov/edocket, 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 EDOCKET, regulations.gov, or e-
mail.
    The EPA EDOCKET and the federal regulations.gov Web sites are 
``anonymous access'' systems, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through EDOCKET or regulations.gov, your e-mail 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. If you 
submit an electronic comment, 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 EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit EDOCKET on-line or see the Federal Register of May 31, 
2002 (67 FR 38102).

I. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency is required to determine whether this regulatory action would be 
``significant'' and therefore subject to review by the Office of 
Management and Budget (OMB) and the requirements of the Executive 
Order. The order defines a ``significant regulatory action'' as any 
regulatory action that is likely to result in a rule that may:
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or,
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, EPA has determined 
that this proposed rule is not a ``significant regulatory action''. 
Today's action proposes to move the implementation date for certain 
recordkeeping and reporting requirements under the highway diesel 
program from June 1, 2007 to June 1, 2006 for an additional one time 
cost of $11,570,000 (see sections II and IV.B. in the preamble to the 
direct final rule that accompanies this proposal in the ``Rules and 
Regulations'' section of this Federal Register). Today's proposal would 
extend the terminal and retail ULSD implementation dates, and the 
effective date of the anti-downgrading requirement, and increase the 
downstream sulfur adjustment factor during the transition period to 
ULSD (see section I of the preamble to the accompanying direct final 
rule). There would be no new costs associated with these provisions. 
There would also be no new costs associated with the other proposed 
miscellaneous technical amendments to the highway diesel, nonroad 
diesel, and Tier 2 gasoline programs (see section III in the 
accompanying direct final rule). Therefore, this proposed rule is not 
subject to the requirements of Executive Order 12866.
    Final Regulatory Support Documents were prepared in connection with 
the original regulations for the Highway Diesel Rule, Nonroad Diesel 
Rule, and Tier 2 gasoline rule as promulgated on January 18, 2001, June 
29, 2004, and February 10, 2000 respectively, and we have no reason to 
believe that our analyses in the original rulemakings were inadequate. 
The relevant analyses are available in the docket for the January 18, 
2001 rulemaking (A-99-061), the June 29, 2004 rulemaking (OAR-2003-0012 
and A-2001-28) \1\, and the February 10, 2000 rulemaking (A-97-10), and 
at the following Internet addresses: http://www.epa.gov/cleandiesel and 
http://www.epa.gov/tier2. The original actions were submitted to the 
Office of Management and Budget for review under Executive Order 12866.
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    \1\ During the course of the Nonroad Rule, the Agency converted 
from the legacy docket system to the current electronic docket 
system (EDOCKET).
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B. Paperwork Reduction Act

    The annual information collection burden associated with this 
action was accounted for in previously approved ICRs. The provisions of 
this proposed rule would provide limited additional

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flexibility to entities in the highway diesel distribution system 
during the transition to ultra-low sulfur diesel fuel in 2006. The 
other miscellaneous proposed amendments in today's notice contain 
technical corrections and clarifications which do not include any new 
information collection requirements. The proposed amendments to the 
designate and track provisions under the highway and nonroad diesel 
programs (contained in section II of the accompanying direct final 
rule) would require compliance with these provisions beginning June 1, 
2006. Compliance with these provisions is currently required beginning 
June 1, 2007. The annual compliance burden associated with these 
provisions would not be affected by advancing the implementation date 
by one year. This annual burden was accounted for in the current 
information collection request for the highway and nonroad diesel fuel 
programs. The Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing highway rule (66 FR 5002, January 18, 2001), the existing 
Nonroad Rule (69 FR 38958, June 29, 2004), and the existing Tier 2 
gasoline rule (65 FR 6698, February 10, 2000), under the provisions of 
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The ICRs contained 
in the highway diesel and nonroad diesel rules were assigned OMB 
control number 2060-0308, and EPA ICR number 1718.06. This ICR is 
currently being revised to reflect the change in the implementation 
date for the pertinent designate and track requirements from June 1, 
2006 to June 1, 2007 (consistent with the accompanying direct final 
rule). The annual compliance burden for the full designate and track 
requirement beginning in June 1, 2007 was estimated at $11,570,000 and 
178,000 hours. The designate and track requirements that today's 
proposed rule would make effective June 1, 2006, are for a limited 
subset of designated fuels (highway diesel only), and the reporting 
requirements for the initial year (June 1, 2006--May 31, 2007) were 
abbreviated by today's rule. Therefore, the annual burden for the 
initial year could be expected to be somewhat less than that estimated 
for following years.
    The ICRs contained in the Tier 2 gasoline rule were assigned OMB 
control number 2060-0437, and EPA ICR number 1907.02. A copy of the OMB 
approved Information Collection Requests (ICRs) may be obtained from 
Susan Auby, Collection Strategies Division; U.S. Environmental 
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 
20460 or by calling (202) 566-1672.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this rule on small 
entities, a small entity is defined as: (1) A small business as defined 
by the Small Business Administration (SBA) size standards at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, we certify that this action would not have a 
significant economic impact on a substantial number of small entities. 
The proposed ULSD transition provisions in today's rule would provide 
limited, temporary flexibility to entities in the highway diesel 
distribution system downstream of the refineries and import facilities. 
Advancing the implementation date for certain recordkeeping and 
reporting requirements under the highway diesel program (as described 
in section II of the preamble to the direct final rule that accompanies 
this proposal) would result in an additional one year of costs 
associated with compliance with these provisions for all affected fuel 
distributors, including those that are small entities. During the 
rulemaking that resulted in the promulgation of these provisions, we 
determined that they would not have a significant impact on a 
substantial number of small entities. The other miscellaneous proposed 
technical amendments to the highway diesel, nonroad diesel, and Tier 2 
gasoline programs would not impose a significant new burden to any 
regulated party.
    Prior to proposing the Highway Rule on June 2, 2000, the Nonroad 
Rule on May 23, 2003, and the Tier 2 Gasoline Rule on May 13, 1999 EPA 
conducted outreach to small entities and convened Small Business 
Advocacy Review (SBAR) panels to obtain the advice and recommendations 
of representatives of the small entities that potentially would be 
subject to the requirements of the rules (66 FR at 5130, 69 FR at 
39155-6, and 69 FR 39155-39162 respectively). For a full description of 
the Panel process, the SBAR report, and the initial Regulatory 
Flexibility Analyses (in Chapters 8, 11, and 8 respectively) of each 
rule's Regulatory Impact Analysis (RIA), refer to the docket for the 
Highway Diesel Rule (Public Docket A-99-061), the Nonroad Diesel Rule 
(Public Docket OAR-2003-0012 and A-2001-28), and the Tier 2 Gasoline 
Rule (Public Docket A-97-10), and the following Internet addresses: 
http://www.epa.gov/cleandiesel/ and http://www.epa.gov/tier2/.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable

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number of regulatory alternatives and to adopt the least costly, most 
cost-effective, or least burdensome alternative that achieves the 
objectives of the rule. The provisions of section 205 do not apply when 
they are inconsistent with applicable law. Moreover, section 205 allows 
EPA to adopt an alternative other than the least costly, most cost-
effective, or least burdensome alternative if the Administrator 
publishes with the final rule an explanation of why such an alternative 
was adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed a small government agency plan 
under section 203 of the UMRA. The plan must provide for the following: 
Notifying potentially affected small governments, enabling officials of 
affected small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    This proposed rule contains no federal mandates for state, local, 
or tribal governments as defined by the provisions of Title II of the 
UMRA. This proposed rule would impose no enforceable duties on any of 
these governmental entities. Nothing in the rule would significantly or 
uniquely affect small governments. EPA has determined that this rule 
contains no federal mandates that may result in expenditures of more 
than $100 million to the private sector in any single year. The 
requirements of UMRA therefore do not apply to this action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' are defined in the 
Executive Order to include regulations that 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.''
    Under Section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, imposes substantial direct 
compliance costs, and is not required by statute. However, if the 
Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the regulation, these restrictions do not apply. EPA also 
may not issue a regulation that has federalism implications and that 
preempts State law, unless the Agency consults with State and local 
officials early in the process of developing the regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules 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). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, EPA also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and Federally protected 
interests within the agency's area of regulatory responsibility.
    This rule does not have federalism implications. It would 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, as 
specified in Executive Order 13132. Although section 6 of Executive 
Order 13132 did not apply to the Highway Rule (66 FR 5002) or the 
Nonroad Rule (69 FR 38958), EPA did consult with representatives from 
STAPPA/ALAPCO, which represents state and local air pollution 
officials. In the spirit of Executive Order 13132, and consistent with 
EPA policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (59 FR 22951, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This rule does not have tribal implications. It would not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
This rule would not uniquely affect the communities of Indian Tribal 
Governments. This rule does not have tribal implications and does not 
impose substantial direct compliance costs on Indian tribal 
governments. Thus, Executive Order 13175 does not apply to this rule. 
EPA specifically solicits comment on this proposed rule from tribal 
officials.

G. Executive Order 13045: Children's Health Protection

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs the Agency to 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    This rule is not subject to the Executive Order because it is not 
economically significant, and does not involve decisions on 
environmental health or safety risks that may disproportionately affect 
children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001) because it is not likely that it

[[Page 70570]]

would have a significant adverse effect on the supply, distribution or 
use of energy. This proposed rule would provide limited, temporary 
flexibility to entities in the highway diesel distribution system 
downstream of the refineries and import facilities. Other proposed 
amendments contained in today's action pertain to ensuring the 
enforceability of the highway diesel program. The remaining proposed 
amendments in today's rule would provide technical correction and 
clarification to the requirements under the highway diesel, the nonroad 
diesel, and the Tier 2 gasoline programs.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (such as materials specifications, test 
methods, sampling procedures, and business practices) that are 
developed or adopted by voluntary consensus standards bodies. NTTAA 
directs EPA to provide Congress, through OMB, explanations when the 
Agency decides not to use available and applicable voluntary consensus 
standards.
    This proposed rule does not involve technical standards. Thus, we 
have determined that the requirements of the NTTAA do not apply.

II. Statutory Provisions and Legal Requirements

    The statutory authority for this action comes from sections 211(c) 
and (i) of the Clean Air Act as amended 42 U.S.C. 7545(c) and (i). This 
action is a rulemaking subject to the provisions of Clean Air Act 
section 307(d). See 42 U.S.C. 7606(d)(1). Additional support for the 
procedural and enforcement related aspects of the rule comes from 
sections 144(a) and 301(a) of the Clean Air Act. 42 U.S.C. 7414(a) and 
7601(a).

List of Subjects in 40 CFR Part 80

    Environmental protection, Diesel fuel, Fuel additives, Gasoline, 
Motor vehicle Pollution, Penalties, Recordkeeping and reporting 
requirements.

    Dated: November 8, 2005.
Stephen L. Johnson,
Administrator.
[FR Doc. 05-22806 Filed 11-21-05; 8:45 am]
BILLING CODE 6560-50-P