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are addressed in the Responses to Public Comments section of this
Supplemental Information.
Nevertheless, the Department is aware from those qualitative
statements that certain alternatives to the rule are possible. For
example, two commenters commented that the regulation should permit
third-party custody of records in order to reduce the burdens of
storing material at a producer's place of business and of maintaining
certain business hours in order to be available for inspection. The
Department believes that allowing third-party custody, however, would
be detrimental to the goals of the statute. It would unnecessarily
complicate the compliance and inspection processes by removing the
records from the physical location where they were initially collected,
sorted, indexed, and compiled. Furthermore, permitting a third party to
maintain the records would, if anything, exacerbate the concerns of
numerous commenters regarding the privacy of information on performers
and businesses by placing that information in the hands of another
party.
Other alternatives suggested by commenters included the
establishment of a national ``sex ID'' system with which performers
would register with the government in a national database, and the
creation of a password-protected database of identification records
available to law enforcement. As explained above, the Department
believes that they would be more burdensome on both the Department and
producers to create, implement, and manage than the record-keeping
system established by the rule. In addition, creation of such systems
would likely require several years' work and delay implementation of
the statute's record-keeping requirements.
The Department has, however, adopted numerous changes to the
proposed rule in response to comments that it was too burdensome. For
example, because commenters argued that the requirement that the
statement appear on the homepage of any web site was too burdensome,
the final rule permits web sites to contain a hypertext link that
states, ``18 U.S.C. 2257 Record-Keeping Requirements Compliance
Statement,'' that will open in a separate window that contains the
required statement. Likewise, in response to public comments, the
Department amended the proposed rule such that the final rule no longer
requires businesses to be available for inspection from 8 a.m. to 6
p.m. every day, but rather permits inspections during the producer's
normal business hours. Further, the Department modified the
requirements regarding the size and typeface of the statement in
response to public comments, as well as clarified that records may be
maintained in either ``hard'' (paper) form or digital form.
At the same time, the Department also rejected potential changes
that would extend the burdensomeness of the rule. For example, the
Department did not adopt a comment that two forms of identification
should be required of performers.
For these reasons, the Department believes that, although private
companies will be affected by the rule, the costs are reasonable in
light of the purpose of the statute and that it has imposed the
regulation in the least burdensome manner possible.

Executive Order 12866

This regulation has been drafted and reviewed in accordance with
Executive Order 12866, Sec. 1(b), Principles of Regulation. The
Department of Justice has determined that this rule is a ``significant
regulatory action'' under Executive Order 12866, Sec. 3(f).
Accordingly this rule has been reviewed by the Office of Management and
Budget.
The benefit of the regulation is that children will be better
protected from exploitation in the production of sexually explicit
depictions by ensuring that only those who are at least 18 years of age
perform in such sexually explicit depictions. The costs to the industry
include slightly higher record-keeping costs and the potential time
spent assisting inspectors in the process of inspecting the required
records. In the proposed rule, the Department expressly encouraged all
affected commercial entities to provide specific estimates, wherever
possible, of the economic costs that this rule will impose on them.
Notwithstanding that request, not a single commenter provided any data
on this aspect of the rule. Accordingly, the costs that this final rule
will impose remain uncertain.

Executive Order 13132

This regulation 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. Therefore, in accordance with Executive
Order 13132, it is determined that this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment.

Executive Order 12988

This regulation meets the applicable standards set forth in
Sec. Sec. 3(a) and 3(b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by State, local and
tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995, 2 U.S.C. 1501 et seq.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 251 of the
Small Business Regulatory Enforcement Fairness Act of 1996. 5 U.S.C.
804. This rule will not result in an annual effect on the economy of
$100,000,000 or more; a major increase in costs or prices; or
significant adverse effects on competition, employment, investment,
productivity, innovation, or the ability of United States-based
companies to compete with foreign-based companies in domestic and
export markets.

Paperwork Reduction Act

This rule modifies existing requirements to clarify the record-
keeping requirements pursuant to Congressional enactments and the
development of the Internet.
This rule contains a new information collection that satisfies the
requirements of existing regulations to clarify the means of
maintaining and organizing the required documents. This information
collection, titled Inspection of Records Relating to Depiction of
Sexually Explicit Performances, has been submitted to the Office of
Management and Budget (OMB) for approval. Although comments were
solicited from the public, in accordance with the Paperwork Reduction
Act of 1995, 44 U.S.C. 3501 et seq., in the proposed rule, no comments
were received.

List of Subjects in 28 CFR Part 75

Crime, Infants and children, Reporting and recordkeeping
requirements.


0
Accordingly, the Attorney General amends chapter I of title 28 of the
Code of Federal Regulations as follows:
0
1. Part 75 of title 28 CFR is revised to read as follows: