T D TTB Electronic Signatures Electronic Submission of Forms by BATTT


									      58600               Federal Register / Vol. 68, No. 197 / Friday, October 10, 2003 / Rules and Regulations

                                    Controlled sub-          DEA application        Application fee
          Business activity                                                                                  period                 Coincident activities allowed
                                       stances                   forms                    ($)               (years)

      (x) Chemical Analysis       Schedules I–V .......     New—225 .............                130                     1   May manufacture and import controlled
                                                            Renewal—225a ....                    130                          substances for analytical or instructional
                                                                                                                              activities; may distribute such sub-
                                                                                                                              stances to persons registered or author-
                                                                                                                              ized to conduct chemical analysis, in-
                                                                                                                              structional activities, or research with
                                                                                                                              such substances and to persons ex-
                                                                                                                              empted from registration pursuant to
                                                                                                                              section 1301.24; may export such sub-
                                                                                                                              stances to persons in other countries
                                                                                                                              performing chemical analysis or enforc-
                                                                                                                              ing laws related to controlled sub-
                                                                                                                              stances or drugs in those countries; and
                                                                                                                              may conduct instructional activities with
                                                                                                                              controlled substances.

      *      *        *    *       *                           What Will This Final Rule Do?                         document, and develop procedures for
        Dated: October 7, 2003.                                  This final rule amends the regulations              the acceptance of signatures in digital or
      Laura M. Nagel,                                          to allow you to:                                      other electronic form. (See 26 U.S.C.
                                                                 • Use electronic signatures to sign                 6011, 6061, and 7502.)
      Deputy Assistant Administrator, Office of
      Diversion Control.                                       certain forms you submit to us instead                   (3) Electronic Signatures in Global
                                                               of using traditional handwritten                      and National Commerce Act of 2000 (E–
      [FR Doc. 03–25817 Filed 10–9–03; 8:45 am]
                                                               signatures; and                                       SIGN). E–SIGN provides that no
      BILLING CODE 4410–09–P
                                                                 • Submit certain forms to TTB                       contract, signature, or record relating to
                                                               electronically through an electronic                  a transaction shall be denied legal effect
                                                               document receiving system that we                     solely because it is in electronic form,
                                                               approve.                                              nor may a document be denied legal
                                                                                                                     effect solely because an electronic
                                                               Why Does TTB Want To Allow You To                     signature or record was used in its
      Alcohol and Tobacco Tax and Trade
                                                               Submit Certain Forms Electronically?                  formation. E–SIGN applies to
                                                                 We believe that by giving you the                   documents that are created in a
      27 CFR Part 73                                           option to submit certain forms                        commercial, consumer, or business
                                                               electronically, instead of requiring                  transaction. It does not cover
                                                               paper documents, we can:                              transactions that are uniquely
      [T.D. TTB–5; Notice No. 5]
                                                                 • Reduce the costs associated with                  governmental such as a compliance
                                                               submitting and maintaining large                      report. (See Public Law 106–229.)
      RIN 1513–AA61                                            volumes of paper documents;                              (4) Office of Management and Budget
                                                                 • Improve the quality and                           Circular A–130. OMB’s Circular A–130
      Electronic Signatures; Electronic                                                                              requires agencies to employ electronic
                                                               accessibility of data;
      Submission of Forms (2000R–458P)
                                                                 • Allow for the faster review and                   information collection techniques where
      AGENCY: Alcohol and Tobacco Tax and                      approval of a variety of documents; and               such means will reduce the burden on
      Trade Bureau (TTB), Treasury.                              • Allow for a variety of our                        the public, increase efficiency, reduce
      ACTION: Treasury decision, final rule.
                                                               documents to be available around the                  costs, and help provide better service.
                                                               clock.                                                (See Circular A–130, Para. 8.a.1(k).)
      SUMMARY: The Alcohol and Tobacco Tax                     What Is TTB’s Authority To Implement                  How Does TTB Plan on Implementing
      and Trade Bureau (TTB) amends its                        These Regulations?                                    Electronic Filing?
      regulations to permit industry members
      to use electronic technology to reduce                     Our authority to implement these                      We are creating a new part 73 in title
      the need for and storage of paper                        regulations comes from:                               27 CFR, chapter I, entitled ‘‘Electronic
      documents. In order to accomplish our                      (1) Government Paperwork                            Signatures; Electronic Submission of
      goals, we are adding a new part 73 that                  Elimination Act (GPEA). GPEA was                      Forms.’’ Part 73 explains our overall
      will allow you to use electronic, rather                 signed into law on October 21, 1998.                  policy regarding electronic signatures
      than handwritten, signatures to sign                     GPEA directs Federal agencies to                      and the electronic submission of certain
      certain forms, and to submit certain                     provide for the optional use and                      forms to TTB.
      forms to TTB electronically through a                    acceptance of electronic documents and
                                                               signatures, and electronic                            Electronic Signatures
      TTB-approved electronic document
      receiving system.                                        recordkeeping, where practical, by                      Upon the effective date of this final
                                                               October 2003. (See Secs. 1702–1710 of                 rule, we recognize electronic signatures
      EFFECTIVE DATE: October 10, 2003.
                                                               Pub. L. 105–277.)                                     executed to certain electronic forms as
      FOR FURTHER INFORMATION CONTACT: Lisa                      (2) Internal Revenue Code of 1986 (26               the full equivalent of, and having the
      M. Gesser, Regulations and Procedures                    U.S.C.) The Internal Revenue Code of                  same legal effect as, traditional
      Division, Alcohol and Tobacco Tax and                    1986 authorizes the Secretary of the                  handwritten signatures executed on
      Trade Bureau, P.O. Box 128, Morganza,                    Treasury to, by regulation, encourage                 paper. We will notify you, by publishing
      MD 20660; telephone 301–290–1460.                        electronic filing, address what                       a general notice in the Federal Register
      SUPPLEMENTARY INFORMATION:                               constitutes a timely filed electronic                 and on our Web site (http://

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                         Federal Register / Vol. 68, No. 197 / Friday, October 10, 2003 / Rules and Regulations                                          58601

      www.ttb.gov), when you may use                           this final rule will not have such an                 Subpart B—Electronic Signatures
      electronic signatures to execute certain                 impact because the electronic
      electronic forms. The general notice will                submission of forms to TTB and the use                73.10 What does subpart B cover?
                                                                                                                     73.11 What are the required components
      provide you with specific instructions                   of electronic signatures are voluntary.                   and controls for acceptable electronic
      about how to submit and what                             This final rule only applies to those                     signatures?
      technology will be acceptable to TTB.                    people who seek our approval to                       73.12 What security controls must I use for
      Electronic Submission of Forms to TTB                    transmit certain forms electronically to                  identification codes and passwords?
        We are in the process of developing                                                                          Subpart C—Electronic Filing of
      the means to allow you to submit forms                   Executive Order 12866                                 Documents With TTB
      electronically. This is a lengthy process;                 This regulation is not a significant
      we will need to develop the hardware                                                                           73.30 What does subpart C cover?
                                                               regulatory action as defined by                       73.31 May I submit forms electronically to
      and software components to accept each                   Executive Order 12866. Accordingly,                       TTB?
      different type of form. Once we are able                 this rule is not subject to the analysis              73.32 May I electronically sign forms I
      to accept a certain form, we will                        required by this Executive Order.                         submit electronically to TTB?
      announce in the Federal Register and                                                                           73.33 Am I legally bound by a form I sign
      on our Web site that you may register                    Executive Order 13132                                     electronically?
      to submit that form electronically. The                     Executive Order 13132, entitled                    73.34 When is an electronically submitted
      announcement will provide you with                                                                                 form considered timely filed?
                                                               ‘‘Federalism’’ (64 FR 43255, August 10,
      instructions on how to register.                                                                               73.35 Do I need to keep paper copies of
                                                               1999), requires Federal agencies to                       forms I submit to TTB electronically?
      Will I Still Have To Maintain Paper                      ensure ‘‘meaningful and timely input by
                                                               State and local officials in the                        Authority: 26 U.S.C. 6011, 6061, 7502; 15
      Copies?                                                                                                        U.S.C. 7001, 7004.
                                                               development of regulatory policies that
         If the regulations require you to
                                                               have federalism implications.’’ This rule             Subpart A—General Provisions
      maintain certain documents in paper
                                                               does not have federalism implications.
      format, you must continue to maintain                                                                          Scope
                                                               This rule will not have substantial
      those documents in paper format even
                                                               direct effects on the States, on the
      if you submit them to us electronically.                                                                       § 73.1    What does this part do?
                                                               relationship between the national
      Nothing in part 73 alters any other                                                                              (a) This part provides the conditions
                                                               government and the States, or on the
      regulatory or statutory requirement that                                                                       under which we will allow you to:
                                                               distribution of power and
      records be maintained in paper format.                                                                           (1) Use electronic signatures or digital
                                                               responsibilities among the various
      This part does provide that TTB may                                                                            signatures executed to electronic forms
                                                               levels of government. This rule will not
      publish a general notice in the Federal                                                                        instead of traditional handwritten
                                                               require States to accept electronic
      Register authorizing you to maintain                                                                           signatures executed on paper forms; and
                                                               reports. The effect of this rule will be to
      certain documents electronically instead                                                                         (2) Electronically submit certain forms
                                                               provide additional regulatory flexibility
      of in paper form.                                                                                              to TTB.
                                                               to States because States could choose to                (b) This part does not require you to
      Notice of Proposed Rulemaking                            accept electronic data that would also                submit forms to us electronically.
        On April 11, 2003, we published a                      satisfy our reporting requirements.
      notice of proposed rulemaking, Notice                                                                          Definitions
                                                               Drafting Information
      No. 5, in the Federal Register (68 FR                                                                          § 73.3 What terms must I know to
      17760) to solicit comments regarding                        The principal author of this document              understand this part?
      our proposal to add the new part 73 to                   is Lisa M. Gesser, Regulations and
                                                                                                            You need to know the following terms
      chapter I of title 27. The notice                        Procedures Division, Alcohol and
                                                                                                          to understand this part:
      requested comments from interested                       Tobacco Tax and Trade Bureau.                27 CFR. Title 27 of the Code of
      persons by May 12, 2003.                                 List of Subjects in 27 CFR Part 73         Federal Regulations, chapter I.
      Comments on Notice of Proposed                                                                        Biometrics. A method of verifying an
                                                                 Electronic signatures, Reporting and     individual’s identity based on
      Rulemaking                                               recordkeeping requirements.                measurement of the individual’s
         We did not receive any comments as                                                               physical feature(s) or repeatable
                                                               Authority and Issuance
      a result of Notice No. 5.                                                                           action(s) where those features and/or
      Regulatory Analyses and Notices                          s For the reasons set out in the preamble, actions are both unique to that
                                                               we amend chapter I of title 27 of the Code individual and measurable.
      Paperwork Reduction Act                                  of Federal Regulations by adding a new       Digital signature. An electronic
        The provisions of the Paperwork                        part 73 to read as follows:                signature based upon cryptographic
      Reduction Act of 1995, 44 U.S.C.                                                                    methods of originator authentication,
      Chapter 35, and its implementing                         PART 73—ELECTRONIC                         computed by using a set of rules and a
      regulations, 5 CFR part 1320, do not                     SIGNATURES; ELECTRONIC                     set of parameters such that the identity
      apply to this rule because there are no                  SUBMISSION OF FORMS                        of the signer and the integrity of the data
      new reporting or recordkeeping                                                                      can be verified. A signer creates a digital
                                                               Subpart A—General Provisions               signature by using public-key
                                                               Sec.                                       encryption to transform a message
      Regulatory Flexibility Act                                                                          digest of an electronic message. If a
        The Regulatory Flexibility Act, 5                      Scope                                      recipient of the digital signature has an
      U.S.C. 601 et seq., requires an agency to                73.1 What does this part do?               electronic message, message digest
      conduct a regulatory flexibility analysis                                                           function, and the signer’s public key,
      of any rule that may have a significant                  Definitions                                the recipient can verify:
      economic impact on a substantial                         73.3 What terms must I know to understand    (1) Whether the transformation was
      number of small entities. We certify that                     this part?                            accomplished with the private key that

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      58602              Federal Register / Vol. 68, No. 197 / Friday, October 10, 2003 / Rules and Regulations

      corresponds to the signer’s public key;                  § 73.11 What are the required components              Subpart C—Electronic Filing of
      and                                                      and controls for acceptable electronic                Documents with TTB
         (2) Whether the electronic message
                                                                                                                     § 73.30   What does subpart C cover?
      has been altered since the                                 (a) Electronic signatures not based on
      transformation was made.                                 biometrics. If you use electronic                       This subpart provides the conditions
                                                               signatures that are not based upon                    under which we will allow you to
         Electronic document receiving system.                                                                       satisfy certain reporting requirements of
      Any set of apparatus, procedures,                        biometrics you must:
                                                                                                                     this chapter by submitting forms to us
      software, records, or documentation                        (1) Employ at least two distinct                    electronically.
      used to receive documents                                identification components such as an
      communicated to it via a                                 identification code and a password;                   § 73.31 May I submit forms electronically
      telecommunications network.                                (2) Use both identification                         to TTB?
         Electronic signature. A computer data                 components when executing an                            Yes; you may submit an electronic
      compilation of any symbol or series of                   electronic signature to an electronic                 form, instead of a paper form, to satisfy
      symbols executed, adopted, or                            document; and                                         any reporting requirement in this
      authorized by an individual to be the                                                                          chapter, only if:
                                                                 (3) Ensure that the electronic
      legally binding equivalent of the                                                                                (a) We have published a notice in the
                                                               signature can only be used by the
      individual’s handwritten signature, and                                                                        Federal Register and on our Web site
                                                               authorized user.
      that:                                                                                                          (http://www.ttb.gov) announcing that we
                                                                 (b) Electronic signatures based on                  are prepared to receive a particular form
         (1) Identifies and authenticates a
                                                               biometrics. If you use electronic                     electronically;
      particular person as the source of the
                                                               signatures based upon biometrics, they                  (b) You have registered to do so
      electronic message; and
                                                               must be designed to ensure that they                  pursuant to the instructions in a notice
         (2) Indicates such person’s approval                  cannot be used by anyone other than                   published in the Federal Register and
      of the information contained in the                      their genuine owners.                                 on our Web site as stated above;
      electronic message.
                                                                                                                       (c) You submit the electronic form to
         Form(s). The term form(s), when used                  § 73.12 What security controls must I use
                                                               for identification codes and passwords?               an electronic document receiving
      in this part, includes all documents                                                                           system that we have designated for the
      required by 27 CFR, chapter I, to be                        If you use electronic signatures based             receipt of that specific form; and
      submitted to TTB.                                        upon use of identification codes in                     (d) The electronic form bears valid
         Handwritten signature. The scripted                   combination with passwords, you must                  electronic signatures, as provided in
      name or legal mark of an individual                      employ controls to ensure their security              subpart B of this part, to the same extent
      handwritten by that individual and                       and integrity. These controls must                    that the paper submission for which it
      executed or adopted with the present                     include:                                              substitutes would bear handwritten
      intention to authenticate a writing in a                    (a) Maintaining the uniqueness of                  signatures.
      permanent form. The act of signing with                  each combined identification code and
      a writing or marking instrument such as                                                                        § 73.32 May I electronically sign forms I
                                                               password, such that no two individuals                submit electronically to TTB?
      a pen or stylus is preserved. The                        have the same combination of
      scripted name or legal mark, while                                                                                You may electronically sign the
                                                               identification code and password;
      conventionally applied to paper, may                                                                           electronic form you submit to us if:
      also be applied to other materials or                       (b) Ensuring that identification code                 (a) You have registered with TTB to
      devices that capture the name or mark.                   and password issuances are periodically               do so and have certified, prior to the
                                                               checked, recalled, or revised (e.g., to               time of such use, that the electronic
         Paper format. A paper document.                       cover such events as password aging);                 signatures or digital signatures in your
         TTB. Refers to the Alcohol and                           (c) Following loss management                      system are intended to be the legally
      Tobacco Tax and Trade Bureau within                      procedures to electronically deauthorize              binding equivalent of traditional
      the Department of the Treasury.                          lost, stolen, missing, or otherwise                   handwritten signatures;
         You and I. ‘‘You’’ and ‘‘I’’ refer to the             potentially compromised tokens, cards,                   (b) The electronic or digital signature
      organization or person who must                          or other devices that bear or generate                meets the standards of this part and is
      maintain records or submit documents                     identification code or password                       authorized by TTB in accordance with
      to TTB to satisfy the requirements of 27                 information, and to issue temporary or                this part; and
      CFR, chapter I.                                          permanent replacements using suitable,                   (c) The electronic or digital signature
                                                               rigorous controls;                                    is sufficiently trustworthy and reliable
      Subpart B—Electronic Signatures                                                                                that the signing party may not repudiate
                                                                  (d) Using transaction safeguards to
      § 73.10   What does subpart B cover?                     prevent unauthorized use of passwords                 the signature.
        This subpart provides the conditions                   and/or identification codes, and to                   § 73.33 Am I legally bound by a form I sign
      under which TTB will allow you to use                    detect and report in an immediate and                 electronically?
      electronic signatures executed to                        urgent manner any attempts at their                     Yes; by electronically signing a form
      electronic forms instead of traditional                  unauthorized use to the system security               you submit to us, you are agreeing to be
      handwritten signatures executed on                       unit and, as appropriate, to                          legally bound to the same extent as if
      paper forms. Where electronic                            organizational management; and                        you applied a traditional handwritten
      signatures and their associated                             (e) Initial and periodic testing of                signature on a paper document
      electronic forms meet the requirements                   devices, such as tokens or cards, that                submitted to satisfy the same reporting
      of this part, TTB will consider the                      bear or generate identification code or               requirement. Persons using electronic
      electronic signatures to be the                          password information to ensure that                   signatures shall, upon TTB’s request,
      equivalent of full handwritten                           they function properly and have not                   provide additional certification or
      signatures, initials, and other general                  been altered in any unauthorized                      testimony that a specific electronic
      signings this chapter requires.                          manner.                                               signature is the legally binding

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                         Federal Register / Vol. 68, No. 197 / Friday, October 10, 2003 / Rules and Regulations                                         58603

      equivalent of the signer’s handwritten                   documents indicated in this preamble as               extensive advance notifications that will
      signature.                                               being available in the docket, are part of            be made to the maritime community via
                                                               docket CGD05–03–031 and are available                 the Local Notice to Mariners, marine
      § 73.34 When is an electronically                        for inspection or copying at Commander                information broadcasts, and area
      submitted form considered timely filed?
                                                               (oax), Fifth Coast Guard District, 431                newspapers, so mariners can adjust
        If you submit a form to our electronic                 Crawford Street, Portsmouth, Virginia                 their plans accordingly. Additionally,
      document receiving system, your report                   23704–5004, between 9 a.m. and 2 p.m.,                the proposed regulated area has been
      will be considered filed on the date of                  Monday through Friday, except Federal                 narrowly tailored to impose the least
      the electronic postmark given by that                    holidays.                                             impact on general navigation yet
      system.                                                  FOR FURTHER INFORMATION CONTACT: S. L.                provide the level of safety deemed
      § 73.35 Do I need to keep paper copies of                Phillips, Project Manager, Auxiliary and              necessary. Vessel traffic will be able to
      forms I submit to TTB electronically?                    Recreational Boating Safety Branch at                 transit Prospect Bay and Kent Narrows
                                                               (757) 398–6204.                                       by navigating around the regulated area.
         Nothing in this part alters any other
      regulatory or statutory requirement that                 SUPPLEMENTARY INFORMATION:                            Small Entities
      records be maintained in paper format.                   Regulatory Information                                   Under the Regulatory Flexibility Act
      If the regulations in this chapter require                                                                     (5 U.S.C. 601–612), we have considered
                                                                  On March 31, 2003, we published a
      you to keep paper copies of certain                                                                            whether this rule will have a significant
                                                               notice of proposed rulemaking (NPRM)
      forms, you must continue to do so                                                                              economic impact on a substantial
                                                               entitled ‘‘Special Local Regulations for
      unless TTB otherwise authorizes you to                                                                         number of small entities. The term
                                                               Marine Events; Prospect Bay, Kent
      maintain electronic copies of these                                                                            ‘‘small entities’’ comprises small
                                                               Island Narrows, MD’’ in the Federal
      documents through a general notice in                                                                          businesses, not-for-profit organizations
                                                               Register (68 FR 15417). We received no
      the Federal Register or through a                                                                              that are independently owned and
                                                               letters commenting on the proposed
      variance.                                                                                                      operated and are not dominant in their
                                                               rule. No public hearing was requested,
        Dated: May 29, 2003.                                   and none was held.                                    fields, and governmental jurisdictions
      Arthur J. Libertucci,                                                                                          with populations of less than 50,000.
                                                               Background and Purpose                                   The Coast Guard certifies under 5
        Approved: September 5, 2003.                              Each year on the first Saturday and                U.S.C. 605 (b) that this rule will not
                                                               Sunday of August, the Kent Narrows                    have a significant economic impact on
      Timothy E. Skud,
                                                               Racing Association sponsors the                       a substantial number of small entities.
      Deputy Assistant Secretary (Tax, Trade, and                                                                    This rule will affect the following
                                                               ‘‘Thunder on the Narrows’’ powerboat
      Tariff Policy).
                                                               races. The event consists of 75                       entities, some of which might be small
      [FR Doc. 03–25524 Filed 10–9–03; 8:45 am]                                                                      entities: the owners or operators of
                                                               Hydroplanes and Jersey Speed Skiffs
      BILLING CODE 4810–31–P                                   racing in heats counter-clockwise                     vessels intending to transit or anchor in
                                                               around a 1.5-mile oval racecourse on the              a portion of Prospect Bay during the
                                                               waters of Prospect Bay, Kent Island                   event.
      DEPARTMENT OF HOMELAND                                   Narrows, Maryland. A fleet of                            This rule will not have a significant
      SECURITY                                                 approximately 200 spectator vessels                   economic impact on a substantial
                                                               normally gathers nearby to view the                   number of small entities for the
      Coast Guard                                              event. Due to the need for vessel control             following reasons. This rule will be in
                                                               during the races, vessel traffic will be              effect for only 2 days each year. Vessel
      33 CFR Part 100                                          temporarily restricted to provide for the             traffic will be able to pass safely around
      [CGD05–03–031]                                           safety of the spectators, participants and            the regulated area. Before the
                                                               transiting vessels.                                   enforcement period, we will issue
      RIN 1625–AA08                                                                                                  maritime advisories so mariners can
                                                               Regulatory Evaluation                                 adjust their plans accordingly.
      Special Local Regulations for Marine                        This rule is not a ‘‘significant
      Events; Prospect Bay, Kent Island                        regulatory action’’ under section 3(f) of             Assistance for Small Entities
      Narrows, MD                                              Executive Order 12866, Regulatory                       Under section 213 (a) of the Small
                                                               Planning and Review, and does not                     Business Regulatory Enforcement
      AGENCY:    Coast Guard, DHS.                                                                                   Fairness Act of 1996 (Pub. L. 104–121),
                                                               require an assessment of potential costs
      ACTION:   Final rule.                                    and benefits under section 6(a)(3) of that            we offered to assist small entities in
                                                               Order. The Office of Management and                   understanding this rule so that they can
      SUMMARY: The Coast Guard is
                                                               Budget has not reviewed it under that                 better evaluate its effects on them and
      establishing permanent special local
                                                               Order. It is not ‘‘significant’’ under the            participate in the rulemaking. No
      regulations for the ‘‘Thunder on the
                                                               regulatory policies and procedures of                 assistance was requested and none was
      Narrows’’ boat races, an annual marine
                                                               the Department of Homeland Security                   provided.
      event held on the waters of Prospect Bay                                                                         Small businesses may send comments
      near Kent Island Narrows, Maryland.                      (DHS).
                                                                  We expect the economic impact of                   on the actions of Federal employees
      These special local regulations are                                                                            who enforce, or otherwise determine
                                                               this rule to be so minimal that a full
      necessary to provide for the safety of life                                                                    compliance with, Federal regulations to
                                                               Regulatory Evaluation under the
      on navigable waters during the event.                                                                          the Small Business and Agriculture
                                                               regulatory policies and procedures of
      This action is intended to restrict vessel                                                                     Regulatory Enforcement Ombudsman
                                                               DHS is unnecessary.
      traffic in portions of Prospect Bay                         Although this regulation will prevent              and the Regional Small Business
      during the event.                                        traffic from transiting a portion of                  Regulatory Fairness Boards. The
      DATES: This rule is effective November                   Prospect Bay during the event, the effect             Ombudsman evaluates these actions
      10, 2003.                                                of this regulation will not be significant            annually and rates each agency’s
      ADDRESSES: Comments and material                         due to the limited duration that the                  responsiveness to small business. If you
      received from the public, as well as                     regulated area will be in effect and the              wish to comment on actions by

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