On August 9, 2006, Cessna Aircraft Company applied for an amendment to Type Certificate Number A1WI to include the new model 525C (CJ4). The model 525C (CJ4), which is a derivative of the model 525B (CJ3), currently approved under Type Certificate Number A1WI, is a commuter category, low-winged monoplane with “T” tailed vertical and horizontal stabilizers, retractable tricycle type landing gear and twin turbofan engines mounted on the aircraft fuselage. The maximum takeoff weight is 16,950 pounds, the VMO/MMO is 305 KIAS/M 0.77 and the maximum altitude is 45,000 feet.

The Cessna model 525C (CJ4) fuel tank system is similar to other Cessna model 525 designs which use the Williams FJ44 series of engine. The fuel tank system is configured to reject engine heat through the airplane fuel tank system by using an engine oil/fuel heat exchanger. Certified as part of the engine, the engine oil/fuel heat exchanger cools the oil and heats the fuel. Over time, the engine manufacturers have optimized the design, size, placement, and space management of the oil/fuel heat exchanger such that today's engines now reject more heat back into the airplane fuel tank system than has existed in the past. As can be seen by the chart below, we are now exposing the fuel tank system and airplane to temperatures above the critical temperature test requirements of §§ 23.961 and 23.965(d), which has been the universal FAA standard for fuel system hot weather operations and fuel tank test and evaluation since 1950.

14 CFR part 23 certification experience to date has shown that fuel system hot weather certification testing with 110 °F fuel temperatures is adequate for fuel system operations for fuel tank temperatures characterized by ambient air temperatures, including cooling, as a result of the atmospheric temperature lapse rate. Heating of the fuel that increases the airplane fuel tank system operational temperatures introduces a number of fuel tank system and airplane concerns. Each must be shown to be acceptable. Compliance by design (i.e., lack of ability to shutoff the engine motive flow) may be utilized although associated type certificate data sheet information may also be necessary to assure future system changes are compliant. The following are those concerns:

○ Evaluation of engine, fuel tank system and airplane performance and engine compatibility with elevated fuel tank system temperatures. [§ 23.901, paragraphs (e)(1) and (e)(2); and §§ 23.939(a) and 23.951(a)]

○ Evaluation of fuel tank system and airplane performance due to fuel degradation and resultant by-products at elevated fuel tank system temperatures. [§§ 23.961, 23.939(a), 23.993(e), 23.1301, and 23.1529)]

○ Evaluation of fuel tank system and airplane performance and engine compatibility due to the higher vapor/liquid ratios with elevated fuel tank system temperatures. [§§ 23.903(f) and 23.951(a); § 23.955, paragraphs (a) and (f); and §§ 23.961 and 23.1301]

○ Evaluation of fuel tank system and airplane performance and engine compatibility, due to the solubility of water and potential for greater microbial growth with elevated fuel tank system temperatures. [§§ 23.951(c) and 23.971]

○ Evaluation of fuel tank system and airplane performance due to elevated fuel tank system material temperatures and surrounding structure compatibility. [§§ 23.613(c), 23.963(a), 23.965(d), and 23.993(e)]

○ Evaluation of fuel tank system component qualification as a result of elevated fuel tank system temperatures. [§§ 23.1301, and 23.1309]

○ Evaluation of service/maintenance instructions, activities, and personnel due to elevated fuel tank system temperatures. [§ 23.1529].

Under the provisions of § 21.101, Cessna Aircraft Company must show that the model 525C meets the applicable provisions of the regulations incorporated by reference in Type Certificate Number A1WI or the applicable regulations in effect on the date of application for the change to the model 525C. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” In addition, the certification basis includes exemptions, if any; equivalent level of safety findings, if any; and the special condition adopted by this rulemaking action.

If the Administrator finds that the applicable airworthiness regulations in 14 CFR part 23 do not contain adequate or appropriate safety standards for the model 525C because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the model 525C must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.101(b)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

The model 525C will incorporate the following novel or unusual design features:

High Fuel Temperatures.

A notice of proposed special conditions No. 23-09-03-SC for the Cessna Aircraft Company, model 525C airplanes was published on September 1, 2009, 74 FR 45133. No comments were received, and the special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the model 525C. Should Cessna Aircraft Company apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register; however, as the certification date for the Cessna Aircraft Company, model 525C is imminent, the FAA finds that good cause exists to make these special conditions effective upon issuance.

This action affects only certain novel or unusual design features on one model of airplanes. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

On April 18, 2008, we issued AD 2008-09-12, Amendment 39-15493 (73 FR 24147, May 2, 2008). That AD applied to all Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. That AD required revising the Airworthiness Limitations Section (ALS) of the Instructions for Continued Airworthiness to include the critical design configuration control limitations (CDCCL) data.

CDCCLs are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection.

Since we issued that AD, we have determined that it is necessary to clarify the AD's intended effect on spare and on-airplane fuel tank system components, regarding the use of maintenance manuals and instructions for continued airworthiness.

Section 91.403(c) of the Federal Aviation Regulations (14 CFR 91.403(c)) specifies the following:

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. This new AD retains the requirements of the existing AD, and adds a new note to clarify the intended effect of the AD on spare and on-airplane fuel tank system components. We have renumbered subsequent notes accordingly.

We have revised this AD to identify the correct legal name of the manufacturer as published in the most recent type certificate data sheet for the affected airplane models.

AD 2008-09-12 allowed the use of alternative CDCCLs that are a part of “a later revision” of Appendix D, “Fuel System Limitations,” of Part 2, “Airworthiness Requirements,” Revision 7, dated May 10, 2007, of the Bombardier CL-600-2B19 Maintenance Requirements Manual CSP A-053. That provision has been removed from this AD. Allowing the use of “a later revision” of specific service documents violates Office of the Federal Register regulations for approving materials that are incorporated by reference. Affected operators, however, may request approval to use a later revision of the referenced service documents as an alternative method of compliance, under the provisions of paragraph (g) of this AD.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the AD.

This revision imposes no additional economic burden. The current costs for this AD are repeated for the convenience of affected operators, as follows:

We estimate that this AD will affect about 700 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $56,000, or $80 per product.

This revision merely clarifies the intended effect on spare and on-airplane fuel tank system components, and makes no substantive change to the AD's requirements. For this reason, it is found that notice and opportunity for prior public comment for this action are unnecessary, and good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2009-1196; Directorate Identifier 2009-NM-170-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect 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.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

On September 18, 2009, the FAA issued AD 2009-20-11, Amendment 39-16034 (74 FR 50683, October 1, 2009), for certain Boeing Model 737-300, -400, and -500 series airplanes. The AD requires revising the maintenance program to include new fuel system limitations for airplanes modified in accordance with Supplemental Type Certificate ST00127BO. This AD also requires inspections and checks of the digital transient suppression device and corrective actions, if necessary.

As published, the vendor contact information specified in the Addresses section of the preamble and paragraph (n)(2) of the regulatory text of AD 2009-20-11 contained an outdated division name and e-mail address. Since that AD was published, the vendor has provided us with the recently updated contact information.

No other part of the regulatory information has been changed; therefore, the final rule is not republished in the Federal Register.

The effective date of this AD remains November 5, 2009.

In the Federal Register of October 1, 2009, on page 50683, in the second column, the ADDRESSES section of AD 2009-20-11 is corrected to read as follows:

I. Background

The Defense Production Act Amendments of 1992 required the Secretary of Commerce to promulgate regulations for U.S. firms to furnish information on sales of defense articles or defense services to foreign countries or foreign firms when such sales are made pursuant to a contract subject to an offset agreement exceeding $5,000,000 in value. The Secretary of Commerce designated BIS as the organization responsible for promulgating such regulations. In 1994, BIS published the Reporting of Offsets Agreements in Sales of Weapon Systems or Defense-Related Items to Foreign Countries or Foreign Firms regulation (15 CFR part 701) (the “Offset Reporting Regulation”). BIS aggregates and uses the information provided by U.S. firms pursuant to the Offset Reporting Regulation to determine the impact of offset transactions on the defense preparedness, industrial competitiveness, employment, and trade of the United States. Pursuant to Section 309, BIS submits reports annually to Congress.

On April 29, 2009, BIS published a proposed rule (74 FR 19466) requesting comments on proposed amendments to the Offset Reporting Regulation. This final rule implements the amendments to the Offset Reporting Regulation.

This rule will allow BIS to improve its assessment of the economic effects of offsets in defense trade. The amendments in this rule clarify the information BIS is seeking to receive from industry. BIS believes that these amendments will lead to less ambiguity and more consistency in industry submissions. BIS is also making these amendments to update its instructions to industry specific to the means of submission and the format of submitted data.

This final rule also responds to a recommendation made by the Government Accountability Office (“GAO”) in its June 26, 2008 report entitled Defense Production Act: Agencies Lack Policies and Guidance for Use of Key Authorities (GAO-08-854). In its report, the GAO stated that Commerce provides useful summaries of offsets issues in its annual report to Congress, but the type of data collected from prime contractors limits BIS's ability to effectively analyze the impact of offsets on the U.S. economy.

Consequently, the GAO recommended that Commerce update its Offset Reporting Regulation to require more precise information on the industry sectors in which offset activity occurs.

The comment period for the proposed rule ended on June 29, 2009. BIS received a total of three written submissions. The written submissions comprised nine distinct comments from two defense contractors and one industry association. BIS posted all comments received by the end of the comment period for public viewing at http://www.regulations.gov and on the BIS Web site at http://efoia.bis.doc.gov.

The comments focused on the following topics: the proposed requirement to classify products and services involved in offset agreements and transactions using the North American Industry Classification System (“NAICS”) codes and the added burden created by this requirement; the proposed linking of offset transactions to offset agreements; the proposed increase in data specificity for performance measures and non-performance penalties associated with offset agreements; and the importance of protecting the business proprietary information submitted by U.S. firms.

BIS received three comments regarding the proposed requirement that certain information reported to BIS be classified using NAICS codes. All three commentators indicated that the NAICS reporting requirement was burdensome and time consuming. One commenter noted that BIS estimated that the requirement to classify offset agreements and transactions would add 33 percent to the total time required to prepare an annual submission pursuant to the Offset Reporting Regulation. Another commenter stated that the defense contractor industry does not track NAICS codes during sales and that many offset transactions would require more than one NAICS code. The third commenter stated that it would require at least an 18-month lead time to implement the changes to its database and to train users.

BIS determined that the requirement to classify offset agreements and transactions would not result in an undue burden on the defense industry for several reasons. First, all companies conducting business with the U.S. Government, including those regularly involved in military export sales reported to Commerce, are required to classify their products and services, in accordance with the NAICS (See Central Contractor Registration Handbook, http://www.ccr.gov). The U.S. Census Bureau (“Census”) posts instructions on its Web site on how to properly classify products and services in accordance with the NAICS. The Census web site also contains a search feature that allows users to find the proper NAICS codes for their products based upon a keyword search.

Moreover, Census requires the reporting of industrial activity using NAICS codes for all U.S. companies for the economic census it conducts every five years. Further, Census collects NAICS-based data monthly from the aerospace industry for its Current Industrial Report on the Civil Aircraft and Aircraft Engines report. According to Census, pursuant to Title 13 of the U.S. Code, U.S. companies are required to report multiple NAICS codes for individual economic transactions to Census for both of these reports.

In BIS's 15-year history of compiling offset data pursuant to the Offset Reporting Regulation, approximately 80 percent of offset activity involves products and services of the aerospace industry, which has a limited number of NAICS codes. The limited number of NAICS codes applicable to military export sales in general should also limit this burden. Given that companies are already required to report information including multiple NAICS codes for individual transactions to a U.S. Government agency other than BIS, and noting the limited number of applicable NAICS codes in the military export sales sector, BIS has determined that identifying military export sales and offset transactions by multiple NAICS codes, as applicable, would not cause an undue burden on industry.

BIS is implementing this change in part as a response to the GAO's June 26, 2008 report entitled Defense Production Act: Agencies Lack Policies and Guidance for Use of Key Authorities (GAO-08-854) in which the GAO recommended that Commerce update its Offset Reporting Regulation to require more precise information on the industry sectors in which offset activity occurs. Further, this requirement will permit BIS to better utilize the NAICS-based Benchmark Input-Output Accounts (Input-Output) of the United States published by the U.S. Department of Commerce's Bureau of Economic Analysis in the preparation of its annual report to Congress. The Input-Output account is a representation of the United States economy used to predict how changes in one industry affect other U.S. industries and is a much more accurate economic model than the methodologies BIS used to analyze the impact of offsets in the past. BIS began using this model to calculate the economic impact of offset agreements and offset transactions for its 13th Annual Report to Congress in December 2008. The inclusion of data that includes six-digit NAICS codes provided by industry will allow BIS to better utilize this model to provide a more accurate assessment of the economic impact of offsets in defense trade. This will allow BIS to better fulfill its mandate under Section 309 in its annual reports to Congress.

With regard to the comment that reporting NAICS codes for offset agreements and transactions would add as much as 33 percent to the hourly burden incurred by firms in compiling information for its submissions to BIS, BIS notes that the 33 percent increase amounts to the addition of three hours to the existing nine hour burden. The commenter stated that for a larger company, this increase would be more substantial than for a small company because the compilation of data is more time consuming in a large company with many offset obligations. BIS notes that the nine hour burden estimate for the collection of the existing information under the Offset Reporting Regulation and the three additional hours estimated for the burden of reporting on NAICS codes is based upon an average for all U.S. firms subject to reporting under this regulation. BIS does not believe that this additional burden outweighs the long term benefits to both BIS and industry of abandoning use of the outdated Standard Industrial Classification codes and instead using the NAICS codes.

In response to the request that BIS wait 18 months after publishing this final rule to make its changes effective, BIS has chosen to make this rule effective 30 days after publication because this rule contains only one significant additional requirement. U.S. firms reporting under the Offset Reporting Regulation should incorporate the new requirements in this rule in their submissions to BIS for calendar year 2009 (reportable to BIS by June 15, 2010). Although BIS recognizes that the changes included in the final rule will require adjustments to the internal tracking and filing systems used by U.S. firms reporting under this rule, given the existing reporting requirements administered by another U.S. Government agency and the limited number of significant changes included in this rule, BIS has determined that firms will be able to make these changes in time to comply with the final rule in their June 2010 submission. Note that this rule's requirements specific to the use of NAICS codes are only applicable to offset agreements and transactions reported to BIS beginning with calendar year 2009.

BIS made one change in this final rule on the basis of comments specific to the NAICS requirement. In the proposed rule, BIS included a requirement for U.S. firms to assign NAICS codes to the credit value of each offset transaction. BIS has determined that it does not need this information to complete the analysis provided in the annual report and has thus removed the requirement in this final rule, easing some of the reporting burden for industry. In making this determination, BIS recognized that because credit value is generally assigned by foreign offset authorities and can involve multipliers, it would be difficult for U.S. firms to determine how to assign NAICS codes to credit values, given that the transaction could involve multiple codes and the credit value could be different than the actual value of the transaction.

BIS received one comment on the new requirement to link offset transactions to a particular offset agreement. The commenter stated that properly assigning each transaction to its agreement will be time consuming for U.S. companies because many companies have multiple offset agreements for the same product in the same country. The commenter noted that it may take some companies as much as a week of additional staff time to comply with this requirement.

BIS reviewed this comment and notes that U.S. firms that report to BIS under the Offset Reporting Regulation are required by their foreign government customers to keep records of each offset transaction for which offset credit is claimed. The firms are also required to report their offset activities to the foreign government customers in order to account for their fulfillment of offset obligations. Both U.S. firms and their foreign government customers must track how much of a U.S. firm's offset obligation has been satisfied and what offset transactions are counted toward that obligation. Given this practice, BIS believes that the information BIS is requesting should be available to U.S. firms.

BIS received one comment regarding the proposed increase in the level of specificity required to be reported related to Performance Measures and Non-Performance Penalties. The commenter stated that providing more specific information on these topics could be cumbersome and would disadvantage U.S. companies in the global market place because such information, if released, would “exacerbate U.S. industry's ability to negotiate a fair contract.”

BIS notes that the requirement to report offset agreement performance measures and non-performance penalties is not a new requirement. The previous Offset Reporting Regulation required companies to report performance measures. The change in this final rule only requires industry to report performance measures and non-performance penalties as separate line items. Therefore, this change will not add any additional burden on industry.

Specific to the concern regarding U.S. industry negotiations, BIS does not include the specific performance measures and non-performance penalties submitted by industry in its annual report. Instead, BIS uses this information to better understand the trends in offset activities in defense trade. Country-specific offset policies that BIS has included in past reports were obtained from publicly available sources.

BIS received three comments regarding the confidentiality of the offset-related data that companies submit to BIS in relation to the public availability of the annual report. One commentator stated that the release of proprietary information could be damaging to companies and to the defense industry. Two commentators expressed concerns that foreign governments use or may use the data from the annual report to win concessions from U.S. defense contractors in offset negotiations.

Although the availability of the offset report and the confidentiality of offset-related data are outside the scope of this final rule, BIS is cognizant of the negative impacts of the release of proprietary information. As provided by Section 309(c) of the DPA, and § 701.5 of the Offset Reporting Regulation, BIS is precluded from publicly disclosing the specific information it receives from U.S. companies pursuant to the Offset Reporting Regulation. Therefore, the offset-related information collected by BIS from defense contractors is highly aggregated so that the activities of individual companies cannot be determined. Additionally, in recent years, BIS has revised the annual report to remove certain sections that were identified as beneficial to foreign governments and made other sections of the report available only within the U.S. Government. BIS will continue to consider additional measures specific to this concern.

BIS is amending the Offset Reporting Regulation to update and provide clarification with regard to the information U.S. firms are required to submit each year to support the preparation of the annual report to Congress on offsets in defense trade.

This final rule amends the last sentence of § 701.1 of the Offset Reporting Regulation to reflect that Commerce has already submitted and will continue to submit reports to Congress. The previous § 701.1 suggested only that Commerce will be submitting reports in the future.

This final rule amends certain definitions in § 701.2 of the Offset Reporting Regulation to reflect BIS's 15-year experience in preparing the annual report to Congress. Specifically, this rule updated the illustrative list of activities in the definition of “offset transaction” in § 701.2(f) and the definitions of “direct offset” in § 701.2(g) and “indirect offset” in § 701.2(h).

In the definition of “offset transaction” in § 701.2(f), this rule removes reference to activities not commonly reported to BIS (i.e., countertrade, barter, counterpurchase, and buy back) and adds reference to activities that are frequently reported (i.e., credit assistance, training, and purchases). Note that this list remains illustrative. Additionally, to clarify the meaning of the different types of offset transactions specified in § 701.2(f), this final rule provides examples for each type of offset transaction listed. These examples were not included in the proposed rule and are intended to ensure better consistency in the data submitted to BIS. None of these terms are currently defined in the Offset Reporting Regulation.

Example 1 to § 701.2(f), clarifies that “co-production” includes transactions that are based upon a government-to-government agreement authorizing the transfer of technology to permit a foreign company to manufacture all or part of a U.S.-origin defense article. Such transactions are based upon an agreement specifically referenced in a Foreign Military Sale (“FMS”) Letter of Offer and Acceptance (LOA) and a government-to-government co-production Memorandum of Understanding. In Example 6, on the other hand, a foreign company receives technology to produce a component of a U.S. defense article, but in part because this transfer wasn't made pursuant to a co-production agreement specifically referenced in an LOA and co-production Memorandum of Understanding, it is classified as “licensed production” instead of “co-production.” Both of these examples also include “technology transfers”, and that term is further described in Example 2.

Additionally, in Example 4 to § 701.2(f) a U.S. company makes arrangements for a line of credit at a financial institution, which is “credit assistance” (distinguishable from the use of credited or “banked” offset credits, which would be classified as “other”). In its 15 years of collecting data for its report, BIS has observed that U.S. firms have submitted data on transactions under the “credit assistance” category for a wide variety of transactions, some of which BIS would not consider to be “credit assistance.” Section 701.2(f) also lists examples for all other terms referenced in the definition of “offset transaction.”

This final rule amends the definitions for “direct offset” and “indirect offset” in § 701.2(g) and § 701.2(h) by removing the references to “defense articles” and “defense goods.” This change was made to clarify that U.S. firms are required to report on all offset transactions for which offset credit of $250,000 or more has been claimed from a foreign representative, even if the offset transaction itself does not involve a defense article or service (i.e., items or services controlled pursuant to the International Traffic in Arms Regulations (22 CFR parts 120-130) (ITAR)). This change clarifies the intent of the reporting requirement and reflects current reporting practices.

This final rule modifies § 701.4 of the Offset Reporting Regulation by reordering the section. The revised section begins with information pertaining to the reporting period and the date by which reports must be submitted to BIS each year, followed by updated reporting instructions on how to submit the report and on how the report should be formatted, and the contents of the required reports. This reordering will make it easier for companies affected by this regulation to identify all of the information they need to submit timely and accurate reports. This section also notes for the first time that BIS publishes an annual notice in the Federal Register to remind companies of their responsibility to report on offset agreements and transactions and to advise them of the reporting deadline (see § 701.4(a)).

This final rule also amends § 701.4(b) to update the address to which reported offsets data should be submitted and provides an e-mail address for electronic submissions and notes that data should be submitted in both hardcopy format and electronic format. This final rule deletes references to outdated software and hardware formats that were described in § 701.4(c) of the previous Offset Reporting Regulation. Section 701.4(b)(1) also contains the notice, previously found in § 701.4(a), that only the firms directly responsible for reporting to the foreign customer should report offset transactions to BIS. This notice has been slightly updated in this final rule to further clarify the scope of reporting required by BIS. Note that the term “U.S. firm” used in § 701.4(c)(1) and § 701.4(c)(2) refers to the prime contractors that are physically located in the “United States” (defined in § 701.2(d)), and who are directly responsible for reporting to the foreign customer as described in § 701.4(b)(1). Section 701.4(b) states that U.S. firms must generally only report on offset agreements they have entered into with a foreign customer, not agreements entered into by their foreign subsidiaries or affiliates. However, U.S. firms must report on all offset transactions that they are directly responsible for reporting to the foreign customer, including transactions performed by a foreign subsidiary or affiliate that are credited toward the U.S. firm's offset agreement.

In order to better reflect the business cycle, the provisions of the Offset Reporting Regulation that required description of the contents of reports on offsets transactions (previously § 701.4(d)) and offsets agreements (previously § 701.4(e)) were reordered so that offset agreement reporting requirements are described in § 701.4(c)(1), before the offset transaction reporting requirements now found in § 701.4(c)(2).

Also in new §§ 701.4(c)(1) and 701.4(c)(2), the term “military export sale” (a defined term in § 701.2) has replaced the term “weapon system,” in order to clarify that not all reported defense sales involve weapon systems. Further clarifying changes made to the descriptions of information required to be reported under § 701.4 are described below.

In new § 701.4(c)(1)(ii), this final rule expands the information required to be submitted to BIS to describe offset agreements. Whereas the previous Offset Reporting Regulation requested only the name or description of the defense article and/or service subject to the offset agreement, this change requires that both the name and description of such articles and/or services be provided as well as the month and year that the offset agreement was signed. These changes will ensure that offset agreements are correctly reported for the appropriate year and will facilitate BIS's ability to track the fulfillment of offset obligations.

New §§ 701.4(c)(1)(iii) and 701.4(c)(2)(iv), respectively, require companies to assign the appropriate North American Industry Classification System (“NAICS”) code(s) to each military export sale for which there is an offset agreement triggering a reporting requirement and to each offset transaction reported under the Offset Reporting Regulation. In addition, new §§ 701.4(c)(1)(v) and 701.4(c)(2)(viii), respectively, require the value of each military export sale and offset transaction to be classified by NAICS code. Note that for military export sales and offset transactions involving items categorized under more than one NAICS code, all codes should be listed and values should be listed by each of the applicable NAICS codes. This final rule includes illustrative examples in §§ 701.4(c)(1)(iii) and 701.4(c)(2)(iv) to assist industry in classifying military export sales and offset transactions by NAICS codes.

Previously, BIS required industry to classify offset transactions by broad industry classification and to provide a name and description of the military export sale. Firms were directed to the Standard Industrial Classification (“SIC”) codes for assistance in identifying an appropriate industry category for offset transactions. As NAICS is the standard industrial classification system used in the United States and officially replaced the SIC in 1997 (see 62 FR 17288, Apr. 4, 1997), this change updates BIS's instructions to industry. This change allows BIS to gather more accurate information on military export sales and offset transactions and will enhance BIS's ability to assess the economic impact of offsets on the U.S. industrial base by allowing BIS to better utilize other data published by statistical agencies of the U.S. Government.

This final rule eliminates the requirement, previously found in § 701.4(e)(1)(iii) of the Offset Reporting Regulation, that companies report the names and titles of the signatories to offset agreements. BIS has determined that this information is not necessary for the preparation of BIS's annual report to Congress. Under the new § 701.4(c)(1)(iv), companies are required to report only the identity of the foreign government agency or branch that is a signatory to the offset agreement.

In order to clarify the individual status of performance measures and non-performance penalties, the final rule separates their reporting requirements by moving them from old § 701.4(e)(1)(vii) to new § 701.4(c)(1)(viii) and new § 701.4(c)(1)(ix), respectively. This rule also includes lists of examples for each.

In new § 701.4(c)(2)(ii), this final rule requires companies to report for each offset transaction the date when the related offset agreement was signed. This data will allow BIS to better track the fulfillment of offset agreements and identify trends in offset transaction activity.

This final rule revises examples of offset transaction categories. The section entitled “Description of Offset Product/Service” in the previous Offset Reporting Regulation has been replaced by new § 701.4(c)(2)(iii), entitled “Offset Transaction Category.” The categories of offset transactions listed as examples in the new section more accurately reflect the types of offset transactions that have been reported to BIS since 1994. For example, the category of “cash payment” has been removed, and the categories of “licensed production,” “investment,” and “credit assistance” have been added, as was an “other” category (for which the reporting company must include a description). The final rule makes one minor change in this section from the proposed rule. The category entitled “overseas investment” in the proposed rule has been renamed “investment.” BIS made this change because it is aware that there may be investment-related activities for which U.S. firms claim offset credit that may not be accurately labeled as “overseas investment.”

Finally, this final rule adds new § 701.6 to describe the penalties available under the Defense Production Act (50 U.S.C. App. 2155) should companies not comply with this regulation. Willful violation of the Defense Production Act may result in punishment by fine or imprisonment, or both. The maximum penalty provided by the Defense Production Act is a $10,000 fine, or one year in prison, or both. The Government may also seek an injunction from a court of appropriate jurisdiction to prohibit the continuance of any violation of, or to enforce compliance with, the Defense Production Act.

1. This rule has been determined to be significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (“PRA”), unless that collection of information displays a currently valid Office of Management and Budget (“OMB”) Control Number. This regulation contains a collection previously approved by the OMB under control number 0694-0084, which carries a burden hour estimate of nine hours for a reporting firm to prepare and submit once per year. In addition, this final rule amends that collection for reporting on offset agreements and transactions by NAICS code, which carries an estimated additional burden of three hours for companies submitting annual reports to BIS.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The Regulatory Flexibility Act (“RFA”), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”), 5 U.S.C. 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) 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. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the statute does not require the agency to prepare a regulatory flexibility analysis. Pursuant to section 605(b), the Chief Counsel for Regulations, Department of Commerce, certified to the Chief Counsel for Advocacy, Small Business Administration, that this rule will not have a significant impact on a substantial number of small entities. The text of that certification was printed in the preamble to the proposed rule (74 FR 19468, April 24, 2009) and it is not repeated here. No comments were received regarding the economic impact of this final rule. As a result, no final regulatory flexibility analysis was prepared.

Background

This final rule amends certain requirements in the Export Administration Regulations (EAR) that apply to Albania and Croatia. These changes are based upon the accession of Albania and Croatia to formal membership in the North Atlantic Treaty Organization (NATO) on April 1, 2009.

This rule amends the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR) by revising certain license requirements that apply to Albania and Croatia to be consistent with those that apply to other members of NATO. Specifically, this rule removes certain crime control (CC), national security (NS) and regional stability (RS) license requirements for Albania and Croatia. As a result of the changes made by this rule, Albania and Croatia are no longer designated as RS Column 2 destinations on the Commerce Country Chart and Croatia is no longer designated as an NS Column 2 destination. However, a license continues to be required for exports and reexports to Albania or Croatia of items on the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR) that are controlled for national security or regional stability reasons and are identified as requiring a license to destinations indicated under NS Column 1 (also NS Column 2, for Albania) or RS Column 1, respectively, on the Commerce Country Chart. A license also continues to be required for exports and reexports to Albania or Croatia of restraint devices, discharge type arms, and related technology that are controlled for crime control reasons under Export Control Classification Numbers (ECCNs) 0A982, 0A985, and 0E982, respectively, on the CCL. Specially designed implements of torture that are controlled under ECCN 0A983 also continue to require a license for export and reexport to Albania or Croatia. In addition, this rule does not affect license requirements that apply to Albania or Croatia based on other reasons for control identified in the EAR, such as chemical/biological (CB), missile technology (MT), nuclear proliferation (NP), and encryption items (EI).

Consistent with the changes described above, this rule amends the national security (NS) license requirement provisions in Section 742.4(a) of the EAR by adding Croatia to the list of countries that are not subject to the NS Column 2 license requirements indicated in various Export Control Classification Numbers (ECCNs) on the CCL. In addition, this rule adds Albania and Croatia to the list of countries identified in Section 742.4(a) of the EAR that are not subject to the NS Column 2 license requirements that apply to certain ECCN 6A003.b.4.b cameras described therein. Although this rule does not remove all of the NS Column 2 license requirements for Albania, as it does for Croatia, the rule does make Albania eligible for the exemption that applies to certain ECCN 6A003.b.4.b cameras described in Section 742.4(a) of the EAR—this policy is consistent with the treatment that is provided for exports of such cameras to Cyprus, Malta, and South Africa, which also are subject to most NS Column 2 license requirements.

Consistent with the changes in the regional stability (RS) license requirements for Albania and Croatia described above, this rule adds both countries to the list of countries identified in Section 742.6(a)(4)(ii) of the EAR as not subject to the RS Column 2 license requirements that apply to certain ECCN 6A003.b.4.b cameras described therein. This rule also amends the RS Column 1 license requirements described in Section 742.6(a) of the EAR by adding Albania and Croatia to the list of countries to which certain exports or reexports of cameras controlled under ECCN 6A003.b.4.b, as described in Section 742.6(a)(2)(ii) or (a)(2)(iv) of the EAR, may be authorized in accordance with the requirements of Section 742.6(a)(2)(iii) or (a)(2)(v), respectively. In addition, this rule adds Albania and Croatia to the list of countries in Section 742.6(a)(3) of the EAR whose governments are authorized to reexport without a license “military commodities” controlled under ECCN 0A919 as part of a military deployment.

This rule also amends Section 743.3(b) of the EAR by adding Albania and Croatia to the list of countries that are subject to the reporting requirements described in this section, which apply to exports of ECCN 6A003.b.4.b thermal imaging cameras that have been authorized under the EAR without a validated license.

Most of the amendments to Sections 740.16(b)(3), 742.4(a), 742.6(a), and 743.3(b) of the EAR that are described above involve provisions of the EAR that were affected by a final rule published by BIS on May 22, 2009 (74 FR 23941), which revised certain license requirements and license exception eligibility requirements for thermal imaging cameras controlled by ECCN 6A003.b.4.b on the CCL. This final rule does not affect the scope of these requirements, except insofar as they apply to exports of such cameras to Albania and Croatia. For additional information on the application of these requirements to Albania and Croatia, please refer to the BIS point of contact identified in the May 22, 2009, final rule.

In addition to the national security and regional stability changes described above, this rule amends Section 736.2(b)(8)(ii) of the EAR (i.e., General Prohibition Eight) to remove “Albania” from the list of countries that are subject to the prohibition against certain in transit shipments. This prohibition applies to intransit shipments through specified countries of items that generally would require a license for export or reexport to such countries and that are not authorized under either a license or a license exception.

This rule also amends Supplement No. 1 to Part 740 of the EAR (titled “Country Groups”) by removing “Albania” from “Country Group D” and adding “Albania” to “Country Group B—Countries,” consistent with the treatment provided to other members of NATO. “Croatia” has already been designated in the EAR as a Country Group B country (see the interim rule titled, “Simplification of Export Administration Regulations,” published at 61 FR 12714, March 25, 1996; Country Group B, p. 12782). Whether or not a country has been designated by the EAR as a Country Group B country can affect its eligibility status with respect to certain license exceptions described in Part 740 of the EAR (e.g., License Exceptions LVS, GBS, and TSR).

Consistent with the status of Albania and Croatia as members of NATO, this rule also amends the License Exception APR (Additional Permissive Reexports) provisions in Section 740.16(b)(3) of the EAR to add Albania and Croatia to the list of eligible destinations for certain thermal imaging cameras controlled under ECCN 6A003.b.4.b on the CCL.

Finally, this rule amends Section 772.1 of the EAR to update the definition of “NATO (North Atlantic Treaty Organization)” by adding “Albania” and “Croatia.”

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 13, 2009, 74 FR 41325 (August 14, 2009), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule contains collections of information subject to the requirements of the PRA. These collections have been approved by OMB under Control Number 0694-0088 (Multi-Purpose Application), which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748, and Control Number 0694-0133, which carries a burden hour estimate of 60 hours annually for all reports submitted in accordance with Section 743.3 of the EAR. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to Jasmeet Seehra, Office of Management and Budget (OMB), and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, as indicated in the “ADDRESSES” section of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (Sec. 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 5 U.S.C. 553 or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis.

The Entity List provides notice to the public that certain exports, reexports, and transfers (in-country) to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of license exceptions in such transactions is limited. Persons are placed on the Entity List on the basis of certain sections of part 744 (Control Policy: End-User and End-Use Based) of the EAR. BIS first published the Entity List in February 1997 as part of its efforts to inform the public of entities that have engaged in activities that could result in an increased risk of diversion of exported and reexported items to weapons of mass destruction (WMD) programs. Since its initial publication, grounds for identification on the Entity List have expanded to include activities sanctioned by the Department of State and activities contrary to U.S. national security and/or foreign policy interests.

Pursuant to Supplement No. 5 to part 744 (Procedures for End-User Review Committee Entity List Decisions) of the EAR, the ERC, composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions to make additions to, removals from or changes to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.

The ERC made a determination to remove Neda Kargar, located in the United Arab Emirates, as a result of her request for removal from the listed entity. Based upon the review of the information provided in the removal request in accordance with § 744.16 (Procedure for Requesting Removal or Modification of an Entity List Entity), and further review that was conducted by the ERC's member agencies, the ERC determined that Neda Kargar should be removed from the Entity List. The ERC decision to remove Neda Kargar took into account information indicating that she did not work at the location listed in her entry on the Entity List, her cooperation with the U.S. Government, and as her assurances of future compliance with the EAR. In accordance with § 744.16(c), the Deputy Assistant Secretary for Export Administration has sent written notification to Neda Kargar informing her of the ERC's decision to remove her from the Entity List. This final rule implements the decision to remove this U.A.E. person from the Entity List.

One person is being removed under this rule as a result of the submission of a formal request for removal based upon the procedures outlined in § 744.16 of the EAR. This entity is located in the United Arab Emirates:

(1) Neda Kargar, No. 308, 3rd Floor, Rafi Center, Al Nakheel, Deira, Dubai, U.A.E.

The removal of Neda Kargar from the Entity List (from the U.A.E., as described above) eliminates the existing license requirement in Supplement No. 4 to part 744 for exports, reexports and transfers (in-country) to this person. However, the removal of Neda Kargar from the Entity List does not relieve persons of other obligations under part 744 of the EAR or under other parts of the EAR. Neither the removal of a person from the Entity List nor the removal of Entity List-based license requirements relieves persons of their obligations under General Prohibition 5 in § 736.2(b)(5) of the EAR which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” Nor do such removals relieve persons of their obligation to apply for export, reexport or in-country transfer licenses required by other provisions of the EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, “BIS's `Know Your Customer' Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 13, 2009 (74 FR 41325 (August 14, 2009)), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to decrease slightly as a result of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States. (See 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et. seq., are not applicable.

BIS amended the EAR in a final rule published in the Federal Register on June 19, 2007 (72 FR 33646) to create a new Authorization Validated End-User (VEU). Authorization VEU allows the export, reexport or transfer (in-country) of certain specified items (including commodities, software and technology, except for those controlled for missile technology or crime control reasons) to approved civil end-users located in eligible destinations under a general authorization instead of under multiple individual licenses. Authorization VEU is described in § 748.15 of the EAR. The June 19 rule also identified China as the initial eligible destination for shipments under the authorization; BIS identified India as an eligible destination in an October 1, 2007 final rule (72 FR 56010).

In a rule published in the Federal Register on April 29, 2009 (74 FR 19382), BIS designated Aviza Technology China (Aviza) as a VEU, thus authorizing certain specific exports, reexports and transfers (in-country) to the listed facilities of the company under Authorization VEU. On July 2, 2009, BIS designated GE India as a VEU (74 FR 31620); GE India's listing included its GE Fanuc Systems PVT Ltd. (GE Fanuc) facility as an “Eligible Destination,” and listed specific items that could be exported, reexported or transferred (in-country) to the GE Fanuc facility under Authorization VEU. Prior to publication of this rule, Aviza and GE India's GE Fanuc facility were listed in Supplement No. 7 to Part 748 of the EAR (Supplement No. 7 to Part 748—Authorization Validated End-User (VEU): List of Validated End-Users, Respective Eligible Items and Eligible Destinations).

In this final rule, BIS amends the EAR to suspend, until further notice, the authority of any person to export, reexport, or transfer (in-country) any items subject to the EAR under Authorization VEU to Aviza and to the GE Fanuc facility in India. BIS is suspending the availability of Authorization VEU for Aviza and the GE Fanuc facility due to material changes at the companies, consistent with § 748.15 of the EAR.

Suspension of the availability of Authorization VEU in this amendment is not the result of prohibited activities by the two companies. This amendment does not otherwise create a new license requirement or adversely affect the licensing policy for exports, reexports or transfers of items to the company and facility identified in this rule.

This amendment applies only to transactions under Authorization VEU involving Aviza and the GE Fanuc facility in India, which were previously identified in Supplement No. 7 to Part 748 of the EAR. This amendment does not apply to other companies or facilities in China or India that may be designated as eligible under Authorization VEU. License requirements and other provisions of the EAR continue to apply to exports, reexports, or transfers (in-country) to Aviza in China and the GE Fanuc facility in India. Additionally, all conditions and restrictions that applied to transactions involving Aviza or the GE Fanuc facility pursuant to Authorization VEU prior to the effective date of this amendment continue to apply. These restrictions and conditions include any that were imposed on either company in connection with its eligibility for Authorization VEU, as communicated by BIS in the initial letter that granted each company VEU status.

Since August 21, 2001, the Export Administration Act has been in lapse and the President, through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended most recently by the Notice of August 13, 2009 (74 FR 41325 (August 14, 2009), has continued the EAR in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222.

Shipments of items removed from eligibility for export, reexport or transfer under Authorization VEU as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on December 23, 2009, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previously applicable authorization so long as they are exported, reexported or transferred before January 6, 2010. Any such items not actually exported or reexported before midnight, on January 6, 2010, require a license in accordance with this regulation.

1. This final rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., unless that collection of information displays a currently valid OMB Control Number. This regulation involves information collections previously approved by the OMB under control number 0694-0088, “Multi-Purpose Application”, which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748, and which involves requirements in connection with Authorization Validated End-User. This rule is expected to result in an increase in license applications submitted to BIS. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase significantly as a result of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

4. The provisions of the Administrative Procedure Act requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable to this rule because this regulation involves a military and foreign affairs function of the United States (5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable. Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments may be submitted to Sheila Quarterman, Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, 14th St. & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230.

The final regulations (TD 9472) that are the subject of this document are under sections 411(d)(6) and 4980F of the Internal Revenue Code.

As published, the final regulations (TD 9472) contain an error that may prove to be misleading and is in need of clarification.

Accordingly, the publication of the final regulations (TD 9472), which were the subject of FR Doc. E9-28078, is corrected as follows:

On page 61275, column 3, in the preamble, under the paragraph heading “Effective/Applicability Dates”, lines 4 and 5 from the bottom of first paragraph of the column, the language “(available on the IRS Web site at http://www.irs.gov/pub/irs-drop/a-09-82.pdf),” is removed and replaced with the language “(2009-48 IRB 720) See § 601.601(d)(2)(ii)(b),” in its place.

The Food, Conservation and Energy Act of 2008, Public Law 110-334, Section 14219, 22 Stat. 923 (2008) (“the Act”) amended the Debt Collection Act of 1982 (as amended by the Debt Collection Improvement Act of 1996) to remove a restriction on the collection of debt by administrative offset, i.e., offset of payments pursuant to 31 U.S.C. 3716. Prior to this change, administrative offset to collect debt was only available if the debt was delinquent for a period of less than ten years. The amendment to the law allows for the collection of debt by administrative offset without any time limitation and applies to any debt outstanding on or after the date of the enactment of the Act.

On June 11, 2009, the Financial Management Service published in the Federal Register an interim rule implementing the statutory change. (See 74 FR 27707, June 11, 2009).

By the close of the comment period, FMS received no comments on the interim rule.

Accordingly, the interim rule amending 31 CFR part 285, published at 74 FR 27707, June 11, 2009, is adopted as a final rule without change.

Congress has established fines or other civil monetary penalties (CMPs) for those who violate Federal laws and regulations. However, the deterrent value of these fines and penalties diminishes over time from the effects of inflation. To address this problem, Congress enacted the Federal Civil Penalties Inflation Adjustment Act, Public Law 101-410, 104 Stat. 890, §§ 1-6, as amended by the Debt Collection Improvement Act of 1996, Public Law 104-134, 110 Stat. 1321, § 31001(s)(1); 28 U.S.C. 2461. These statutes require Federal agencies to adjust their CMPs for inflation at least once every four years, using a nondiscretionary statutory formula, thus making further direct involvement by Congress unnecessary.

This final rule is published without a prior notice of proposed rulemaking or public comment period. Pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for dispensing with notice and comment in this rulemaking. This rulemaking implements the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996. These statutes require certain actions with respect to adjusting CMPs for inflation and do not allow for discretion in implementation, so that prior notice and comment is unnecessary and contrary to the public interest.

The method for calculating the effects of inflation on fines and penalties is very specifically prescribed by statutes, which allow no discretion. The statutes specify the inflation measure to be used, the method for the calculation of the inflation adjustment, and the method for the numerical rounding of the results.

The statutes require the use of the change in the Consumer Price Index for All Urban Consumers (CPI-U) as the inflation measure for these calculations. The CPI-U is calculated and published by the U.S. Department of Labor, Bureau of Labor Statistics, and uses the period of 1982 to 1984 as the base level where the CPI-U = 100.

The inflation adjustment prescribed by the statutes is calculated as the difference between the CPI-U for the month of June of the calendar year preceding the adjustment and the CPI-U for the month of June of the calendar year in which the amount of the civil monetary penalty was last set or adjusted pursuant to law. Since the last inflation adjustment was made in 2003 and the year preceding this adjustment is 2008, the current inflation adjustment equals the increase in the CPI-U (not seasonally adjusted) from June, 2003 to June, 2008:

Coast Guard District Commanders and Captains of the Port (COTP) must be immediately responsive to the safety and security needs within their jurisdiction; therefore, District Commanders and COTPs have been delegated the authority to issue certain local regulations. Safety zones may be established for safety or environmental purposes. A safety zone may be stationary and described by fixed limits or it may be described as a zone around a vessel in motion. Security zones limit access to prevent injury or damage to vessels, ports, or waterfront facilities and may also describe a zone around a vessel in motion. Special local regulations are issued to enhance the safety of participants and spectators at regattas and other marine events. Drawbridge operation regulations authorize changes to drawbridge schedules to accommodate bridge repairs, seasonal vessel traffic, and local public events. Timely publication of these rules in the Federal Register is often precluded when a rule responds to an emergency, or when an event occurs without sufficient advance notice. The affected public is, however, informed of these rules through Local Notices to Mariners, press releases, and other means. Moreover, actual notification is provided by Coast Guard patrol vessels enforcing the restrictions imposed by the rule. Because Federal Register publication was not possible before the beginning of the effective period, mariners were personally notified of the contents of these safety zones, security zones, special local regulations, regulated navigation areas or drawbridge operation regulations by Coast Guard officials' on-scene prior to any enforcement action. However, the Coast Guard, by law, must publish in the Federal Register notice of substantive rules adopted. To meet this obligation without imposing undue expense on the public, the Coast Guard periodically publishes a list of these temporary safety zones, security zones, special local regulations, regulated navigation areas and drawbridge operation regulations. Permanent rules are not included in this list because they are published in their entirety in the Federal Register. Temporary rules are also published in their entirety if sufficient time is available to do so before they are placed in effect or terminated. The temporary rules listed in this notice have been exempted from review under Executive Order 12666, Regulatory Planning and Review, because of their emergency nature, or limited scope and temporary effectiveness.

The following unpublished rules were placed in effect temporarily during the period between March 2005 and November 2008 unless otherwise indicated.

Regulatory Information

On March 24, 2009, we published a notice of proposed rulemaking (NPRM) entitled “Safety Zones: Fireworks Displays in the Captain of the Port Portland Zone” in the Federal Register (74 FR 12292). We received no comments on the proposed rule. No public meeting was requested and none was held.

Fireworks displays create hazardous conditions for the maritime public as a result of the large number of vessels that congregate near the displays as well as the noise, falling debris, and explosions that occur during the events. The safety zones established by this rule will help to ensure the safety of the maritime public by prohibiting all persons and vessels from coming too close to the fireworks displays and their associated hazards.

No comments on this rule were received and no changes to the rule were made.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. The Coast Guard has made this finding because the rule will have little, if any, economic impact since the safety zones it establishes will only be in effect for several hours during one day each year and will not significantly impede maritime traffic transiting the areas where they are located.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels wishing to transit one of the safety zones established by this rule. The rule will not have a significant economic impact on a substantial number of small entities, however, because the safety zones established are only to be in effect for several hours during one day each year and will not significantly impede maritime traffic transiting the areas where they are located.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, 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.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the establishment of safety zones. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to those engaged in the following activities:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

This listing is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR cite at http://www.gpoaccess.gov/ecfr

Under section 408(g) of FFDCA, 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2008-0126 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk as required by 40 CFR part 178 on or before February 22, 2010.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit this copy, identified by docket ID number EPA-HQ-OPP-2008-0126 by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.

• Mail: Office of Pesticide Programs (OPP) Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

• Delivery: OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket Facility's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is (703) 305-5805.

In the Federal Register of March 12, 2008 (73 FR 13225) (FRL-8354-6), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 8E7318) by Interregional Research Project #4 (IR-4), 500 College Road East, Suite 201 W, Princeton, NJ 08540. The petition requested that 40 CFR 180.572 be amended by establishing tolerances for combined residues of the insecticide bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl) hydrazinecarboxylate) and its metabolite, diazinecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate), in or on bean dry, seed at 0.2 parts per million (ppm); grass, forage, fodder and hay, group 17, forage at 140 ppm; and grass, forage, fodder and hay, group 17, hay at 120 ppm. That notice referenced a summary of the petition prepared by Chemtura Corporation, the registrant, on behalf of IR-4, which is available to the public in the docket, http://www.regulations.gov. One comment was received on the notice of filing. EPA's response to this comment is discussed in Unit IV.C.

After the petition was submitted, IR-4 subsequently withdrew the tolerance request for grass, forage, fodder and hay, group 17, forage; and grass, forage, fodder and hay, group 17, hay. As such, these commodities are not considered in this document.

EPA reviewed the petition and determined that the tolerance should be set at 0.60 ppm on bean, dry seed. The reasons for these changes are explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....”

Consistent with section 408(b)(2)(D) of FFDCA, and the factors specified in section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for the petitioned-for tolerances for combined residues of the insecticide bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl) hydrazinecarboxylate) and its metabolite, diazinecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate), in or on bean, dry seed at 0.60 ppm. EPA's assessment of exposures and risks associated with establishing tolerances follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Bifenazate is not acutely toxic by the oral, inhalation, or dermal routes of exposure. It is minimally irritating to the eye and slightly-irritating to the skin. Bifenazate is a dermal sensitizer by the Magnusson/Kligman method, but not the Buehler method. Subchronic and chronic studies in rats and dogs indicate that the liver and hematopoietic system (spleen and/or bone marrow with associated hematological findings) are the primary target organs in these species, with additional toxicity in the kidney (chronic dog) and adrenal gland (male rats) also identified. Similarly, the hematopoietic system (spleen) was the primary target organ in the repeat-dose dermal toxicity study. Also associated with this toxicity in several studies were decreased body weight, body-weight gain, and food consumption. No evidence of carcinogenicity was seen in the rat and mouse studies and the Agency has classified bifenazate as “not likely” to be a human carcinogen by any relevant route of exposure. A full battery of mutagenicity studies were negative for mutagenic or clastogenic activity. The developmental studies in rats and rabbits did not demonstrate increased sensitivity of fetuses to bifenazate. Similarly, increased qualitative or quantitative susceptibility to offspring were not observed with bifenazate during pre- or postnatal development in the reproduction study. There was no evidence of neurotoxicity (clinical signs or neuropathology) in any of the toxicology studies conducted with bifenazate. Therefore, a bifenazate developmental neurotoxicity (DNT) study was not required by the Agency. Specific information on the studies received and the nature of the adverse effects caused by bifenazate as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “Bifenazate; Petition for Establishment of Tolerances for the Use of Bifenazate on Dry Bean Seed. HED Human-Health Risk Assessment,” pages 23-24 in docket ID number EPA-HQ-OPP-2008-0126.

For hazards that have a threshold below which there is no appreciable risk, a toxicological point of departure (POD) is identified as the basis for derivation of reference values for risk assessment. The POD may be defined as the highest dose at which no adverse effects are observed (the NOAEL) in the toxicology study identified as appropriate for use in risk assessment. However, if a NOAEL cannot be determined, the lowest dose at which adverse effects of concern are identified (the LOAEL) or a benchmark dose (BMD) approach is sometimes used for risk assessment. Uncertainty/safety factors (UFs) are used in conjunction with the POD to take into account uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. Safety is assessed for acute and chronic dietary risks by comparing aggregate food and water exposure to the pesticide to the acute population adjusted dose (aPAD) and chronic population adjusted dose (cPAD). The aPAD and cPAD are calculated by dividing the POD by all applicable UFs. Aggregate short-, intermediate-, and chronic-term risks are evaluated by comparing food, water, and residential exposure to the POD to ensure that the margin of exposure (MOE) called for by the product of all applicable UFs is not exceeded. This latter value is referred to as the level of concern (LOC).

For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect greater than that expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for bifenazate used for human risk assessment can be found at http://www.regulations.gov in the document titled “Bifenazate; Petition for Establishment of Tolerances for the Use of Bifenazate on Dry Bean Seed. HED Human-Health Risk Assessment,” pages 10-11 in docket ID number EPA-HQ-OPP-2008-0126.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to bifenazate, EPA considered exposure under the petitioned-for tolerance as well as all existing bifenazate tolerances in 40 CFR 180.572. EPA assessed dietary exposures from bifenazate in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. No such effects were identified in the toxicological studies for bifenazate; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA 1994-1996 and 1998 CSFII. As to residue levels in food, EPA assumed that all commodities, except squash, peach, tomato and milk, contained tolerance-level residues. For squash, peach and tomato, EPA assumed residues were present at average field trial levels. For milk, the tolerance level was adjusted upward to account for all of the residues of concern for risk assessment. Default processing factors were assumed for all commodities except apple juice, grape juice, wine/sherry, tomato paste, and tomato puree. The processing factors for these commodities were based on data from processing studies. The chronic analysis also incorporated average percent crop treated (PCT) information for some registered commodities but assumed 100 PCT for the new use.

iii. Cancer. No evidence of carcinogenicity was seen in the cancer studies performed with bifenazate on rats and mice, and EPA has classified bifenazate as ”not likely“ to be a human carcinogen by any relevant route of exposure. Therefore, a cancer exposure assessment was not conducted.

Bifenazate contains hydrazine as part of its chemical structure. This side chain is structurally similar to unsymmetrical dimethyl hydrazine (UDMH), a category B2 animal carcinogen and possible human carcinogen. However, EPA has concluded that formation of free biphenyl hydrazine or other hydrazines is unlikely based on the results of submitted metabolism studies. The rat, livestock, and plant metabolism studies indicate that metabolism of bifenazate proceeds via oxidation of the hydrazine moiety of bifenazate to form D3598 (diazene). The D3598 is then metabolized to D1989 (methoxy biphenyl) and to bound residues by reaction with natural products. A radish metabolism study which specifically monitored for the formation of biphenyl hydrazine found none. Based on the results of the metabolism studies, especially the absence of biphenyl hydrazine in the radish metabolism study or in the excreta of rats in the rat metabolism study, EPA concluded that the formation of free hydrazines is unlikely. This conclusion is further supported by the lack of carcinogenic effects in the bifenazate carcinogenicity studies.

iv. Anticipated residue and percent crop treated (PCT) information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of this tolerance.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

The Agency used PCT information as follows:

Almond 5%; apple 5%; apricot 1%; cherry 1%; cucumber 1%; grape 5%; nectarine 5%; peach 10%; pear 10%; pecan 1%; pepper 1%; pistachio 1%; plum 5%; strawberry 30%; tomato 1%; walnut 1%; and watermelon 1%; 100 PCT was assumed for all new uses and the remaining currently registered uses.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which bifenazate may be applied in a particular area.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for bifenazate in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of bifenazate. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

Based on the First Index Reservoir Screening Tool (FIRST) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of bifenazate for chronic exposures are estimated to be 11.2 parts per billion (ppb) for surface water and 0.044 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 11.2 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Bifenazate is currently registered for the following residential non-dietary sites: Ornamental plants, including bedding plants, flowering plants, foliage plants, bulb crops, perennials, trees, and shrubs. There is a potential for short-term dermal and inhalation exposure of homeowners applying bifenazate on these sites. However, post-application exposures of adults and children from this use are expected to be negligible. Therefore, EPA assessed only short-term dermal and inhalation residential handler exposures for adults. Handler exposures were estimated assuming applications would be made using hose-end sprayers, since this application method is expected to result in higher exposures than other application methods, such as pump sprayers or similar devices.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found bifenazate to share a common mechanism of toxicity with any other substances, and bifenazate does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that bifenazate does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www.epa.gov/pesticides/cumulative.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. The prenatal and postnatal toxicology database for bifenazate includes rat and rabbit developmental toxicity studies and a 2-generation reproduction toxicity study in rats. There was no quantitative or qualitative evidence of increased susceptibility of rats or rabbit fetuses to in utero exposure in the developmental studies, nor of rats following prenatal/postnatal exposure in the 2-generation reproduction study.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

• There are no residual uncertainties in the toxicity database. The bifenazate toxicological database is complete with the exception of an inhalation study, acute and subchronic neurotoxicity studies and an immunotoxicity study. The immunotoxicity and acute and subchronic neurotoxicity studies are now required as a part of new data requirements in the 40 CFR part 158 for conventional pesticide registration and a 28-day inhalation study has not been submitted. However, the Agency does not believe that conducting these studies will result in a lower point of departure (POD) than that currently used for overall risk assessment, and therefore, a database uncertainty factor (UFDB) is not needed to account for lack of these studies for the following reasons:

i. The toxicology database for bifenazate does not indicate that the immune system is the primary target organ. The observed effects on the immune system have been well characterized and were seen at dose(s) that produce evidence of overt systemic toxicity. These effects included increased spleen weight in females and histopathological changes in the spleen in males in a 90-day oral rat toxicity study, extramedullary hematopoiesis in the both sexes in a 21-day dermal toxicity study in rats, and changes in hematological parameters, clinical chemistry parameters in both sexes and histopathological effects in bone marrow (compensatory hyperplasia) in both sexes in a 1-year chronic toxicity study.

ii. The overall weight of evidence suggests that bifenazate does not directly target the immune system, and these findings may be due to secondary effect of overt systemic toxicity. Further, there is no evidence of neurotoxicity or neuropathology in the bifenazate database.

iii. A 28-day inhalation study is not available; however, the EPA has determined that the additional FQPA SF is not needed. Residential inhalation risk was estimated by calculating exposure using the Agency's Residential SOPs. For chemicals with low vapor pressure (7.5 x 10- 5 mmHg or below for outdoor uses at 20-30°C) these standard assumptions are expected to overestimate the exposure via the inhalation route. Bifenazate is such a compound and exposure through the inhalation route is expected to be minimal. Therefore, the risk estimate is conservative and is considered protective and the additional FQPA SF is not needed.

Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www.epa.gov/pesticides/trac/science/trac6a05.pdf.

• There is no quantitative or qualitative evidence of increased susceptibility of rats or rabbit fetuses to in utero exposure in developmental studies, nor following pre/post-natal exposure to rats in the 2-generation reproduction study.

• A developmental neurotoxicity study (DNT) is not required because there is no evidence of neurotoxicity or neuropathology in the bifenazate database.

• The dietary food and drinking water exposure assessments will not underestimate the potential exposures for infants and children; and the residential use (ornamentals) is not expected to result in post-application exposure to infants and children.

EPA determines whether acute and chronic pesticide exposures are safe by comparing aggregate exposure estimates to the aPAD and cPAD. The aPAD and cPAD represent the highest safe exposures, taking into account all appropriate SFs. EPA calculates the aPAD and cPAD by dividing the POD by all applicable UFs. For linear cancer risks, EPA calculates the probability of additional cancer cases given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the POD to ensure that the MOE called for by the product of all applicable UFs is not exceeded.

1. Acute risk. An acute aggregate risk assessment takes into account exposure estimates from acute dietary consumption of food and drinking water. No adverse effect resulting from a single-oral exposure was identified and no acute dietary endpoint was selected. Therefore, bifenazate is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to bifenazate from food and water will utilize 50% of the cPAD for children 1 to 2 years old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of bifenazate is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Bifenazate is currently registered for use that could result in short-term residential exposure and the Agency has determined that it is appropriate to aggregate chronic food and water and short-term exposures for bifenazate.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded that food, water, and residential exposures aggregated result in aggregate MOEs of 2,200 for the U.S. population. The aggregate MOEs for adults take into consideration food and drinking water exposures as well as dermal and inhalation exposures of adults applying bifenazate to ornamentals in residential areas. Since residential exposure of infants and children is not expected, short-term aggregate risk for infants and children is the sum of the risk from food and water, which does not exceed the Agency's level of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Bifenazate is not registered for any use patterns that would result in intermediate-term residential exposure. Therefore, the intermediate-term aggregate risk is the sum of the risk from exposure to bifenazate through food and water, which has already been addressed, and will not be greater than the chronic aggregate risk.

5. Aggregate cancer risk for U.S. population. Bifenazate has been classified as not likely to be a human carcinogen by any relevant route of exposure and is, therefore, not expected to pose a cancer risk.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to bifenazate residues.

Adequate enforcement methodology is available to enforce the tolerance expression. High-performance liquid chromatography (HPLC) Method UCC-D2341 is available as a primary enforcement method for determination of the combined residues of bifenazate and its metabolite, diazinecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate), in/on crop matrices. The method has undergone a successful validation and has been forwarded to the Food and Drug Administration (FDA) for inclusion in the Pesticide Analytical Manual (PAM) Volume II. In addition, a method utilizing a liquid chromatographic system with tandem mass spectrometers (LC/MS/MS) was recently submitted as a confirmatory method (Method NCL ME 245) and has been forwarded to FDA. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address: residuemethods@epa.gov.

There are currently no established Codex, Canadian, or Mexican maximum residue limits (MRLs) for bifenazate in/on dry bean seed.

A comment was received from a private citizen indicating that testing conducted on animals have absolutely no validity and cruel to the test animals. The Agency disagrees with the commenter's claims regarding animal testing. Since humans and animals have complex organ systems and mechanisms for the distribution of chemicals in the body, as well as processes for eliminating toxic substances from their systems, EPA relies on laboratory animals, such as, rats and mice to mimic the complexity of human and higher-order animal physiological responses when exposed to a pesticide. EPA is committed, however, to reducing the use of animals whenever possible. EPA-required studies include animals only when the requirements of sound toxicological science make the use of an animal absolutely necessary. The Agency's goal is to be able to predict the potential of pesticides to cause harmful effects to humans and wildlife by using fewer laboratory animals as models and have been accepting data from alternative (to animals) test methods for several years. As progress is made on finding or developing non-animal test models that reliably predict the potential for harm to humans or the environment, EPA expects that it will need fewer animal studies to make safety determinations. Finally, because the commenter has not provided the Agency with a specific rationale (including supporting information) as to why the Agency's action is inconsistent with the legal standards in section 408 of FFDCA, EPA can not provide any more detailed response to the commenter's disagreement with the Agency's decision.

In addition, the commenter noted several adverse effects seen in animal toxicology studies with bifenazate and claims because of these effects no tolerance should be approved. EPA has found, however, that there is a reasonable certainty of no harm to humans after considering these toxicological studies and the exposure levels of humans to bifenazate.

The initial petition submitted by IR-4 proposed tolerance for grass, forage, fodder and hay, group 17, forage; and grass, forage, fodder and hay, group 17, hay. EPA reviewed the petition and concluded that in order to grant the use on grass, a ruminant metabolism and adequate feeding studies would be required. IR-4 subsequently withdrew these proposed tolerances.

EPA evaluated this petition and upon reviewing the submitted field trial data and entering it into the Agency's tolerance spreadsheet as specified by the Guidance for Setting Pesticide Tolerances Based on Field Trial Data SOP, it was determined that the tolerance should be set at 0.60 ppm for residues in/on bean, dry seed as opposed to the level proposed by IR-4.

Additionally, EPA has revised the tolerance expression to clarify (1) that, as provided in FFDCA section 408(a)(3), the tolerance covers metabolites and degradates of bifenazate not specifically mentioned; and (2) that compliance with the specified tolerance levels is to be determined by measuring only the specific compounds mentioned in the tolerance expression. This change was made to both the tolerance expressions for plant commodities and livestock commodities because it makes no substantive change to the meaning of the tolerance but rather only clarifies the existing language.

Therefore, a tolerance is established for combined residues of the insecticide bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl) hydrazinecarboxylate) and its metabolite, diazinecarboxylic acid, 2-(4-methoxy-[1,1'-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate), in or on bean, dry seed at 0.60 ppm.

This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to 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).

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register. This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

(a) General. (1) Tolerances are established for residues of bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl)hydrazinecarboxylate) including its metabolites and degradates, in or on the commodities listed in the following table. Compliance with the tolerance levels specified are to be determined by measuring only the sum of bifenazate and its metabolite diazinecarboxylic acid, 2-(4-methoxy-[1,1′-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate) in or on the following food commodities:

(2) Tolerances are established for residues of bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl) hydrazinecarboxylate) including its metabolites and degradates, in or on the commodities listed in the following table. Compliance with the tolerance levels specified are to be determined by measuring only the sum of bifenazate and its metabolites diazinecarboxylic acid, 2-(4-methoxy-[1,1′-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate); 1,1′-biphenyl, 4-ol; and 1,1′-biphenyl, 4-oxysulfonic acid (expressed as 1,1′-biphenyl, 4-ol) in or on the following food commodities:

(b) Section 18 emergency exemptions. Time-limited tolerances are established for residues of bifenazate (1-methylethyl 2-(4-methoxy[1,1′-biphenyl]-3-yl)hydrazinecarboxylate) including its metabolites and degradates in connection with use of the pesticide under section 18 emergency exemptions granted by EPA. Compliance with the tolerance levels specified in the following table are to be determined by measuring only the sum of bifenazate and its metabolite diazinecarboxylic acid, 2-(4-methoxy-[1,1′-biphenyl]-3-yl), 1-methylethyl ester (expressed as bifenazate). The tolerances will expire and are revoked on the dates specified in the following table.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to those engaged in the following activities:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

This listing is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.

In addition to accessing electronically available documents at http://www.regulations.gov, you may access this Federal Register document electronically through the EPA Internet under the “Federal Register” listings at http://www.epa.gov/fedrgstr. You may also access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR cite at http://www.gpoaccess.gov/ecfr. To access the OPPTS Harmonized Test Guidelines referenced in this document, go directly to the guidelines at http://www.epa.gov/oppts and select “Test Methods & Guidelines” on the left side navigation menu.

Under section 408(g) of FFDCA, 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2007-0536 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk as required by 40 CFR part 178 on or before February 22, 2010.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit this copy, identified by docket ID number EPA-HQ-OPP-2007-0536, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.

• Mail: Office of Pesticide Programs (OPP) Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

• Delivery: OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket Facility's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is (703) 305-5805.

In the Federal Register of August 22, 2007 (72 FR 47010) (FRL-8142-5) (Docket ID number EPA-HQ-OPP-2007-0536, EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 6E7074) by IR-4, 500 College Road East, Suite 201 W, Princeton, NJ 08540-6635. The petition requested that 40 CFR 180.421 be amended by establishing tolerances for residues of the fungicide fenarimol, alpha-(2-chlorophenyl)-alpha-(4-chlorophenyl)-5-pyrimidinemethanol, in or on hop at 1.0 parts per million (ppm). That notice referenced a summary of the petition prepared on behalf of IR-4 by Gowan Company, the registrant, which is available to the public in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

In the Federal Register of June 6, 2007 (72 FR 31221) (FRL-8122-7) (Docket ID number EPA-HQ-OPP-2007-0097). EPA issued a proposed rule pursuant to sections 408(e) of FFDCA, 21 U.S.C. 346a(e). The rule proposed that 40 CFR 180.421 be amended by increasing the tolerance for residues of the fungicide fenarimol, alpha-(2-chlorophenyl)-alpha-(4-chlorophenyl)-5-pyrimidinemethanol, in or on apple from 0.1 ppm to 0.3 ppm. EPA proposed the tolerance increase in order to harmonize with a Codex Maximum Residue Limit (MRL) of 0.3 ppm on apples. The proposal explained the basis for EPA's conclusion that there is a reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to fenarimol, including exposure under the amended apple tolerance. The proposal established a 60-day public comment period. Comments were received in response to the proposed rule. EPA's response to these comments is discussed in Unit IV.C.

Based upon review of the data supporting the petition, EPA has revised the proposed tolerance on hop, dried cones. The reason for this change is explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with section 408(b)(2)(D) of FFDCA, and the factors specified in section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for the petitioned-for tolerances for residues of fenarimol on hop, dried cones at 5.0 ppm and apple at 0.3 ppm. EPA's assessment of exposures and risks associated with establishing tolerances follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Fenarimol has a relatively low order of acute toxicity via the oral, dermal, and inhalation routes of exposure. It is not a dermal sensitizer but causes corneal opacity in rabbits. Chronic studies indicated that the liver is a target organ for toxicity. Liver toxicity was manifested by liver weight increases and the presence of “fatty liver” in rats. In dogs, increased liver weights and increases in serum enzymes, indicative of liver toxicity, were noted. Additionally, reproduction and developmental studies showed that fenarimol inhibited aromatase, an enzyme involved in the conversion of androgens to estrogens. Two acceptable rodent carcinogenicity studies showed no evidence of significant tumor increases; therefore, fenarimol has been classified as “not likely to be carcinogenic to humans.” Additionally, the toxicity database indicates no evidence of mutagenicity or neurotoxicity.

The toxicology data for fenarimol provides no indication of increased susceptibility, as compared to adults, of rat and rabbit fetuses to in utero exposure in developmental studies. Developmental kidney effects (hydronephrosis) in the rat were shown to be reversible. The multi-generation reproduction study in rats indicates that fenarimol causes reduced fertility in males and dystocia in females; these effects were attributed to the inhibition of aromatase. Decreased litter size was also noted in the study.

Non-guideline reproductive performance studies in mice, guinea pigs, and rabbits resulted in decreased reproductive performance in male mice, but no such effect in the guinea pig or rabbit studies. A pubertal assay conducted in female rats resulted in decreased T4 thyroid hormone coupled with an increase in circulating thyroid stimulating hormone (TSH) levels. A female rat uterotrophic assay resulted in significant uterine weight increases accompanied by increased serum follicle stimulating hormone (FSH) levels and decreased serum T3 levels.

Specific information on the studies received and the nature of the adverse effects caused by fenarimol as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “Fenarimol. Human Health Risk Assessment for the Proposed Food Use of Fenarimol on Hops,” pages 46 to 49 in docket ID number EPA-HQ-OPP-2007-0536.

For hazards that have a threshold below which there is no appreciable risk, a toxicological point of departure (POD) is identified as the basis for derivation of reference values for risk assessment. The POD may be defined as the highest dose at which no adverse effects are observed (the NOAEL) in the toxicology study identified as appropriate for use in risk assessment. However, if a NOAEL cannot be determined, the lowest dose at which adverse effects of concern are identified (the LOAEL) or a benchmark dose (BMD) approach is sometimes used for risk assessment. Uncertainty/safety factors (UFs) are used in conjunction with the POD to take into account uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. Safety is assessed for acute and chronic dietary risks by comparing aggregate food and water exposure to the pesticide to the acute population adjusted dose (aPAD) and chronic population adjusted dose (cPAD). The aPAD and cPAD are calculated by dividing the POD by all applicable UFs. Aggregate short-term, intermediate-term, and chronic-term risks are evaluated by comparing food, water, and residential exposure to the POD to ensure that the margin of exposure (MOE) called for by the product of all applicable UFs is not exceeded. This latter value is referred to as the level of concern (LOC).

For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect greater than that expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for fenarimol used for human risk assessment can be found at http://www.regulations.gov in document “Fenarimol. Human Health Risk Assessment for the Proposed Food Use of Fenarimol on Hops,” pages 28 to 29 in docket ID number EPA-HQ-OPP-2007-0536.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to fenarimol, EPA considered exposure under the petitioned-for tolerances as well as all existing fenarimol tolerances in 40 CFR 180.421. EPA assessed dietary exposures from fenarimol in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

No such effects were identified in the toxicological studies for fenarimol; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the United States Department of Agriculture (USDA) 1994-1996 and 1998 Continuing Surveys of Food Intakes by Individuals (CSFII). The chronic dietary exposure assessment for fenarimol is refined using anticipated residues (ARs) from field trial data, processing factors, and percent crop treated (PCT) data.

ARs based on Food and Drug Administration (FDA) monitoring data were used for apples, bananas, cherries, grapes, and pears. Tolerance values were assumed for foods covered by all additional tolerances. PCT data was used for apples, cherries, grapes, and pears. Dietary Exposure Evalution Model (DEEM) default processing factors were used for all food commodities, except apple juice, pear juice, grape juice, and raisins, which used factors derived from processing studies.

iii. Cancer. Based on the absence of significant tumor increases in two adequate rodent carcinogenicity studies, EPA has classified fenarimol as “not likely to be carcinogenic to humans.” Therefore, a quantitative exposure assessment to evaluate cancer risk is unnecessary.

iv. Anticipated residue and PCT information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the AR levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such Data Call-Ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a. The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b. The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c. Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

The Agency used PCT information as follows:

Apples, 20%; cherries, 15%; grapes, 25%; and pears, 10%.

In most cases, EPA uses available data from USDA/National Agricultural Statistics Service (NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which fenarimol may be applied in a particular area.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for the total residues of concern, including parent fenarimol and its organic degradates (U-1, U-2, U-6, and U-7), in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of fenarimol. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

Based on the Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of fenarimol for surface water are estimated to be 66 parts per billion (ppb) for chronic exposures. For ground water, the estimated drinking water concentration is 19 ppb.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 66 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Fenarimol is currently registered for use on professionally managed turf areas, such as stadia and golf course tees, greens, and fairways. Short-term postapplication dermal exposure to adult golfers is possible.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found fenarimol to share a common mechanism of toxicity with any other substances, and fenarimol does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that fenarimol does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www.epa.gov/pesticides/cumulative.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) safety factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional SF when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. The database for prenatal developmental (in rats and rabbits) and reproductive (in rats) toxicity is considered complete and includes special studies in addition to conventional guideline studies. The rat developmental study showed evidence of hydronephrosis in fetuses at dose levels equal to or possibly lower than doses causing maternal toxicity; however, a special study showed this effect to be reversible and therefore not considered an adverse effect. Additionally, the decreased live born litter size and survival indices in the rat multi-generation reproduction study are considered to be secondary consequenies of parental effects (e.g. dystocia and fertility), and is not an indicator of increased susceptibility. Therefore, there is no evidence of increased susceptibility of fetuses following in utero exposure in the rat or rabbit developmental toxicity study or of offspring following prenatal and postnatal exposure in the rat reproduction study, and there are no concerns or residual uncertainties for prenatal and/or postnatal toxicity.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicity database for fenarimol is complete except for immunotoxicity testing. Recent changes to 40 CFR part 158 make immunotoxicity testing (OPPTS Harmonized Test Guideline 870.7800) required for pesticide registration; however, the available data for fenarimol do not show potential for immunotoxicity. Consequently, the EPA believes the existing data are sufficient for endpoint selection for exposure/risk assessment scenarios and for evaluation of the requirements under the FQPA, and an additional database UF does not need to be applied.

ii. There is no indication that fenarimol is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that fenarimol results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. There are no residual uncertainties identified in the exposure databases. The chronic dietary food exposure assessment utilized tolerance-level residues or ARs that are based on reliable field trial data, and factors derived from processing studies (for apple juice, pear juice, grape juice, and raisins) or DEEM default processing factors. For several currently registered commodities, the chronic assessment also utilized PCT data that have a valid basis and are considered to be reliable. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to fenarimol in drinking water. EPA made similarly conservative assumptions to assess postapplication exposures. These assessments will not underestimate the exposure and risks posed by fenarimol.

EPA determines whether acute and chronic pesticide exposures are safe by comparing aggregate exposure estimates to the aPAD and cPAD. The aPAD and cPAD represent the highest safe exposures, taking into account all appropriate SFs. EPA calculates the aPAD and cPAD by dividing the POD by all applicable UFs. For linear cancer risks, EPA calculates the probability of additional cancer cases given the estimated aggregate exposure. Short-term, intermediate-term, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the POD to ensure that the MOE called for by the product of all applicable UFs is not exceeded.

1. Acute risk. An acute aggregate risk assessment takes into account exposure estimates from acute dietary consumption of food and drinking water. No adverse effect resulting from a single-oral exposure was identified and no acute dietary endpoint was selected. Therefore, fenarimol is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to fenarimol from food and water will utilize 76% of the cPAD for infants less than 1-year old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of fenarimol is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Fenarimol is currently registered for use on professionally managed turf, including stadia and golf course tees, greens, and fairways, which could result in short-term postapplication dermal exposure to golfers. The Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to fenarimol.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures aggregated result in aggregate MOEs of 8,800 for adults 20-49 years old. EPA has determined that this assessment adequately estimates the risk for youth golfers as well. As the aggregate MOE is greater than 1,000 (the LOC), short-term aggregate exposure to fenarimol is not of concern to EPA.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Fenarimol is not registered for any use patterns that would result in intermediate-term residential exposure. Therefore, the intermediate-term aggregate risk is the sum of the risk from exposure to fenarimol through food and water, which has already been addressed, and will not be greater than the chronic aggregate risk.

5. Aggregate cancer risk for U.S. population. As discussed in Unit III.C.1.iii., EPA has classified fenarimol as “not likely to be carcinogenic to humans,” and it is not expected to pose a cancer risk to humans.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to fenarimol residues.

Adequate enforcement methodology, gas chromatography (GC) with an electrolytic conductivity detector (ECD), is available to enforce the tolerance expression, and is published in the Pesticide Analytical Manual (PAM) Vol. II (Method R039).

Residue definitions are harmonized between the United States, Codex, and Mexico. In order to harmonize with a Codex MRL of 0.3 ppm for apples, EPA is increasing the tolerance for residues of apples from 0.1 ppm to 0.3 ppm. Additionally, a Codex MRL exists on hop dried cones at 5.0 ppm. The Agency is establishing a tolerance on hop, dried cones at 5.0 ppm to harmonize MRLs between the United States and Codex for this commodity.

EPA received one comment to the proposed rule of June 6, 2007, which made a general objection to the presence of any pesticide residues on crops and stated that EPA should set no pesticide tolerance greater than zero. The Agency understands the commenter's concerns and recognizes that some individuals believe that pesticides should be banned completely. However, the existing legal framework provided by section 408 of the FFDCA states that tolerances greater than zero may be set when it has been demonstrated that the pesticide meets the safety standard imposed by that statute. This citizen's comment appears to be directed at the underlying statute and not EPA's implementation of it; the citizen has made no contention that EPA has acted in violation of the statutory framework.

Based upon review of the data supporting the IR-4 petition, EPA revised the proposed tolerance for hop, dried cones from 1.0 ppm to 1.2 ppm. EPA revised the tolerance level based on analysis of the residue field trial data using the Agency's Tolerance Spreadsheet in accordance with the Agency's “Guidance for Setting Pesticide Tolerances Based on Field Trial Data.” However, it was discovered that a Codex MRL exists on hops, dried cones at 5.0 ppm. As a result, EPA has increased the hop, dried cones tolerance from 1.2 ppm to 5.0 ppm to harmonize with Codex. The potentially greater exposure under this increased tolerance value was included in EPA's fenarimol risk assessment.

Therefore, a tolerance is established for residues of fenarimol, alpha-(2-chlorophenyl)-alpha-(4-chlorophenyl)-5-pyrimidinemethanol, in or on hop, dried cones at 5.0 ppm. Additionally, the established tolerance of fenarimol in or on apple is increased from 0.1 ppm to 0.3 ppm.

This final rule establishes tolerances under section 408(d) and 408(e) of FFDCA following an agency initiated proposal. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule on hops, dried cones, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) do not apply to this tolerance. The tolerance on apples, however, was initiated by an EPA proposal and thus the RFA is applicable. Pursuant to the RFA, the Agency hereby certifies that the apple tolerance will not have significant negative economic impact on a substantial number of small entities. Establishing a pesticide tolerance or an exemption from the requirement of a pesticide tolerance is, in effect, the removal of a regulatory restriction on pesticide residues in food and thus such an action will not have any negative economic impact on any entities, including small entities.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to 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).

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register. This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Pursuant to the Rail Safety Improvement Act of 1988, Public Law 100-342, § 4, 102 Stat. 624, 625-27 (June 22, 1988) (recodified at 49 U.S.C. 20135), Congress conferred on the Secretary of DOT the authority to establish a locomotive engineer qualification licensing or certification program. The Secretary of Transportation delegated this authority to the Federal Railroad Administrator. 49 CFR 1.49(m). In 1991, FRA implemented this statutory provision by issuing a final rule. 56 FR 28228, 28254 (June 19, 1991) (codified at 49 CFR part 240).

By notice of proposed rulemaking (NPRM) published on December 31, 2008 (73 FR 80349), FRA proposed revisions to its regulations governing the qualification and certification of locomotive engineers. The comment period for the NPRM closed on March 2, 2009. FRA received written comments submitted by the Association of American Railroads, the Union Pacific Railroad Company, the Brotherhood of Locomotive Engineers and Trainmen, and the United Transportation Union. FRA also received a written request from the United Transportation Union, Nebraska State Legislative Board, for a hearing. Pursuant to 49 U.S.C. 20103(e), which requires that “[a]n opportunity for an oral presentation shall be provided” when prescribing or amending a railroad safety regulation, FRA held a public hearing on April 14, 2009. The Union Pacific Railroad Company and the BNSF Railway Company provided oral comments at the hearing. Additionally, on April 14, 2009, FRA reopened the NPRM comment period for an additional 30 days so that (i) FRA could make the public hearing transcript available for review and comment by the general public, (ii) interested parties could provide additional comments or documents, and (iii) interested parties could respond to testimony provided at the public hearing.

By letter dated May 18, 2009, the Brotherhood of Locomotive Engineers and Trainmen requested an extension of that comment period, which closed on May 14, 2009. Based on that request, FRA reopened the comment period for an additional 30 days until June 15, 2009. See 74 FR 25,208 (May 27, 2009). FRA received written, post-hearing comments submitted by the Association of American Railroads, the Brotherhood of Locomotive Engineers and Trainmen, and the United Transportation Union. The comment period for the NPRM closed on June 15, 2009.

FRA proposed to amend 49 CFR 240.107 by adding a new paragraph (e) that would prohibit a railroad from reclassifying the certification of any type of certified engineer to a more restrictive class of certificate or to a student engineer certificate during the period in which the certification is otherwise valid. See 73 FR 80349, 80351-80352 (December 31, 2008).

While some commenters supported the NPRM's proposal to prohibit reclassifications, others argued against it. Those commenters who opposed the proposal raised four main concerns:

(1) FRA seeks to deny railroads the ability to use skill performance testing failures as opportunities to correct deficiencies in employee skill-sets during the 3-year certificate period which will: (i) Increase denials at recertification and (ii) take away incentive for employees to improve their skills during the remedial training time prior to recertification.

(2) Sections 240.209 and 240.211 provide that a person who fails to achieve a passing score under the testing and evaluation requirements of part 240 shall not be permitted to operate as a locomotive servicing or train service engineer prior to that person achieving a passing score. However, the NPRM prohibits a railroad from reclassifying the certificate of any type of certified engineer to a more restrictive class or a student, and thus, would prevent a person who fails from ever operating, testing, or going through remedial training again.

(3) The proposed rule changes will require some type of training for the entire time an engineer's current certificate is valid and then a denial process when the engineer is up for recertification. This could impose up to three years of training of an engineer with the same outcome as the current reclassification process.

(4) FRA does not recognize the medical component of the engineer certification process. Engineers may be released to return to work after a major illness, because their bodies are medically fit for duty. However, in some instances, they have lost the cognitive ability to properly perform their job responsibilities. While a doctor may not be able to test for such diminished cognitive abilities, a Designated Supervisor of Locomotive Engineers (DSLE) can observe an engineer's ability to timely make correct decisions in operating a train. By disallowing a DSLE to make this judgment, FRA is closing off an important avenue of safety by assuming that any time a doctor allows an employee to return to duty, the employee is fit to work.

(1) The commenters appear to be blending the three requirements of Part 240. Those requirements are (i) unannounced compliance (efficiency) tests, (ii) annual check rides and (iii) skills tests. Federal regulations only require knowledge and skills tests when certifying or recertifying an engineer or relying on a certification granted by another railroad under 49 CFR 240.225(a). However, a railroad may impose more stringent requirements and thus, have additional operational tests and performance evaluations. This rule simply limits such additional test and evaluation failure consequences by prohibiting reclassification. Thus, the rule does not deny railroads the opportunity to correct deficiencies during the 3-year certification period. Indeed, nothing in this rule prohibits a railroad from evaluating engineers and providing any necessary remedial training between certification periods.

(2) FRA's prohibition on reclassification would not prevent a person who failed to achieve a passing score under the testing and evaluation requirements of part 240 from ever operating a locomotive again. The railroad could simply place a restriction on the certificate of the person who failed (240.107(d)) thereby prohibiting the person from operating a locomotive except under the restrictions specified. Once the person achieves a passing score or shows improvement, the restriction may be lifted. Thus, the person who failed would not be reclassified as a student although the person's engineer activities could be limited as if the person were a student.

(3) The issue raised by some commenters regarding a railroad having to provide training to a certified person whose certificate has been restricted may be handled by seeking a waiver of the part 240 requirements. As provided in § 240.9, a railroad may apply for a waiver in accordance with the provisions of part 211 of this chapter from training, continuing education, and other requirements for a person who will not be operating as a locomotive servicing or train service engineer for that railroad. Further, this rule in no way prohibits a railroad from initiating disciplinary sanctions against its employees in the normal and customary manner, including those contained in its collective bargaining agreements. See § 240.5.

(4) FRA is not disallowing a DSLE from making a judgment. If the employee is medically fit but a check ride reveals skills deficiencies, restrictions may be placed on the certificate until the person can prove competency.

As noted in the NPRM, FRA has considered other options, including permitting reclassification while providing affected engineers with the option of challenging the reclassification through a hearing. However, allowing reclassifications, even with a hearing, could result in the disparate treatment of engineers. If, for example, two train service engineers commit the same operating deficiency, a railroad may decide to reprimand one of the engineers but reclassify the certificate of the other engineer to a student engineer certificate. Assuming the reclassification is upheld during the hearing process, one engineer could return to work as a train service engineer while the other could only return to work as a student engineer. This rule attempts to eliminate the potential for disparate treatment that could result from the practice of reclassifying engineers' certificates.

In its proposal to prohibit reclassification, FRA noted that the proposed provision would not prevent a railroad from placing restrictions on a certificate pursuant to 240.107(d). FRA further noted that restrictions are applied and reviewed in accordance with the internal railroad rules, procedures, and processes developed in coordination with its employees. See 73 FR 80349, 80352 (December 31, 2008).

One commenter questioned how FRA could continue to bear responsibility for the manner in which railroads exercise discretion under part 240 when FRA claims it will leave the matter of restrictions to non-FRA decision-makers. According to the commenter, FRA is removing itself from oversight of restrictions imposed by railroads which will then become subject to the oversight of arbitrators who are not obligated to follow any precedence. Thus, FRA may become bound by arbitrators' decisions, resulting in more inconsistencies and unanticipated consequences.

Contrary to the commenter's assertion, it has been FRA's understanding that a restriction is not a denial of certification or a revocation under part 240 and thus, disputes regarding restrictions are covered by the Railway Labor Act and should be handled under the procedures provided for in that Act. Furthermore, a restricted train service or locomotive servicing engineer certificate is still a valid certificate that other railroads may rely on when determining whether the person is qualified pursuant to § 240.225. Of course, any railroad that chooses to rely on a restricted certificate issued by another railroad should ensure that the person can demonstrate that they are qualified—and should certainly not ignore the restriction.

FRA proposed to amend 49 CFR 240.307 to clarify and ensure that each railroad understands that it may revoke an engineer's certificate only for that conduct specifically identified in § 240.117(e) or § 240.119(c). FRA was informed by at least one Class I railroad that it believes § 240.307 could be read to allow revocation for deficiencies other than those specified in § 240.117(e) or § 240.119(c). FRA proposed to make clear that such an interpretation is incorrect and contravenes the intent and purpose of part 240 when it was issued. See 73 FR 80349, 80353 (December 31, 2008).

Some commenters supported the proposal, but one commenter argued against it. The commenter who opposed the proposal suggested that limiting revocations to § 240.117(e) and § 240.119(c) violations does not make sense in light of Emergency Order No. 26 (EO 26), which restricts the use of cell phones and other electronic devices in certain circumstances. The NPRM would prohibit railroads from revoking an engineer's certificate for violating EO 26 unless that violation was combined with a § 240.117(e) or § 240.119(c) violation. The commenter believes that a violation of EO 26, in and of itself, should be a revocable offense.

Whether a locomotive engineer should have his or her certificate revoked for violating EO 26 is beyond the scope of the NPRM. In the future, FRA plans to revisit EO 26 and could initiate a rulemaking that would make the requirements of EO 26 permanent. In any such rulemaking, FRA could consider adding violations of those requirements to the list of revocable offenses under part 240. In the meantime, a railroad may choose to discipline its employees for improper use of electronic devices, but may not revoke an engineer's certification based on a violation of EO 26.

FRA proposed to amend 49 CFR 240.127 to require each railroad to indicate the action it will take, beyond those required by § 240.211(c), in the event that a person fails a skills performance test. See 73 FR 80349, 80352-80353 (December 31, 2008).

In response to FRA's proposal to amend 49 CFR 240.127 and 240.129 (see section E below), a commenter asserted that there is no reason to require railroads to specify the potential measures to be taken. According to the commenter, a railroad would need the flexibility to change the actions it would take in the event of failure, but the proposal would prohibit a railroad from adopting new approaches to failures unless the changes were reflected in the certification program. Further, the situation will be even worse if FRA requires each railroad to resubmit a revised program each time a change is made.

Another commenter suggested that FRA's proposed language should be used along with the following: “and if said action is subject in any regard to a collective bargaining agreement, the applicable provisions of the collective bargaining agreement shall be included as an appendix to the railroad's program.”

The rule balances the need to provide railroads with the flexibility to handle skills test and evaluation failures appropriately with the need to make the test and evaluation process transparent. FRA believes that transparency will help prevent railroads from developing processes for handling skills test failures that could result in unanticipated consequences.

Although FRA considered other options, such as prescribing the specific actions a railroad must take, FRA believes it should be left up to each railroad to decide the appropriate actions to take in light of various factors, including collective bargaining agreements. Indeed, FRA previously proposed prescribing the number of tests and interval between retests and other consequences of test failure in the 1989 NPRM (54 FR 50890, 50933-50935 (December 11, 1989)), but did not implement those proposals based, in part, on commenters' concerns that the proposals would disrupt contractual agreements (56 FR 28228, 28236-28237 (June 19, 1991)). Further, FRA has found that the vast majority of railroads have adequate policies to deal with skills test failures or deficiencies and have handled them appropriately for many years.

To avoid restricting the options available to the railroads and employee representatives to develop processes for handling skill test failures, FRA designed this proposal to be as flexible as possible. There are a variety of actions and approaches that a railroad can take in response to a skills test failure and FRA does not want to stifle a railroad's ability to adopt an approach that is best for its organization. Some of the actions railroads may want to consider include: develop and provide formal remedial training for engineers who fail skills tests or have deficiencies in their performance; automatically download event recorder data upon a test failure or deficient performance in order to preserve evidence of the failure/deficiency; require two supervisors to ride along on a retest; and retest an engineer on an actual train if the engineer failed a test on a simulator. Each railroad should also consider implementing a formal procedure whereby an engineer is given the opportunity to explain, in writing, the factors that he or she believes caused their skills test failure or performance deficiencies. This explanation may allow a railroad to determine what areas of training to focus on or perhaps discover that the reason for the failure/deficiency was due to something other than a lack of skills.

FRA believes there are numerous other approaches that could and should be considered and evaluated by railroads and their employees. FRA realizes that a railroad's list of actions it will take in response to a skills test failure or deficient performance could be expansive given the various circumstances that could contribute to a test failure or deficient performance. FRA disagrees with the suggestion to add a provision regarding collective bargaining agreements (CBAs). FRA does not enforce CBAs. In addition, railroad discipline policies are beyond the scope of the NPRM and Part 240. See 49 CFR 240.5.

FRA proposed to amend 49 CFR 240.129 to require railroads to indicate the action they will take in the event they find deficiencies with an engineer's performance during an operational monitoring observation or unannounced compliance test. See 73 FR 80349, 80353 (December 31, 2008).

In addition to one commenter's assertion that there is no reason to require railroads to specify the potential measures to be taken (see section D above), other commenters suggested that 49 CFR 240.129 should explicitly state that regardless of whether an engineer's performance is monitored pursuant to § 240.129(b) or is being tested pursuant to § 240.129(e), the only circumstances in which an adverse certification outcome is possible is when the monitoring/testing discloses a violation of § 240.117(e). According to those commenters, if a railroad finds some deficiency that is unrelated to § 240.117(e) (e.g., non-compliance with throttle modulation or train handling procedures, or any other performance deficiencies), it lacks authority under part 240 to take any action whatsoever. Further, on a railroad where engineers are unionized, available disciplinary options are subject to whatever constraints are imposed by the applicable collective bargaining agreement.

Commenters also suggested that 49 CFR 240.129 should include the following changes: (i) The use of simulators should be limited to training only, and using simulators for either testing or monitoring purposes should be explicitly prohibited; (ii) only a DSLE who is qualified on the physical characteristics of the territory over which a test is being conducted— and on the equipment used in the test— should be empowered to make a finding that could have adverse consequences under 49 CFR 240.127 and 49 CFR 240.129; and (iii) where movable banners, barricades or flags are used, the banner/board must, at a minimum, meet the standards for rear end marking devices as prescribed by 49 CFR part 221.

As discussed in section D above, the NPRM attempted to balance the need to provide railroads with flexibility to handle deficiencies appropriately with the need to make the process transparent. FRA believes that transparency will help prevent railroads from developing processes for handling deficiencies that again result in unanticipated consequences.

While the remaining comments regarding § 240.129 are beyond the scope of the NPRM and FRA declines to address them in detail, FRA would like to clarify the comments regarding the interaction between § 240.129 and § 240.117(e). Although a railroad may not revoke a certificate for deficiencies not covered by § 240.117(e), a railroad may place restrictions on the certificate pursuant to § 240.107(d). See preceding discussion in section II.B. above.

In the NPRM, FRA sought comments as to whether it should require the railroads to explain the scoring system they use to determine whether a person passes or fails a skills test or operational monitoring ride.

Some commenters suggested that railroad scoring systems should be published in detail and subject to FRA approval. Another commenter advocated against requiring railroads to explain their scoring systems. According to that commenter, FRA lacks evidence of a problem with the railroads' assessment of engineer performance and there are no allegations that railroads are falling short in efforts to ascertain whether engineers are capable of performing safely. Further, the commenter suggested that there is no safety basis for interfering in railroads' decisions on how to construct their scoring systems nor is there an indication of the criteria FRA would use in deciding whether the scoring systems are adequate.

As discussed in the NPRM, FRA is aware of concerns raised by locomotive engineers that they have no way of knowing why and how they failed a skills test or monitoring ride. Further, FRA is aware that at least one railroad has, in the past, deducted points on a performance skills test for non-safety related items that should not have been counted towards the engineer's evaluation score. Thus, FRA continues to believe that requiring railroads to explain their scoring systems will have the benefit of ensuring that the scoring criteria are transparent and the pass/fail determinations are arrived at consistently throughout the railroad. FRA believes that transparency will help prevent railroads from developing part 240-required tests that include items that should not be scored (e.g., fuel conservation, meets schedule, etc.) and will assist FRA in determining how the tests are scored.

As part of its proposal to require the railroads to update their programs to indicate the action they will take in the event that a person fails a part 240.127 skills test or a railroad finds deficiencies with a locomotive engineer's performance during a part 240.129 observation or test, FRA indicated that it would not consider the program updates to be material modifications pursuant to 49 CFR 240.103(e). See 73 FR 80349, 80353 (December 31, 2008).

Some commenters suggested that the updates should be considered material modifications pursuant to 240.103(e) but did not articulate a legal basis for doing so. Another commenter suggested that deeming the updates to be material modifications would deny the railroads the flexibility they need to address test failures and performance deficiencies since the proposal would, according to the commenter, prohibit railroads from adopting new approaches to failures unless the changes were reflected in their certification programs.

Based on its review of the comments and 49 CFR part 240, FRA does not consider any of the program updates required by the amendments to 49 CFR 240.127 and 240.129 to be material modifications pursuant to 49 CFR 240.103(e). FRA expects that each railroad will not have to develop a new scoring system or process to handle test failures or deficiencies but will simply document the previously implemented system or process in its program.

FRA proposed to: (i) Eliminate the implementation and phase-in dates listed throughout part 240 and any section or section heading that references those dates; delete §§ 240.117(i) and (j); (ii) revise the language in part 240 containing references to various provisions in 49 CFR part 232 (see, e.g., §§ 240.117(e)(3) and 240.309(e)(3)) in order to make them consistent with the language in part 232; (iii) revise the term “annually monitored” in § 240.129(c)(2) to read “monitored each calendar year”; (iv) amend §§ 240.129(e) and 240.303(d) in order to make them consistent with guidance provided by FRA in Memorandum OP-04-13 (February 3, 2004); (v) delete the reference to §§ 240.203(a)(1)-(3) in the penalty schedule and revise §§ 240.203(b) and (c) in the penalty schedule to reference paragraphs (a) and (b); (vi) amend the reference to subsection (d) in the current penalty schedule for § 240.205 to read (b); (vii) amend the reference to § 240.15 in § 240.307(j) to read § 240.215; (viii) amend the reference to 49 CFR 218.5(f) in § 240.7 (subsection (1) of the definition of “locomotive engineer”) to read 49 CFR 218.5; (ix) amend the reference to paragraph (c) in § 240.203(a) to read paragraph (b); and (x) delete the last paragraph of Appendix D to part 240 which begins “Although the number of state agencies * * * .”

The only comments received by FRA on these proposals supported their implementation.

Since FRA did not receive any comments objecting to the proposed amendments and because FRA sees no reason to change its approach, they will be adopted in this final rule as proposed in the NPRM.

In addition to the comments discussed above, FRA received comments espousing interpretations of various provision of part 240 and commenting on part 240's appellate procedures. For example, one comment suggested that part 240 does not permit a railroad to rely upon past revocable offenses as a basis for denial of recertification. Another comment stated that the appellate procedures in subpart E of Part 240 are unwieldy and too time consuming. Since these comments are beyond the scope of the NPRM, FRA need not address them in this rulemaking. However, FRA notes that it is developing recommendations for implementing the Rail Safety Improvement Act mandate for certification of train conductors and is participating in a Railroad Safety Advisory Committee Working Group concerning the certification of train conductors. Based on that rulemaking, FRA expects that Part 240 will be reviewed and possibly amended in light of the provisions in the conductor certification rule. The comments that are beyond the scope of this rulemaking might be more properly addressed during that process.

FRA is amending this section by adding a new paragraph (e) that prohibits a railroad from reclassifying the certification of any type of certified engineer to a more restrictive class of certificate or to a student engineer certificate during the period in which the certification is otherwise valid. Although reclassification has been referred to by different names by various parties (e.g., demotion, diminution in the quality of a license, etc.), the practice that FRA is prohibiting is the taking of any type of locomotive engineer certificate, during the period in which the certificate is valid, and replacing it with a more restrictive class of certificate or a student engineer certificate based on deficiencies found during operational evaluations and skills tests that do not require revocation of an engineer's certification under §§ 240.117(e) or 240.119(c).

Although FRA has previously interpreted the plain language of the regulation to permit reclassification, the unanticipated consequences of that practice necessitate its prohibition. As explained in the NPRM, the effect of the reclassification policy used by one Class I railroad has been to require some engineers to exchange their train service certificates for student engineer certificates without an opportunity for review of the reclassification decision. An engineer who is reclassified to a student could find it more difficult to be certified by another U.S. railroad than an engineer who has not been reclassified. Further, there is significant room for abuse in a system that allows reclassification based on the somewhat subjective scoring of a skills performance test. Thus, FRA is prohibiting railroads from requiring an engineer to exchange his or her train service or locomotive servicing certification for a more restrictive class of certificate or a student engineer certificate during the period in which the certification is otherwise valid.

While this rule prohibits the practice of reclassification, it does not prevent the railroads from continuing to pursue other measures to ensure the safe operation of locomotives. For example, the rule does not prevent a railroad from placing restrictions on a certificate pursuant to § 240.107(d). It should be noted, however, that while § 240.107(d) permits a railroad to place restrictions on a certificate; restrictions are applied and reviewed in accordance with internal railroad rules, procedures and processes. Part 240 does not govern the issuance or review of restrictions; that is a matter handled under a railroad's internal discipline system or collective bargaining agreement.

This rule also does not prevent a railroad from suspending or revoking a certificate pursuant to § 240.307 for violation of one of the provisions contained in § 240.117(e), or prohibiting a person from operating a locomotive as a train service or locomotive servicing engineer pursuant to § 240.211(c). Further, this rule does not prevent a railroad from offering an engineer the opportunity to work for the railroad in any other capacity provided that the railroad does not reclassify the engineer's certificate. For example, CBAs often contain a provision by which the parties agree to permit flowback from an engineer job to another railroad job if a locomotive engineer should somehow become ineligible to operate locomotives or trains. As FRA has previously clarified, part 240 is not intended to create or prohibit flowback. See § 240.5(e) and 64 FR 60966, 60975 (November 8, 1999).

This rule does not convert part 240's locomotive engineer certification system into a licensing system. Although some parties have referred to the practice of reclassification as a “diminution in the quality of a license,” a certificate is not a license and this rule does not convert a locomotive engineer certificate issued in accordance with part 240 into a license. Indeed, in adopting a certification system (i.e., FRA sets eligibility criteria but leaves it to the railroads to evaluate candidates by those standards) rather than a traditional licensing system (i.e., a government agency sets eligibility criteria and evaluates candidates), FRA noted that part 240 “afford railroads considerable discretion” in the daily administration of their certification program but “FRA bears responsibility for the manner in which the railroads exercise that discretion, since the performance of the railroads” under part 240 will determine whether their safety purposes are fulfilled. See 56 FR 28228, 28229-28230 (June 19, 1991). This rule continues that relationship.

This section is amended to require each railroad to indicate the types of actions it will take, beyond what is required by § 240.211(c), in the event that a person fails a skills performance test. In addition, this section is amended to require each railroad to describe the scoring system it will use during a skills performance test administered in accordance with the procedures required under § 240.211, including a description of the skills to be tested and the weight or possible score that each skill will be given.

Pursuant to § 240.101 and § 240.103, each railroad's written certification program, including its procedures for skill performance testing under § 240.127 and monitoring operational performance under § 240.129, is subject to FRA approval. That approval process, in connection with this rule, will permit FRA an opportunity to ensure that each railroad is handling skills test failures in accordance with the intent and spirit of the regulation. The rule will also compel each railroad to carefully consider the process by which it will handle skill test failures and demonstrate to FRA that it is dealing with its engineers in an objective manner. Moreover, requiring a railroad to explain its scoring system will likely have the benefit of ensuring that the scoring criteria are transparent and that pass/fail determinations are arrived at consistently throughout the railroad.

Although a railroad will be required to update its certification program under this rule, FRA does not consider the updates to be material modifications pursuant to § 240.103(e). Of course, FRA may find issues during a review or audit of the updated certification program and will address those issues with the railroad at that time.

This section is amended to require railroads to indicate the types of actions they will take in the event they find deficiencies with an engineer's performance during an operational monitoring observation or unannounced compliance test. In addition, this section is amended to require each railroad to describe the scoring system it will use during an operational monitoring observation or unannounced compliance test administered in accordance with the procedures required under § 240.303.

As explained in the NPRM, FRA believes it is up to each railroad to decide the appropriate action to take in light of various factors, including collective bargaining agreements. Further, FRA has found that the vast majority of railroads have adequate policies to deal with deficiencies with an engineer's performance and have handled them appropriately for many years. For a discussion of the benefits of this amendment and actions railroads may want to consider taking in the event they find deficiencies with an engineer's performance, see FRA's Response in Section II.D. of the preamble to this rule.

Although a railroad will be required to update its certification program under this rule, FRA does not consider the updates to be material modifications pursuant to § 240.103(e). Of course, FRA may find issues during a review or audit of the updated certification program and will address those issues with the railroad at that time.

This section is amended to clarify and ensure that railroads understand that they may revoke an engineer's certificate only for that conduct specifically identified in § 240.117(e) or § 240.119(c). FRA has been informed by at least one Class I railroad that it believes § 240.307 could be read to allow revocation for deficiencies other than those specified in § 240.117(e) or § 240.119(c). This rule makes clear that such an interpretation is incorrect and contravenes the intent and purpose of part 240 when it was issued.

This rule has been evaluated in accordance with existing policies and procedures, and determined to be non-significant under both Executive Order 12866 and DOT policies and procedures. See 44 FR 11034 (February 26, 1979). FRA has prepared and placed in Docket No. FRA-2008-0091 a Regulatory Evaluation addressing the economic impact of this rule. Document inspection and copying facilities are available at the DOT Central Docket Management Facility located in Room W12-140 on the Ground level of the West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590. Docket material is also available for inspection electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Photocopies may also be obtained by submitting a written request to the FRA Docket Clerk at the Office of Chief Counsel, RCC-10, Mail Stop 10, Federal Railroad Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590; please refer to Docket No. FRA-2008-0091.

In this final rule, FRA is clarifying and/or amending certain sections of its existing regulation pertaining to the qualification and certification of locomotive engineers. Costs that may be incurred due to the rule are presented below. The revision or amendments to a railroad's certification program will not need to be submitted to FRA, but must be available to present to FRA upon request. The table below presents the estimated 20-year monetary costs associated with the final rule, at discount rates of 3 percent and 7 percent.

This analysis determines that over a 20-year period the discounted costs will be approximately $703,084 when discounted at 3%, and $676,800 when discounted at 7%.

The benefits that will accrue cannot be expressed in monetary terms; however, FRA is confident that such benefits will meet or exceed the costs associated with implementation of the final rule. The main benefit of this final rule is that railroads will no longer be able to use this regulation in a manner not contemplated by FRA. FRA also anticipates benefits flowing from a more precise and complete regulation. Benefits resulting from this final rule are process improvements that assist FRA in working with a railroad to resolve problems associated with the engineer certification program. The final rule works with railroad carriers' needs and operating environments to produce a regulatory scheme that is economically efficient while providing FRA oversight. Savings, that have not been quantified, would accrue from the consolidated provisions of the rule and the clarification of the railroads' certification programs.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) and Executive Order 13272 (67 FR 53461, August 16, 2002) require agency review of proposed and final rules to assess their impact on small entities. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), FRA has prepared and placed in the docket a Certification Statement that assesses the small entity impact of this rule, and certifies that this final rule is not expected to have a significant economic impact on a substantial number of small entities.

Document inspection and copying facilities are available at the DOT Central Docket Management Facility located in Room W12-140 on the Ground level of the West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590. Docket material is also available for inspection electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Photocopies may also be obtained by submitting a written request to the FRA Docket Clerk at the Office of Chief Counsel, RCC-10, Mail Stop 10, Federal Railroad Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590; please refer to Docket No. FRA-2008-0091.

The U.S. Small Business Administration (SBA) stipulates in its “Size Standards” that the largest a railroad business firm that is “for-profit” may be, and still be classified as a “small entity,” is 1,500 employees for “Line-Haul Operating Railroads,” and 500 employees for “Switching and Terminal Establishments.” “Small entity” is defined in the Act as a small business that is not independently owned and operated, and is not dominant in its field of operation. SBA's “Size Standards” may be altered by Federal agencies after consultation with SBA and in conjunction with public comment. Pursuant to that authority, FRA has published a final policy that formally establishes “small entities” as railroads which meet the line haulage revenue requirements of a Class III railroad. The revenue requirements are currently $20 million or less in annual operating revenue. The $20 million limit (which is adjusted by applying the railroad revenue deflator adjustment) is based on the Surface Transportation Board's threshold for a Class III railroad carrier. FRA uses the same revenue dollar limit to determine whether a railroad or shipper or contractor is a small entity.

There are approximately 733 railroads that would be affected by this regulation. Of this number, approximately 687, or 94 percent, are small entities. Although this regulation affects a substantial number of small entities, FRA does not anticipate that this regulation would impose a significant economic impact on a substantial number of small entities.

The factual basis for the certification that this final rule will not have a significant economic impact on a substantial number of small entities, is that the average net cost incurred by each of the small railroads due to this regulation will be approximately $752 (not discounted). Also, each of the affected small railroads will only incur these average costs during the first year of implementation of the regulation. This is far less than one percent of the annual average revenue for small (local) railroads (approximately $4.0 million1 in 2007 (not discounted) per small railroad).Accordingly, FRA does not consider this impact to be significant. Nor does FRA anticipate that this regulation would result in long-term or short-term insolvency for any small railroad.

FRA invited comments from all interested parties on this Certification at the NPRM stage of the rulemaking. FRA particularly encouraged small entities that could potentially be impacted by the proposed amendments to participate in the public comment process by submitting comments on this assessment or this rulemaking to the official US DOT docket. Although comments were received pertaining to this rulemaking effort, no comments were received that specifically and directly addressed this Certification. With the absence of comments specifically addressing The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) and Executive Order 13272, FRA will adhere to originally presented Certification that accompanied the NPRM. The Certification basis remains unchanged for the final rule.

The information collection requirements in this final rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. The sections that contain the new information collection requirements are duly designated, and the estimated time to fulfill each requirement is as follows:

All estimates include the time for reviewing instructions; searching existing data sources; gathering or maintaining the needed data; and reviewing the information. For information or a copy of the paperwork package submitted to OMB, contact Robert Brogan at 202-493-6292 or Kimberly Toone at 202-493-6132.

Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, Attention: FRA Desk Officer. Comments may also be sent via e-mail to the Office of Management and Budget at the following address: oira_submissions@omb.eop.gov.

OMB is required to make a decision concerning the collection of information requirements contained in this final rule between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication.

FRA cannot impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action prior to the effective date of this final rule. The OMB control number, when assigned, will be announced by separate notice in the Federal Register.

Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999), requires FRA 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 Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.

This rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132. This rule will not have a substantial effect on the States or their political subdivisions; it will not impose any compliance costs; and it will not affect the relationships between the Federal government and the States or their political subdivisions, or the distribution of power and responsibilities among the various levels of government. Consequently, FRA concludes that this rule has no federalism implications.

The Trade Agreement Act of 1979 prohibits Federal agencies from engaging in any standards or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and where appropriate, that they be the basis for U.S. standards.

This rule is purely domestic in nature and is not expected to affect trade opportunities for U.S. firms doing business overseas or for foreign firms doing business in the United States.

FRA has evaluated this rule in accordance with its “Procedures for Considering Environmental Impacts” (FRA's Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined that this rule is not a major FRA action (requiring the preparation of an environmental impact statement or environmental assessment) because it is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA's Procedures. See 64 FR 28547 (May 26, 1999). Section 4(c)(20) reads as follows:

In accordance with section 4(c) and (e) of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. As a result, FRA finds that this rule is not a major Federal action significantly affecting the quality of the human environment.

Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $141,300,000 or more in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. This final rule will not result in the expenditure, in the aggregate, of $141,300,000 or more in any one year, and thus preparation of such a statement is not required.

Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355 (May 22, 2001). Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. FRA has evaluated this rule in accordance with Executive Order 13211. FRA has determined that this rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Consequently, FRA has determined that this rule is not a “significant energy action” within the meaning of Executive Order 13211.

Anyone is able to search the electronic form of all comments or petitions for reconsideration received into any agency docket by the name of the individual submitting the comment or petition for reconsideration (or signing the comment or petition for reconsideration, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78) or you may visit http://www.regulations.gov/search/footer/privacyanduse.jsp.

Table of Contents I. Background II. Petitions for Reconsideration III. Agency Response to Petitions for Additional Lead Time IV. How NHTSA's Regulations May Give Rise to a Judicial Finding of Preemption V. Agency Response to Petitions Regarding Preemption VI. Technical Correction VII. Rulemaking Analyses and Notices I. Background

On October 8, 2008, we published in the Federal Register a final rule (October 2008 final rule) revising the definition of “designated seating position” (DSP), as that term is used in the Federal motor vehicle safety standards (FMVSS), and providing a calculation procedure for determining the number of seating positions at a seat location.1 The revised definition specifies more clearly the areas within the interior of a vehicle that are regarded as being designated seating positions. The rule also established a calculation procedure for determining the number of DSPs at a seat location for trucks and multipurpose passenger vehicles with a gross vehicle weight rating less than 10,000 pounds, passenger cars, and buses.

The designation of a seating position has important safety consequences. Under the FMVSSs, motor vehicle manufacturers must meet various performance requirements for each interior location designated as a seating position. For example, FMVSS No. 208, “Occupant crash protection,” requires that each DSP in a light vehicle be provided with the appropriate occupant crash protection system (e.g., air bag, seat belts or both). Clarity in the definition of DSP is important for the purposes of that standard because if a vehicle has fewer DSPs than the number of individuals able to sit in it, one or more of those individuals would not be protected by seat belts and/or other crash protection systems.

In the final rule, the agency stated that the revised definition of “designated seating position” added clarity to the existing definition and was not expected to have a substantial impact on current vehicle design. The degree to which seat design exhibited the characteristics that gave rise to the agency's concerns had lessened in the fleet. Manufacturers had either reduced the width of the seating area to more accurately reflect the intended occupancy or had provided additional DSPs.

The October 2008 final rule noted that the inclusion of auxiliary seats in the definition of “designated seating position” and the newly established procedure for determining the number of DSPs would require minor redesign of a small number of vehicles. To allow manufacturers the opportunity to make such redesigns, the agency provided approximately two years of lead time, such that, on September 1, 2010, all vehicles would have to comply with the new requirements.

In the preamble to the final rule, we observed that, in Geier v. American Honda Motor Company, Inc., the Supreme Court had recognized that State requirements imposed on motor vehicle manufacturers, including sanctions imposed by State tort law, could stand as an obstacle to the accomplishment and execution of some FMVSSs, and that, where such conflict occurs, the Supremacy Clause of the Constitution could make the State tort law requirements unenforceable.2 We stated our opinion that State tort law judgments premised on there being more DSPs in a motor vehicle than the number contemplated by the definition in 49 CFR Part 571 could have a negative effect on safety because it would induce manufacturers to equip motor vehicles with an excessive number of seat belts. Because seat belt comfort and convenience (i.e., ease of use) significantly affect the seat belt usage rate, we opined that the installation of an excessive number of seat belts would decrease, not increase, safety, thereby hampering our efforts to promote high seat belt use rates. To make sure that this opinion would be readily available and clear to all, in the October 2008 final rule, we included in the regulatory text of the definition of “designated seating position” language stating that any State law requirement, including State tort law, premised on there being more DSPs in a motor vehicle than the number contemplated by the new definition, was preempted.

We received ten petitions for reconsideration of the October 2008 final rule. The petitioners are SAE International (SAE), BMW North America (BMW), the Alliance of Automobile Manufacturers (Alliance), Volkswagen of America (Volkswagen), the Association of International Automobile Manufacturers (AIAM), the American Association for Justice (AAJ), Safety Research and Strategies, Toyota Motor North America (Toyota), Mitsubishi Motors R&D of America (Mitsubishi), and Public Citizen.3 Toyota also expressed its support for the Alliance's petition. The petitions filed by SAE International and Toyota were styled both as requests for interpretation and as petitions for reconsideration.

In this notice, we are responding to petitions by the Alliance, AIAM, Mitsubishi, and Volkswagen that sought additional lead time for implementing the new definition of “designated seating position” via a phase-in. The October 2008 final rule requires manufacturers to comply with the new definition for all vehicles manufactured after September 1, 2010, without a phase-in; however, each of the petitioners request that the agency move the 100 percent compliance date to September 1, 2011.

We are also responding to the issues relating to preemption. The petitions from the AAJ and Public Citizen requested removal of the language that we incorporated in the text of the final rule stating that any State requirement, including any determination under State tort law, premised on there being more DSPs than the number contemplated in the definition, was preempted. The AAJ asserted that the preemption language contradicted Congressional intent, as discerned in a November 2005 letter signed by two Senators to NHTSA's Deputy Administrator, to allow lawsuits against automobile manufacturers based on State tort law. The AAJ and Public Citizen also objected to our reliance on Geier v. American Honda Motor Co. to support our statement about preemption of state tort law. The AAJ contends that the DSP definition rulemaking was unlike the passive restraint rulemaking at issue in Geier because the DSP rulemaking did not stress the need for vehicle manufacturers to have different compliance options available to them.

Public Citizen disagreed with our conclusion that State tort law could frustrate the accomplishment or purposes of the DSP definition. Public Citizen argued that vehicle manufacturers are unlikely to equip a vehicle with more seat belts than are necessary. Instead, that organization contended, citing statements in our June 22, 2005 Notice of Proposed Rulemaking 4 (June 2005 NPRM) and our October 2008 final rule, that vehicle manufacturers are more likely to respond to a State tort law decision having the effect of requiring more DSPs than the number required by our October 2008 final rule by introducing void spaces or impediments between DSPs rather than designating additional seating positions and installing additional seat belts. Public Citizen also argued that, under the new DSP definition, vehicle manufacturers cannot leave an ambiguous seating surface in the middle of a bench seat, and, if these design features (voids or impediments) are sufficient to discourage excessive occupancy, then State courts would be unlikely to issue tort law judgments premised on there being more DSPs than the number contemplated in the definition. Thus, as a practical matter, no conflict with our regulations would arise.

We are also correcting a technical error. The petitions from SAE International, the Alliance, and AIAM also pointed out a technical error in the regulation setting forth the formula for calculating the number of designated seating positions. These petitions point out that 49 CFR § 571.10(b)(1) and (b)(2) each refer to “paragraph (d),” which does not exist, and that the reference was probably intended to refer to § 571.10(c).

Our responses to the other issues raised by the petitioners will be provided in a later notice. The petitions from SAE International, BMW, Volkswagen, AIAM, and Toyota sought clarification of or changes to the formula for determining the number of DSPs at a seat location, procedural concerns regarding measuring seating surfaces, countermeasures, and other technical corrections. The petitions from AIAM and Public Citizen challenged the adequacy of data to support the amendment of the definition of “designated seating position.”

The Alliance, AIAM, Mitsubishi, and Volkswagen petitioned the agency to phase-in the requirements to provide additional lead time for some vehicles. The Alliance agreed with the agency's assessment that only a small number of vehicles in the fleet will require a redesign to comply. However, it noted that additional time is needed for non-compliant vehicles to be redesigned to the new DSP definition. Mitsubishi supported the Alliance petition and provided a suggested phase-in schedule. Volkswagen added that a number of its carlines are affected by the new requirements and a phase-in will permit a cost-effective implementation of any required changes.

The AIAM also identified that changes will need to be made in vehicles that have auxiliary seats (i.e., temporary or folding seats) to comply with the FMVSSs because under the new definition, these types of seats are now considered DSPs. For example, it noted that such seats would have to be redesigned to meet the requirements of FMVSS No. 225, “Child restraint anchorage systems,” which it suggested would necessitate allocation of significant engineering resources and testing. The AIAM stated that these modifications would be difficult and costly to implement within two years, particularly for existing models.

In response to the petitions, the agency has decided to provide an additional year of lead time. We believe granting an extra year of lead time will address the petitioners' concerns and allow manufacturers more flexibility to allocate their resources better. We agree with the petitioners that some vehicles will need significant redesign to comply with other FMVSSs such as pickup trucks with auxiliary seats that will now have to meet FMVSS Nos. 210, “Seat belt assembly anchorages” and 225, “Child restraint anchorage systems,” requirements. For some vehicles, structural reinforcement to the vehicle's body may be needed at the attachment location for the seat belt and child restraint anchorage hardware to assure compliance with the respective standards.

We are not persuaded by the petitioners' request for a phase-in of the requirements. Based upon our prior fleet assessment, we continue to believe only a small percentage of vehicles do not comply with the new requirements. Hence, a phase-in based on a manufacturer's complying production volume would add little safety benefit. However, because some vehicles would require considerable redesign to comply with the new definition, we believe that providing an additional year of lead time is a more practical approach.

Before addressing the merits of the petitions related to preemption, we review the state of the law concerning the circumstances in which our regulations may give rise to a judicial finding of preemption of State requirements. First, the National Traffic and Motor Vehicle Safety Act of 1966 (Safety Act) contains a clause expressly preempting non-identical state statutes and regulations, now codified at 49 U.S.C. 30103(b)(1). This express preemption clause prevents States from enacting safety statutes or administratively issuing safety regulations that address the same aspect of performance as Federal motor vehicle safety standards issued by NHTSA, but are not identical to those Federal standards.

Second, Federal laws and regulations may be found to impliedly preempt State law in two ways. Federal law preempts State law if compliance with both the State and Federal standards are impossible. In addition, Federal law preempts State law if, for example, State tort actions create an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

In Geier v. American Honda Motor Co., the Supreme Court specifically addressed the possible preemptive effect of the Safety Act in combination with one of the FMVSSs issued under that Act, on common law tort claims. The issue before the court was whether the Safety Act, in light of FMVSS No. 208, preempted a lawsuit claiming a 1987 car was defective for lacking a driver air bag. When the car was manufactured, FMVSS No. 208 had required manufacturers to equip some, but not all, of their vehicles with passive (i.e., automatic) restraints.

The conclusions in Geier can be summarized as follows:

• The Safety Act's provision expressly preempting state “standards” does not preempt common law tort claims. The issue of whether the term “standards” includes tort law actions is resolved (in the negative) by another provision in the Safety Act—the “savings” clause. That provision states that “[c]ompliance with” a Federal safety standard “does not exempt any person from any liability under common law.” There would not be any common law tort claims for the provision to save if the “standards” in the express preemption provision were read to include those claims.

• The savings clause preserves those tort actions that seek to establish greater safety than the minimum safety achieved by a FMVSS intended to provide a floor.

• The savings clause does not bar the working of conflict preemption principles. Further, neither the express preemption provision nor the saving provision, whether read singly or together, create some kind of “special burden” beyond that inherent in ordinary preemption principles that would specially favor or disfavor pre-emption. The two provisions, read together, reflect a neutral policy, not a specially favorable or unfavorable policy, toward the application of ordinary conflict preemption principles.

• The preemption provision and the savings clause are countervailing provisions. The preemption provision reflects a desire to subject the industry to a single, uniform set of FMVSSs. On the other hand, the savings clause reflects a congressional determination that occasional nonuniformity is a small price to pay for a system in which juries not only create, but also enforce, safety standards, while simultaneously providing necessary compensation to victims. Nothing in any natural reading of the two provisions favors one set of policies over the other where a jury-imposed safety standard actually conflicts with a FMVSS.

• A court should not find preemption too readily in the absence of clear evidence of a conflict.

• The Court provided limited guidance, beyond dealing with “no airbag” cases, on what types of circumstances could create a conflict under the Safety Act, and how concrete a conflict must be.

• The common-law “no airbag” action before the Court was found to be preempted because it actually conflicted with FMVSS No. 208. In reaching that conclusion, the Court devoted considerable attention to the Department of Transportation's detailed explanation of the “significant considerations” underlying FMVSS No. 208's regulatory approach, and observed how the standard reflected these considerations. The standard sought a gradually developing variety of passive restraint devices for statutorily relevant reasons including safety and public acceptability. The rule of state tort law sought by the petitioner would have constrained the variety of passive restraint devices by requiring manufacturers of all similar cars to install a single type of device, an air bag, instead of other types of passive restraint systems, thereby presenting an obstacle to the variety and mix of devices that the FMVSS sought.

We find merit in Public Citizen's argument that an actual conflict may never arise with respect to pronouncements in state tort law decisions regarding the appropriate number of designated seating positions. We stated in our October 2008 final rule that a tort law judgment premised on a view that a motor vehicle needed to have more DSPs than the number contemplated by our definition could have a negative safety effect. Such an effect would occur if, in response to such a tort law judgment, manufacturers installed an excessive number of seat belts. We said further that such installation could decrease comfort or make use of seat belts difficult, making it less likely that an occupant would use his or her respective seat belt, thereby reducing overall safety.

However, as Public Citizen noted, in estimating compliance costs in our October 2008 final rule, we opined that, because adding seat belts would be more expensive, manufacturers would be more likely to implement the revised DSP definition by reducing seat width or installing an impediment in affected vehicles to discourage people from sitting between seats.5 Public Citizen argued that if the manufacturers took either of those two steps, the resulting vehicle designs would not contain ambiguous seating space and thus would be unlikely to give rise to State tort law decisions premised on a view that a motor vehicle was equipped with an insufficient number of seat belts.

We agree. Even if there were State tort law decisions requiring more DSPs than the number contemplated by our definition, we believe that the manufacturers would likely respond in the same way that they will respond to the changes mandated by our October 2008 final rule. That is, because of the higher cost of adding lap/shoulder seat belts, we believe that it is unlikely that a manufacturer will increase the number of DSPs in a vehicle and install an excessive number of seat belts. Instead, we believe the most likely responses by manufacturers will be to either install an impediment or void in vehicles or decrease seating surface width.6 Because manufacturers' most likely response to an adverse State tort law decision would not be to increase the number of DSPs and install an excessive number of seat belts in vehicles, we believe it is very unlikely that a tort law judgment would actually conflict with our DSP definition.

Moreover, we have no knowledge of any State tort law decision that might conflict with the October 2008 final rule. In the final rule, we noted that no State or local governmental entities submitted comments on our proposed rule. We also contacted organizations representing interests of State and local governments and officials about the rulemaking. We received a response from the National Conference of State Legislatures indicating that they had no comments. We have no knowledge of any pending State tort litigation that could potentially conflict with the October 2008 final rule.

We also observe that that the procedures for measuring seats and calculating the appropriate number of DSPs make it unlikely that a State law or determination could conflict with the new DSP definition. The calculation of the number of DSPs on a bench seat with a seating surface width of less than 1400 mm is generally based upon the number of 5th percentile adult females that could occupy a seat. Thus, for a seat surface width of 1050 mm or more, there would be three DSPs. We believe it unlikely that any State law or determination would require three DSPs in a seating space of less than 1050 mm because it would be difficult for three adults to sit in such a small space.

Thus, we have no reason to believe that any existing State tort law determination conflicts with our manner of calculating the appropriate number of DSPs set forth in the October 2008 final rule, nor do we have any reason to anticipate that a future State tort law decision will create such a conflict. In the absence of such a conflict, there can be no preemption of State tort law. Accordingly, we have removed the regulatory text preempting State law, including State tort law determinations, premised on there being more DSPs than the number contemplated by the new definition.

Petitioner AAJ also sought removal of the regulatory text preempting State law, contending that NHTSA lacks the statutory authority to issue regulations that preempt State tort law. In view of the forgoing discussion, we need not address this contention in the context of this rulemaking.

The petitions for reconsideration filed by SAE International, the Alliance, and AIAM pointed out a technical error in the regulation setting forth the formula for calculating the number of designated seating positions. These petitions noted that 49 CFR 571.10(b)(1) and (b)(2) each refer to “paragraph (d),” which does not exist, and that the reference was probably intended to refer to § 571.10(c). The petitioners are correct. Accordingly, we are amending § 571.10(b)(1) and (b)(2) to correct this error.

Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), provides for making determinations whether a regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and to the requirements of the Executive Order.

This notice has not been reviewed under Executive Order 12866. NHTSA has considered the impact of this proposed rule and determined that the action is not “significant” within the meaning of the Department of Transportation's regulatory policies and procedures. The changes made by this final rule do not affect the costs and benefits estimated for our October 2008 final rule.

In compliance with the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., NHTSA has evaluated the effects of this action on small entities. I hereby certify that this rule will not have a significant economic impact on a substantial number of small entities. The changes made by this final rule do not affect the costs and benefits estimated for our October 2008 final rule. For these reasons, the agency has not prepared a new or revised regulatory flexibility analysis.

NHTSA has examined today's final rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The agency has concluded that the rule does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The rule does 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 the responsibilities among the various levels of government.” Further, no consultation is needed to discuss the issue of preemption in connection with today's rule. For a discussion of that issue, see the main portion of this preamble.

With respect to the review of the promulgation of a new regulation, section 3(b) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996) requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect; (2) clearly specifies the effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) clearly specifies the retroactive effect, if any; (5) adequately defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with that requirement.

Pursuant to this Order, NHTSA notes as follows. The issue of preemption is discussed above. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit or petition for review of this regulation in court.

NHTSA has analyzed this final rule for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action will not have any significant impact on the quality of the human environment.

This amendment does not contain any collection of information requirements requiring review under the Paperwork Reduction Act of 1995 (Pub. L. 104-13).

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” This final rule does not establish or amend a technical standard.

The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). This rulemaking will not result in expenditures by State, local or tribal governments, in the aggregate, or by the private sector in excess of $100 million annually.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://docketsinfo.dot.gov/.

This rule is also accessible at www.gpoaccess.gov/fr.

Pelagic longline fishing in the western and central Pacific Ocean is managed, in part, under the Western and Central Pacific Fisheries Convention Implementation Act (Act). Regulations governing fishing by U.S. vessels in accordance with the Act appear at 50 CFR part 300, subpart O.

NMFS established a limit for calendar year 2009 of 3,763 metric tons (mt) of bigeye tuna (Thunnus obesus) that may be caught and retained in the U.S. pelagic longline fishery in the area of application of the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (Convention Area), codified at 50 CFR 300.224 (74 FR 63999, December 7, 2009). NMFS monitored the retained catches of bigeye tuna using logbook data submitted by vessel captains and other available information, and determined that the 2009 catch limit is expected to be reached by December 29, 2009. In accordance with § 300.224(d), this rule serves as advance notification to fishermen, the fishing industry, and the general public that the U.S. longline fishery for bigeye tuna in the Convention Area will be closed from December 29, 2009, through the end of the calendar year. The 2010 fishing year is scheduled to open on January 1, 2010; the 2010 bigeye tuna catch limit will be 3,763 mt. This rule does not apply to the longline fisheries of American Samoa, Guam, or the Commonwealth of the Northern Mariana Islands (CNMI), as described below.

During the closure, a U.S. fishing vessel may not retain on board, transship, or land bigeye tuna captured by longline gear in the Convention Area, except that any bigeye tuna already on board a fishing vessel upon the effective date of the restrictions may be retained on board, transshipped, and landed, provided that they are landed within 14 days of the start of the closure (i.e., January 12, 2010). This 14-day landing requirement does not apply to a vessel that has declared to NMFS, pursuant to 50 CFR 665.23(a), that the current trip type is shallow-setting.

Furthermore, bigeye tuna caught by longline gear may be retained on board, transshipped, and landed if the fish are caught by a vessel registered for use under a valid NMFS-issued American Samoa Longline Limited Access Permit or if they are landed in American Samoa, Guam, or the CNMI, under the following conditions:

(1) The bigeye tuna must not have been caught in the portion of the U.S. exclusive economic zone (EEZ) surrounding the Hawaiian Archipelago;

(2) Such retention, transshipment, and/or landing is in compliance with applicable laws and regulations; and

(3) The bigeye tuna must be landed by a U.S. fishing vessel operated in compliance with a valid permit issued under 50 CFR 660.707 or 665.21.

During the closure, a U.S. vessel is also prohibited from transshipping bigeye tuna caught in the Convention Area by longline gear to any vessel other than a U.S. fishing vessel operated with a valid permit issued under 50 CFR 660.707 or 665.21.

The catch limit and this closure do not apply to bigeye tuna caught by longline gear outside the Convention Area, such as in the eastern Pacific Ocean. To ensure compliance with the restrictions related to bigeye tuna caught by longline gear in the Convention Area, however, the following requirements apply:

(1) A U.S. fishing vessel may not be used to fish with longline gear both inside and outside the Convention Area during the same fishing trip, with the exception of a fishing trip that is in progress on December 29, 2009. In that case, the catch of bigeye tuna must be landed by January 12, 2010; and

(2) If a U.S. vessel is used to fish using longline gear outside the Convention Area and the vessel enters the Convention Area at any time during the same fishing trip, the longline gear on the fishing vessel must be stowed in a manner so as not to be readily available for fishing while the vessel is in the Convention Area. Specifically, the hooks, branch or dropper lines, and floats used to buoy the mainline must be stowed and not available for immediate use, and any power-operated mainline hauler on deck must be covered in such a manner that it is not readily available for use.

The above two additional prohibitions do not apply to the following vessels:

(1) Vessels on declared shallow-setting trips pursuant to 50 CFR 665.23(a); and

(2) Vessels registered for use under valid American Samoa Longline Limited Access Permits and vessels landing their bigeye tuna catch in American Samoa, Guam, or the CNMI, so long as these vessels conduct fishing activities in accordance with the conditions described above; that is, the bigeye tuna were not caught in the EEZ around Hawaii, the retention, transshipment, and/or landing is in compliance with applicable laws and regulations, and the bigeye tuna are landed by a vessel that has a valid permit issued under 50 CFR 660.707 or 665.21.

This action is required by § 300.224(d) and is exempt from review under Executive Order 12866.