We are adopting amendments to Items 1104 and 1121  2 of Regulation AB  3 (a subpart of Regulation S-K) under the Securities Act of 1933 (“Securities Act”)  4 and Rules 101 and 314  5 of Regulation S-T. 6 We also are adding Rules 15Ga-1  7 and 17g-7  8 and Form ABS-15G  9 under the Securities Exchange Act of 1934 (“Exchange Act”)  10 and the Act.

On October 4, 2010, we proposed rules to implement Section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) related to asset-backed securities (“ABS”). 11 Section 943 of the Act requires the Commission to prescribe regulations on the use of representations and warranties in the market for asset-backed securities:

(1) To require any securitizer to disclose fulfilled and unfulfilled repurchase requests across all trusts aggregated by securitizer, so that investors may identify asset originators with clear underwriting deficiencies; and

(2) to require each nationally recognized statistical rating organization (“NRSRO”) to include, in any report accompanying a credit rating for an asset-backed securities offering, a description of (A) the representations, warranties and enforcement mechanisms available to investors; and (B) how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. 12

In addition to the rules required by the Act, we also re-proposed disclosure requirements in Regulation AB in order to conform disclosures about repurchase request activity to those required by Section 943 of the Act. 13

As we discussed in the Proposing Release, in the underlying transaction agreements for an asset securitization, sponsors or originators typically make representations and warranties relating to the pool assets and their origination, including about the quality of the pool assets. For instance, in the case of residential mortgage-backed securities, one typical representation and warranty is that each of the loans has complied with applicable federal, state and local laws, including truth-in-lending, consumer credit protection, predatory and abusive laws and disclosure laws. Another representation that may be included is that no fraud has taken place in connection with the origination of the assets on the part of the originator or any party involved in the origination of the assets. Upon discovery that a pool asset does not comply with the representation or warranty, under transaction covenants, an obligated party, typically the sponsor, must repurchase the asset or substitute a different asset that complies with the representations and warranties for the non-compliant asset. The effectiveness of the contractual provisions related to representations and warranties has been questioned and lack of responsiveness by sponsors to potential breaches of the representations and warranties relating to the pool assets has been the subject of investor complaint. 14

As discussed in more detail below, we have taken into consideration the comments received on the proposed rules and are adopting new Rules 15Ga-1 and 17g-7, new Form ABS-15G and amendments to Regulation AB. The rules and form that we are adopting today implement the requirements of Section 943 of the Act, and also conform disclosure requirements for prospectuses and ongoing reports for ABS sold in registered transactions. We received over forty comment letters in response to the proposed rules. These letters came from investors, securitizers, corporations, credit rating agencies, professional and trade associations, law firms, municipal entities, and other interested parties. 15 In general, commentators supported the manner in which we proposed to implement Section 943 of the Act. Some commentators opposed some aspects of the proposed rules and suggested modifications to the proposals.

The adopted rules reflect changes made in response to many of these comments. We discuss our revisions with respect to each proposed rule in more detail throughout this release. The rules we are adopting require:

• ABS securitizers to disclose demand, repurchase and replacement history in a tabular format for an initial three-year look back period ending December 31, 2011;

• ABS securitizers to disclose, subsequent to that date, demand, repurchase and replacement activity in a tabular format on a quarterly basis;

• ABS issuers to disclose demand, repurchase and replacement history for a three-year look back period, in the same tabular format as new Rule 15Ga-1, in the body of the prospectus;

• ABS issuers to disclose demand, repurchase and replacement activity for a specific ABS, in the same tabular format, in periodic reports filed on Form 10-D; and

• NRSROs to disclose, in any report accompanying a credit rating for an ABS transaction, the representations, warranties and enforcement mechanisms available to investors and how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities.

We proposed and are adopting new Rule 15Ga-1 to implement Section 943(2) of the Act. This new rule would require any securitizer of asset-backed securities to disclose fulfilled and unfulfilled repurchase requests across all trusts aggregated by securitizer, so that investors may identify asset originators with clear underwriting deficiencies. Under the new rule, a securitizer would provide the disclosure by filing new Form ABS-15G. 16

As we discussed in the Proposing Release, the Act amended the Exchange Act to include a definition of an “asset-backed security” and Section 943 of the Act references that definition. 17 The statutory definition of an asset-backed security (“Exchange Act-ABS”) is much broader than the definition of an asset-backed security in Regulation AB (“Reg AB-ABS”). 18 The definition of an Exchange Act-ABS includes securities that are typically sold in transactions that are exempt from registration under the Securities Act, such as collateralized debt obligations (“CDOs”), as well as securities issued or guaranteed by a government sponsored entity (“GSE”), such as Fannie Mae and Freddie Mac and municipal securities that otherwise come within the definition. 19 Since Section 943 uses the broader Exchange Act-ABS definition, our new Rule 15Ga-1 would require a securitizer to provide disclosures relating to all asset-backed securities that fall within the statutory definition, whether or not sold in Securities Act registered transactions. However, as we discuss further below, even if a security meets the definition of an Exchange Act-ABS, the new disclosure requirement would only be triggered if the underlying transaction agreements contain a covenant to repurchase or replace an asset.

Section 943 and new Rule 15Ga-1 impose the disclosure obligation on a “securitizer” as defined in the Exchange Act. The Act amended the Exchange Act to include the definition of a “securitizer.” Under the Exchange Act, a securitizer is either:

(A) An issuer of an asset-backed security; or

(B) A person who organizes and initiates an asset-backed securities transaction by selling or transferring assets, either directly or indirectly, including through an affiliate, to the issuer. 20

The definition of securitizer is not specifically limited to entities that undertake transactions that are registered under the Securities Act or conducted in reliance upon any particular exemption. 21 Consequently, it applies to any entity or person that issues or organizes an Exchange Act-ABS as specified in Section 15G(a)(3) of the Exchange Act. Further, as noted above, Section 943 and Section 15G(a)(3) do not distinguish between securitizers of Exchange Act-ABS in registered or unregistered transactions, and our new Rule 15Ga-1 would apply equally to securitizers offering ABS in registered and unregistered transactions.

With respect to registered transactions and the definitions of transaction parties in Regulation AB, sponsors and depositors  22 both fall within the statutory definition of securitizer. A sponsor typically initiates a securitization transaction by selling or pledging to a specially created issuing entity a group of financial assets that the sponsor either has originated itself or has purchased in the secondary market. 23 In some instances, the transfer of assets is a two-step process: The financial assets are transferred by the sponsor first to an intermediate entity, often a limited purpose entity created by the sponsor for a securitization program and commonly called a depositor, and then the depositor will transfer the assets to the issuing entity for the particular asset-backed transaction. 24 Because both sponsors and depositors fit within the statutory definition of securitizers, both entities would have the disclosure responsibilities under new Rule 15Ga-1. However, if a sponsor filed all disclosures required under new Rule 15Ga-1, which would include disclosures of the activity of affiliated depositors, as described below, consistent with the proposal final Rule 15Ga-1 provides that those depositors affiliated with the sponsors would not have to separately provide and file the same disclosures. We believe this is appropriate for affiliated securitizers because otherwise such disclosure would be duplicative and would not provide any additional useful information, since as noted above, the depositor usually serves as an intermediate entity of a transaction initiated by a sponsor. 25 In addition, investors would be able to find information “aggregated by securitizer” as required by Section 943 in this case because the table would be aggregated either by affiliated depositors or the sponsor the ABS.

We received two comment letters that urged us to consider two other situations related to a securitizer's filing requirement. One requested that either the Exchange Act reporting party or the party that contractually assumes a reporting duty would have the obligation to disclose repurchase request information and file Form ABS-15G, but not both. 26 The other requested we allow securitizers to reference and rely on originator disclosures to satisfy a securitizer's requirements if they have made contractual arrangements to do so. 27 Both of these commentators requested filing accommodations that related to unaffiliated parties, and we are concerned that the requested approach could make it more difficult for investors to locate the information “aggregated by securitizer” as is required by Section 943 because the relationship between unaffiliated transaction parties may not be readily understood. Therefore, we are requiring that all securitizers in a transaction file Form ABS-15G, unless they are affiliated securitizers as discussed above.

One commentator explained that requiring disclosure of assets “originated and sold,” as proposed, could be construed to require the securitizer to report demand and repurchase activity on loans originated and sold by it but securitized by other securitizers which might lead to inconsistent and duplicative reporting. 28 In the case of Exchange Act-ABS issued by the GSE's, we received several comment letters noting that the term securitizer, for purposes of Rule 15Ga-1 should be applied solely to Fannie Mae or Freddie Mac and not the financial institution transferring loans for securitization by Fannie Mae or Freddie Mac. 29 We agree with commentators observations that “originated and sold” may be read to require disclosure about transfers of assets that were not securitized, and thus as discussed further below, we have revised the rule to require disclosure concerning assets “securitized” by securitizers.

As stated earlier, Section 943 and the new rule apply to Exchange Act-ABS whether or not offered and sold in Securities Act registered transactions. In addition, Section 943 and the new rule impose the disclosure obligation on any securitizer, as defined in the Exchange Act. Thus, the new rule will apply to a municipal entity that is a securitizer of Exchange Act-ABS (“municipal securitizer”). We sought comment in the Proposing Release on whether we should provide further guidance regarding the application of proposed Rule 15Ga-1 to securities issued by municipal entities that would fall within the definition of Exchange-Act ABS. We also asked whether the types of municipal securities about which proposed Rule 15Ga-1 would require a municipal securitizer to provide representation and warranty repurchase disclosure was clear. Several commentators provided examples of municipal securities that could fall within the definition of Exchange-Act ABS such as student loan bonds, housing and mortgage bonds, bond-bank issuances, and revolving fund bonds. 30

With respect to proposed Rule 15Ga-1, a few commentators noted that it would not likely apply to most municipal securities because the underlying transaction documents typically would not contain a covenant to repurchase or replace an asset if it does not comply with representation and warranty provisions, if any. 31 Commentators also noted various reasons why proposed Rule 15Ga-1 should not apply to municipal securitizers, such as a belief that they have an express statutory exemption  32 or that there is a requirement under the Act to first make a rule determination about the status of the securities. 33 In addition, several commentators argued that the Commission has authority to exempt municipal securitizers from Rule15Ga-1, citing the overall structure of the Act's amendments and legislative history. These commentators questioned whether Congress intended to require Section 943 disclosures with respect to municipal securities at all. 34

Other commentators suggested that the Commission wait for the results of the municipal disclosure study required by Subtitle H of the Act  35 before requiring compliance with the proposals  36 as well as for the results of the Commission's municipal field hearings, discussed below. 37 One investor group was concerned that a piecemeal approach to municipal securities disclosure would have the unintended effect of creating confusion for investors and issuers alike because different asset classes of municipal securities would be subject to different disclosure requirements. 38

Moreover, many commentators argued that certain municipal ABS, such as housing bonds, only include assets originated under strict underwriting standards and are subject to legal and program requirements in order to obtain and maintain guarantees and tax-exempt status  39 and noted that issues regarding underwriting deficiencies and unfulfilled repurchase requests that the Act intends to address have not been an issue in the municipal securities market. 40 Furthermore, according to a few commentators, any repurchase obligations that do exist for municipal ABS have been enforced by the relevant municipal issuer in order to ensure the continual tax-exempt status of the municipal ABS. 41

Commentators also noted that a significant difference between municipal ABS and more typical Exchange Act-ABS is that the Municipal Securities Rulemaking Board (MSRB)  42 collects and publicly disseminates market information and information about municipal securities issuers and offerings on its centralized public database, EMMA. 43 Thus, even though most municipal securities are sold in unregistered transactions in reliance on exemptions from registration, as commentators noted, 44 as a result of the applicability of Exchange Act Rule 15c2-12 to municipal securities offerings by underwriters, municipal issuers issuing municipal securities subject to that rule already provide disclosures in offering documents and disclosures to the secondary market pursuant to continuing disclosure agreements entered into for the benefit of bondholders. Under Rule 15c2-12, specified annual and event notices are required to be submitted to the MSRB's EMMA system. 45 However, Rule 15c2-12 does not specifically require representation and warranty repurchase disclosure.

Commentators noted other factors that distinguish securitizers of municipal ABS from other Exchange Act-ABS securitizers. For instance, commentators noted that municipal securitizers generally are state or local government entities and exist to serve a public purpose. 46 In addition, commentators also noted that municipal ABS in some cases are secured by a pledge of assets or are secured by a general obligation of the municipal issuer. 47 Finally, commentators stated that market participants do not identify or consider municipal securities as substantially similar to ABS. 48

Despite the distinguishing factors discussed above, we have determined that the final rules should apply to municipal securitizers. Section 943(2) of the Act requires the Commission to adopt rules mandating that “any securitizer” of an Exchange Act-ABS, including municipal ABS, provide the disclosures specified therein. The statute does not expressly provide the Commission the authority to provide exemptions for particular classes of securitizers, including municipal securitizers. We note that Section 943 is a stand-alone provision and is not included as an amendment to the Exchange Act or the Securities Act. As a result, our final rule applies to municipal ABS if they otherwise come within the definition of Exchange Act-ABS. Nonetheless, we recognize that municipal securitizers may have had less experience with developing and providing the types of information required by Section 943(2) and the new rule, and thus may have less developed infrastructures for providing the required disclosures. 49 We believe that a delayed compliance date for municipal securitizers should allow those securitizers to observe how the rule operates for other securitizers and to better prepare for implementation of the rules. We also believe that delayed compliance for municipal securitizers will allow us to evaluate the implementation of Rule 15Ga-1 by other securitizers and provide us with the opportunity to consider whether adjustments to the rule would be appropriate for municipal securitizers before the rule becomes applicable to them. As commentators also noted, we are currently undergoing a review of the municipal securities market, and as part of that review, we recently began a series of field hearings to examine the municipal securities markets, including disclosure and transparency within the municipal securities markets. 50 At the conclusion of this process, the staff of the Commission expects to prepare a report containing information learned and any recommendations for regulatory changes, industry “best practices,” or legislative changes. 51 The results of our review and the studies required by the Act  52 could lead us to conclude that changes to the requirements of Rule 15Ga-1 would be appropriate for municipal securitizers.

Therefore, we are delaying compliance for new Rule 15Ga-1 for municipal securitizers for a period of three years after the date applicable to securitizers other than municipal securitizers. 53 For purposes of the delayed compliance only, a municipal securitizer would be any securitizer that is a State or Territory of the United States, the District of Columbia, any political subdivision of any State, Territory or the District of Columbia, or any public instrumentality of one or more States, Territories or the District of Columbia.

In addition, as discussed below, in an effort to limit the cost and burden on municipal securitizers subject to the new rule, as well as provide the disclosures for investors in the same location as other disclosures regarding municipal securities, we will permit municipal securitizers to satisfy the rule's filing obligation by filing the information on EMMA. 54

In accordance with Section 943 of the Act, we are adopting new Rule 15Ga-1  55 to require any securitizer of an Exchange Act-ABS to provide tabular disclosure of fulfilled and unfulfilled repurchase requests, so that investors may identify asset originators with clear underwriting deficiencies.

We proposed that if the underlying transaction agreements include a covenant to repurchase or replace an underlying asset for breach of a representation or warranty, then a securitizer would be required to provide the information described below for all assets originated or sold by the securitizer that were the subject of a demand for repurchase or replacement with respect to all outstanding Exchange Act-ABS of the securitizer held by non-affiliates of the securitizer. As discussed further below, we proposed that a securitizer provide the repurchase history for the last five years by filing Form ABS-15G at the time a securitizer first offers an Exchange Act-ABS or organizes and initiates an offering of Exchange Act-ABS, registered or unregistered, after the effective date of the new rules, as adopted. In addition, we proposed that going forward, a securitizer would provide the disclosures for all outstanding Exchange Act-ABS on a monthly basis by filing Form ABS-15G.

Section 943(2) requires disclosure of fulfilled and unfulfilled repurchase requests. Therefore, we proposed to require tabular disclosure of assets subject to any and all demands for repurchase or replacement of the underlying pool assets as long as the transaction agreements provide a covenant to repurchase or replace an underlying asset, which would include demands that did not result in a repurchase under the transaction agreements and demands that were made by the investors upon the trustee. We also proposed that securitizers be permitted to footnote the table to provide additional explanatory disclosures to describe the data disclosed.

In the Proposing Release, we expressed concern that initially a securitizer may not be able to obtain complete information from a trustee about demands made by investors because it may not have tracked these demands. Because securitizers may not have access to historical information about investor demands made upon the trustee, (as opposed to trustee demands upon the securitizer, which presumably, would be known to the securitizer) prior to the effective date of the new rules, we proposed an instruction that a securitizer may disclose in a footnote, if true, that a securitizer requested and was able to obtain only partial information or was unable to obtain any information with respect to investor demands to a trustee that occurred prior to the effective date of the proposed rules and state that the disclosures do not contain all investor demands made to the trustee prior to the effective date.

In the Proposing Release, we acknowledged that a single securitizer ( i.e., sponsor) may have several securitization programs to securitize different types of asset classes. Because the Act requires information “aggregated by securitizer,” we proposed that a securitizer list the names of all the issuing entities  56 of Exchange Act-ABS outstanding, in order of the date of formation of the issuing entity, so that investors may identify the securities that contain the assets subject to the demands for repurchase and when the issuing entity was formed. We also proposed to require disclosure of the asset class and grouping of the information in the table by asset class. Additionally, if any of the Exchange Act-ABS of the issuing entity were registered under the Securities Act, we proposed that the Central Index Key (“CIK”) number of the issuing entity be disclosed and that the securitizer indicate by check mark whether any Exchange Act-ABS were registered. We noted that these items would provide important information that would enable an investor to locate additional publicly available disclosure for registered transactions, if applicable. Because the Act provided that disclosure is required “so that investors may identify asset originators with clear underwriting deficiencies,”  57 we proposed that securitizers further break out the information by originator of the underlying assets.

We also proposed that the table provide information about the assets that were subject of a demand; the assets that were repurchased or replaced; the assets that were not repurchased or replaced; and the assets that are pending repurchase or replacement. 58 Additionally, we proposed an instruction to include footnote disclosure about the reasons why repurchase or replacement is pending. 59 Lastly, we proposed that the table include totals by asset class for columns that require numbers of assets and principal amounts. 60

Comments on this aspect of the proposal were mixed. We received several comments on the form and the content of the table. Four commentators expressed general support that the proposed rule would implement the statutory requirements. 61 Some commentators suggested that we only require reporting where the repurchase obligation is tied to representations and warranties regarding the underwriting criteria. 62 Another commentator remarked that while repurchase requests occur for many reasons, they serve as a useful benchmark to identify loans with potential problems, such as early payment defaults, incorrect loan information, fraud problems, impermissible adverse selection procedures, or paperwork deficiencies. 63

Several commentators also requested that demands be limited to those that comport with the procedures specified in the transaction documents. 64 One commentator noted that its investor members believe that existing transaction agreements include overly restrictive thresholds for recognizing bona fide repurchase demands, and noted that even where the data may be incomplete, demands that were not made in accordance with the relevant transaction documents would provide directional information as to the responsiveness of securitizers and originators of assets as well as identify originators with a history of underwriting deficiencies. 65

Comments regarding the proposal to provide repurchase history for an initial five-year look back period were mixed. Several commentators were generally supportive of an initial look back period. 66 Two commentators noted that the requirement should apply regardless of whether the ABS is outstanding at the end of the reporting period. 67 Several others did not support an initial look back period and requested prospective application only. 68 Several commentators noted issues with historical information, such as lack of systems to capture the data, the change in underwriting standards since the housing crisis, misperceptions that may arise from analyzing fragmented data, and the ability to obtain the data from other transaction parties including that certain transaction parties may no longer exist. 69 We also received comment letters suggesting that a three- or five-year look back period would be appropriate for ongoing periodic disclosures. 70

Several commentators requested that a securitizer should report activity for different asset classes in separate reports, instead of including the activity for all asset classes in which the securitizer has issued ABS in a single report, as proposed. 71 One commentator acknowledged that the result of this suggested change would be that some securitizers may be required to file more than one report, but its members believed reports by asset class would produce more consistent reports that are more useful to investors in evaluating particular offerings. 72

Most commentators generally supported disclosure of the name of the asset originator. 73 A few commentators suggested that disclosure should only be required if the number of assets or amounts related to a particular originator exceeds a certain de minimis amount of the asset pool. 74 Another commentator requested that instead of listing all issuing entities, it be allowed to aggregate the data by seller of the loan and noted that the GSEs have hundreds of thousands of individual GSE securities outstanding; therefore, a listing by individual issuing entity would likely result in extremely unwieldy and disjointed disclosures. 75

We also received several comments regarding revisions to the columns in the table in order to provide more standardized disclosures. Generally, commentators requested more standardization regarding demands that were pending and not repurchased or replaced. 76 One commentator also strongly recommended that whether, and to what extent detail is provided, should be left to the judgment of each individual securitizer, rather than mandated. 77 Other commentators requested we specifically require more narrative disclosure about the information presented in the table. 78

After considering the comments, we are adopting the table substantially as proposed, with some modifications to the format of the table. We are also adopting modifications to the filing requirement for the initial disclosures and to the filing requirements for periodic disclosures. We continue to believe that Section 943(2) requires historical disclosures about a securitizer's repurchase history, in order to give investors a clearer sense of potential problems with originators' underwriting practices, but as we recognized in the Proposing Release, and as commentators stated, securitizers may not have all of the information readily available. Therefore, we have tailored the final amendments to address many of the concerns expressed by the commentators that we believe are consistent with the purposes of Section 943.

As proposed, we are requiring disclosure in the table with respect to any Exchange Act-ABS where the underlying transaction agreements contain a covenant to repurchase or replace an underlying asset for breach of a representation or warranty. We are not limiting the disclosure requirement to representations and warranties concerning underwriting standards, as suggested by some commentators  79 because as discussed above, covenants may require repurchase if the underlying asset does not meet other types of representations and warranties, such as applicable laws or fraud, which could also be indicative of underwriting deficiencies. 80 We are also revising the text of the regulation to refer to assets “securitized” by a securitizer instead of “originated and transferred” as proposed to address commentators concerns as described above. 81

After considering the comments received, we are adopting additions to the table in order to provide better disclosures about the demand, repurchase and replacement history so that investors may identify asset originators with clear underwriting deficiencies.

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip D. Moeller, John R. Norris, and Cheryl A. LaFleur.

Issued January 20, 2011.

1. The Federal Energy Regulatory Commission (Commission) is revising its financial forms, statements, and reports for natural gas companies, contained in FERC Form Nos. 2, 2-A, and 3-Q, to include functionalized fuel data on pages 521a through 521c of those forms, and to include on those forms the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement. In addition, the Commission also is revising page 520 for consistency.

2. In Order No. 710, the Commission revised its financial forms, statements, and reports for natural gas companies, contained in FERC Form Nos. 2, 2-A, and 3-Q, to make the information reported in these forms more useful by updating them to reflect current market and cost information relevant to interstate natural gas pipelines and their customers. 1 The information provided in these forms included data on fuel use, but did not require these data to be functionally disaggregated.

3. On rehearing, the American Gas Association (AGA) argued that the fuel data would be more useful if such data were broken out by different pipeline functions, including transportation, storage, gathering, and exploration/production, and should include, by function, the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement. This argument originally was rejected in Order No. 710-A, and Chairman (then Commissioner) Wellinghoff issued a partial dissent arguing that AGA's proposals should have been adopted. 2

4. Subsequently, AGA filed a petition for review in the United States Court of Appeals for the District of Columbia Circuit arguing that the Commission erred by not addressing the concerns raised by Chairman Wellinghoff in his partial dissent to Order No. 710-A. The court agreed and remanded the matter back to the Commission for further proceedings. 3

5. On June 17, 2010, the Commission issued a notice of proposed rulemaking proposing to revise pages 521a, 521b, and page 520, and proposing to add pages 521c and 521d to FERC Form Nos. 2, 2-A, and 3-Q to include functionalized fuel data, including the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement. 4

6. In response to the June 2010 NOPR, comments were filed by eight commenters. 5 Certain of the comments presented proposals that differed from the Commission's proposals in the June 2010 NOPR. To give all interested persons an opportunity to comment on these proposals prior to making a final decision, the Commission issued a notice allowing reply comments. Reply comments were filed by two commenters. 6

7. After consideration of the comments, the Commission will revise pages 521a, 521b, and page 520 of FERC Form Nos. 2, 2-A, and 3-Q, and will add page 521c, as proposed in the June 2010 NOPR. 7 We make this determination because we find that the additional information to be reported on pages 521a-521c will allow the user to match the revenues generated by the sale of excess fuel with the functionalized costs reported on page 520 and will allow a user to better determine if there is a cross-subsidy. The revised forms will also now allow the user to determine where on the pipeline system fuel costs are being incurred and how they are being allocated. This added transparency will ensure that the Commission and pipeline customers have information critical to assessing the justness and reasonableness of pipeline rates. The collection and public availability of this information is consistent with our goal of having sufficient information reported to allow the Commission and pipeline customers to assess the impact on pipeline rates of changing fuel costs. The Commission also gave consideration to whether the data reported on FERC Form Nos. 2, 2-A, and 3-Q discussed herein should be reported on a monthly or quarterly basis. We have determined to require that the page 521 fuel use information should be reported on a monthly basis in the quarterly reports, 8 as that provides greater transparency.

8. These revisions to FERC Form Nos. 2, 2-A, and 3-Q do not require the reporting of previously unreported new categories of information. 9 Instead, the new requirements merely require greater transparency through a disaggregation of existing data categories. Moreover, the Commission has determined that the burden on filers of reporting this information is small and is justified by the usefulness of the information.

9. Of the eight comments filed in response to the June 2010 NOPR, six support the Commission's proposals. 10 One of the six comments offers suggestions for additional revisions to the forms. 11 In addition, one commenter seeks clarification as to the scope of the reporting requirements, 12 and another, while expressing support for the goals of the June 2010 NOPR, offers a counterproposal to accomplish these goals. 13

10. APGA urges the Commission to adopt the proposed revisions to FERC Form Nos. 2, 2-A, and 3-Q. 14 While AGA also supports the June 2010 NOPR proposals and urges prompt action on a final rule, 15 AGA requests that the Commission require monthly reporting of volume throughput data on page 520 and separate reporting of backhaul volumes. 16 Associations add that the proposed revised reporting requirements would provide useful information. 17 TVA likewise supports the Commission's proposal to include additional line items in 521a and 521b to account for fuel information disaggregated by function. 18 IOGA supports the proposed changes in reporting, particularly the inclusion of lost and unaccounted-for gas (“LAUF”) used in transportation, storage, gathering, and exploration/production in the fuel data required on FERC Form Nos. 2, 2-A, and 3-Q as a separate component of fuel, by function. 19 Kansas Commission supports the changes proposed in the NOPR. 20

11. MidAmerican requests clarification that the reporting of discounted and negotiated fuel should only contain fuel volumes related to agreements that contain discounted or negotiated fuel. 21

12. While INGAA expresses support for the Commission's goal of enhancing FERC Form No. 2 fuel use reporting, it asserts that the Commission's June 2010 NOPR went beyond AGA's original proposal of reporting fuel by function that has been waived, discounted, or reduced as part of a negotiated rate agreement. INGAA offers an alternative reporting plan that it asserts will meet the Commission's stated goals. 22

13. The Commission's proposal in the June 2010 NOPR would disaggregate fuel use data into Discounted, Negotiated and Recourse categories. By contrast, under INGAA's proposal, companies would report aggregated Dths and Total dollars collected by function for Gas Used for Compressor Stations, for Gas Used for Other Deliveries and Other Operations, Gas Lost and Unaccounted for, Net Excess or (Deficiency), Disposition of Excess Gas, and Gas Acquired to meet Deficiency (eliminating the reporting of data in columns b, c, d, f, g, and h, as proposed in the June 2010 NOPR).

14. The Commission's proposal would require filers to report Dths not collected under waived, discounted, and negotiated for Gas Used for Compressor Stations, for Gas Used for Other Deliveries and Other Operations, Gas Lost and Unaccounted for, Net Excess or (Deficiency), Disposition of Excess Gas, and Gas Acquired to meet Deficiency. Under INGAA's proposal, this reporting requirement (Dths not collected by function under waived and negotiated deals) would apply to shipper supplied gas only, including Lines 2-7 on pages 521a and 521b. This change would eliminate the reporting of waived, negotiated and total fuel for lines 9 through 64 that was proposed in the June 2010 NOPR.

15. Six of the seven commenters that addressed this issue contend that the NOPR proposal reports an appropriate level of detail on fuel use. 23 INGAA was the sole commenter arguing against the NOPR proposal in this regard.

16. INGAA urges that the Commission limit its revisions to FERC Form No. 2 to AGA's proposal in its response  24 to the September 2007 NOPR, arguing that the June 2010 NOPR went further than necessary to accomplish what AGA proposed, and objects to the June 2010 NOPR proposal as providing more information than necessary. 25 INGAA demonstrates its point by referring to AGA's November 13, 2007 comments which referenced pages 4, 5, and 6 of Workpaper 2, and Workpaper 10 of the Informational Fuel Report filed by Dominion Transmission, Inc., (DTI) in Docket No. RP00-632-023 on June 27, 2007, as an example of what should be included on page 521. 26 INGAA argues that neither the Commission nor AGA has made a case that the additional degree of reporting is required to facilitate monitoring for potential cross-subsidies among services. 27

17. By contrast, AGA agrees that the level of detail in the information to be reported under the NOPR proposal is needed to adequately assess the justness and reasonableness of pipeline fuel charges, addresses the D.C. Circuit Remand Order, and the burden of producing such information is small and nonetheless justified. 28

18. APGA also states that the additional reporting requirements proposed in the NOPR will better ensure that pipeline customers and the Commission have sufficient information to identify unjust and unreasonable rates and services and to support potential complaints. 29 APGA states that, under the Commission's current reporting requirements, customers and the Commission currently cannot match the revenues generated by the sale of excess gas with the reported functionalized fuel costs. 30 Information regarding both fuel costs and excess gas revenues, broken-down and reported by function (including gathering, transmission, distribution, storage and production/extraction/processing), will allow customers and the Commission to better assess how pipeline fuel costs are incurred and allocated. 31 Requiring pipelines to disaggregate their excess gas revenue information and report it by function will thus provide customers and the Commission with information necessary to better determine the reasonableness of pipeline fuel rates. 32

19. APGA also supports the Commission's proposal to require pipelines to report the amount of fuel by function that has been waived, discounted or reduced in negotiated rate agreements. 33 It states that, under the Commission's policy, existing shippers are protected from subsidizing pipeline customers who have negotiated rates. 34 It adds that the Commission's proposal to require pipelines to report fuel costs and revenues associated with each type of rate structure (i.e., negotiated, discounted, or recourse) by function will aid customers and the Commission in identifying inappropriate cross-subsidization. 35

20. Associations assert that the revised reporting requirements will improve the reporting of fuel data in FERC Form No. 2. 36 Associations maintain that pipeline fuel revenues can constitute a substantial percentage of a pipeline's total system revenues, and therefore, ensuring that shippers are not paying excessive fuel rates or percentages is extremely important. 37

21. Associations comment that shippers will benefit from having functionalized fuel data reported on FERC Form No. 2 because this will allow shippers: (1) To ensure that rates are just and reasonable, as the greater level of detail will allow them to better assess whether pipelines are substantially over recovering fuel from their shippers  38 and (2) to assess whether they are subsidizing other shippers. 39 In this regard, Associations state that functionalized reporting will show the sources and uses of a pipeline's fuel by service type on FERC Form No. 2. Associations state that functionalized fuel reporting, for example, will show a pipeline's shippers the amount of fuel that storage users provided to the pipeline, as well as how much of that fuel the pipeline actually used for storage services. 40 If storage users in this example provided less fuel than the pipeline used for storage services, shippers using other pipeline services might want to take a closer look at the pipeline's fuel to determine whether they are subsidizing the storage shippers' fuel. 41 Thus, Associations assert that functionalized fuel data will allow shippers to confirm that they are providing the appropriate amount of fuel to the pipeline and are not subsidizing other shippers. 42

22. Associations also support breaking out fuel volumes and revenues into rate types—discounted rates, negotiated rates or recourse rates—and maintain that this level of detail will provide shippers and the Commission with information that will be useful in assessing fuel rates. 43 Associations maintain that reporting fuel volumes and revenues by rate type will help shippers ensure: (1) The prevention of inappropriate subsidization; (2) the accuracy of pipeline fuel trackers; and (3) the compliance of pipelines with the Commission's fuel discounting policies. 44

23. Associations also state that requiring pipelines to report fuel data by rate type would prevent subsidization of some shippers by allowing the Commission and shippers to distinguish between those fuel discounts that are eligible for a discount adjustment in a rate case and those that are not. 45 Associations add that, as the new FERC Form No. 2 will require pipelines to identify discounted fuel volumes and revenues as either “discounted,” “negotiated,” or “recourse,” shippers could use these data to distinguish between those fuel discounts that are appropriately included as adjustments in a rate case (e.g., backhauls) and those that are not (e.g., discounts that are part of a negotiated rate). 46 Moreover, Associations assert that this detail gives shippers a better indication of what appropriate fuel rates should be, allowing the shippers to determine if fuel rate changes are warranted. 47

24. Finally, Associations argue that reporting fuel data by rate type could provide an added check on fuel tracker calculations and on pipelines' compliance with fuel discounting policies. 48

25. IOGA maintains that it is critical to include and break out LAUF, which it asserts, has been far in excess of actual fuel use on certain Appalachian pipelines. 49 In this regard, IOGA posits that requiring interstate pipelines to break out fuel and LAUF by function in FERC Form Nos. 2, 2-A, and 3-Q would be helpful to IOGA's efforts to limit fuel and LAUF assessed to shippers and ultimately netted back to Appalachian producers. 50 Because the Appalachian pipelines are part of integrated energy companies engaged in exploration, production, gathering, storage and transportation of natural gas, IOGA asserts that it has long been concerned that unmetered gas flow allocable to affiliated exploration and production affiliates or farm tap customers of affiliated LDCs becomes LAUF charged to other shippers, instead. 51 It states that increasing the transparency of FERC Form Nos. 2, 2-A, and 3-Q could help alleviate those concerns. 52

26. IOGA also argues that requiring the filing of more transparent fuel and LAUF data will allow the Commission and interested market participants to better analyze allegedly extraordinary fuel and LAUF experienced by certain interstate pipelines. 53 For example, IOGA notes that one interstate pipeline serving the Appalachian basin recently made a filing with the Commission claiming that its actual gathering fuel and LAUF during a 12-month period was in excess of 11 percent. 54 IOGA asserts that pipeline recovery of fuel and LAUF should be minimized to the extent possible. If gas is disappearing between the wellhead and the interconnection between a pipeline's gathering and transmission facilities, IOGA argues that producers and shippers deserve to know why. 55 IOGA further argues that, by increasing its ability to compare fuel and LAUF experienced among pipelines, the Commission will be better equipped to determine whether a given level of fuel and LAUF is unjust and unreasonable and whether the cost should be borne by the pipeline rather than by its customers. 56

27. Kansas Commission asserts that the information submitted on the Commission's financial forms is critical to the ability of shippers and other interested parties to assess pipeline rates, and as such should be as complete and detailed as practical. 57

28. TVA agrees with the June 2010 NOPR assertion that breaking down fuel costs and revenues associated with negotiated, discounted, or recourse rate structures by function will provide greater clarity on the justness and reasonableness of rates. 58 In addition, TVA agrees that reporting the amount of fuel by function that has been waived, discounted, or reduced as part of a negotiated rate agreement will allow for the determination of whether cross-subsidization is occurring, and thus, is critical to assessing the justness and reasonableness of the pipeline's fuel rates in the absence of mandated rate cases. 59

29. Further, TVA hopes that the added transparency will encourage support for pipelines to develop, and customers to support, incentive fuel initiatives, as tracking mechanisms with a true-up process do little to promote capital investment for energy efficiency. 60 In addition, it states that the proposed changes will add detail and promote transparency when considering the unknown impact of cost-recovery resulting from potential carbon legislation requirements associated with monitoring and/or reporting greenhouse gas emissions. 61

30. INGAA, by contrast, would have the pipelines aggregate fuel use data by function along with the volume of fuel “not collected.”  62 INGAA asserts that this approach has the benefit of focusing the additional fuel use reporting on the areas that gave rise to AGA's original concerns of fuel waivers and negotiated rate contracts that could present cross subsidy concerns. 63

31. Specifically, INGAA suggests the following revisions to page 521a and b:

32. INGAA also suggests that the Commission not include a separate reporting category for discounted rates because pipelines cannot discount the fuel use component of a discounted rate because it is a non-discountable variable cost. 65

33. AGA responds that, as recognized in the June 2010 NOPR, the Commission has a policy against existing shippers subsidizing the negotiated rate program, and it notes that the June 2010 NOPR properly concluded that the information proposed to be required could be useful in identifying potential violations of that policy. 66 AGA objects to INGAA's counterproposal, arguing that the NOPR proposal would increase the ability of the Commission and interested parties to assess whether a pipeline's existing shippers are subsidizing the pipeline's negotiated rate program, while INGAA's counterproposal would effectively delete much of the information sought in the June 2010 NOPR. 67

34. AGA notes that INGAA argued in its comments that reporting fuel use data by customer contract would require pipelines to establish mechanisms for allocating fuel use among the types of contracts (negotiated, discounted, or recourse). 68 AGA believes that it would be appropriate for pipelines to make those allocations transparent through the reporting requirements proposed in the NOPR. 69

35. Unless the pipeline itself provides its allocation methods on its financial forms, AGA argues that customers cannot adequately assess the costs and revenues associated with fuel charges to discounted and negotiated rate customers. 70 Commission staff and interested parties cannot be expected to estimate or otherwise discern a pipeline's allocation scheme in the absence of information from the pipeline itself. Accordingly, AGA urges the Commission to require pipelines to report fuel costs and revenues by rate structure (discounted, negotiated, recourse) broken down by function as proposed in the June 2010 NOPR. 71 Thus, AGA supports the June 2010 NOPR proposal and urges the Commission to reject the proposals advanced by INGAA. 72

36. In Order No. 710-A, the Commission found that the detail sought by AGA might provide additional clarity with respect to fuel costs, but decided not to require the reporting of this information based on concerns over the burden associated with compliance with such a requirement. 73 The Commission also declined to accept AGA's proposal to require natural gas pipelines to report details about the amount of fuel that they waived, discounted or reduced as part of a negotiated rate agreement based on concerns that this information might not be significant and might not be readily available, as many pipelines do not periodically file to adjust fuel rates and may not keep records of this type of information. 74

37. After consideration of the comments and reply comments to the June 2010 NOPR, the Commission finds that the additional information to be reported on pages 521a and 521b will allow users to match the revenues generated by the sale of excess fuel with the functionalized costs reported on page 520 and will allow users to better determine if there is a cross-subsidy, which is critical to assessing the justness and reasonableness of the pipeline's fuel rates particularly in the context of pipelines' negotiated rate program. We find that requiring the reporting of fuel costs and revenues by rate structure broken down by function will increase the ability of the Commission and interested parties to assess whether a pipeline's existing shippers are subsidizing the pipeline's negotiated rate program. Thus, we find that INGAA's proposal would effectively delete much of the valuable information sought in the June 2010 NOPR.

38. The revised forms also will now allow the user to better determine where on the pipeline system fuel costs are being incurred and how they are being allocated. This added transparency, which is supported by the majority of the commenters, will ensure that the Commission and pipeline customers have sufficient information to be able to assess the justness and reasonableness of pipeline rates. The collection and public availability of this information is consistent with our goal of having sufficient information to allow the Commission and pipeline customers to assess the impact on pipeline rates of changing fuel costs.

39. By contrast, if we adopted INGAA's suggestion to limit the revisions to FERC Form No. 2 to those originally proposed by AGA, then the benefits of increased transparency of rates, particularly within the negotiated rate program, which are described in the two preceding paragraphs, would not be fully realized. The Commission's proposal better captures important information about a company's fuel use. The fact that this is not identical to that proposed by AGA to the September 2007 NOPR in no way refutes the usefulness of these data being reported and made available to the Commission and the public.

40. Moreover, requiring the reporting by function of the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement will enable pipeline customers to better determine if inappropriate cross-subsidization is occurring. The Commission has a policy that existing shippers must not subsidize the negotiated rate program; this additional information would be useful in identifying potential violations of that policy. 75 The revised schedules adopted in this Final Rule will functionally disaggregate the fuel costs and revenues associated with each type of rate structure (i.e., negotiated, discounted, or recourse) to provide users with better information to assess the justness and reasonableness of a pipeline's fuel rates.

41. In this Final Rule, therefore, the Commission is revising the financial reporting forms required to be filed by natural gas companies (FERC Form Nos. 2, 2-A, and 3-Q) to include functionalized fuel data on pages 521a, 521b, and 521c of those forms, and to include on such forms the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement. Specifically, the Commission is revising pages 521a and 521b in the following manner:

42. FERC Form Nos. 2, 2-A, and 3-Q involve estimates and allocations and the methods for making these allocations are to be documented in FERC Form Nos. 2, 2-A, and 3-Q. Thus, we will add an instruction to page 521a to require that companies disclose their fuel use allocation method(s) in a note to these financial forms.

43. AGA favors further revisions to the forms to require interstate pipelines to separately report forwardhaul and backhaul throughput volumes associated with detailed fuel use, LAUF, and fuel collections data reported on the revised FERC Form No. 2. 77 AGA cites a recent case involving the calculation of retention percentages for fuel use and LAUF where, it asserts, the Commission determined that additional data were required regarding forwardhaul and backhaul deliveries in order to properly determine a pipeline's level of fuel use. 78

44. AGA argues that in Columbia Gulf the Commission stated that it was unable to determine whether the throughput figures set forth on page 305 of the pipeline's FERC Form No. 2 filings included or excluded backhaul volumes and that the Commission accordingly directed the pipeline to provide “[f]orward haul and backhaul deliveries stated separately for the mainline, onshore, and offshore zones for each month” for a specified period of time. 79 AGA asserts that the Commission recognized in that case that accurate forwardhaul and backhaul throughput data are important for the Commission and shippers to properly assess fuel use and LAUF, and that the current FERC Form No. 2 is not adequate to collect the separate forwardhaul and backhaul throughput data needed to conduct a proper analysis of fuel use and lost and unaccounted for fuel costs. 80

45. AGA maintains that the current rulemaking is the proper proceeding in which to consider this revision, even though it was not raised earlier, because the purpose of this proceeding is to revise the financial forms for interstate pipelines “to provide, in greater detail, the information the Commission needs to carry out its responsibilities under the NGA to ensure that rates are just and reasonable, and to provide pipeline customers and the public the information they need to assess the justness and reasonableness of pipeline rates.”  81

46. In its reply comments INGAA disagrees with AGA's proposal for an additional breakout of forwardhaul and backhaul data, arguing that this is neither practical nor necessary to achieve the Commission's FERC Form No. 2 reporting goals. 82 In INGAA's view, the fact that this information was deemed important by the Commission in Columbia Gulf does not warrant a general requirement that it be reported across the industry on an ongoing basis. 83 INGAA also notes that “typically no fuel is used for backhaul volumes, although the Commission requires an allocation of LAUF gas [to] be attributed to backhauls.”  84

47. INGAA cautions that if the proposal involves the reporting of fuel retained and fuel used on backhaul volumes, this would present practical difficulties with respect to backhauls that use no compressor fuel (citing Mississippi River Transmission Corp., 98 FERC ¶ 61,119 at 61,353 (2002) in this regard). However, INGAA agrees that these problems would not be present if the proposal only requires the reporting of forwardhaul and backhaul throughput volumes, which is all that is being required in this Final Rule.

48. INGAA comments that, particularly on a reticulated pipeline, gas flows in each direction, depending on demand and storage operations, and there may be no specific or designated transportation path for many services, which makes reporting problematic or impossible. 85 INGAA argues that the current gas system does not provide shippers with a set capacity path and that gas flows in each direction, depending on demand and storage, and this is why the Commission declined to adopt a generic requirement to establish a path priority system in Order No. 637. 86

49. In addition, INGAA argues that a single transportation service can involve a combination of forwardhauls or backhauls; thus, classifying each dekatherm of transportation as forwardhaul or backhaul is impossible. 87

50. Currently FERC Form No. 2 does not require a distinction between forwardhaul and backhaul volumes. Since compressor fuel use is not assessed to backhaul volumes, it is inaccurate to include backhaul volumes for throughput.

51. After consideration of all the arguments on this issue, we find that it would be informative and useful for pipelines to separately report their forwardhaul and backhaul volumes, because this would allow the Commission and customers to determine whether the fuel use being assigned to customers in their bills contain any cross-subsidies, based on the inclusion of backhaul volumes in their gas purchases, and thus help ensure that rates are just and reasonable. We also find that the benefits arising from this reporting, providing the opportunity to track fuel costs and examine cross-subsidies, outweigh the burden of reporting such data.

52. As to INGAA's argument that it would not be possible, even for the services that are pathed, to classify each dekatherm of transportation as either forwardhaul or backhaul, we conclude that, for a majority of pipelines, this is not a significant problem. Many pipelines offer clearly defined backhaul services that are defined in their tariffs. In order to offer and, ultimately, provide that service, those pipelines must be able to determine the volumes for which the service is provided. However, some pipelines do not offer backhaul service, and for these pipelines it is reasonable to expect that backhaul volumes may not be able to be tracked. Therefore, the Commission will require reporting on this matter depending on the service identified in the tariff. If backhaul service is not offered under the tariff, the reporting pipeline may report as if the service it offers is entirely forwardhaul. The reporting pipeline must separately identify backhaul volumes only if it offers backhaul service in its tariff and provides this service to customers.

53. MidAmerican comments that, to its knowledge, very few discounted and negotiated rate agreements include a provision for discounted or negotiated fuel. 88 Thus, MidAmerican suggests that the Commission clarify that columns (b) and (c) of pages 521a and 521b and columns (f) and (g) of pages 521c and 521d include only contracts with discounted or negotiated fuel rates, and the column headings be revised to read “Discounted Fuel Rate” and “Negotiated Fuel Rate.”  89

54. MidAmerican further argues that the columns should only contain volumes related to agreements with discounted or negotiated fuel, not fuel volumes related to all discounted or negotiated agreements, if the purpose of the information is to determine if there is a cross subsidy. 90

55. In this Final Rule, we are requiring pipelines to report fuel use by function for all contracts involving discounted rates, negotiated rates, or recourse rates. We reject MidAmerican's proposal to only require the reporting of fuel costs in contracts where the fuel rate is discounted. Under MidAmerican's proposal, how a contract is structured would dictate whether it would be within the scope of the reporting requirements of this Final Rule and MidAmerican states that very few discounted and negotiated rate agreements include a provision for discounted or negotiated fuel. If this is so, or if future contracts are specifically written to make it so, then, under MidAmerican's proposal, many contracts that otherwise would be included in the reporting requirements would not be reported. This would have the consequence of diminishing the benefits of enhanced transparency that we hope to achieve with this Final Rule and thus we reject MidAmerican's suggestion.

56. As to MidAmerican's suggestion that columns (b) and (c) on pages 521a and 521b, and columns (f) and (g) on pages 521c and 521d, should only contain volumes and dollars related to agreements with discounted or negotiated fuel, not fuel volumes or dollars related to discounted or negotiated agreements, for the reasons stated, we clarify that the amounts reported on pages 521a and 521b in columns (b) and (c) and on page 521c at columns (f) and (g) reflect shipper supplied gas collected under all discounted or negotiated rate agreements. 91

57. As mentioned above, FERC Form Nos. 2 and 2-A are annual reports and FERC Form 3-Q is a quarterly report. In the June 2010 NOPR, the Commission invited comments on whether the data reported on FERC Form Nos. 2, 2-A, and 3-Q should be reported on a monthly or quarterly basis (i.e., whether the data should provide separate entries for each month, or one entry covering the entire quarter).

58. AGA favors continuation of the requirement for monthly reporting of fuel use on page 521, asserting that important seasonal changes would be obscured by quarterly reporting. 92 AGA states that the consumption of natural gas in the United States varies significantly from one month to the next and, while demand in the industrial sector is largely constant, demand in the residential and commercial sector is weather-driven and has a dramatic seasonal shape with a winter peak. 93 AGA also notes that demand in the power generation sector is weather sensitive with a summer peak, or in some cases bi-modal with both winter and summer peaks. 94 AGA states that, because fuel is a variable cost and varies with consumption, the amount of fuel costs and revenues experienced by interstate pipelines varies by month and the fuel cost and revenue data of interstate pipelines does not fit neatly into calendar quarters. Consequently, significant variations in fuel data would be masked by fuel reporting only on a quarterly basis. 95

59. AGA further recommends that the fuel information on page 520 be reported on a monthly basis. 96 AGA argues that, as the Commission noted in the June 2010 NOPR, the fuel information reported on page 520 works in tandem with the information reported on page 521 and should allow a shipper to match the functionalized costs on page 520 with the functionalized revenues on page 521. 97 Having only quarterly information reported on page 520 would impede the ability of shippers and the Commission to match costs and revenues with the monthly information reported on page 521. 98 Therefore, AGA requests that page 520 of the financial reports be revised to add the appropriate columns to reflect the reporting of the information on that page on a monthly basis. 99

60. Associations also argue that providing shippers with access to detailed fuel information on a monthly basis, such as functionalized fuel data by rate type on FERC Form No. 2, would allow the Commission and shippers to ensure that fuel rates remain just and reasonable. 100 Associations state that better information would also help the Commission and shippers to develop a Natural Gas Act (NGA), section 5 complaint proceeding case and, further, would allow parties to confirm fuel tracker reports. 101

61. IOGA urges the Commission to retain the requirement for the monthly filing of fuel data. 102 In IOGA's experience, fuel and LAUF can vary significantly from month to month. Monthly breakdowns in FERC Form Nos. 2, 2-A, and 3-Q could provide valuable data that might be masked by aggregated quarterly data. 103 IOGA notes that pipelines already report transportation and gathering quantities by month, and contends that quarterly reporting of fuel and LAUF as proposed by INGAA will foreclose accurate comparative analysis of the relationship between quantities shipped and fuel and LAUF on a monthly basis. 104

62. IOGA further argues that, as pipelines track throughput, fuel and LAUF data monthly for invoicing and other purposes, a requirement to report fuel and LAUF by month will not pose additional administrative burden or expense. 105

63. Kansas Commission believes that monthly reporting of this information is not necessary to provide the information required to effectively evaluate a pipeline's rates. Therefore, Kansas Commission supports INGAA's suggestion to change the reporting requirements to quarterly. 106

64. INGAA argues that the reporting requirements should be quarterly. 107 INGAA comments that, because of weather events and anomalous events in the data, monthly data cannot provide an accurate picture or trend. 108 INGAA also asserts that pipelines with storage assets or significant line pack do not need to dispose of excess fuel, so monthly data would not provide an accurate picture of fuel use. 109

65. In response to INGAA, AGA argues that monthly reporting is preferable, because significant variations in fuel data can be masked by fuel reporting on a quarterly basis, 110 and quarterly data cannot be disaggregated to obtain monthly information to determine what costs or revenues were experienced and by what functions. Only monthly fuel information will provide sufficient transparency to allow the Commission and interested parties to assess the justness and reasonableness of interstate pipeline fuel charges. 111 AGA also notes that INGAA did not contradict AGA's observation that weather variations and the location of shipper-scheduled volumes on the pipeline from month to month have a substantial effect on fuel consumption. 112

66. In Order No. 710, the Commission eliminated FERC Form No. 11, the Natural Gas Pipeline Company Quarterly Statement of Monthly Data, and shifted the reporting of that information to FERC Form Nos. 2 and 3-Q. 113 We found that this fuel use information provides critical data for detecting trends, determining seasonal variation of fuel use, and testing the reasonableness of a pipeline's fuel costs. Upon further consideration of this issue in the instant docket, the Commission finds that monthly reporting provides greater transparency and provides more representative information about a pipeline's fuel use than quarterly reporting and we will retain this requirement.

67. Reporting data on a monthly basis provides more accurate accounting of fuel use, allowing for a better understanding of pipeline operations, and provides critical detail to understand how the pipeline treats its fuel. It would not be unexpected that a pipeline's operating parameters would change from January to March, from April to June, from July to September, or from October to December. It would seem counter to the interest of increased transparency to reduce the granularity of fuel use data over these periods. The monthly data are more representative of the pipeline's varying operations, enabling the transparency required by Order No. 710 to more fully evaluate a pipeline's fuel use and address the concerns of the remand. We conclude that moving to quarterly reporting would gloss over natural gas monthly fluctuations, thus distorting what actually occurred during the reporting period. Thus, we find that fuel use data should continue to be reported on a monthly basis, and not on a quarterly basis.

68. As to AGA's proposal to modify page 520 to have respondent companies report transmission throughput volumes on a monthly basis, we note that AGA did not provide specific reasons supporting the imposition of this requirement. Currently, page 520 only requires that transmission volumes be reported on a quarter and year to date basis and we see no need to revise this requirement. The reporting of transmission volume throughput and the reporting of fuel data are separate matters and the additional information to be provided on fuel use does not provide a reason to further break down transportation volume throughput. Thus, we find that the quarterly separation of that data is sufficient and we will not impose the additional burden on filers to break down these data in the absence of demonstrated benefits.

69. AGA, APGA, and Kansas Commission comment that the burden of producing and reporting the additional details on fuel use proposed in the June 2010 NOPR is both small and justified. 114 By contrast, INGAA finds the June 2010 NOPR proposal unduly burdensome. 115

70. Specifically, APGA comments that pipelines should have this information readily available because they maintain it for their own purposes. 116 Given the potential benefit of the information and the relatively low compliance burden on pipelines, APGA supports the Commission's proposal to require pipelines to report the amount of fuel waived, discounted or reduced as part of negotiated rate agreements. 117

71. Kansas Commission states that the benefits of the additional reporting outweigh any burden that might be placed on the reporting pipelines. 118 Given that pipelines already functionalize this data for ratemaking purposes, Kansas Commission concludes that the burden on pipelines will be minimal. 119

72. Kansas Commission further argues that, in the absence of a mandatory requirement for pipelines to periodically restate their base tariff rates, the Commission must rely on section 5 of the NGA to police pipeline rates. Under these circumstances, the need for functionalized data is heightened. 120 Without functionalized data, shippers and other interested parties cannot determine whether a pipeline is cross-subsidizing service, and the efficacy of the NGA section 5 complaint process is undermined. 121 Accordingly, the Kansas Commission supports the Commission's proposal to require functionalized fuel data to be included on pages 521a and 521b of FERC Form No. 2. 122 Kansas Commission also supports the Commission's proposal to require pipelines to report the amount of fuel waived, discounted or reduced as part of a negotiated rate agreement. 123

73. INGAA maintains that the Commission's proposal is unnecessarily burdensome. 124 First, INGAA maintains that it is difficult for pipelines to track fuel use by individual contract or contract type because pipelines operate on an integrated basis. 125 Second, INGAA asserts that it would require substantially more information than would be provided under this proposal to enable FERC Form No. 2 users to monitor potential cross-subsidy concerns. 126 Third, INGAA comments that pipelines will have to establish a mechanism for allocating fuel use between or among services and contracts. 127

74. The Commission finds that fuel use data on a functionalized basis is needed to obtain the transparency necessary to ensure just and reasonable rates. Additionally, we find that this reporting requirement is not unnecessarily burdensome. Currently, pipelines that file annual fuel use trackers assign fuel to their individual shippers. In this Final Rule, the Commission is not imposing any additional reporting requirements that change how those pipelines track fuel. Pipeline billings are provided on an integrated basis, accounting for sales based on whether the volumes are negotiated, recourse, or discounted. Moreover, contrary to INGAA's assertions, the Commission is not requiring pipelines to track fuel by individual contracts, but merely continuing the current practice of requiring the assignment of fuel based on an allocation of throughput or stated fuel rate. The revisions to page 521a through 521c require the same accounting mechanism for fuel, enabling parties to better understand how fuel use costs are assigned.

75. The Commission in the June 2010 NOPR estimated the annual burden to comply with the requirements established in Docket No. RM07-9-003 while inviting comments on the cost to comply with the proposed requirements. We estimated that the additional collection costs would not be overly burdensome. 128 The Commission provided its best estimate of the time required to complete page 521a through 521d. No party presented data contradicting the Commission's estimate. While INGAA contends that the proposal is burdensome, INGAA did not identify any inaccuracies in the Commission's estimate, did not quantify its own estimate of the impact of reporting fuel on a functionalized basis, and did not provide any support for its contention that functionalizing fuel would be burdensome to the pipelines. In this Final Rule, as discussed above, we are adding a requirement to report information on forwardhauls and backhauls and we are revising our burden estimate to account for this requirement. The Commission finds that, even with this minor additional reporting requirement, the benefits of enhanced transparency provided by the additional reporting proposed in the June 2010 NOPR outweigh the burden placed on the pipelines. Further, we find that our estimated burden hours (as adjusted) are small and reasonable, and we will continue to require fuel to be reported on a functionalized basis.

76. AGA contends that the new rules should apply to the financial forms that are required to be filed beginning in calendar year 2011. 129 AGA states that the annual financial reports (FERC Form Nos. 2 and 2-A) showing data for calendar year 2010 would be required to be filed on April 18, 2011. Quarterly financial reports (FERC Form No. 3-Q) would be required to be filed 60 days (for major pipelines) or 70 days (for non-major pipelines) after the end of the reporting quarter. Thus, the first quarterly financial reports in 2011 would be due March 1, 2011 (for majors) and March 10, 2011 (for non-majors), based on fourth quarter 2010 data. 130

77. INGAA comments that changes to FERC Form No. 2 should be prospective. 131 It states that this approach will provide pipelines adequate time to put data collection software in place. 132 In addition, it states that implementing the changes prospectively will allow time for pipelines to complete any engineering or other operational studies that might be needed for pipelines that do not already have accounting systems in place to make reasonably accurate estimates. 133 INGAA urges that pipelines be permitted to collect any additional data the Commission may require in 2011, with reporting to begin in 2012. 134

78. We conclude that the information to be reported under this Final Rule may require some companies to revise accounting systems to accurately allocate fuel use. While this is already reflected in the burden estimate, we nonetheless will revise the implementation schedule that we proposed in the June 2010 NOPR to address this concern. Additionally, we are not requiring companies subject to this Final Rule to refile the FERC Form Nos. 2, 2-A, and 3-Q that they have already filed.

79. Companies subject to these new requirements must begin collecting the more detailed data starting on July 1, 2011, and must use that data in completing their FERC Form Nos. 2, 2-A, and 3-Q thereafter. The revised data requirements would first be reflected in the FERC Form No. 3-Q filings for the period July 1 through September 30, 2011, which must be filed within 60 days of the end of the reporting quarter for majors and within 70 days of the end of the reporting quarter for non-majors (i.e., by November 29, 2011 for majors and December 9, 2011 for non-majors) and in the FERC Form Nos. 2 and 2-A filings for 2011, which must be filed by April 18, 2012. 135

80. As noted above, 136 page 521 only reports fourth quarter data and not yearly data. By contrast, page 520 gives yearly totals. However, while page 520 currently breaks down LAUF into several subcategories, the revised page 520 adopted in this Final Rule combines these subcategories into a single total that is reported on line 32 of the revised page 520. Thus, the FERC Form Nos. 2 and 2-A, filings for 2011, which must be filed by April 18, 2012, should report LAUF as a single line item on line 32, and should not report the breakdowns of these data for the first six months of the reporting year.

81. The Office of Management and Budget's (OMB) regulations require approval of certain information collection requirements imposed by agency rules. 137 Previously, the Commission submitted to OMB the information collection requirements arising from Order No. 710 and OMB approved those requirements. 138 The revisions to FERC Form Nos. 2, 2-A, and 3-Q adopted in this Final Rule consist of giving additional details about certain fuel cost data that the Commission already required to be reported in less detail in Order No. 710.

82. The Commission is submitting the information collection requirements imposed in this Final Rule to OMB for review and approval under section 3507(d) of the Paperwork Reduction Act of 1995. 139 Comments are solicited on the Commission's need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods of minimizing respondent's burden, including the use of automated information techniques.

83. This Final Rule affects the following existing data collections:

Title: FERC Form No. 2, “Annual Report for Major Natural Gas Companies”; FERC Form No. 2-A, “Annual Report for Nonmajor Natural Gas Companies”; FERC Form No. 3-Q, “Quarterly Financial Report of Electric Utilities, Licensees, and Natural Gas Companies.”

Action: Proposed information collection.

OMB Control Nos. 1902-0028 (FERC Form No. 2); 1902-0030 (FERC Form No. 2-A); and 1902-0205 (FERC Form No. 3-Q).

Respondents: Businesses or other for profit.

Frequency of responses: Annually (FERC Form Nos. 2 and 2-A) and quarterly (FERC Form No. 3-Q).

Necessity of the information: The information maintained and collected under the requirements of 18 CFR 260.1, 18 CFR 260.2, and 18 CFR 260.300 is essential to the Commission's oversight duties. The data now reported in the forms does not provide sufficient information to the Commission and the public to permit an evaluation of the filers' jurisdictional rates. Since the triennial restatement of rates requirement was abolished and pipelines are no longer required to submit this information, the need for current and relevant data is greater than in the past. The information collection required by this Final Rule will increase the forms' usefulness to both the public and the Commission.

84. Without this information, it is difficult for the Commission and the public to perform an assessment of pipeline costs, and thereby help to ensure that rates are just and reasonable. The pipelines should already have this information readily available for their own use in developing separately stated fuel rates in their tariffs. In any event, we believe this additional information will allow the Commission and form users to better analyze pipeline fuel costs, an important component in assessing the justness and reasonableness of pipelines' rates.

Burden Statement: The Commission estimates that on average it will take each respondent six additional hours per collection to comply with the proposed requirements. 140 Most of the additional information required to be reported is already compiled and maintained by the pipelines. This proposal will increase the burden hours as follows:

Information Collection Costs: 3072 hours at $120/hour = $368,640.

85. Given that none of the commenters identified any errors or inaccuracies in the estimates we used in the June 2010 NOPR, we will adopt these same estimates in this Final Rule, with the exception that we are adjusting our estimate to account for our requirement to report on forwardhauls and backhauls. At paragraphs 73-74 above, we address and reject INGAA's contention that certain parts of our proposal would be burdensome.

86 Internal Review: The Commission has reviewed the proposed changes and has determined that the changes are necessary. These requirements conform to the Commission's need for efficient information collection, communication, and management within the energy industry. The Commission has assured itself, by means of internal review, that there is specific, objective support associated with the information requirements.

87. Interested persons may obtain information on the reporting requirements by contacting: Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, phone (202) 502-8663, fax: (202) 273-0873, e-mail: DataClearance@ferc.gov. For submitting comments concerning the collections of information and the associated burden estimates, please send your comments to the contact listed above and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 395-4638, fax: (202) 395-7285]. Due to security concerns, comments should be sent electronically to the following e-mail address: oira_submission@omb.eop.gov. Please refer to OMB Control Nos. 1902-0028 (FERC Form No. 2), 1902-0030 (FERC Form No. 2-A), and 1902-0205 (FERC Form No. 3-Q), and the docket number of this Final Rule in your submission.

88. The Commission is required to prepare an environmental assessment or an environmental impact statement for any action that may have a significant adverse effect on the human environment. 141 However, in 18 CFR 380.4(a)(5), we categorically excluded the type of information gathering required in this Final Rule from the requirement to prepare an environmental impact statement. Thus, we affirm the finding we made in the June 2010 NOPR that this Final Rule does not impose any requirements that might have a significant effect on the human environment and find that no environmental impact statement concerning this rule is required.

89. The Regulatory Flexibility Act of 1980 (RFA)  142 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. 143 However, the RFA does not define “significant” or “substantial.” Instead, the RFA leaves it up to an agency to determine the effect of its regulations on small entities. Most filing companies regulated by the Commission do not fall within the RFA's definition of small entity.

90. The Commission estimates that there are 84 Major natural gas pipeline companies and 44 Non-major companies that will be affected by the Final Rule. 144 As we stated in the June 2010 NOPR, this Final Rule will apply to all interstate natural gas companies subject to the Commission's jurisdiction. While we do not foresee that this Final Rule will have a significant impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, we will consider granting waivers in appropriate circumstances. Moreover, our most recent information shows that only six natural gas companies not affiliated with a large natural gas company fall within the definition of a small entity and these six entities constitute only 4.7 percent of the 128 total companies.

91. Accordingly, the Commission certifies that this Final Rule will not have a significant impact on a substantial number of small entities. As a result, no regulatory flexibility analysis is required.

92. In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( http://www.ferc.gov ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.

93. From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

94. User assistance is available for eLibrary and the FERC's Web site during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or e-mail at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. E-mail the Public Reference Room at public.referenceroom@ferc.gov.

95. These regulations are effective February 25, 2011. Companies subject to the requirements of this Final Rule must comply with the requirements of this rule in accordance with the implementation timeline prescribed in this preamble. The Commission has determined (with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB) that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b) (B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because immediate action is necessary to ensure the safety of the public in the vicinity of munitions recently discovered in Gravesend Bay by civilian divers. U.S. Navy underwater surveys confirmed the location of unexploded ordnance in Gravesend Bay. In the interest of public safety the U.S. Navy has requested that the Coast Guard restrict access to the area in which the munitions are located until the munitions can be rendered safe and removed. Immediate action is required to ensure that no unauthorized persons and vessels travel through or conduct underwater activities that may disturb the current location of the unexploded ordnance, such as dive operations or anchoring within close proximity to the unexploded munitions. Publishing a NPRM and waiting 30 days for comment would be contrary to the public interest because any delay in the effective date of this rule would expose mariners, the boating public, and divers to the potential hazards associated with unexploded ordnance. Furthermore, a separate notice of proposed rulemaking will be pursued, where the public will have the opportunity to provide comment.

For these reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

In response to media reports of military munitions found in Gravesend Bay by civilian divers, U.S. Navy Explosive Ordnance Disposal divers from Naval Weapons Station Earle conducted underwater surveys and confirmed the location of munitions on the bottom of Gravesend Bay. The munitions consist of approximately 1,500 rounds of 20mm ammunition, one 3-inch diameter projectile and two cartridge casings.

In the interest of public safety, the U.S. Navy has requested that the Coast Guard limit access to the location in Gravesend Bay where the munitions are located until the ordnance could be rendered safe and removed.

This temporary safety zone is necessary to ensure the safety of mariners, vessels, and civilian divers from the potential hazards associated with unexploded military munitions. This temporary final rule is an interim measure while a long-term rulemaking process is pursued separately under docket number USCG-2010-1091.

The Captain of the Port New York is establishing a temporary safety zone around the location of the unexploded ordnance site to ensure the safety of mariners and vessels transiting in the vicinity of unexploded ordnance as well as divers intending to dive in the area.

The safety zone will encompass all waters of Gravesend Bay within 110-yard radius of a point at the approximate position 40°36′30″ N, 074°02′14″ W (NAD 83), approximately 70 yards southeast of the Verrazano Bridge Brooklyn tower.

All persons and vessels shall comply with the instructions of the Coast Guard Captain of the Port or the designated on-scene representative. Entry into, transiting, anchoring, or diving within the safety zone is prohibited unless authorized by the Captain of the Port New York, or the on-scene representative. The Captain of the Port or the on-scene representative may be contacted via VHF Channel 16.

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.

This rule temporarily restricts access to a small portion of Gravesend Bay until unexploded military ordnance are rendered safe and removed. The safety zone is located in an area where the Coast Guard expects insignificant adverse impact to mariners from the zone's activation. This rule is intended to protect the public from the hazards associated with unexploded ordnance. Furthermore, vessels will be able to safely transit around the area.

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 and operators of vessels intending to transit or anchor in a portion of Gravesend Bay, in the vicinity of the Verrazano Bridge, Brooklyn, NY.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: Vessel traffic can safely transit around the zone. The rule limits access to a relatively small portion of the waterway where there is a known hazard until the hazard is rendered safe. Before the effective period, we will issue maritime advisories widely available to users of the waterway.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can 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 (adjusted for inflation) 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 cause 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 that 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 a temporary safety zone on the waters of Gravesend Bay until recently discovered military munitions are rendered safe and removed from the area. An environmental analysis checklist and a categorical exclusion determination will be available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because publishing an NPRM would be impracticable, since immediate action is needed to protect the general public, vessel and tows from a sunken vessel and associated hazards in position 29°48.77′ N 091°33.02′ W, in the Charenton Drainage and Navigation Canal.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Publishing an NPRM and delaying its effective date would be impracticable since immediate action is needed to protect the general public, vessel and tows from destruction, loss or injury due to a sunken vessel and associated hazards in position 29°48.77′ N 091°33.02′ W.

A Mobile Inshore Drilling Rig (Hercules Rig 61) scheduled for scrap sank in the Charenton Navigation and Drainage Canal. A safety zone is needed to protect the general public, vessels and tows from destruction, loss or injury from a sunken vessel and associated hazards during the response action.

The Coast Guard is establishing a temporary Safety Zone 500 yards North and South, bank to bank, of position 29°48.77′ N 091°33.02′ W within the Charenton Drainage and Navigation Canal. The temporary Safety Zone is established for the period from January 7, 2011, through June 30, 2011. Vessels and tows may not enter this zone unless authorized by the Captain of the Port Morgan City.

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.

This rule will only be in effect for a limited period of time and notifications to the marine community will be made through broadcast notice to mariners and Local Notice to Mariners. Vessels needing to transit the area can request permission from the Captain of the Port. The impacts on routine navigation are expected to be minimal.

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 intending to transit through the Safety Zone from January 7, 2011 to June 30, 2011. This Safety Zone will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for only a short period of time, and vessels that need to transit the area while the safety zone is effective can request permission from the Captain of the Port.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can 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 (adjusted for inflation) 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 cause 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 a safety zone.

Because this rule involves an emergency situation and will be in effect for over one week, an environmental analysis checklist and a categorical exclusion determination will be provided and made available at the docket as indicated in the ADDRESSES section.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

On April 23, 2010, MDE submitted to EPA SIP revision # 10-05 concerning the adoption of the EPA CTG for flat wood paneling coatings.

Section 172(c)(1) of the CAA provides that SIPs for nonattainment areas must include reasonably available control measures (RACM), including RACT for sources of emissions. Section 182(b)(2)(A) provides that for certain nonattainment areas, States must revise their SIPs to include RACT for sources of VOC emissions covered by a CTG document issued after November 15, 1990 and prior to the area's date of attainment.

The CTG for flat wood paneling coatings is intended to provide state and local air pollution control authorities information that should assist them in determining RACT for VOCs from flat wood paneling coating. In developing this CTG, EPA, among other things, evaluated the sources of VOC emissions from the flat wood paneling coating industry and the available control approaches for addressing these emissions, including the costs of such approaches. Based on available information and data, EPA provides recommendations for RACT for flat wood paneling coating.

In June 1978, EPA published a final CTG for flat wood paneling coatings, entitled “Control of Volatile Organic Emissions from Existing Stationary Sources, Volume VII, Factory Surface Coating of Flat Wood Paneling,” EPA-450/2-78-034 (June 1978). In September 1979, EPA published guidance to provide assistance to State and local air pollution control agencies in preparing RACT regulations for a variety of categories, including flat wood paneling. In 2003, EPA promulgated national emission standards for hazardous air pollutants (NESHAP) covering surface coating of wood building products (including flat wood paneling). See 68 FR 31746 (May 28, 2003).

Under section 183(e) of the CAA, EPA conducted a study of VOC emissions from the use of consumer and commercial products to assess their potential to contribute to levels of ozone that violate the NAAQS for ozone, and to establish criteria for regulating VOC emissions from these products. Section 183(e) of the CAA directs EPA to list for regulation those categories of products that account for at least 80 percent of the VOC emissions, on a reactivity-adjusted basis, from consumer and commercial products in areas that violate the NAAQS for ozone (i.e., ozone nonattainment areas), and to divide the list of categories to be regulated into four groups.

EPA published the original list of product categories and the original schedule that established the four groups of categories in the Federal Register on March 23, 1995 (60 FR 15264). Flexible package printing materials was included in that list. EPA noted in that notice that EPA may amend the list of products for regulation, and the groups of products for regulation, and the groups of product categories, in order to achieve an effective regulatory program in accordance with the Agency's discretion under CAA section 183(e). EPA published a revised schedule and grouping on March 18, 1999 (64 FR 13422). EPA again revised the list to regroup the product categories on November 17, 2005 (70 FR 69759). On May 16, 2006 (71 FR 28320), EPA modified the section 183(e) list and schedule for regulation by adding one category and removing one category of consumer and commercial products. Flat wood paneling coatings are included on the current section CAA183(e) list.

Flat wood paneling products are used in construction and can be classified as three main product types: decorative interior panels, exterior siding, and tileboard. A typical flat wood coating facility applies stains and varnishes to natural plywood panels used for wall coverings. This CTG applies to facilities that apply flat wood paneling coatings that emit at least 6.8 kg/day (15 lb/day) of VOC before consideration of controls. Flat wood paneling coatings means wood paneling products that are any interior, exterior or tileboard (class I hardboard) panel to which a protective, decorative, or functional material or layer has been applied. There are several approaches to reducing VOC emissions from flat wood coating facilities: (1) The use of low-VOC, waterborne coatings, (2) the use of ultraviolet cure and electron beam cure coatings, (3) adding/improving add-on controls, and (4) the implementation of work practice standards.

On April 23, 2010, Maryland Department of the Environment (MDE) submitted to EPA a SIP revision concerning the adoption of the EPA CTG for flat wood paneling coatings. EPA develops CTGs as guidance on control requirements for source categories. States can follow the CTGs or adopt more restrictive standards. MDE is adopting EPA's CTG standards for flat wood paneling coatings ( see EPA-450/2-78-034, June 1978). This SIP revision includes amendments to a new regulation .33 under COMAR 26.11.19, Volatile Organic Compounds from Specific Processes. This action affects facilities that apply stains and varnishes to natural plywood panels used for wall coverings.

New regulation COMAR 26.11.19.33—Control of Volatile Organic Compounds (VOCs) Emissions from Flat Wood Paneling Coatings contains the following requirements and standards:

(1) Section .33(A): Includes definitions for the following terms pertaining to flat wood paneling coatings: (1) “Class II finishes on hardboard panels,” “Exterior siding,” “Flat wood paneling,” “Hardwood plywood,” “Natural finish hardwood plywood panels,” “Printed interior panels,” “Thin particleboard,” and “Tileboard.”

(2) Section .33(B): Incorporates by reference ANSI A135.5-2004, Prefinished Hardwood Paneling and ANSI A135.4-2004, Basic Hardboard.

(3) Section .33(C): Describes the applicability of this regulation.

(4) Section .33(D): Includes the requirements for flat wood paneling coating. Any person who applies flat wood paneling coatings, including inks and adhesives, where total precontrol VOC emissions from all flat wood paneling coating operations at a premises is 15 pounds or more per day (6.8 kg/day) shall meet the coating standards or overall control efficiency specified in Table 1.

Maryland's April 23, 2010 SIP revision meets the CAA requirement to include RACT for sources covered by the EPA CTG for flat wood paneling coating. Therefore, EPA is approving the Maryland SIP revision that adopts the CTG standards for flat wood paneling coating. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the Proposed Rules section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on March 28, 2011 without further notice unless EPA receives adverse comment by February 25, 2011. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action 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 the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 28, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking.

This action pertaining to Maryland's adoption of the CTG standards for flat wood paneling coating may not be challenged later in proceedings to enforce its requirements. (See CAA section 307(b)(2).)

40 CFR part 52 is amended as follows:

On September 27, 2010, the Commonwealth of Virginia submitted a formal revision to its SIP. The SIP revision consists of revisions pertaining to the ambient air quality standards for lead and related reference conditions. The CAA specifies that EPA must re-evaluate the appropriateness of its various air quality standards every five years. As part of the process, EPA reviewed the latest research and determined that revised standards for lead were necessary to protect public health and welfare. EPA revised the level of the primary lead standard to a level of 0.15 micrograms per cubic meter (μg/m 3 ) to provide increased protection for children and other “at risk” populations. The secondary standard was also revised to a level of 0.15 μg/m 3 to afford increased protection for the environment. EPA promulgated the more stringent primary and secondary NAAQS for lead on November 12, 2008 (73 FR 66964).

On September 27, 2010, the Commonwealth of Virginia submitted a formal revision to its SIP. The SIP revision consists of an amendment which includes the revised primary and secondary ambient air quality standards for lead and related reference conditions. Virginia's revision incorporates the Federal lead standards into the Code of Virginia (9VAC5 Chapter 30). In addition, the list of appendices to 40 CFR Part 51 was updated under “Documents Incorporated by Reference” (9VAC5-20-21).

The following are the specific sections that are being modified or amended:

• 9VAC5-20-21: Documents Incorporated by Reference (modified)

• 9VAC5-30-15: Reference Conditions (modified)

• 9VAC5-30-80: Lead (amended)

In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, provides a privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information (1) that are generated or developed before the commencement of a voluntary environmental assessment; (2) that are prepared independently of the assessment process; (3) that demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) that are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege Law, Va. Code Sec. 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by Federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce Federally authorized environmental programs in a manner that is no less stringent than their Federal counterparts * * *.” The opinion concludes that “[r]egarding § 10.1-1198, therefore, documents or other information needed for civil or criminal enforcement under one of these programs could not be privileged because such documents and information are essential to pursuing enforcement in a manner required by Federal law to maintain program delegation, authorization or approval.”

Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by Federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any Federally authorized programs, since “no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with Federal law, which is one of the criteria for immunity.”

Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the Federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on Federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.

EPA is approving Virginia's SIP revision for the lead NAAQS and related reference conditions, as well as the updated list of appendices to 40 CFR Part 51 under documents incorporated by reference. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on March 28, 2011 without further notice unless EPA receives adverse comment by February 25, 2011. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action 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 the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 28, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action pertaining to Virginia's adoption of the revised lead standards of 0.15 μg/m 3 and related reference conditions may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR Part 52 is amended as follows:

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 site at http://www.gpoaccess.gov/ecfr.

Under FFDCA section 408(g), 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-2009-0713 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before March 28, 2011. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

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. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2009-0713, 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 October 7, 2009 (74 FR 51597) (FRL-8792-7), 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 9E7591) by IR-4, 500 College Road East, Suite 201 W., Princeton, NJ 08540. The petition requested that 40 CFR 180.546 be amended by establishing tolerances for residues of the fungicide mefenoxam, ( R )- and ( S )-2-[(2,6-dimethyl(phenyl)-methoxyacetylamine]-propionic acid methyl ester, and its metabolites containing the 2,6 dimethylaniline moiety, and N -(2-hydroxy methyl-6-methylphenyl)- N -(methoxyacetyl)-alanine methyl ester, each expressed as mefenoxam equivalents, in or on bean, snap, succulent at 0.35 parts per million (ppm); caneberry subgroup 13-07A at 0.80 ppm; bushberry subgroup 13-07B at 2.0 ppm; onion, bulb, subgroup 3-07A at 3.0 ppm; onion, green, subgroup 3-07B at 10.0 ppm; and spinach at 8.0 ppm. The notice additionally requested to remove the individual tolerance for lingonberry at 2.0 ppm, as it will be superseded by inclusion in bushberry subgroup 13-07B. That notice referenced a summary of the petition prepared on behalf of IR-4 by Syngenta Crop Protection, Inc., the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has revised the proposed tolerance levels for several commodities. EPA has also revised the tolerance expression for all established commodities to be consistent with current Agency policy. The reasons for these changes are explained in Unit IV.C.

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 mefenoxam including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with mefenoxam 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.

Mefenoxam, is the R -enantiomer of metalaxyl which is a racemic mixture that contains approximately 50% each of the R - and S -enantiomers. EPA conducted a side-by-side comparison of the available toxicity data for mefenoxam and metalaxyl and concluded that mefenoxam has similar toxicity to that of metalaxyl. Therefore, metalaxyl data may be used to support the registration of mefenoxam.

The database for mefenoxam/metalaxyl indicates that the liver is the major target organ. Liver effects observed in oral studies in rats, mice, and dogs include increased liver enzymes (alanine amino-transferase, aspartate amino-transferase, and alkaline phosphatase), increased incidence of pathological observations in the liver (hepatocyte hypertrophy, vacuolation of hepatocytes, and fatty infiltration) and increased relative and absolute liver weights. In guideline studies, the dog appears to be the most sensitive species.

The developmental toxicity studies in rat and rabbit and the multigeneration reproduction study did not show metalaxyl/mefenoxam to be a developmental or reproductive toxicant. There was no indication of increased susceptibility in pups following prenatal and postnatal exposures to mefenoxam. In the rat and rabbit developmental toxicity studies, in which animals were administered metalaxyl by gavage at relatively high doses, both rat and rabbit dams exhibited clinical signs (ataxia, body tremors, reduced activity, and righting reflex). These clinical signs are believed to result from metalaxyl/mefenoxam induced bradycardia mediated through alpha-adrenoreceptors and not from neurotoxicity.

Metalaxyl has been classified as “not likely to be carcinogenic to humans” based on the results of a carcinogenicity study in mice and the combined chronic toxicity and carcinogenicity studies in rats. Based on the classification of metalaxyl, mefenoxam is also considered “not likely to be carcinogenic to humans.” Mutagenicity studies do not indicate increased mutagenic potential following exposure to metalaxyl/mefenoxam.

Specific information on the studies received and the nature of the adverse effects caused by mefenoxam 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 “Mefenoxam. Human Health Risk Assessment for Proposed Uses on Snap Beans and the Caneberry Subgroup, Expanded Uses on the Bulb and Green Onion Subgroups and the Bushberry Subgroup, and Amended Use on Spinach.” at pages 51-53 in docket ID number EPA-HQ-OPP-2009-0713.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level-generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)-and a safe margin of exposure (MOE). 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 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 mefenoxam used for human risk assessment is shown in Table 1 of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to mefenoxam, EPA considered exposure under the petitioned-for tolerances as well as all existing mefenoxam tolerances in 40 CFR 180.546 and metalaxyl tolerances in 40 CFR 180.408. EPA assessed dietary exposures from mefenoxam/metalaxyl 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 mefenoxam; 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 U.S. Department of Agriculture (USDA) 1994-1996 and 1998 Continuing Surveys of Food Intakes by Individuals (CSFII). As to residue levels in food, EPA assumed tolerance-level residues for most commodities. Additional factors derived from available residue chemistry data were applied to the tolerance values for leafy vegetables, grain seed (including dried beans), with the exception of flour cereal grains, nut commodities, succulent snap beans, and caneberries to address concerns regarding the adequacy of the residue analytical method to determine all metalaxyl/mefenoxam residues of concern, including metabolites, in plant and animal commodities. This was accomplished by calculating parent and metabolite to parent ratios to residue levels of concern for risk assessment purposes.

Additionally, EPA used DEEM default processing factors except where specific mefenoxam/metalaxyl tolerances exist for processed commodities or where metabolism and processing data are available to establish specific processing factors. Tolerances were used for dried apricot, tomato paste, tomato puree, and potato processed commodities and a data-derived processing factor was applied for fruit juices based on available metabolism and processing data. Finally, the dietary assessment incorporated average percent crop treated (PCT) information, when available, for mefenoxam because it showed higher estimates than metalaxyl. One hundred PCT was used for all other commodities, including the proposed uses.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that mefenoxam does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and percent crop treated (PCT) information. 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.

In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency estimated the PCT for existing uses as follows:

In most cases, EPA uses available data from the USDA/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 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 mefenoxam 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 metalaxyl/mefenoxam in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of mefenoxam. 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 Tier II Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS) and Tier I Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of mefenoxam for chronic exposures for non-cancer assessments are estimated to be 36.7 parts per billion (ppb) for surface water and 1.72 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 36.7 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). Mefenoxam is currently registered for the following uses that could result in residential exposures: Residential turf and ornamentals and recreational turf, such as golf courses and athletic fields. EPA assessed residential exposure using the following assumptions: Exposure to adults may occur from handling mefenoxam, and to children from postapplication contact with treated areas. Therefore, adult handlers were assessed for short-term inhalation exposure resulting from residential application of mefenoxam; intermediate-term handler exposure is not expected. For children, short- and intermediate-term postapplication oral exposures (hand-to-mouth, object-to-mouth, and incidental ingestion of soil) were assessed. Dermal toxicity endpoints were not identified for any mefenoxam use pattern and chronic residential exposure is not expected; therefore, these exposure scenarios were not assessed. It was also determined that postapplication mefenoxam exposures to adults and children at recreational use sites would be similar to those assessed for residential use sites and, therefore, a separate recreational exposure assessment is not necessary.

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.

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 mefenoxam to share a common mechanism of toxicity with any other substances, and mefenoxam does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that mefenoxam 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 Web site 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. There is no evidence that mefenoxam results in increased susceptibility from in utero exposure to rats or rabbits in the prenatal developmental studies or exposure to young rats 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:

i. The toxicity database for mefenoxam is complete except for immunotoxicity, acute neurotoxicity, and subchronic neurotoxicity testing. Recent changes to 40 CFR part 158 require acute and subchronic neurotoxicity testing (OPPTS Guideline 870.6200), and immunotoxicity testing (OPPTS Guideline 870.7800) for pesticide registration. However, the existing data are sufficient for endpoint selection for exposure/risk assessment scenarios, and for evaluation of the requirements under the FQPA. The available studies do not indicate potential for immunotoxicity, as evidenced by the lack of effects seen in the spleen, thymus, or hematological parameters. Also, metalaxyl and mefenoxam do not belong to a class of compounds ( e.g., the organotins, heavy metals, or halogenated aromatic hydrocarbons) that would be expected to be toxic to the immune system.

ii. With respect to neurotoxicity, clinical signs (ataxia, body tremors, reduced activity, and righting reflex) were observed in maternal animals in rat and rabbit developmental studies at relatively high doses (≥ 150 mg/kg/day), where metalaxyl was administered by gavage only. These clinical signs were unlikely neurotoxically mediated, but rather resulted from the bradycardia mediated through alpha-adrenoreceptors. Therefore, there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that mefenoxam 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. Although one additional field trial with residue decline measures is needed to complete the geographic distribution for caneberry crops, there are no uncertainties in the exposure database due to the fact that: (1) There is no significant difference in residues in blackberry/raspberry samples from field trials conducted in four regions including the major production region (~70%) and relatively low production (6-15%) in the remaining regions; and (2) existing decline data indicate that residues decline with increasing sampling intervals.

The chronic dietary food exposure assessment was somewhat refined, using estimated average PCT data, when available, and 100 PCT for all other commodities. The assessment was also performed based on tolerance-level residues or additional factors to address concerns regarding the adequacy of the residue analytical method in some commodities and DEEM default processing factors unless specific tolerances were established for processed commodities or metabolism and processing data were available to establish specific processing factors. These assumptions are based on reliable data which will not underestimate potential dietary exposures. EPA made conservative (protective) assumptions in the ground water and surface water modeling used to assess exposure to mefenoxam in drinking water. EPA used similarly conservative assumptions to assess postapplication exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by mefenoxam.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer 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 appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from 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, mefenoxam 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 mefenoxam from food and water will utilize 60% of the cPAD for children 1-2 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 mefenoxam 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). Mefenoxam is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to mefenoxam.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 2,500 for the general U.S. population; 920 for children 3-5 years old; and 880 for children 1-2 years old. Because EPA's level of concern for mefenoxam is a MOE of 100 or below, these MOEs are not 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). Mefenoxam is currently registered for uses that could result in intermediate-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with intermediate-term residential exposures to mefenoxam.

Using the exposure assumptions described in this unit for intermediate-term exposures, EPA has concluded that the combined intermediate-term food, water, and residential exposures result in aggregate MOEs of 150 for children 3-5 years old and 140 for children 1-2 years old. Because EPA's level of concern for mefenoxam is a MOE of 100 or below, these MOEs are not of concern.

5. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, mefenoxam 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 mefenoxam residues.

For the purposes of this tolerance action, adequate enforcement methodologies including a gas-liquid chromatography with alkali flame-ionization detection (GLC/AFID) (Method AG-348) and a GLC with nitrogen-phosphorus detection (NPD) (Method AG-395) are available to enforce the tolerance expression for plant commodities. However, the Agency determined that the current residue analytical methods available for tolerance enforcement will not adequately recover all of the metalaxyl/mefenoxam residues of concern in the revised tolerance expression. For this action, therefore, the Agency applied additional factors derived from available residue chemistry data to certain commodities to account for all residues of concern for dietary risk assessments, as previously described in Unit III.C.ii.

Neither Method AG-348 nor Method AG-395 distinguish between the R - and S -enantiomers of metalaxyl/mefenoxam; however, a confirmatory high performance liquid chromatography method with mass spectrometric detection that utilizes a chiral column (chiral LC/MS), Method 456-98, is available for the enantioselective determination of the D - and L -enantiomers of metalaxyl in crops. Therefore, EPA has determined for future actions that the multiresidue method Protocol D, which completely recovers metalaxyl/mefenoxam per se, is an adequate enforcement method for the determination of metalaxyl/mefenoxam per se in plant and livestock commodities; and analysis using a 2,6-DMA common moiety method, including recovery data for parent, CGA-62826, and CGA-94689, can be used in order to refine dietary risk assessments.

Method AG-;348 may be found in PAM Vol. II; Method AG-395 and Method 456-98 have been submitted for inclusion in PAM Vol. II; and Multiresidue method Protocol D may be found in PAM, Vol. I Section 302. Methods not published in PAM 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 .

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint U.N. Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

Pending revocation of Codex MRLs for metalaxyl, Codex MRLs for metalaxyl-m (mefenoxam) have not been advanced to final status. Therefore, there are currently no Codex MRLs established for residues of mefenoxam in or on the commodities associated with this petition. However, with the adoption of the revised tolerance expression, the U.S. tolerance expression will be harmonized with the tolerance expression for Codex.

Canadian MRLs for mefenoxam (metalaxyl-m) are covered by MRLs established for metalaxyl, and Canadian MRLs have been established for residues of metalaxyl in or on spinach at 10 ppm, bulb onion at 3.0 ppm, green onion at 10 ppm, bean at 0.2 ppm, raspberry at 0.2 ppm, and blueberry at 2.0 ppm. The Canadian MRLs are harmonized with U.S. tolerance levels in or on the commodities associated with this petition, with the exception of caneberry subgroup 13-07A, which is being established at 0.70 ppm (the Canadian MRL for raspberry is 0.2 ppm). The U.S. tolerance on caneberry subgroup 13-07A cannot be harmonized with the Canadian MRL on raspberry at this time because the field trial data supporting the U.S. tolerance result in residues above 0.2 ppm. Additionally, with the adoption of the revised tolerance expression for mefenoxam, the U.S. tolerance expression will not be in harmonization with Canadian MRLs.

Based on analysis of the residue field trial data supporting the petition, EPA revised the proposed tolerances on bean, snap, succulent from 0.35 ppm to 0.20 ppm; caneberry subgroup 13-07A from 0.80 ppm to 0.70 ppm; and spinach from 8.0 ppm to 10 ppm. The Agency revised these tolerance levels 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. 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 mefenoxam 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.

Therefore, tolerances are established for residues of mefenoxam, including its metabolites and degradates, in or on bean, snap, succulent at 0.20 ppm; caneberry subgroup 13-07A at 0.70 ppm; bushberry subgroup 13-07B at 2.0 ppm; onion, bulb, subgroup 3-07A at 3.0 ppm; onion, green, subgroup 3-07B at 10 ppm; and spinach at 10 ppm. Compliance with the specified tolerance levels is to be determined by measuring only metalaxyl (methyl N -(2,6-dimethylphenyl)- N -(methoxyacetyl)- DL -alaninate). Additionally, this regulation deletes the individual tolerance in or on lingonberry at 2.0 ppm.

This final rule establishes tolerances 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) (Pub. L. 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).

Therefore, 40 CFR chapter I is amended as follows:

I. Does this action apply to me?

The Agency included in the final rule a list of those who may be potentially affected by this action. If you have questions regarding the applicability of this action to a particular entity, consult either technical person listed under FOR FURTHER INFORMATION CONTACT .

The codified text for FR Doc. 2010-33313, published in the Federal Register issue of January 7, 2011 (76 FR 1067) (FRL-8846-9) is corrected to fix a typographical error concerning the required date of submission for letters of intent to test and exemption applications. The correct date by which EPA must receive a letter of intent to test or an exemption application from manufacturers (including importers) in Tier 1 is March 9, 2011 (not February 7, 2011, as stated in § 799.5087, paragraphs (c)(2) and (c)(4) of the initial publication).

Section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B), provides that, when an Agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the Agency may issue a final rule without providing notice and an opportunity for public comment. EPA has determined that there is good cause for making this technical correction final without prior proposal and opportunity for comment, because this is a correction of a typographical error, not a change in the regulation as intended by EPA. Notice and comment are not necessary to correct a typographical error, especially when the corrected text gives persons subject to the rule more time to file a letter of intent and an exemption application. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(3)(B).

No. As described previously, this final rule corrects a typographical error in the original final rule concerning the required date by which EPA must receive a letter of intent to test or an exemption application from manufacturers (including importers) in Tier 1. As a technical correction, this action is not subject to review by the Office of Management and Budget (OMB) under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). This action does not impose or change any information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Because this action is not subject to notice and comment requirements under the APA or any other statute, it is not subject to the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) or sections 202 and 205 of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1531-1538). Nor does this action significantly or uniquely affect small governments. This final rule does not have Tribal implications, as specified in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000), or federalism implications as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Since this action is not economically significant under Executive Order 12866, it is not subject to Executive Orders 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), and 13211, Actions concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This action does not involve technical standards; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) do not apply. For the reasons already stated, the Agency is not required to and has not considered environmental justice-related issues as specified in Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994). The Agency's actions regarding these requirements in relation to the original final rule, are discussed in the preamble to that rule.

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).

Therefore, 40 CFR part 799 is corrected as follows:

Section 1007(a)(2) of the Legal Services Corporation Act (“Act”), 42 U.S.C. 2996f(a)(2), requires the Corporation to establish maximum income levels for individuals eligible for legal assistance, and the Act provides that other specified factors shall be taken into account along with income.

Section 1611.3(c) of the Corporation's regulations establishes a maximum income level equivalent to one hundred and twenty-five percent (125%) of the Federal Poverty Guidelines. Since 1982, the Department of Health and Human Services has been responsible for updating and issuing the Federal Poverty Guidelines. The figures for 2010 set out below are equivalent to 125% of the current Federal Poverty Guidelines as published on August 3, 2010 (75 FR 45628).

In addition, LSC is publishing charts listing income levels that are 200% of the Federal Poverty Guidelines. These charts are for reference purposes only as an aid to grant recipients in assessing the financial eligibility of an applicant whose income is greater than 200% of the applicable Federal Poverty Guidelines amount, but less than 200% of the applicable Federal Poverty Guidelines amount (and who may be found to be financially eligible under duly adopted exceptions to the annual income ceiling in accordance with sections 1611.3, 1611.4 and 1611.5).

LSC notes that these 2010 Income Guidelines are substantively unchanged from the 2009 Income Guidelines. This is because HHS' Poverty Guidelines for the remainder of 2010 are unchanged from the 2009 Poverty Guidelines which have been in place since last year.

For reasons set forth above, 45 CFR 1611 is amended as follows:

The NWHI commercial lobster fishery is managed under the Fishery Ecosystem Plan for the Hawaiian Archipelago. The regulations at 50 CFR 665.252(b) require NMFS to publish an annual harvest guideline for lobster Permit Area 1, comprised of Federal waters around the NWHI. Regulations governing the Papahanaumokuakea Marine National Monument in the NWHI prohibit the unpermitted removal of monument resources (50 CFR 404.7), and establish a zero annual harvest guideline for lobsters (50 CFR 404.10(a)). Accordingly, NMFS establishes the harvest guideline at zero lobsters for the NWHI commercial lobster fishery for calendar year 2011. Thus, no harvest of NWHI lobster resources is allowed.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The A season allowance of the 2011 Pacific cod sideboard limit established for non-AFA crab vessels that are subject to sideboard limits harvesting Pacific cod for processing by the offshore component in the Central Regulatory Area of the GOA is 502 metric tons (mt), as established by the final 2010 and 2011 harvest specifications for groundfish of the GOA (75 FR 11749, March 12, 2010) and inseason adjustment (76 FR 469, January 5, 2011).

In accordance with § 680.22(e)(2)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2011 Pacific cod sideboard limit established for non-AFA crab vessels harvesting Pacific cod for processing by the offshore component in the Central Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a sideboard directed fishing allowance of 492 mt, and is setting aside the remaining 10 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 680.22(e)(3), the Regional Administrator finds that this sideboard directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by non-AFA crab vessels that are subject to sideboard limits harvesting Pacific cod for processing by the offshore component in the Central Regulatory Area of the GOA.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the sideboard directed fishing closure of Pacific cod for non-AFA crab vessels that are subject to sideboard limits harvesting Pacific cod for processing by the offshore component in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of January 20, 2011.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 680.22 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The A season allowance of the 2011 Pacific cod TAC allocated as a directed fishing allowance to pot catcher/processors in the BSAI is 1,551 metric tons as established by the final 2010 and 2011 harvest specifications for groundfish in the BSAI (75 FR 11778, March 12, 2010) and inseason adjustment (76 FR 467, January 5, 2011).

In accordance with § 679.20(d)(1)(iii), the Administrator, Alaska Region, NMFS, has determined that the A season allowance of the 2011 Pacific cod TAC allocated as a directed fishing allowance to pot catcher/processors in the BSAI has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by pot catcher/processors in the BSAI.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of Pacific cod by pot catcher/processors in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of January 20, 2011.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.