The Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296, (the HHFK Act), was signed into law on December 13, 2010. The HHFK Act includes Section 305 and 361, which are nondiscretionary and directly affect a number of nutrition assistance programs authorized under the NSLA (42 U.S.C. 1751 et seq. ) and the CNA (42 U.S.C. 1771 et seq.), including: The Special Supplemental Nutrition Program for Women, Infants and Children (WIC); the WIC Farmers' Market Nutrition Program (FMNP); the National School Lunch Program (NSLP); the School Breakfast Program (SBP); the Special Milk Program for Children (SMP); State Administrative Expense (SAE) Funds; the Summer Food Service Program (SFSP); and the Child and Adult Care Food Program (CACFP). The provisions of sections 305 and 361 also apply to the Fresh Fruit and Vegetable Program. Proposed regulations for that Program are expected to be issued shortly.

First, Section 305 of the HHFK Act added a new provision Section 28(c) of the NSLA, 42 U.S.C. 1760(c), requiring State and local entities and their contractors participating in the programs under the NSLA and the CNA to cooperate in studies and evaluations conducted by or on behalf of the Department of Agriculture (USDA) related to programs authorized under the NSLA or the CNA. USDA conducts studies related to Program operations in order to comply with existing laws or to provide Program information for program management and improvement. It is essential that such studies reflect an accurate portrait of these Programs on a Program-wide basis. In accordance with Section 445 of the HHFK Act, Section 305 became effective October 1, 2010, and has been implemented via memoranda to Child Nutrition, WIC, and FMNP State agencies, issued March, 2011. This rule amends 7 CFR 210.23(e), 215.7(f), 215.11(f), 220.7(g), 220.13(m), 225.18(j), 226.25(h), 246.26(k), and 248.24(d) to reflect this nondiscretionary statutory requirement.

Second, Section 361 of the HHFK Act amended Section 12(b) of the NSLA by establishing expectations for the use of Federal funds supporting the administration of Programs authorized under the NSLA and the CNA. Specifically, all agreements between FNS and a State agency to administer the Programs affected by this rule must include a provision that supports full use of Federal funds for the administration of the Programs and excludes such funds from State budget restrictions or limitations including, at a minimum, hiring freezes, work furloughs, and travel restrictions. Section 361 also became effective on October 1, 2010, in accordance with Section 445 of the HHFK Act and has been implemented via memoranda to all Child Nutrition, WIC, and FMNP State agencies.

In this final rule, the Department excludes from State budget restrictions State-imposed cost-saving measures of hiring freezes, work furloughs, and travel restrictions affecting USDA Programs under the NSLA and CNA. These limits are the exclusions specified in Section 361 of the HHFK Act. Should the Department determine that expansion of these restrictions is necessary to ensure the ability of State agencies to administer USDA's nutrition assistance Programs effectively, we will initiate a separate rulemaking process.

Because the Federal/State agreement for the Child Nutrition Programs is permanent, the amendment signed in FY 2011 conforms to the requirements of Section 361 for FY 2011 and all subsequent fiscal years. The Federal/State annual agreements for WIC and the FMNP were amended for FY 2011. FNS has begun revising the Federal/State Agreement forms for the WIC and FMNP to include the necessary statement related to the full use of Federal funds in accordance with Section 361 of the HHFK Act. The revised form is expected to be ready for use for FY 2012. This rule amends 7 CFR 225.5(a)(5), 226.8(e), 235.6(i), 246.3(c)(3), and 248.3(c)(2) to reflect this requirement.

In accordance with the Secretary's Statement of Policy (36 FR 13804), it is found and determined upon good cause that it is unnecessary to engage in the Notice and Comment provisions of 5 U.S.C. 553 normally required before the adoption of final regulations in an FNS-sponsored program. As indicated earlier, Sections 305 and 361 of the HHFK Act adopted as final rules in this rulemaking are nondiscretionary. These provisions are being incorporated as regulations using language taken verbatim from the Act. The nondiscretionary nature of Sections 305 and 361 means that notice and comment would serve no useful purpose in the promulgation of these regulations.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

This rule has been designated a “not significant regulatory action.” Accordingly, the rule will not be reviewed by the Office of Management and Budget.

This rule has been designated as non-significant by the Office of Management and Budget; therefore, no Regulatory Impact Analysis is required.

Pursuant to section 605(b) of the Regulatory Flexibility Act at 5 U.S.C. 601-612, FNS certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This final rule incorporates into the regulations governing the Programs authorized under the Richard B. Russell National School Lunch Act and the Child Nutrition Act of 1966, as amended, two statutory provisions set forth in the Healthy, Hunger-Free Kids Act of 2010. The HHFK Act requires State and local cooperation in USDA studies and evaluations related to programs authorized under the NSLA and the CNA. The HHFK Act also amends the NSLA by stipulating that Federal funds available for Programs authorized in the NSLA and CNA must not be subject to State budget restrictions or limitations, including hiring freezes, work furloughs, and travel restrictions.

The provision implementing Section 305 is applicable to States, WIC and FMNP State agencies, State educational agencies, local educational agencies, local WIC and FMNP agencies, schools, institutions, facilities, and contractors; however, the provision simply requires cooperation with studies and evaluations and will not have a significant economic impact on affected parties. The provision implementing Section 361 are applicable to all State agencies, and, in the case of the WIC Program and the FMNP, local agencies that administer the Programs authorized under the NSLA or the CNA and will not have a significant economic impact on a substantial number of small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under Section 202 of the UMRA, FNS generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, or tribal governments in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires FNS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule.

This final rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local or tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of Sections 202 and 205 of the UMRA.

The nutrition assistance programs affected by this rulemaking are listed in the Catalog of Federal Domestic Assistance as follows:

• WIC No. 10.557

• FMNP No. 10.572

• NSLP No. 10.555

• SBP No. 10.553

• SAE No. 10.560

• SMP No. 10.556

• CACFP No. 10.558

• SFSP No. 10.559

For the reasons set forth in the final rule at 7 CFR part 3015, Subpart V and related Notice (48 FR 29115, June 24, 1983), these programs are included in the scope of Executive Order 12372 that requires intergovernmental consultation with State and local officials.

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section 6(b)(2)(B) of Executive Order 13132. FNS has considered the impact of this rule on State and local governments and has determined that this rule does not have federalism implications. Therefore, under Section 6(b) of the Executive Order, a federalism summary impact statement is not required.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless specified in the DATES section of the final rule. Prior to any judicial challenge to the provisions of this rule or the application of its provisions, all applicable administrative procedures must be exhausted.

FNS has reviewed this rule in accordance with Departmental Regulations 4300-4, “Civil Rights Impact Analysis,” and 1512-1, “Regulatory Decision Making Requirements.” After a careful review of the rule's intent and provisions, FNS has determined that this rule is not intended to limit or reduce in any way the ability of protected classes of individuals to receive benefits on the basis of their race, color, national origin, sex, age or disability, nor is it intended to have a differential impact on minority-owned or operated business establishments, and woman-owned or operated business establishments that participate in the Programs affected by this rulemaking.

Federal WIC regulations specifically prohibit State agencies that administer the WIC Program, and their cooperators, from engaging in actions that discriminate against any individual in any of the protected classes (see 7 CFR 246.8 for the nondiscrimination policy in the WIC Program; 7 CFR 248.7 for the nondiscrimination policy in the FMNP).

In the NSLP, the regulation in 7 CFR 210.23(b) seeks to ensure non-discrimination in the operation of the school meals programs by prohibiting the denial of meal benefits to any child because of race, color, national origin, age, sex, or disability. It also requires State agencies and school food authorities to comply with the requirements of: Title VI of the Civil Rights Act of 1964; title IX of the Education Amendments of 1972; section 504 of the Rehabilitation Act of 1973; the Age Discrimination Act of 1975; Department of Agriculture regulations on nondiscrimination (7 CFR parts 15, 15a, and 15b); and FNS Instruction 113-6. Other regulatory provisions (7 CFR 210.9(b)(11), 7 CFR 210.18(h)(1)(iii), 7 CFR 220.7(e)(5), 7 CFR 220.7(e)(15), and 7 CFR 220.13(f)(4)) also require nondiscrimination in the operation of the lunch and breakfast programs or refer to the Department's nondiscrimination regulations (7 CFR part 15b).

In the Special Milk Program, 7 CFR 215.13a(d)(5) requires program operators to have a free milk policy statement that includes an assurance that there will be no discrimination against free milk recipients and no discrimination against any child on the basis of race, color, or national origin. In addition, 7 CFR 215.14 requires that the school food authority's agreement with the State agency contain the assurances required by Department's regulations on nondiscrimination (7 CFR part 15b). Other regulatory provisions (7 CFR 215.7(d)(3), 215.11(b)(2)) also require nondiscrimination in the operation of the milk program or refer to the Department's nondiscrimination regulations (7 CFR part 15b).

In the SFSP, the regulations at 7 CFR 225.7(g)(1) require institutions to agree to operate the Program in compliance with applicable Federal civil rights laws, including title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973; the Age Discrimination Act of 1975, and the Department's regulations concerning nondiscrimination (7 CFR parts 15, 15a and 15b). At 7 CFR 225.6(c)(4)(i), each sponsor applying to participate in the SFSP must submit a statement of nondiscrimination in its policy for serving meals to children.

In the CACFP, the regulations at 7 CFR 226.6(b)(4)(iv) require that sponsors comply with all requirements of title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973; the Age Discrimination Act of 1975, and the Department's regulations concerning nondiscrimination (7 CFR parts 15, 15a and 15b).

The provisions in this rule have no direct impact upon or involvement with Program participants.

E.O. 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects 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. In early 2011, USDA engaged in a series of consultative sessions to obtain input by Tribal officials or their designees concerning the impact of this rule on the tribe or Indian Tribal governments, or whether this rule may preempt Tribal law. Reports from these consultations will be made part of the USDA annual reporting on Tribal Consultation and Collaboration. USDA will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule and will provide additional venues, such as Webinars and teleconferences, to periodically host collaborative conversations with Tribal officials or their designees concerning ways to improve this rule in Indian country.

We are not aware of any current Tribal laws that could be in conflict with this final rule.

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320), requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current, valid OMB control number. This final rule has no new information collection requirements. The information collection burdens associated with the signing of Federal-State agreements in this final rule have been previously approved under OMB No. 0584-0332, Form FNS-339, Federal-State Supplemental Nutrition Programs Agreement, and OMB No. 0584-0006, 0584-0005, 0584-0012, 0584-0280, 0584-0055, 0584-0067, Form FNS-74. The information collection burdens associated with participating in a study or an evaluation will be covered under separate Information Collection Packages that are specific to a particular study or evaluation that will be submitted to OMB for approval.

FNS is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities to provide for citizen access to government information and services, and for other purposes. Also, State agencies may provide Program information, as well as their financial reports, to FNS electronically.

Accordingly, 7 CFR parts 210, 215, 220, 225, 226, 235, 246 and 248 are amended as follows:

The Securities and Exchange Commission is adopting rule 202(a)(11)(G)-1 [17 CFR 275.202(a)(11)(G)-1] under the Investment Advisers Act of 1940 [15 U.S.C. 80b] (the “Advisers Act” or “Act”). 1

On October 12, 2010, the Commission issued a release proposing new rule 202(a)(11)(G)-1 that would exempt “family offices” from regulation under the Advisers Act. 2 We proposed this rule in anticipation of the Dodd-Frank Wall Street Reform and Consumer Protection Act's (the “Dodd-Frank Act”)  3 repeal of the private adviser exemption from registration contained in section 203(b)(3) of the Advisers Act, effective July 21, 2011, upon which many family offices currently rely. 4

The Dodd-Frank Act creates in its place a new exclusion from the Advisers Act in section 202(a)(11)(G) under which family offices, as defined by the Commission, are not investment advisers subject to the Advisers Act. 5 Historically, family offices that fell outside the private adviser exemption have sought and obtained from us orders under the Advisers Act declaring those offices not to be investment advisers within the intent of section 202(a)(11) of the Advisers Act. 6 Recognizing this past practice, section 409 of the Dodd-Frank Act instructs that any family office definition the Commission adopts should be “consistent with the previous exemptive policy” of the Commission and recognize “the range of organizational, management, and employment structures and arrangements employed by family offices.”  7

We received approximately 90 comments on the proposed rule, most of which were submitted by law firms representing family offices. 8 Many urged that we adopt a broader exemption to accommodate typical family office structures that were not reflected in our previous exemptive orders. 9 Some urged us to include exceptions in various aspects of the rule to allow individuals or entities with no family relations to nevertheless receive investment advice from the family office without the protections of the Advisers Act. 10 Some disputed our interpretation of the legislative direction we received to define the term “family office” consistent with our previous exemptive orders. 11 After careful consideration of these comment letters, we are adopting rule 202(a)(11)(G)-1, with certain modifications from our proposal as further described below.

We are adopting new rule 202(a)(11)(G)-1 under the Advisers Act to define the term “family office” for purposes of the Act. Family offices, as so defined, are excluded from the Act's definition of “investment adviser,” and are thus not subject to any of the provisions of the Act. The scope of the rule is generally consistent with the conditions of exemptive orders that we have issued to family offices. As with the proposal, and as discussed in more detail below, our final rule in some cases has modified those conditions to turn the fact-specific exemptive orders into a rule of general applicability and to take into account the need for certain clarifications and further modifications identified by commenters.

As we discussed in the Proposing Release, our orders have provided an exclusion for family offices because we viewed them as not the sort of arrangement that the Advisers Act was designed to regulate. 12 Disputes among family members concerning the operation of the family office could, as we noted in the Proposing Release, be resolved within the family unit or, if necessary, through state courts under laws designed to govern family disputes. In light of the purpose of the exclusion and the legislative instructions we received, we have not expanded the exclusion, as several commenters suggested, to permit family offices to provide advisory services to multiple families or to clients who are not family members, other than certain key employees.

The failure of a family office to be able to meet the conditions of the rule will not preclude the office from providing advisory services to family members either collectively or individually. Rather, the family office will need to register under the Advisers Act (unless another exemption is available) or seek an exemptive order from the Commission. A number of family offices currently are registered under the Advisers Act.

As proposed, rule 202(a)(11)(G)-1 contains three general conditions. First, the exclusion is limited to family offices that provide advice about securities only to certain “family clients.” Second, it requires that family clients wholly own the family office and family members and/or family entities control the family office. Third, it precludes a family office from holding itself out to the public as an investment adviser. In addition to these conditions, we have incorporated into the rule the “grandfathering” provision required by section 409 of the Dodd-Frank Act. 13

A family office excluded from the Act is limited to an office that advises only “family clients.”  14 As discussed in more detail below, family clients include current and former family members, certain employees of the family office (and, under certain circumstances, former employees), charities funded exclusively by family clients, estates of current and former family members or key employees, trusts existing for the sole current benefit of family clients or, if both family clients and charitable and non-profit organizations are the sole current beneficiaries, trusts funded solely by family clients, revocable trusts funded solely by family clients, certain key employee trusts, and companies wholly owned exclusively by, and operated for the sole benefit of, family clients (with certain exceptions). 15

Under the rule, a “family member” includes all lineal descendants of a common ancestor (who may be living or deceased) as well as current and former spouses or spousal equivalents of those descendants, provided that the common ancestor is no more than 10 generations removed from the youngest generation of family members. 16 All children by adoption and current and former stepchildren also are considered family members.

We have expanded persons who may be considered family members in response to several comments we received. We had proposed to define the term “family member” by reference to the “founder” of the family office, and generally to include the founder's spouse (or spousal equivalent), their parents, their lineal descendants, and their siblings and their lineal descendants. 17 Commenters observed that the proposed rule implicitly assumed that the founder of the family office is the initial generator of the family's wealth and is an individual or couple. 18 They noted that in many cases, however, family offices are established by persons several generations remote from the initial wealth generator. 19 Some commenters also criticized our proposed approach because it would treat who could be a family member differently depending on when the family office was established. 20 For example, one commenter stated that our proposal would have allowed a family office that was formed a long time ago to provide services to persons that are currently third or fourth cousins to each other, but that a family office established today may need to wait at least 40 or 50 years before being able to provide services to equivalent types of family members. 21

Some commenters recommended that the Commission address these concerns by leaving the term “family member” undefined, 22 while others recommended that the Commission retain the approach of the proposed rule, but expand the rule to treat as family members grandparents, great-grandparents, aunts, uncles, great aunts, and great uncles of the founders and their spouses and children. 23 Leaving the term family member undefined could allow typical commercial investment advisory businesses to rely on the exclusion (by, for example, designating an extremely remote family member as a common ancestor). On the other hand, attempting to expand the family member definition by ascending up the family tree from the founders would not address the difficulty in identifying the founders of the family office as identified by commenters and would not address the concern, depending on when the family office was founded, that the definition will not capture many family members of family offices established several generations after the initial family wealth was created.

We are adopting, instead, an approach suggested in several comment letters that permits a family to choose a common ancestor (who may be deceased) and define family members by reference to the degree of lineal kinship to the designated relative. 24 This approach avoids any assumptions regarding the source of family wealth and the inconsistent treatment of extended family members compared to the approach we proposed. 25 In order to prevent families from choosing an extremely remote ancestor, which could allow commercial advisory businesses to rely on the rule, we are imposing a 10 generation limit between the oldest and youngest generation of family members. Such a limit, suggested by several commenters, would constrain the scope of persons considered family members while accommodating the typical number of generations served by most family offices. 26

Under this approach, the family office will be able to choose the common ancestor and may change that designation over time such that the family office clientele is able to shift over time along with the family members served by the family office. A family office exempt under the rule with a common ancestor several generations up from current family members will be able to serve a greater number of current collateral family members but fewer future lineal members.

For example, G1 (who is deceased) founded a business and placed his fortune into a trust for the benefit of his heirs. G4 founded a family office to manage that wealth for the ever growing number of family members descended from G1 and treated G1 as the common ancestor for purposes of which family members the family office could advise under the exclusion. At the time G4 created the family office, current clients extended as far as G4's great-grandchildren (or G7). Over time the family grows and additional generations are born. Eventually, to allow the family office to serve later generations that would otherwise extend beyond the 10 generation limit, the family office redesignates its common ancestor to an individual in G3. 27 The family office can do this under rule 202(a)(11)(G)-1 because the rule does not specify which individual the common ancestor is and it does not specify that it always has to be the same common ancestor. As a result of this redesignation, the family office is able to advise clients two generations younger, but would no longer be able to advise certain branches of G1's family tree without registering under the Advisers Act. 28

The rule, as proposed, treats lineal descendants and their spouses, spousal equivalents, stepchildren, and adopted children as family members. 29 Most commenters generally supported our inclusion of spousal equivalents, stepchildren and children by adoption, 30 but two commenters  31 opposed the inclusion of spousal equivalents, invoking the Defense of Marriage Act (“DOMA”). 32 Because the term “spouse” is not defined in the rule and a “spousal equivalent” is identified as a category of person, separate and distinct from a “spouse,” that meets the definition of a “family member,” we do not believe that the rule violates that Act.

In response to comments we have expanded the definition to include foster children and persons who were minors when another family member became their legal guardian. 33 We are persuaded by the commenters that argued that foster children and children in a guardianship relationship often have familial ties indistinguishable from that of children and stepchildren, and that including such individuals would not cause the family office to resemble a typical commercial investment adviser. 34

Finally, the rule treats former family members ( i.e., former spouses, spousal equivalents and stepchildren) as family members. 35 We had proposed permitting former family members to retain any investments held through the family office at the time they became a former family member, but to limit them from making any new investments through the family office. 36 Commenters pointed out that a former spouse's financial arrangements often remain intertwined with those of the family, particularly if they provide for children who remain family members. 37 Some argued that stepchildren of a divorced spouse may remain close to the family after the divorce. 38 We are persuaded by these arguments and have modified the definition of former family member to include stepchildren. 39

As proposed, rule 202(a)(11)(G)-1 prevents an involuntary transfer of assets to a person who is not a family client ( e.g., a bequest to a friend of assets in a family office-advised private fund) from causing the family office to lose its exclusion. Under the rule, a family office may continue to provide advice with respect to such assets following an involuntary transfer for a transition period of up to one year. 40 The transition period permits the family office to orderly transition that client's assets to another investment adviser or otherwise restructure its activities to comply with the Advisers Act.

We proposed to allow the family office to continue to advise a non-family client for four months following the transfer of assets resulting from the involuntary event. 41 A number of commenters argued that four months is an inadequate period of time to transition investment advice arrangements as a result of an involuntary transfer, 42 particularly for illiquid assets such as investments in private funds. 43 Some suggested that the family office be required to transfer the assets as soon as legally and practically feasible. 44 Others suggested that we treat involuntary transfers in the same manner as we had proposed treating former family members—permitting their existing investments to remain with the family office but prohibiting new investments. 45 Still others suggested that the transfer period be lengthened to anywhere from one year to three years. 46

After an involuntary transfer, such as a bequest, the office would no longer be providing advice solely to members of a single family, and after several such bequests the office could cease to operate in any way as a family office. Thus, we believe that relief for involuntary transfers must be temporary. We are persuaded, however, that the four month transition period we proposed would be inadequate and have extended the period to one year. 47

Rule 202(a)(11)(G)-1 treats as a family client certain family trusts established for testamentary and charitable purposes. We have expanded the types of trusts that may be treated as a family client in response to several comments that our proposal failed to take into account certain aspects of trust and estate planning. 48 As discussed in more detail below, these expansions accommodate common estate planning and charitable giving plans and do not suggest that the family office is engaging in a commercial enterprise.

Irrevocable trusts. The rule treats as a family client any irrevocable trust in which one or more family clients are the only current beneficiaries. 49 We proposed including as a family client any trust or estate existing for the sole benefit of one or more family clients. 50

As suggested by commenters, the final rule disregards contingent beneficiaries of trusts, which commenters explained are often named in the event that all family members are deceased to prevent the trust from distributing assets to distant relatives or escheating to the state. 51 If the contingent beneficiary later becomes an actual beneficiary and is not a permitted current beneficiary of a family trust under the exclusion (such as a family friend), the rule's provisions concerning involuntary transfers allow for an orderly transition of investment advice regarding those assets away from the family office.

Also in response to commenters, the rule permits the family office to advise irrevocable trusts funded exclusively by one or more other family clients in which the only current beneficiaries, in addition to other family clients, are non-profit organizations, charitable foundations, charitable trusts, or other charitable organizations. 52 Several commenters noted that families often establish and fund trusts whose sole current beneficiaries are both family clients and public charities. 53 Such an entity may not be a “charitable trust” as a technical manner, but we see no reason for treating them differently under the rule from charitable trusts funded exclusively by family clients.

Other commenters argued that a trust should be permitted to have current beneficiaries that are not family clients and that the rule instead should merely require that the trust be for the primary benefit of one or more family clients. 54 These commenters argued that the family office's provision of investment advice to these kinds of trusts would not change the family office's character and that it is the trust that is the client of the family office, rather than the beneficiary. We disagree. Current beneficiaries of a trust are greatly affected by the nature and quality of investment advice provided to the trust and would be harmed if there were fraud committed by the family office in managing trust assets. Even if in small numbers, these individuals and entities stand to benefit substantially from the protections of the Advisers Act and do not necessarily have any family ties or investment sophistication to stand in the Act's stead.

Revocable Trusts. The rule also treats as a family client a revocable trust of which one or more family clients are the sole grantors. 55 Accordingly, a revocable trust may be advised by a family office relying on the rule regardless of whether the beneficiaries of the trust are family members. We received several comments that argued that revocable trusts should be treated differently than irrevocable trusts, since the grantor of a revocable trust effectively controls the trust and the beneficiaries of the trust have no reasonable expectation of obtaining any benefit from the trust until the trust becomes irrevocable (generally upon the death of the grantor). 56 Therefore, the identity of the beneficiaries of the trust should not matter so long as one or more family clients are the sole grantors of the trust. We agree that in the case of a revocable trust, the contingent nature of any beneficiary's expectation that it will benefit from the trust's assets supports disregarding a revocable trust's beneficiaries under the exclusion, just as other contingent beneficiaries are disregarded.

Estates. The final rule treats as a family client an estate of a family member, former family member, key employee or former key employee. 57 As suggested by several commenters, this provision permits a family office to advise the executor of a family member's estate even if that estate will be distributed to (and thus be for the benefit of) non-family members. 58 The executor of an estate is acting in lieu of the deceased family client in managing and distributing the family client's assets. Therefore, advice to the executor is equivalent to providing advice to that family client. 59

The rule treats as a family client any non-profit organization, charitable foundation, charitable trust (including charitable lead trusts and charitable remainder trusts whose only current beneficiaries are other family clients and charitable or non-profit organizations), or other charitable organization, in each case funded exclusively by one or more other family clients. 60 We understand that some family offices currently advise charitable or non-profit organizations that have accepted funding from non-family clients. 61 So that these family offices have sufficient time to transition such advisory arrangements or restructure the charitable or non-profit organization, we are including a transition period of until December 31, 2013 before family offices have to comply with this aspect of the exclusion. 62

We had proposed treating as a family client any charitable foundation, charitable organization, or charitable trust established and funded exclusively by one or more family members. 63 Some commenters recommended that the Commission change the requirement that charities be established and funded “by family members” to “by family clients” because they asserted that family charities are often established and funded by family trusts, corporations or estates, and not exclusively by family members. 64 We agree that making this change is consistent with our view of the scope of persons that should be permitted to be served by the family office. Several commenters also believed that we should not require that a charitable organization be established by family members or family clients in order to receive investment advice from the family office under the exclusion because in some cases such charitable organizations may have been originally established by distant relatives that do not currently qualify as “family members.”  65 We agree that as long as all the funding currently held by the charitable organization came solely from family clients, the individuals or entities that originally established it are not of import for our policy rationale. 66 We have changed the rule accordingly.

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, “* * * a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to the Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the West Virginia program on January 21, 1981. You can find background information on the West Virginia program, including the Secretary's findings, the disposition of comments, and conditions of approval of the West Virginia program in the January 21, 1981, Federal Register (46 FR 5915). You can also find later actions concerning West Virginia's program and program amendments at 30 CFR 948.10, 948.12, 948.13, 948.15, and 948.16.

By letter dated April 25, 2011, and received by OSM on May 2, 2011 (Administrative Record Number WV-1557), the WVDEP submitted an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ). The proposed amendment consists of both statutory and regulatory revisions.

Enrolled Committee Substitute for House Bill No. 2955 (HB 2955) includes revisions to the West Virginia Surface Coal Mining and Reclamation Act (WVSCMRA). HB 2955 was adopted by the West Virginia Legislature on March 18, 2011, and approved by the Governor on April 5, 2011. HB 2955 increased the filing fee for the State's surface mining permit to $3,500, the permit renewal fee to $3,000, and established a notice of intent to prospect fee of $2,000, a significant permit revision fee of $2,000, a permit amendment fee of $550, a permit transfer fee of $1,500, a permit assignment fee of $1,500, and an inactive status approval fee of $2,000. HB 2955 also proposes to change “director” to “secretary” in accordance with a past reorganization of the WVDEP and make other non-substantive changes.

Enrolled Committee Substitute for Senate Bill No. 121 (SB 121) passed the West Virginia Legislature on March 18, 2011, and was signed by the Governor on March 30, 2011. SB 121 authorized WVDEP to promulgate several revisions to its Surface Mining Reclamation Regulations. SB 121 authorizes regulatory revisions which, among other things, provide for a minimum incremental bonding rate of $10,000 per increment at CSR 38-2-11.4.a.2. Section 22-3-11(a) of WVSCMRA currently requires mining operators to furnish a minimum bond of $10,000, regardless of acreage. Under the revised provision, an operator will have to post a minimum bond of $10,000 for each increment that is to be mined. Except for the regulatory revision at subdivision 11.4.a.2 that provides for a minimum incremental bonding rate, the other regulatory revisions will be acted upon following our normal program amendment procedures.

Because these changes have an effective date of June 16, 2011, the WVDEP requested that these revisions be approved by OSM on an interim basis and take effect immediately upon publication of this interim rule in the Federal Register . OSM will publish, under a separate Federal Register notice, a proposed rule and request comments on those other regulatory changes in the proposed State amendment that are not specifically addressed by this action.

The full text of the program amendment is available for you to read at the locations listed above under ADDRESSES .

Specifically, West Virginia requests that the following statutory and regulatory revisions identified below be approved on an interim basis.

1. WVSCMRA 22-3-7(b) Notice of Intent to Prospect. Notice of intention to prospect shall * * * be accompanied by * * * a filing fee of $2,000. This proposed State provision falls under the Federal provisions at section 512 of SMCRA and 30 CFR Part 772.

2. WVSCMRA 22-3-8(a)(4) New Permit. Each application for a new surface mining permit * * * shall be accompanied by a fee of $3,500. The State's permit fee was increased from $1,000 to $3,500. This proposed State revision falls under the Federal provisions at section 507(a) of SMCRA and 30 CFR 777.17.

3. WVSCMRA 22-3-19(a)(4) Permit Renewal. Any renewal application for an active permit shall be * * * accompanied by a filing fee of $3,000. The State's permit renewal fee was increased from $2,000 to $3,000. This proposed State revision falls under the Federal provisions at section 507(a) of SMCRA and 30 CFR 777.17.

4. WVSCMRA 22-3-19(b)(2) Significant Permit Revision. An application for a significant revision of a permit * * * shall be accompanied by a filing fee of $2,000. The significant permit revision fee is new and was added to the State's statutory provisions. This proposed State revision falls under the Federal provisions at section 507(a) of SMCRA and 30 CFR 777.17.

5. WVSCMRA Code 22-3-19(b)(3) Permit Amendment. An application for a new area is subject to all procedures and requirements applicable to applications for original permits * * * and a filing fee of $550. The permit amendment fee is new and was added to the State's statutory provisions. This proposed State revision falls under the Federal provisions at section 507(a) of SMCRA and 30 CFR 777.17.

6. WVSCMRA Code 22-3-19(d) Permit Transfer or Assignment of Rights. No transfer, assignment or sale of the rights granted under any permit * * * may be made without the prior written approval of the secretary, application for which shall be accompanied by a filing fee of $1,500 for transfer or $1,500 for assignment. The permit transfer and assignment of rights fees are new and were added to the State's statutory provisions. These proposed State revisions fall under the Federal provisions at section 507(a) of SMCRA and 30 CFR 777.17.

7 . WVSCMRA Code 22-3-19(e) Inactive Status Fee. Each request for inactive status shall be submitted on forms prescribed by the secretary, shall be accompanied by a filing fee of $2,000, and shall be granted in accordance with the procedure established in the Surface Mining and Reclamation Rule. The inactive status fee is new and was added to the State's statutory provisions. This proposed State revision falls under the provisions at section 507(a) of SMCRA and 30 CFR 777.17.

8. CSR 38-2-11.4.a.2 Incremental Bonding. If incrementally bonded, the minimum bond shall be $10,000 per increment. The proposed revision, which establishes a minimum incremental bonding rate, is new and was added to subdivision 11.4.a.2. This proposed State regulatory revision falls under the Federal bonding provisions at 30 CFR 800.14.

Effective upon publication of this interim rule, we are approving, on an interim basis, the revisions to Subsections 22-3-7(b), 22-3-8(a)(4), 22-3-19(a)(4), 22-3-19(b)(2), 22-3-19(b)(3), 22-3-19(d), and 22-2-19(e) of the WVSCMRA, which increase the filing fee for the surface mining permit to $3,500, the permit renewal fee to $3,000, and which establish a notice of intent to prospect fee of $2,000, a significant permit revision fee of $2,000, a permit amendment fee of $550, a permit transfer fee of $1,500, a permit assignment fee of $1,500, and an inactive status approval fee of $2,000.

Section 507(a) of SMCRA and 30 CFR 777.17 provide that a permit application must be accompanied by a fee that is determined by the regulatory authority. The fee cannot exceed the actual or anticipated cost of reviewing, administering, and enforcing the State permit, and it can be paid over the term of the permit. We find that the proposed fees for the various permitting actions mentioned above are in accordance with section 507(a) of SMCRA and do not render the West Virginia program less effective than the Federal requirements at 30 CFR 777.17, and can be approved. Further, the notice of intention to prospect fee is in accordance with section 512 of SMCRA and no less effective than the Federal coal exploration requirements at 30 CFR Part 772, and can be approved.

In addition, we are approving, on an interim basis, the regulatory revision at CSR 38-2-11.4.a.2 which provides for a minimum incremental bonding rate of $10,000 per increment. We find that the State's proposed incremental bonding rate is no less effective than the Federal bonding requirements at 30 CFR 800.14, and can be approved.

Because our approval of these revisions is on an interim basis, and in order to satisfy our state program amendment public participation requirements at 30 CFR 732.17(h), we will accept comments on these proposed fee changes and the minimum incremental bonding rate in accordance with Section IV of this Federal Register notice. Following our review of the comments received, we will issue a final rule announcing OSM's final decision on the statutory and regulatory revisions that are the subject of this interim rule.

Pursuant to the Administrative Procedure Act at 5 U.S.C. 553(b)(3)(B), we find that good cause exists to approve the statutory revisions at Subsections 22-3-7(b), 22-3-8(a)(4), 22-3-19(a)(4), 22-3-19(b)(2), 22-3-19(b)(3), 22-3-19(d), and 22-3-19(e) of the WVSCMRA and the regulatory revision at CSR 38-2-11.4.a.2 on an interim basis without notice and opportunity for comment, because to require notice and opportunity for comment now would be contrary to the public interest in that the permit fees and the incremental bonding rate are due to take effect on June 16, 2011, and it would delay the start of the collection of the permit fees and the incremental bonding rate.

State permit fees provide a source of revenue for the State to administer its permanent regulatory program. It is in the public's interest that these increased and new permit fees be implemented without further delay. Any delay in the implementation of these fees may require the State to fund the program with general revenue funds that may be needed for other public purposes. States are encouraged to make the funding of their regulatory programs self sufficient through the use of permit and other fees imposed on the mining industry.

In addition, bonds are used by the State to perform bond forfeiture reclamation. Rather than posting the total bond amount for each operation, more operators are using incremental bonding to reduce the total amount of bonds that they are required to furnish. To ensure that the incremental bond will be sufficient to cover the full cost of reclamation in the event of forfeiture, the State is requiring operators to post a minimum bond of $10,000 per increment. It is in the public's interest that the minimum incremental bonding rate becomes effective immediately to ensure that the State will have sufficient revenue to cover the cost of any bond forfeiture reclamation that may be required under the State's alternative bonding system.

As explained above, the public will still have an opportunity to comment on these proposed changes before we announce a final decision on them in the Federal Register at a later date. In addition, the other State program amendment revisions that are not specifically addressed by this action will be announced in a separate Federal Register notice.

Under the provisions of 30 CFR 732.17(h), we are seeking your comments on whether the amendment satisfies the applicable program approval criteria of 30 CFR 732.15. If we approve the amendment, it will become part of the West Virginia program.

Send your written comments to OSM at one of the addresses given above. Your written comments should be specific, pertain only to the issues proposed in this rulemaking, and include explanations in support of your recommendations. We may not consider or respond to your comments when developing the final rule if they are received after the close of the comment period (see DATES ) or sent to an address other than those listed above (see ADDRESSES ).

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed under FOR FURTHER INFORMATION CONTACT by 4 p.m. (local time), on July 14, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed under FOR FURTHER INFORMATION CONTACT . We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold a hearing.

To assist the transcriber and ensure an accurate record, we request, if possible, that each person who speaks at the public hearing provide us with a written copy of his or her comments. The public hearing will continue on the specified date until everyone scheduled to speak has been given an opportunity to be heard. If you are in the audience and have not been scheduled to speak and wish to do so, you will be allowed to speak after those who have been scheduled. We will end the hearing after everyone scheduled to speak and others present in the audience who wish to speak, have been heard.

If there is limited interest in participation in a public hearing, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed under FOR FURTHER INFORMATION CONTACT . All such meetings will be open to the public and, if possible, we will post notices of meetings at the locations listed under ADDRESSES . We will make a written summary of each meeting a part of the Administrative Record.

Based on the above findings, we are approving on an interim basis, the specific revisions outlined above to the West Virginia program as provided to us on May 2, 2011. To implement this decision, we are amending the Federal regulations at 30 CFR Part 948, which codify decisions concerning the West Virginia program. We find that good cause exists under 5 U.S.C. 553(d)(3) to make this interim rule effective immediately. Section 503(a) of SMCRA requires that the State's program demonstrate that the State has the capability of carrying out the provisions of the Act and meeting its purposes. Making this rule effective immediately will expedite that process. In addition, SMCRA requires consistency of State and Federal mining and reclamation standards.

This rule does not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulation.

This rule is exempt from review by the Office of Management and Budget under Executive Order 12866.

The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR Parts 730, 731, and 732 have been met.

This rule does not have Federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary pursuant to SMCRA.

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally-recognized Indian tribes and have determined that the rule does not have substantial direct effects 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. The basis for this determination is that our decision is on a State regulatory program and does not involve a Federal regulation involving Indian lands.

On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq. ).

The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon the data and assumptions for the counterpart Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the analysis performed under various laws and executive orders for the counterpart Federal regulations.

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the analysis performed under various laws and executive orders for the counterpart Federal regulations.

For the reasons set out in the preamble, 30 CFR part 948 is amended as set forth below:

This document and additional information concerning OFAC are available from OFAC's Web site ( http://www.treasury.gov/ofac ). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on demand service, tel.: 202-622-0077.

On May 28, 2003, the President issued Executive Order 13304 (68 FR 32315, May 29, 2003), invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq. ) (“IEEPA”) and the National Emergencies Act (50 U.S.C. 1601 et seq. ) (the “NEA”). In this order, the President determined that the situations that gave rise to the national emergencies declared in Executive Order 12808 of May 30, 1992 (57 FR 23299, June 2, 1992), and Executive Order 13088 of June 9, 1998 (63 FR 32109, June 12, 1998), with respect to the former Socialist Federal Republic of Yugoslavia have been significantly altered by the peaceful transition to democracy and other positive developments in Serbia and Montenegro (formerly the Federal Republic of Yugoslavia (Serbia and Montenegro) (“FRY(S&M)”)). Executive Order 13304 terminated the national emergencies with respect to the former Socialist Federal Republic of Yugoslavia declared in those orders and revoked those and all related orders, including Executive Order 12810 of June 5, 1992 (57 FR 24347, June 9, 1992), Executive Order 12831 of January 15, 1993 (58 FR 5253, January 21, 1993), Executive Order 12846 of April 25, 1993 (58 FR 25771, April 27, 1993), Executive Order 12934 of October 25, 1994 (59 FR 54117, October 27, 1994), Executive Order 13121 of April 30, 1999 (64 FR 24021, May 5, 1999), and Executive Order 13192 of January 17, 2001 (66 FR 7379, January 23, 2001).

In Executive Order 12808 of May 30, 1992, the President, invoking the authority of, inter alia, IEEPA and the NEA, had declared a national emergency with respect to actions and policies of the Governments of Serbia and Montenegro, acting under the name of the Socialist Federal Republic of Yugoslavia or the Federal Republic of Yugoslavia, in their involvement in and support for groups attempting to seize territory in Croatia and Bosnia-Herzegovina by force and violence. In Executive Order 12934 of October 25, 1994, the President expanded the scope of this national emergency to address the policies and actions of the Bosnian Serb forces and the authorities in the territory they controlled. To implement Executive Order 12808, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Sanctions Regulations, 31 CFR part 585 (58 FR 13201, March 10, 1993). These regulations were later renamed the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled areas of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR part 585 (60 FR 34114, June 30, 1995) (the “Part 585 Regulations”), when they were amended to implement Executive Order 12934. The Part 585 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of the Governments of Serbia and Montenegro, in the name of the Governments of the Socialist Federal Republic of Yugoslavia or the Federal Republic of Yugoslavia, or of Bosnian Serb military and paramilitary forces, authorities, and entities.

In Executive Order 13088 of June 9, 1998, the President, invoking the authority of, inter alia, IEEPA and the NEA, had declared a national emergency with respect to the actions and policies of the Governments of the FRY(S&M) and the Republic of Serbia with respect to Kosovo, which, by promoting ethnic conflict and human suffering, threatened to destabilize the countries of the region and to disrupt progress in Bosnia and Herzegovina in implementing the Dayton peace agreement. To implement Executive Order 13088, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Kosovo Sanctions Regulations, 31 CFR part 586, (63 FR 54576, October 13, 1998) (the “Part 586 Regulations”). The Part 586 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of the Governments of the FRY(S&M), the Republic of Serbia, and the Republic of Montenegro.

On January 17, 2001, the President issued Executive Order 13192, invoking the authority of, inter alia, IEEPA, the NEA, and section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c) (the “UNPA”). In Executive Order 13192, the President amended Executive Order 13088 to lift the blocking of property of the Governments of the FRY(S&M), the Republic of Serbia, and the Republic of Montenegro, revoke the trade and investment sanctions against these governments and the FRY(S&M), and introduce new measures to support the work of the International Criminal Tribunal for the former Yugoslavia (“ICTY”), address the illegitimate control over FRY(S&M) political institutions and economic resources or enterprises exercised by former President Slobodan Milosevic and his associates, and counter continuing threats to regional stability and implementation of the Dayton peace agreement. The new measures targeted persons under open indictment by the ICTY and persons exercising illegitimate control over FRY(S&M) political processes or institutions or economic resources or enterprises. To implement the new measures imposed by Executive Order 13192, OFAC issued the Federal Republic of Yugoslavia (Serbia and Montenegro) Milosevic Sanctions Regulations, 31 CFR part 587 (66 FR 50511, October 3, 2001) (the “Part 587 Regulations”). The Part 587 Regulations required the blocking of all property and interests in property that were in the United States or within the possession or control of United States persons, including overseas branches, of (i) persons listed in the Annex to Executive Order 13192 and (ii) persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be under open indictment by the ICTY, subject to applicable laws and procedures, or to have sought, or to be seeking, to maintain or reestablish illegitimate control over the political processes or institutions or the economic resources or enterprises of the FRY(S&M), the Republic of Serbia, the Republic of Montenegro, or the territory of Kosovo.

In 2001-2002, before the date of Executive Order 13304, OFAC had issued a series of general licenses and regulatory amendments that had authorized, with certain exceptions, most transactions otherwise prohibited by the Part 585 Regulations and the Part 586 Regulations, and had unblocked most property previously blocked pursuant to those regulations, with the exception of property and interests in property of: (i) Diplomatic and/or consular missions of the former Socialist Federal Republic of Yugoslavia; (ii) persons subject to sanctions under the Western Balkans Stabilization Regulations, 31 CFR part 588, or otherwise subject to sanctions under other parts of 31 CFR chapter V; and (iii) the central bank of the former Socialist Federal Republic of Yugoslavia, i.e., the National Bank of Yugoslavia, blocked pursuant to the Part 585 Regulations.

Section 1 of Executive Order 13304 provides that, pursuant to section 202 of the NEA (50 U.S.C. 1622), termination of the national emergencies declared in Executive Orders 12808 and 13088 shall not affect any action taken or proceeding pending not finally concluded or determined as of the effective date of Executive Order 13304 (May 29, 2003), or any action or proceeding based on any act committed prior to such date or any rights or duties that matured or penalties that were incurred prior to such date.

In addition, section 1 of Executive Order 13304 invokes the authority of section 207 of IEEPA (50 U.S.C. 1706). Section 207(a) of IEEPA allows the President to continue to prohibit transactions involving property in which a foreign country or national thereof has an interest after a national emergency has been terminated if the President determines that the continuation of such a prohibition with respect to that property is necessary on account of claims involving such country or its nationals. Pursuant to section 207(a) of IEEPA, the President determined in section 1 of Executive Order 13304 that continuation of prohibitions with regard to transactions involving property blocked pursuant to Executive Orders 12808 or 13088 that continued to be blocked as of May 29, 2003 (the effective date of Executive Order 13304), was necessary on account of claims involving successor states to the former Socialist Federal Republic of Yugoslavia or other potential claimants.

Since the effective date of Executive Order 13304, the successor states to the former Socialist Federal Republic of Yugoslavia have reached an agreement concerning the division of assets of the former Socialist Federal Republic of Yugoslavia.

Accordingly, OFAC is removing the Federal Republic of Yugoslavia (Serbia & Montenegro) and Bosnian Serb-controlled Areas of the Republic of Bosnia and Herzegovina Sanctions Regulations, 31 CFR part 585, the Federal Republic of Yugoslavia (Serbia & Montenegro) Kosovo Sanctions Regulations, 31 CFR part 586, and the Federal Republic of Yugoslavia (Serbia & Montenegro) Milosevic Sanctions Regulations, 31 CFR part 587, from 31 CFR chapter V. The removal of these three parts from 31 CFR chapter V does not affect ongoing enforcement proceedings or prevent the initiation of enforcement proceedings where the relevant statute of limitations has not run.

Please note that certain transactions relating to the Western Balkans region remain subject to Executive Order 13219 of June 26, 2001, Executive Order 13304 of May 28, 2003, and the Western Balkans Stabilization Regulations, 31 CFR part 588 (the “WBSR”), and property and interests in property blocked pursuant to those Executive Orders and regulations remain blocked. In a separate final rule also published today, OFAC is amending the WBSR to implement Executive Order 13304 and to make other changes.

Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

This document and additional information concerning OFAC are available from OFAC's Web site ( http://www.treasury.gov/ofac ). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on-demand service, tel.: 202/622-0077.

On June 26, 2001, the President issued Executive Order 13219 (66 FR 34777, June 29, 2001) (“E.O. 13219”), invoking the authority of, inter alia , the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (“IEEPA”) and the National Emergencies Act (50 U.S.C. 1601 et seq. ) (the “NEA”). In E.O. 13219, the President determined that the actions of persons engaged in, or assisting, sponsoring, or supporting, (i) extremist violence in the former Yugoslav Republic of Macedonia, southern Serbia, the Federal Republic of Yugoslavia, and elsewhere in the Western Balkans region, or (ii) acts obstructing implementation of the Dayton Accords in Bosnia or United Nations Security Council Resolution (“UNSCR”) 1244 of June 10, 1999, in Kosovo, constitute an unusual and extraordinary threat to the national security and foreign policy of the United States and declared a national emergency to deal with that threat. E.O. 13219 blocked, with certain exceptions, all property and interests in property that were in the United States, that came within the United States, or that were or came within the possession or control of United States persons, of persons listed in the Annex to E.O. 13219 or designated by the Secretary of the Treasury, in consultation with the Secretary of State, pursuant to criteria set forth in E.O. 13219. E.O. 13219 also prohibited any transaction by a U.S. person that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in E.O. 13219, as well as any conspiracy formed to violate such prohibitions.

Acting under authority delegated by the Secretary of the Treasury, OFAC promulgated the Western Balkans Stabilization Regulations, 31 CFR part 588 (67 FR 37671, May 30, 2002) (the “WBSR”), to implement E.O. 13219.

On May 28, 2003, the President issued Executive Order 13304 (68 FR 32315, May 29, 2003) (“E.O. 13304”), invoking the authority of, inter alia, IEEPA, the NEA, and section 5 of the United Nations Participation Act (22 U.S.C. 287c) (the “UNPA”). In E.O. 13304, the President first determined that the situations that gave rise to the national emergencies declared in Executive Order 12808 of May 30, 1992 (57 FR 23299, June 2, 1992), and Executive Order 13088 of June 9, 1998 (63 FR 32109, June 12, 1998), with respect to the former Socialist Federal Republic of Yugoslavia had been significantly altered by the peaceful transition to democracy and other positive developments in Serbia and Montenegro, terminated the national emergencies declared in those orders, and revoked those and all related orders. Section 1 of E.O. 13304 invokes certain residual authorities of the NEA and IEEPA with respect to the terminated national emergencies. In a separate final rule also published today, OFAC is removing from the Code of Federal Regulations those regulations that implemented the orders revoked by E.O. 13304, parts 585 through 587 of 31 CFR chapter V.

In E.O. 13304, the President then took additional steps with respect to continuing, widespread, and illicit actions obstructing implementation of the Ohrid Framework Agreement of 2001 relating to Macedonia, UNSCR 1244 relating to Kosovo, or the Dayton Accords relating to Bosnia and Herzegovina, including the harboring of individuals indicted by the International Criminal Tribunal for the former Yugoslavia, and with respect to the national emergency described and declared in E.O. 13219. E.O. 13304 amended E.O. 13219 to expand and clarify the scope of persons targeted by the blocking sanctions.

Section 2 of E.O. 13304 provides that the Annex to E.O. 13219 is replaced and superseded in its entirety by the Annex to E.O. 13304. Section 3 of E.O. 13304 revises section 1(a) and 1(b) of E.O. 13219. As so amended, section 1(a) of E.O. 13219 now blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of United States persons, of: (i) Persons listed in the Annex to the order, as amended by E.O. 13304, and (ii) persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, because they are determined: (A) To be under open indictment by the International Criminal Tribunal for the former Yugoslavia (the “ICTY”), unless circumstances warrant otherwise; (B) to have committed, or to pose a significant risk of committing, acts of violence that have the purpose or effect of threatening the peace in or diminishing the stability or security of any area or state in the Western Balkans region, undermining the authority, efforts, or objectives of international organizations or entities present in the region, or endangering the safety of persons participating in or providing support to the activities of those international organizations or entities; (C) to have actively obstructed, or pose a significant risk of actively obstructing, the Ohrid Framework Agreement of 2001 relating to Macedonia, UNSCR 1244 relating to Kosovo, or the Dayton Accords or the Conclusions of the Peace Implementation Conference held in London on December 8-9, 1995, including the decisions or conclusions of the High Representative, the Peace Implementation Council or its Steering Board, relating to Bosnia and Herzegovina; (D) to have materially assisted in, sponsored, or provided financial, material, or technological support for, or goods or services in support of, such acts of violence or obstructionism or any person listed in or designated pursuant to E.O. 13219, as amended by E.O. 13304; or (E) to be owned or controlled by, or acting or purporting to act directly or indirectly for or on behalf of, any person listed in or designated pursuant to E.O. 13219, as amended by E.O. 13304.

Section 1(b) of E.O. 13219, as amended by section 3 of E.O. 13304, clarifies that the President's determination—that the making of donations of the type specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) ( i.e., donations of certain articles, such as food, clothing, and medicine, intended to be used to relieve human suffering) would seriously impair the ability to deal with the national emergency declared in E.O. 13219—applies to such donations by or to persons whose property and interests in property are blocked pursuant to E.O. 13219, as amended by E.O. 13304, and that such donations therefore are prohibited.

Section 5 of E.O. 13304 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the UNPA, as may be necessary to carry out the purposes of E.O. 13304. Section 5 of E.O. 13304 also provides that the Secretary of the Treasury may redelgate any of these functions to other officers and agencies of the U.S. Government.

Acting under authority delegated by the Secretary of the Treasury, OFAC today is amending the WBSR to implement E.O. 13304 and to make additional conforming and technical changes to the regulations. Due to the extensive nature of these amendments, OFAC is reissuing the WBSR in their entirety.

Section 588.201 of subpart B of the WBSR has been revised to make it consistent with section 1 of E.O. 13219, as amended by section 3 of E.O. 13304.

New section 588.312, has been added to subpart C of the WBSR, to define the term “financial, material, or technological support,” as used in revised section 588.201(a)(2)(iv) of the WBSR, to mean any property, tangible or intangible, and to include a list of specific examples. Please note that, in adding new section 588.312 to the WBSR, OFAC does not imply any limitation on the scope of paragraphs (a)(1), (a)(2)(i), (a)(2)(ii), (a)(2)(iii), or (a)(2)(v) of section 588.201. Furthermore, the designation criteria in these paragraphs, as well as in paragraph (a)(2)(iv) of section 588.201, will be applied in a manner consistent with pertinent federal law, including, where applicable, the First Amendment to the United States Constitution.

A new section 588.411 has been added to subpart D of the WBSR to incorporate guidance, issued by OFAC on February 14, 2008, titled “Entities Owned by Persons Whose Property and Interests in Property Are Blocked.” A note referencing this section has been added to section 588.301 of subpart C.

Section 588.507 of Subpart E of the WBSR has been revised to incorporate the provisions of General License No. 1, issued by OFAC on July 9, 2003, which authorized the provision of professional legal services relating to the representation of persons in matters pending before the International Criminal Tribunal for the former Yugoslavia.

This final rule also makes additional conforming and technical changes to the WBSR.

Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control revises part 588 of 31 CFR chapter V to read as follows:

On March 18, 2011, we published a notice of proposed rulemaking (NPRM) entitled Safety Zone; 2011 Hylebos Bridge Restoration, Hylebos Waterway, Tacoma, WA in the Federal Register (76 FR 14829). We received 0 comments on the proposed rule. No public meeting was requested, and none was held.

The Hylebos Bridge restoration involves removal of deteriorated concrete from the Hylebos Bridge and refinishing the bridge's surface. The project poses a safety risk to any vessel traffic in the vicinity below the bridge due to potential falling debris. The hydro demolition machine that will be used can remove up to 16 inches of concrete in a single pass presenting a major safety hazard to vessels, persons, or property below. This safety zone will be enforced daily from 6 a.m. until 6 p.m. from August 20, 2011 through August 22, 2011, unless canceled sooner by the Captain of the Port.

The notice of proposed rulemaking for this rule did not receive any comments.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard bases this finding on the fact that the safety zone is small in size, short in duration, and maritime traffic will be able to transit this area during times when the zone is not enforced. Maritime traffic may also request permission to transit through the zone from the Captain of the Port, Puget Sound or Designated Representative.

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 or anchor in a portion of the Hylebos Waterway from 6 a.m. until 6 p.m. from August 20, 2011 through August 22, 2011. This safety zone will not have a significant economic impact on a substantial number of small entities, because the safety zone is short in duration, is minimal in size, and maritime traffic will be allowed to transit through the safety zone with the permission of the Captain of the Port, Puget Sound or Designated Representative.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (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 effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

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

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that might 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 temporary safety zone. An environmental analysis checklist and a categorical exclusion determination are 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 it would be contrary to public interest to publish an NPRM as immediate action is necessary to protect the public and property from the dangers associated with flooding emergencies.

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 . Delaying its effective date would be contrary to public interest because immediate action is needed to protect vessels and mariners from the safety hazards associated with flooding emergencies.

On June 7, 2011, the Captain of the Port Upper Mississippi River deemed navigation on the Big Sioux River unsafe due to severe flooding and has restricted navigation on the Big Sioux River, from the Military Road Bridge in North Sioux City, SD at 42.52 degrees North, 096.48 West longitude to the confluence of the Missouri River at 42.49 degrees North, 096.45 degrees West longitude and extending the entire width of the river. Entry into this zone is prohibited during enforcement periods unless specifically authorized by the Captain of the Port Sector Upper Mississippi River or a designated representative. Emergency response boats or vessels may enter these waters when responding to emergent situations on or near the river.

The Coast Guard is establishing a temporary safety zone for the Big Sioux River from the Military Road Bridge in North Sioux City, SD at 42.52 degrees North, 096.48 West longitude to the confluence of the Missouri River at 42.49 degrees North, 096.45 degrees West longitude and extending the entire width of the river. During enforcement periods, vessels and tows may not enter this zone unless authorized by the Captain of the Port Sector Upper Mississippi River. Emergency response boats or vessels may enter these waters when responding to emergent situations on or near the river. This rule is effective from 12:01 am CDT June 7, 2011 until 11:59 pm CDT August 30, 2011, unless terminated earlier. This safety zone will be enforced when high water conditions pose a danger to navigation, the levee system, and the general public. The Captain of the Port Sector Upper Mississippi River will inform the public through broadcast notices to mariners and/or marine safety information bulletins when enforcement periods are in place and of all safety zone changes. When enforcement is implemented, vessels currently in the safety zone will be provided opportunity to safely exit the restricted area.

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. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).

Notifications to the marine community will be made through broadcast notices to mariners and/or marine safety information bulletins. Vessels requiring entry into or passage through the Safety Zone may request permission from the Captain of the Port Sector Upper Mississippi, or a designated representative and entry will be evaluated on a case-by-case basis to minimize impact and protect the general public, levee system, and vessels from destruction, loss or injury due to the hazards associated with rising flood water. 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 waters of the Big Sioux River from the Military Road Bridge in North Sioux City, SD at 42.52 degrees North, 096.48 West longitude to the confluence of the Missouri River at 42.49 degrees North, 096.45 degrees West longitude and extending the entire width of the river on and after 12:01 am CDT June 7, 2011. This Safety Zone is not expected to have a significant economic impact on a substantial number of small entities because vessels may request permission to transit the area from the Captain of the Port Sector Upper Mississippi, or a designated representative, for passage through the Safety Zone. Passage through the safety zone will be evaluated on a case-by-case basis to minimize impact and protect the general public, levee system, and vessels from destruction, loss or injury due to the hazards associated with rising flood water. If you are a small business entity and are significantly affected by this regulation, please contact LCDR Scott Stoermer, Sector Upper Mississippi River, Coast Guard at (314) 269-2540.

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 they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small businesses. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

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

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

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

This rule will not affect 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 Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation because this rule is not expected to result in any significant adverse environmental impact as described in the National Environmental Policy Act of 1969 (NEPA).

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:

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 the Coast Guard did not receive necessary information regarding the fireworks displays until April 27, 2011. As a result, the Coast Guard did not have sufficient time to publish an NPRM and to receive public comments prior to the fireworks display. Any delay in the effective date of this rule would be contrary to the public interest because immediate action is needed to minimize potential danger to the public during the fireworks displays.

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. Any delay in the effective date of this rule would expose the public to the dangers posed by the pyrotechnics used in the fireworks display.

The legal basis for the rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.

The purpose of the rule is to protect the public from the hazards associated with the launching of fireworks over navigable waters of the United States.

Multiple fireworks displays are planned for the Fourth of July weekend celebration throughout the Captain of the Port St. Petersburg Zone. The fireworks will be launched from land, piers, or barges. Whether launched from land, pier, or barge, such fireworks will explode over navigable waters of the United States.

The Coast Guard is establishing ten temporary safety zones for Fourth of July weekend fireworks displays within the navigable waters of the Captain of the Port St. Petersburg Zone. The safety zones are listed below.

1. Longboat Key, Florida. All waters within a 100 yard radius around the barge from which the fireworks will be launched, located just offshore of Mar Vista Restaurant in Longboat Key at position 27°26′13″ N, 82°40′45″ W. This safety zone will be enforced from 8:45 p.m. until 10 p.m. on July 2, 2011.

2. Anna Maria, Florida. All waters within a 120 yard radius around the area from which the fireworks will be launched, located on the Gulf of Mexico just offshore of Sand Bar Restaurant in Anna Maria at position 27°31′35″ N, 82°44′17″ W. This safety zone will be enforced from 8:30 p.m. until 10 p.m. on July 4, 2011.

3. Cape Coral, Florida. All waters within a 240 yard radius around the land based location from which the fireworks will be launched, located on the Caloosahatchee River to the east side of the Cape Coral Bridge at position 26°33′46″ N, 81°55′59″ W. This safety zone will be enforced from 8:30 p.m. until 9:50 p.m. on July 4, 2011.

4. Naples, Florida. All waters within a 200 yard radius around the pier from which the fireworks will be launched, located on the Gulf of Mexico from the Naples Pier at position 27°07′53″ N, 81°48′32″ W. This safety zone will be enforced from 8:30 p.m. until 10 p.m. on July 4, 2011.

5. Palmetto, Florida. All waters within a 150 yard radius around the area from which the fireworks will be launched, located on the Manatee River just off the Green Bridge from the Green Bridge Fishing Pier at position 27°30′15″ N, 82°34′19″ W. This safety zone will be enforced from 8:30 p.m. until 10:30 p.m. on July 4, 2011.

6. Sarasota, Florida. All waters within a 125 yard radius around the area from which the fireworks will be launched, from a land based location on Sarasota Bay at Marina Jacks at position 27°19′55″ N, 82°32′48″ W. This safety zone will be enforced from 8:30 p.m. until 10 p.m. on July 4, 2011.

7. St. Petersburg, Florida. All waters within a 200 yard radius around the area from which the fireworks will be launched, from a land based location on Tampa Bay at Spa Beach at position 27°46′31″ N, 82°37′38″ W. This safety zone will be enforced from 8:30 p.m. until 10 p.m. on July 4, 2011.

8. Fort Myers Beach, Florida. All waters within a 240 yard radius around the pier from which the fireworks will be launched, located on the Gulf of Mexico from the Fort Myers Beach Public Pier at position 26°27′6″ N, 81°57′26″ W. This safety zone will be enforced from 8:45 p.m. until 10:15 p.m. on July 4, 2011.

9. Madeira Beach, Florida. All waters within a 95 yard radius around the area from which the fireworks will be launched, from a land based location on Boca Ciega Bay in the vicinity of the Madeira Beach Recreation Center at position 27°48′25″ N, 82°47′58″ W. This safety zone will be enforced from 8:45 p.m. until 10 p.m. on July 4, 2011.

10. Palm Harbor, Florida. All waters within a 95 yard radius around the barge from which fireworks will be launched, located just offshore of the entrance to the Ozona Neighborhood entrance in Palm Harbor at approximate position 28°03′44″ N, 82°47′07″ W. This zone will be enforced from 8:45 p.m. until 11 p.m. on July 3, 2011.

Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within any of the safety zones unless authorized by the Captain of the Port St. Petersburg or a designated representative. Persons and vessels desiring to enter, transit through, anchor in, or remain within any of the safety zones may contact the Captain of the Port St. Petersburg via telephone at 727-824-7524, or a designated representative via VHF radio on channel 16, to seek authorization. The Coast Guard will provide notice of the safety zones by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

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, as supplemented by Executive Order 13563, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The economic impact of this rule is not significant for the following reasons: (1) Each safety zone will be enforced for a maximum of two hours and 15 minutes; (2) vessel traffic in the areas are expected to be minimal during the enforcement period; (3) although persons and vessels will not be able to enter, transit through, anchor in, or remain within any of the safety zones without authorization from the Captain of the Port St. Petersburg or a designated representative, they may operate in the surrounding area during the enforcement period; (4) persons and vessels may still enter, transit through, anchor in, or remain within the safety zones if authorized by the Captain of the Port St. Petersburg or a designated representative; and (5) the Coast Guard will provide advance notification of the safety zones to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

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 may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to enter, transit through, anchor in, or remain within any of the safety zones described in this regulation during the respective enforcement period. For the reasons discussed in the Executive Order 12866 and Executive Order 13563 section above, this rule will not have a significant economic impact on a substantial number of small entities.

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 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

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

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

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

On April 26, 2011, we published a notice of proposed rulemaking (NPRM) entitled Safety Zone, Newport River; Morehead City, North Carolina in the Federal Register (33 FR 165). We received no comments on the proposed rule. No public meeting was requested, and none was held.

The State of North Carolina Department of Transportation awarded a contract to Astron General Contracting Company of Jacksonville, NC to perform bridge maintenance on the US Highway 70 Fixed bridge crossing Newport River at Morehead City, North Carolina. The contract provides for cleaning, painting, and steel repair to begin on June 1, 2011 and will be completed by July 31, 2011. The contractor requires the main channel in the vicinity of the bridge to remain closed during demobilization on August 20, 2011 from 10 a.m. to 4 p.m. The Coast Guard will temporarily restrict access to this section of Newport River during the mobilization of the bridge maintenance equipment.

There were no comments; no changes were made.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

Although this regulation will restrict access to the area, the effect of this rule will not be significant because: (i) The safety zone will be in effect for a limited time, from 10 a.m. to 4 p.m., on August 20, 2011, (ii) the Coast Guard will give advance notification via maritime advisories so mariners can adjust their plans accordingly, and (iii) although the safety zone will apply to the section of the Newport River in the immediate vicinity of the US Highway 70 Fixed bridge, vessel traffic may use alternate waterways to transit safely around the safety zone. All Coast Guard vessels enforcing this regulated area can be contacted on marine band radio VHF-FM channel 16 (156.8 MHz).

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 recreational and fishing vessels intending to transit the specified portion of Newport River from 10 a.m. to 4 p.m. on August 20, 2011.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule will only be in effect for six hours from 10 a.m. to 4 p.m. Although the safety zone will apply to the section of the Newport River in the vicinity of the bridge, vessel traffic may use alternate waterways to transit safely around the safety zone. Before the effective period, the Coast Guard will issue maritime advisories widely available to the users of the waterway.

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

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

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (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 effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

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

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

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the establishment of a temporary safety zone to protect the public from bridge maintenance operations. An environmental analysis checklist and a categorical exclusion determination are 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 waiting for a comment period to run would be impracticable and contrary to the public interest because it would prevent the Captain of the Port Detroit from protecting the public from the hazards associated with maritime fireworks displays.

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 . For the same reasons discussed in the preceding paragraph, a 30-day notice period would be impracticable and contrary to the public interest.

The Bay Point fireworks displays will occur between 10 p.m. and 10:20 p.m. on July 2, 2011. In the case of inclement weather on July 2, 2011, the fireworks display will occur between 10 p.m. until 10:20 p.m. on July 3, 2011, weather permitting. The Captain of the Port Detroit has determined that the Bay Point fireworks display will present hazards to spectators within the vicinity of the launch site. Such hazards include obstructions to the waterway, the explosive danger of fireworks, and debris falling into the water.

Because of the aforesaid hazards, the Captain of the Port, Sector Detroit has determined that a temporary safety zone is necessary to ensure the safety of spectators and vessels during the setup, loading, and launching of the Bay Point Fireworks display. Accordingly, the safety zone will encompass all U.S. navigable waters of Lake Erie within a 140-yard radius of the fireworks launch site, located at position 41°30′29.23″ N, 082°43′8.45″ W. All geographic coordinates are North American Datum of 1983 (NAD 83).

All persons and vessels shall comply with the instructions of the Coast Guard Captain of the Port, Sector Detroit or the designated representative. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Sector Detroit or his designated representative. The Captain of the Port, Sector Detroit or his designated 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. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues.

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 the Lake Erie, Bay Point Marina; Marblehead, OH between 10 p.m. and 10:20 p.m. on July 2, 2011 or, in the case of inclement weather on July 2, 2011, from 10 p.m. until 10:20 p.m. on July 3, 2011.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This rule will only be in effect for twenty minutes total and commercial vessels can request permission to transit through the safety zone. The Coast Guard will give notice to the public via a Broadcast Notice to Mariners that the regulation is in effect.

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 expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not affect 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 Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 023-01, 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 because it involves the establishment of a temporary safety zone. This rule involves the establishment of a safety zone and is therefore categorically excluded under paragraph 34(g) of the Instruction. An environmental analysis checklist and a categorical exclusion determination are 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:

EPA is determining that the Birmingham Area (comprised of Jefferson and Shelby Counties in their entireties, and a portion of Walker County in Alabama) has attaining data for the 1997 annual PM 2.5 NAAQS. This determination is based upon quality assured, quality controlled and certified ambient air monitoring data that shows the Area has monitored attainment of the 1997 annual PM 2.5 NAAQS based on the 2008-2010 data.

Other specific requirements of the determination and the rationale for EPA's action are explained in the notice of proposed rulemaking (NPR) published on April 12, 2011 (76 FR 20291). For summary purposes, the Pelham High School monitor did not meet data completeness for the 3rd quarter of 2010. The 3-year 2008-2010 design value with data substitution is 11.8 μg/m 3 ; therefore, the monitor passes the data substitution test. The official design value for the monitor is 10.9 μg/m 3 . The Area's highest 3-year average annual concentration for 2008-2010 is 13.7 μg/m 3 at the North Birmingham monitor. The comment period closed on May 12, 2011. No comments were received in response to the NPR.

This final action, in accordance with 40 CFR 51.1004(c), suspends the requirements for this Area to submit attainment demonstrations, associated RACM, RFP plans, contingency measures, and other planning SIPs related to attainment of the 1997 annual PM 2.5 NAAQS as long as this Area continues to meet the 1997 annual PM 2.5 NAAQS. Finalizing this action does not constitute a redesignation of the Birmingham Area to attainment for the 1997 annual PM 2.5 NAAQS under section 107(d)(3) of the Clean Air Act (CAA). Further, finalizing this action does not involve approving maintenance plans for the Area as required under section 175A of the CAA, nor does it involve a determination that the Area has met all requirements for a redesignation.

EPA is determining that the Birmingham Area has attaining data for the 1997 annual PM 2.5 NAAQS. This determination is based upon quality assured, quality controlled, and certified ambient air monitoring data showing that this Area has monitored attainment of the 1997 annual PM 2.5 NAAQS during the period 2008-2010. This final action, in accordance with 40 CFR 51.1004(c), will suspend the requirements for this Area to submit attainment demonstrations, associated RACM, RFP plans, contingency measures, and other planning SIPs related to attainment of the 1997 annual PM 2.5 NAAQS as long as the Area continues to meet the 1997 annual PM 2.5 NAAQS. EPA is taking this final action because it is in accordance with the CAA and EPA policy and guidance.

This action makes a determination of attainment based on air quality, and will result in the suspension of certain federal requirements, and it will 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 1997 PM 2.5 clean NAAQS data determination for the Birmingham Area 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 August 29, 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. This action 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:

• 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 provides 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 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.gpoaccess.gov/ecfr. To access the harmonized test guidelines referenced in this document electronically, please go to http://www.epa.gov/ocspp and select “Test Methods and Guidelines.”

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-2008-0474 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 August 29, 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-2008-0474, 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 July 9, 2008 (73 FR 39291) (FRL-8371-2), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP 8E7355) by Huntsman, 10003 Woodloch Forest Drive, The Woodlands, TX 77380; Dow AgroSciences L.L.C., 9330 Zionsville Road, Indianapolis, Indiana 46268; Nufarm Americas Inc., 150 Harvester Drive Suite 220, Burr Ridge, Illinois 60527; BASF, 26 Davis Drive, Research Triangle Park, NC 27709; Stepan Company, 22 W. Frontage Road, Northfield, IL 60093; Loveland Products Inc., PO Box 1286, Greeley, CO 80632; and Rhodia Inc., CN 1500, Cranbury, New Jersey 08512. The petition requested that 40 CFR 180.920 be amended by establishing an exemption from the requirement of a tolerance for residues of diethylene glycol mono butyl ether (CAS Reg. No. 112-34-5) when used as an inert ingredient solvent, stabilizer and/or antifreeze without limitation in pesticide formulations applied to pre-harvest crops. That notice referenced a summary of the petition prepared by Huntsman, Dow AgroSciences L.L.C., Nufarm Americas Inc., BASF, Stepan Company, Loveland Products Inc., and Rhodia Inc., which is available in the docket, http://www.regulations.gov. The Agency received one comment in response to the notice of filing.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for 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 * * *.”

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with section 408(c)(2)(A) of FFDCA, and the factors specified in FFDCA section 408(c)(2)(B), 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 diethylene glycol mono butyl ether including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with diethylene glycol mono butyl ether follows.

EPA has evaluated the available toxicity data and considered their 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. Specific information on the studies received and the nature of the adverse effects caused by diethylene glycol mono butyl ether as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.

Diethylene glycol mono butyl ether (DEGBE) has low acute toxicity via the oral and dermal routes. It is a slightly irritating to the skin and moderately irritating to the eyes. It is a skin not a sensitizer.

Oral subchronic studies with DEGBE were available in the rat. In a study in F344 rats, toxicity was mainly manifested as an increase in creatinine levels at >51 mg/kg/day. Confidence in this study is low because of the high unexplained mortality. Also, in other studies in rats, toxicity was observed at doses >210 mg/kg/day. These effects included increased absolute relative liver weight; and hepatic cytochrome P450's and UGT levels; decreased total protein, cholesterol, and aspartate aminotransferase, very slight hepatocyte hypertrophy and increased individual hepatocyte degeneration in females only, decreased RBC count; hemoglobin (Hgb); and hematocrit (Hct) and increased absolute and relative kidney weights with an equivocal increase in minor histopathologic changes typical of early spontaneous nephropathy. In a well conducted 90-day toxicity study in rats via drinking water, rats were exposed to DEGBE at 0, 50, 250, or 1000 mg/kg/day. The NOAEL in this study was 250 mg/kg/day based on kidney, liver and blood effects seen at the LOAEL of 1000 mg/kg/day. In this study, no adverse treatment-related effects were observed on functional observational battery (FOB) parameters. Liver toxicity (including liver enzymes), kidney toxicity and blood parameters were affected at the limit dose of 1000 mg/kg/day.

There was one developmental toxicity study in Wistar rats conducted via the oral route of exposure. In this study, there were no maternal or developmental effects at doses up to 633 mg/kg/day. In a developmental toxicity study in mice via gavage, DEGBE did not produce any malformations at doses up to 2050 mg/kg/day. The maternal and developmental NOAEL in mice was 500 mg/kg/day. A developmental study in rabbits via the dermal route of exposure was available for review. In this study, maternal and developmental toxicity was not observed at doses up to 1000 mg/kg/day.

There were 2 oral reproduction toxicity studies in rats available for review. In both studies rats were exposed to DEGBE via gavage at doses of 0, 250, 500 or 1000 mg/kg/day. In one study fetal susceptibility was not observed. Maternal (mortality) and offspring (reduced mean pup weight) toxicity occurred at the same dose (1000 mg/kg/day). The maternal and developmental NOAELs in this study were 500 mg/kg/day. In a second study quantitative fetal susceptibility was observed. Parental toxicity was not observed at doses up to 1,000 mg/kg/day. Offspring toxicity (decreased bodyweight) was observed at 1000 mg/kg/day. The offspring NOAEL was 500 mg/kg/day. Reproductive toxicity was not observed in either study. A reproductive toxicity study in rats with exposure via the dermal route was also available for review. Parental, offspring and reproduction toxicity was not observed at doses up to 2000 mg/kg/day.

Dermal toxicity studies with DEGBE were available in the rat and rabbit. In a 13-week dermal toxicity study in the Sprague-Dawley (SD) rat, systemic toxicity was not observed at doses up to 2,000 mg/kg/day. In a separate 13-week dermal toxicity study in SD rats, the NOAEL was 580 mg/kg/day based on renal tubular epithelium degeneration seen at the LOAEL of 1900 mg/kg/day. In a neurotoxicity study via the dermal route of exposure, degeneration of the renal tubular epithelium was observed at 2000 mg/kg/day. The NOAEL was 600 mg/kg/day. No effects on FOB parameters, motor activity or neuropathology were observed at doses up to 2000 mg/kg/day following dermal treatment. No local or systemic effects were observed in the New Zealand white rabbit.

Several inhalation toxicity studies with DEGBE were available for review in rats. Perivascular and peribronchial infiltrate were observed in Wistar male and female rats and decreased spleen weights in males at doses > 100 mg/m3. In addition, liver toxicity, kidney toxicity and blood effects were identified as the target organs in inhalation studies.

Immunotoxicity studies for DEGBE were not available for review. However, DEGBE belongs to the glycol ethers class of chemicals. Immunotoxicity studies were available for ethylene glycol mono butyl ether, also a glycol ether differing in only one ethyl group from DEGBE. These data were used to assess the immunotoxic potential of DEGBE. Signs of potential immunotoxicity were not observed in any of the available studies with the surrogate chemical. Nor was there evidence of immunotoxicity potential in any of the studies submitted for DEGBE. Therefore, DEGBE is not expected to be immunotoxic.

Mutagenicity studies (Ames test, mammalian gene mutation, mouse lymphoma, chromosome aberration and unscheduled DNA synthesis) with DEGBE were available for review. All the tests were negative with the exception of the mouse lymphoma assay in which cells were weakly positive in the absence of S-9, while it was negative in the presence of S-9.

Chronic and carcinogenicity studies were not available on DEGBE. However, DEGBE belongs to the glycol ether class of chemicals which include structurally similar chemicals ethylene glycol and diethylene glycol. Therefore, carcinogenicity data available on these chemicals were used to assess DEGBE's potential to cause cancer. Based on the lack of evidence of carcinogenicity potential for ethylene glycol and diethylene glycol and the lack of mutagenic concerns for DEGBE, it is not expected to be carcinogenic to humans.

Metabolism studies demonstrated that DEGBE was absorbed rapidly, metabolized and primarily eliminated via the urine. The major metabolite was identified as 2-(2-butoxyethoxy) acetic acid.

Specific information on the studies received and the nature of the adverse effects caused by the diethylene glycol mono butyl ether, as well as, the no observed adverse effect level (NOAEL) and the lowest observed adverse effect level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document 042203, Diethylene glycol mono butyl ether; Human Health Risk Assessment and Ecological Effects Assessment to Support Proposed Exemption from the Requirement of a Tolerance When Used as Inert Ingredients in Pesticide Formulations at pp. 6-21 and pp. 19-22 in EPA-HQ-OPP-2008-0474.

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 diethylene glycol mono butyl ether used for human risk assessment is shown in Table 1 of this unit.

No acute endpoint of concern for general population was identified in the available data base.

The 90 day oral toxicity study in rats via drinking water was selected to establish the chronic reference dose (cRfD). The NOAEL in this study was 250 mg/kg/day and the LOAEL was 1000 mg/kg/day based on kidney, liver, and blood effects. Although 51 mg/kg/day was the lowest LOAEL in the database, confidence in this study was low due to the observed unexplained mortality. A lower NOAEL (94 mg/kg/day) was also observed in a 30 day oral toxicity study in the rat. The LOAEL (210 mg/kg/day) was based on decreased water consumption, growth retardation, and abnormalities in various organs. However, there is more confidence in the 90 day oral toxicity study in rats because it is a more recent study, was well conducted, tested more animals, provided more detailed information, provided data on all parameters measured in the 30-day study, has a well established NOAEL (250 mg/kg/day) and none of the aforementioned effects were observed. Therefore, the point of departure of 250 mg/kg/day was selected to establish the cRfD.

The point of departure selected for the dermal exposure scenario is from the 13 week neurotoxicity screening battery in rats. The NOAEL in this study was 600 mg/kg/day and the LOAEL was 2,000 mg/kg/day based on mild degeneration of renal tubular epithelium in males. This endpoint and dose for dermal exposure assessment was further supported by a 90-day dermal toxicity study in rats with a NOAEL of 580 mg/kg/day based renal tubular degeneration seen at the LOAEL of 1900 mg/kg/day. For the inhalation scenarios, 94 mg/m3 (~27 mg/kg/day) from an inhalation toxicity study in Wistar rats was selected for the point of departure. Although, 39 mg/m3 (~11 mg/kg/day) from an inhalation toxicity study in F344 rats represents the lowest NOAEL in the database for this scenario it was not selected because the observed liver changes were minor and occurred at the high dose (117 mg/m3). In addition, the selected study was more recent and one would expect changes to occur in the liver since animals in this study were treated for a longer duration. However, liver toxicity was not observed in the selected study. Therefore, 94 mg/m3 (~27 mg/kg/day) was selected for the point of departure for all inhalation scenarios.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to diethylene glycol mono butyl ether, EPA considered exposure under the proposed exemption from the requirement of a tolerance. EPA assessed dietary exposures from diethylene glycol mono butyl ether in food as follows:

No acute endpoint of concern was identified in the database. Therefore, acute dietary risk assessment was not conducted.

i. Chronic exposure. In conducting the chronic dietary exposure assessments, EPA used food consumption information from the United States Department of Agriculture (USDA) 1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII). As to residue levels in food, no residue data were submitted for the diethylene glycol mono butyl ether. In the absence of specific residue data, EPA has developed an approach which uses surrogate information to derive upper bound exposure estimates for the subject inert ingredient. Upper bound exposure estimates are based on the highest tolerance for a given commodity from a list of high-use insecticides, herbicides, and fungicides. A complete description of the general approach taken to assess inert ingredient risks in the absence of residue data is contained in the memorandum entitled “Alkyl Amines Polyalkoxylates (Cluster 4): Acute and Chronic Aggregate (Food and Drinking Water) Dietary Exposure and Risk Assessments for the Inerts.” (D361707, S. Piper, 2/25/09) and can be found at http://www.regulations.gov in docket ID number EPA-HQ-OPP-2008-0738.

In the dietary exposure assessment, the Agency assumed that the residue level of the inert ingredient would be no higher than the highest tolerance for a given commodity. Implicit in this assumption is that there would be similar rates of degradation (if any) between the active and inert ingredient and that the concentration of inert ingredient in the scenarios leading to these highest of tolerances would be no higher than the concentration of the active ingredient.

The Agency believes the assumptions used to estimate dietary exposures led to an extremely conservative assessment of dietary risk due to a series of compounded conservatisms. First, assuming that the level of residue for an inert ingredient is equal to the level of residue for the active ingredient will overstate exposure. The concentration of active ingredient in agricultural products is generally at least 50 percent of the product and often can be much higher. Further, pesticide products rarely have a single inert ingredient; rather there is generally a combination of different inert ingredients used which additionally reduces the concentration of any single inert ingredient in the pesticide product in relation to that of the active ingredient.

Second, the conservatism of this methodology is compounded by EPA's decision to assume that, for each commodity, the active ingredient which will serve as a guide to the potential level of inert ingredient residues is the active ingredient with the highest tolerance level. This assumption overstates residue values because it would be highly unlikely, given the high number of inert ingredients, that a single inert ingredient or class of ingredients would be present at the level of the active ingredient in the highest tolerance for every commodity. Finally, a third compounding conservatism is EPA's assumption that all foods contain the inert ingredient at the highest tolerance level. In other words, EPA assumed 100 percent of all foods are treated with the inert ingredient at the rate and manner necessary to produce the highest residue legally possible for an active ingredient. In summary, EPA chose a very conservative method for estimating what level of inert residue could be on food, then used this methodology to choose the highest possible residue that could be found on food and assumed that all food contained this residue. No consideration was given to potential degradation between harvest and consumption even though monitoring data shows that tolerance level residues are typically one to two orders of magnitude higher than actual residues in food when distributed in commerce.

Accordingly, although sufficient information to quantify actual residue levels in food is not available, the compounding of these conservative assumptions will lead to a significant exaggeration of actual exposures. EPA does not believe that this approach underestimates exposure in the absence of residue data.

ii. Cancer. For the reasons discussed above, the Agency has not identified any concerns for carcinogenicity relating to diethylene glycol mono butyl ether. Accordingly, a dietary exposure assessment to evaluate cancer risk was not performed.

2. Dietary exposure from drinking water. For the purpose of the screening level dietary risk assessment to support this request for an exemption from the requirement of a tolerance for diethylene glycol mono butyl ether, a conservative drinking water concentration value of 100 ppb based on screening level modeling was used to assess the contribution to drinking water for the chronic dietary risk assessments for parent compound. These values were directly entered into the dietary exposure model.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., textiles (clothing and diapers), carpets, swimming pools, and hard surface disinfection on walls, floors, tables).

DEGBE may be used in inert ingredients in products that are registered for specific uses that may result in residential exposure. A screening level residential exposure and risk assessment was completed for products containing DEGBE as inert ingredients. The DEGBE inerts may be present in consumer personal (care) products and cosmetics (at concentrations up to 30%) ( http://hpd.nlm.nih.gov/index.htm ). The Agency conducted exposure assessments based on end-use product application methods and labeled application rates. The Agency conducted an assessment to represent worst-case residential exposure by assessing DEGBE in pesticide formulations used in crack and crevice applications. The Agency conducted an assessment to represent worst-case residential exposure by assessing post application exposures and risks from DEGBE in pesticide formulations.

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 diethylene glycol mono butyl ether to share a common mechanism of toxicity with any other substances, and diethylene glycol mono butyl ether does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that diethylene glycol mono butyl ether 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. Fetal susceptibility was not observed in either of the developmental toxicity studies with rats or rabbits. There were no toxic effects observed in parents or offspring in either study at the highest doses tested, 633 and 1000 mg/kg/day, respectively. No developmental effects were observed in mice at doses up to 2050 mg/kg/day. In a reproduction toxicity study in the rat, quantitative fetal susceptibility was observed. Parental toxicity was not observed at doses up to 1,000 mg/kg/day. However, offspring toxicity (decreased bodyweight) occurred at 1000 mg/kg/day. There was a well established NOAEL in this study protecting fetuses. Therefore, the concern for increased fetal susceptibility is low and there are no residual concerns.

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 diethylene glycol mono butyl ether is adequate. The following acceptable studies are available:

ii. Signs of neurotoxicity were not observed in the neurotoxicity screening battery administered via the dermal route. Nor were signs of neurotoxicity observed in a 90 day oral toxicity (drinking water) in rats. In addition, signs of neurotoxicity were not observed in any of the other submitted studies. Therefore, EPA concluded that the developmental neurotoxicity study is not required.

iii. Immunotoxicity studies for DEGBE were not available for review. However, DEGBE belongs to the glycol ethers class of chemicals. Immunotoxicity studies were available for ethylene glycol monobutyl ether, also a glycol ether differing only in one ethyl group. This data was used to assess the immunotoxic potential of DEGBE. Signs of potential immunotoxicity were not observed in any of the available studies with DEGBE and the surrogate chemical. Therefore, DEGBE is not expected to be immunotoxic.

iv. Evidence of increased susceptibility was observed in a reproduction toxicity study in the rat. However, the concern for this increased susceptibility was low because there was a well established NOAEL of 500 mg/kg/d in this study. Also, the established cRfD (250 mg/kg/day) is protective of the fetal effects.

v. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed using very conservative assumptions. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to DEGBE in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by DEGBE.

Determination of safety section. 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. No adverse effects attributable to a single exposure of DEGBE were seen in the toxicity databases. Therefore, DEGBE 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 DEGBE from food and water will utilize 0.08% for the U.S. population and 0.25% of the cPAD for children 1-2 yrs old, the population group receiving the greatest exposure.

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).

DEGBE is currently used as an inert ingredient in pesticide products that are 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 DEGBE.

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 102 for both adult males and females respectively. Adult residential exposure combines high end dermal and inhalation handler exposure from liquids/trigger sprayer/home garden use with a high end post application dermal exposure from contact with treated lawns. As the level of concern is for MOEs that are lower than 100, this MOE is not of concern. EPA has concluded that the combined short-term aggregated food, water, and residential exposures result in an aggregate MOE of 163 for children. Children's residential exposure includes total exposures associated with contact with treated lawns (dermal and hand-to-mouth exposures). Because EPA's level of concern for DEGBE 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).

DEGBE is currently used as an inert ingredient in pesticide products that are 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 DEGBE.

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 550 for adult males and females. Adult residential exposure combines high end dermal and inhalation handler exposure from liquids/trigger sprayer/home garden use with a high end post application dermal exposure from contact with treated lawns. EPA has concluded the combined intermediate-term aggregated food, water, and residential exposures result in an aggregate MOE of 230 for children. Children's residential exposure includes total exposures associated with contact with treated lawns (dermal and hand-to-mouth exposures). Because EPA's level of concern for DEGBE is a MOE of 100 or below, these MOEs are not of concern.

5. Aggregate cancer risk for U.S. population. The Agency has not identified any concerns for carcinogenicity relating to DEGBE.

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 DEGBE residues.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

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.

The Codex has not established an MRL for diethylene glycol mono butyl ether.

The comment was received from a private citizen who opposed the authorization to sell any pesticide that leaves a residue on food. The Agency understands the commenter's concerns and recognizes that some individuals believe that no residue of pesticides should be allowed. However, under the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) EPA is authorized to establish pesticide tolerances or exemptions where persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by the statute.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180. 920 for diethylene glycol mono butyl ether when used as an inert ingredient (pesticide inert ingredient as a solvent, stabilizer and/or antifreeze within pesticide formulations/products without limitation) in pesticide formulations applied to pre-harvest crops.

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

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

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

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://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

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-2010-0980 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 August 29, 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-2010-0980, by one of the following methods:

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

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

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

In the Federal Register of March 29, 2011 (76 FR 17374) (FRL-8867-4), 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 0E7781) by BASF Corporation, P.O. Box 13528, Research Triangle Park, NC 27709. The petition requested that 40 CFR 180.560 be amended by expanding the tolerances therein to cover residues of the inert ingredient (herbicide safener), cloquintocet-mexyl (acetic acid [(5-chloro-8-quinolinyl) oxy]-, 1-methylhexyl ester; CAS Reg. No. 99607-70-2), and its acid metabolite (5-chloro-8-quinolinoxyacetic acid) on wheat forage, wheat grain, wheat hay, and wheat straw when used in formulation with the active ingredient, dicamba. No numerical change to the tolerances for the specific wheat commodities was sought. That notice referenced a summary of the petition prepared by BASF Corporation, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

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 cloquintocet-mexyl including exposure resulting from the amended tolerances established by this action. EPA's assessment of exposures and risks associated with cloquintocet-mexyl follows.

In the Federal Register of March 31, 2010 (75 FR 16017) (FRL-8816-3), EPA issued a final rule that amended 40 CFR 180.560 by adding a reference to the active ingredient, flucarbazone-sodium (wheat only). When the Agency conducted the risk assessments supporting this tolerance action, it assumed that 100% of wheat crops were treated with cloquintocet-mexyl and that residues were present on all wheat commodities at the tolerance levels. With these assumptions, exposure to cloquintocet-mexyl did not exceed 1% of the acute Population adjusted dose or chronic Population adjusted dose for the most exposed population groups. Since this current action to amend the tolerance expression of cloquintocet-mexyl does not involve a change in the tolerance levels for wheat commodities, the toxicity database has not changed, and exposure has already been assessed based on the conservative assumption that all wheat is treated with cloquintocet-mexyl and contains tolerance-level residues, EPA concludes that the last risk assessment, described in its entirety in the March 31, 2010 final rule, is still applicable.

Therefore, based on the risk assessment discussed in the final rule published in the Federal Register of March 31, 2010, 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 cloquintocet-mexyl and its acid metabolite (5-chloro-8-quinolinoxyacetic acid).

Adequate enforcement methodology is available to enforce the tolerance expression. The two enforcement methods are the High Performance Liquid Chromatography with Ultraviolet Detection (HPLC/UV) method REM 138.01 for determination of cloquintocet-mexyl (parent) and the HPLC/UV Method REM 138.10 for determination of its acid metabolite. These methods 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. The Codex has not established a MRL for cloquintocet-mexyl.

Therefore, the previously established tolerance expression for residues of cloquintocet-mexyl and its acid metabolite on wheat forage, wheat grain, wheat hay, and wheat straw is amended as set forth in the regulatory text.

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:

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).

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://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

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-2005-0253 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 August 29, 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-2005-0253, by one of the following methods:

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

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

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

In the Federal Register of March 30, 2011 (76 FR 17611) (FRL-8866-6), EPA issued a proposed rule pursuant to section 408(e) of FFDCA, 21 U.S.C. 346a(e), announcing the Agency's proposal to amend the propylene oxide tolerance (40 CFR 180.491) on “nut, tree, group 14” to read “nutmeat, processed, except peanuts.” One comment was received on the proposal. The commenter supported EPA's proposed tolerance amendment and EPA's explanation as to why the tolerance should be amended.

Therefore, for the reasons stated in the proposed rule, EPA is amending the propylene oxide tolerance (40 CFR 180.491) on “nut, tree, group 14” to read “nutmeat, processed, except peanuts.”

This final rule amends a tolerance pursuant to section 408(e) of FFDCA. 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).

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).

Pursuant to the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), the Agency hereby certifies that this final rule will not have significant negative economic impact on a substantial number of small entities. In fact, this rule will have no impact because it merely corrects an error in the propylene oxide tolerance regulation that was inserted in the regulation without proper authority and thus was without legal effect.

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:

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:

• 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 provides 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 40 CFR part 180 through the Government Printing Office's e-CFR cite at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl http://www.gpoaccess.gov/ecfr. To access the harmonized test guidelines referenced in this document electronically, please go to http://www.epa.gov/ocspp and select “Test Methods and Guidelines.”

In this document EPA issues an order requiring the submission of various data to support the continuation of the mevinphos tolerances at 40 CFR 180.157 under section 408 of the Federal Food, Drug, and Cosmetic Act (“FFDCA”), 21 U.S.C. 346a.

Mevinphos is not currently registered under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. 136 et seq., and may not be sold, distributed, or used in the United States. Mevinphos' FIFRA registration was canceled in 1994. However, 15 FFDCA tolerances remain for residues of mevinphos on the following commodities: Broccoli, cabbage, cauliflower, celery, spinach, strawberries, grapes, lettuce, melons, watermelon, peas, peppers, summer squash, cucumbers, and tomatoes (40 CFR 180.157). Since there are currently no domestic registrations for mevinphos, these tolerances are referred to as “import tolerances.” It is these tolerances that are addressed by the data call-in order.

Under section 408(f) of the FFDCA, EPA is authorized to require, by order, submission of data “reasonably required to support the continuation of a tolerance” when such data cannot be obtained under the Data Call-In authority of FIFRA section 3(c)(2)(B), or section 4 of the Toxic Substances Control Act (“TSCA”), 15 U.S.C. 2603. A FFDCA section 408 data call-in order may only be issued following publication of notice of the order and a 60-day public comment provision.

A section 408(f) Data Call-In order must contain the following elements:

1. A requirement that one or more persons submit to EPA a notice identifying the person(s) who commit to submit the data required in the order;

2. A description of the required data and the required reports connected to such data;

3. An explanation of why the required data could not be obtained under section 3(c)(2)(B) of FIFRA or section 4 of TSCA; and

4. The required submission date for the notice identifying one or more interested persons who commit to submit the required data and the required submission dates for all the data and reports required in the order. (21 U.S.C. 346a(f)(1)(C)).

EPA may by order modify or revoke the affected tolerances if any one of the following submissions are not made in a timely manner:

1. A notice identifying the one or more interested persons who commit to submit the data;

2. The data itself; or

3. The reports required under a section 408(f) order are not submitted by the date specified in the order. (21 U.S.C. 346a(f)(2)).

On July 28, 2010, EPA issued a proposed data call-in order for the pesticide mevinphos in connection with tolerances for that pesticide under section 408 of the FFDCA, 21 U.S.C. 346a. (75 FR 44181). The proposed data call-in order included the following studies:

1. Comparative Cholinesterase Assay (870.6300);

2. Immunotoxicity Study (870.7800);

3. Directions for Use (860.1200);

4. Crop Field Trials (860.1500)—(broccoli, cabbage, cauliflower, celery, grapes, lettuce, peas, peppers, spinach, summer squash, strawberries, and tomatoes); and

5. Processing Study (tomatoes) (860.1520).

EPA received no comments in response to the July 28, 2010 Federal Register notice announcing the Agency's proposed data call-in order for mevinphos. In addition, the Agency has not received any of the data identified in the proposed order as needed to support the mevinphos tolerances.

Because no comments were submitted on the proposed order and the data deficiencies identified in the proposed order remain, EPA is today issuing the final data call-in order under FFDCA section 408(f)(1)(C) for mevinphos in the same form as the proposed order and for the reasons set forth in that proposed order. Specifically, EPA is requiring:

1. Notice of intent to submit data. A notice identifying the person or persons who commit to submit the data and reports in accordance with Unit V.2. must be submitted to EPA if any person wishes to support the mevinphos tolerances. The notice must be submitted on a section 408(f) Order Response form which is available on the Federal Government's electronic docket, http:/www.regulations.gov, under docket ID number EPA-HQ-OPP-2010-0423.

2. Deadline for submission of notice identifying data submitters. The notice described in Unit V.1. identifying data submitters must be submitted to and received by EPA on or before June 29, 2011. Instructions on methods for submitting this notice (referred to in this order as a “section 408(f) Order Response form”) are set out under the ADDRESSES heading above.

3. Required data and reports and readlines for submission. The table below lists the data and reports required to be submitted on mevinphos under this order and the deadlines for the submission of each study and report. The required submission date is calculated from the close of the 90-day period following Federal Register publication of the order for providing notice of intent to submit the data. Thus, for example, if EPA generally allows 12 months to complete a study, the required submission date for such a study under this order would be 15 months from the date of publication of the order in the Federal Register.

EPA provided a description of why the required data could not be obtained under section 3(c)(2)(B) of FIFRA or section 4 of TSCA in the proposed order and relies on that description in this final order.

If, within 90 days after publication of this final order, the Agency does not receive a section 408(f) Order Response Form identifying a person who agrees to submit the required data, EPA will revoke the mevinphos tolerances at 40 CFR 180.157. Such revocation is subject to the objection and hearing procedure in FFDCA section 408(g)(2) but the only material issue in such a procedure is whether a submission required by the order was made in a timely fashion.

Additional events that may be the basis for modification or revocation of mevinphos tolerances include, but are not limited to the following:

1. No person submits on the required schedule an acceptable protocol report when such report is required to be submitted to the Agency for review.

2. No person submits on the required schedule acceptable data as required by the final order.

As required by statute, this action requiring submission of data in support of tolerances is in the form of an order and not a rule. (21 U.S.C. 346a(f)(1)(C)). Under the Administrative Procedures Act, orders are expressly excluded from the definition of a rule. (5 U.S.C. 551(4)). Accordingly, the regulatory assessment requirements imposed on rulemaking do not, therefore, apply to this action.

This is a summary of the Commission's Report and Order (Order) in WC Docket No. 11-42, CC Docket No. 96-45, WC Docket No. 03-109, FCC 11-97, released on June 21, 2011. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554.

1. In this order we take immediate action to address potential waste in the universal service Lifeline and Link Up program (Lifeline/Link Up or the program) by preventing duplicative program payments for multiple Lifeline-supported services to the same individual. On March 4, 2011, the Commission released a Notice of Proposed Rulemaking to reform and modernize Lifeline/Link Up. In the 2011 Lifeline and Link Up NPRM, 76 FR 16482, March 23, 2011, the Commission underscored its commitment to eliminating waste, fraud, and abuse in Lifeline/Link Up and presented a comprehensive set of proposals to better target support to needy consumers and maximize the number of Americans with access to modern communications services. We explained that, while we are considering broader reforms to the program, which we remain committed to complete as soon as possible, it may be necessary for the Commission to take action to address immediately the harm done to the Universal Service Fund (Fund) by duplicative claims for Lifeline support. To ensure that Lifeline support is limited to the amount necessary to provide access to telecommunications service to qualifying low-income consumers, we adopt measures to prevent, detect and resolve duplicative Lifeline claims for the same consumer. The near-term reforms we adopt here will reduce waste in the Fund and give the Commission flexibility to modernize the Low-Income Program in order to align it with changes in technology and market dynamics, such as the proposal we currently are reviewing to support broadband pilot projects for low-income consumers.

2. In May 2010, the Commission asked the Federal-State Joint Board on Universal Service to review the low income program to ensure that it is effectively reaching eligible consumers and that oversight continues to be appropriately structured to minimize waste, fraud, and abuse. Meanwhile, under the Commission's oversight and pursuant to the Commission's rules, the Universal Service Administrative Company (USAC) has conducted a series of audits to test compliance with our low income program rules, including audits to determine if there was a problem with duplicative claims for Lifeline. The audits revealed that some low-income subscribers are receiving multiple Lifeline benefits contrary to our program restrictions. The agency already has taken steps to address the situation; in particular, the Office of the Managing Director (OMD) directed USAC to perform a significant number of in-depth data validations (IDVs), which are streamlined inquiries of Lifeline recipients targeted at uncovering duplicative claims for Lifeline support in select states. To ensure prompt action to eliminate duplicative Lifeline support, we not only make clear that qualifying low-income consumers may receive no more than a single Lifeline benefit; we also require an ETC, upon notification from USAC, to de-enroll any subscriber that is receiving multiple benefits in violation of that rule. Further, we direct the Wireline Competition Bureau (Bureau) to send a letter to USAC to implement an administrative process to detect and resolve duplicative claims.

3. In this order, we amend §§ 54.401 and 54.405 of the Commission's rules to codify the restriction that an eligible low-income consumer cannot receive more than one Lifeline-supported service at a time. We also amend § 54.405 of the Commission's rules to provide that, upon a finding by USAC that a low-income consumer is the recipient of multiple Lifeline subsidies, any ETC notified that it has not been selected to continue providing Lifeline-discounted service to the consumer shall de-enroll that subscriber from participation in that ETC's Lifeline program pursuant to the procedures described below. As noted below, we do not require a total termination of Lifeline discounts to the consumer in this situation, as the consumer will be permitted to maintain a single Lifeline service with one of the ETCs. We expect USAC to continue to perform in-depth data validations targeted at uncovering duplicative claims for Lifeline support, and we direct the Bureau to send a letter to USAC to implement a process to detect and resolve duplicative claims that is consistent with the ETCs' proposed Industry Duplicate Resolution Process, as described below. The process we direct USAC to implement is an interim measure that is aimed at resolving duplicative claims in the near term while the Commission considers more comprehensive resolution of this and other issues raised in the 2011 Lifeline and Link Up NPRM.

4. With limited exceptions, the Commission has not previously explicitly required ETCs to inquire whether a subscriber is receiving a Lifeline discount from another carrier. In light of the importance of ensuring that eligible low-income consumers continue to receive sufficient but not excessive Lifeline support, we now codify the limitation that an eligible consumer may receive only one Lifeline-supported service. As noted above, recent audit results indicate that some consumers may be receiving Lifeline discounts for more than one service, resulting in potentially millions of dollars in wasteful, excessive support from the Fund. We therefore amend § 54.401(a)(1) of the Commission's rules to adopt a definition of “Lifeline” that will ensure that consumers do not, whether inadvertently or knowingly, subscribe to multiple Lifeline-supported services:

5. When the program rules were initially adopted, most consumers had only one option for telephone service: Their incumbent telephone company's wireline service. In light of the advent of multiple Lifeline options for consumers, we now find it necessary to establish this restriction in our rules to ensure that low-income support is being used for its intended purposes—to provide basic telephone service to low-income consumers, rather than to provide multiple supported services to such consumers. We emphasize the importance of ETCs communicating program rules with their subscribers pursuant to 47 CFR 54.405(b). In particular, when enrolling new eligible low income consumers in Lifeline, we expect ETCs will explain in plain, easily comprehensible language that no consumer is permitted to receive more than one Lifeline subsidy. Some consumers may not adequately understand eligibility qualifications for Lifeline services, and may not understand that if they already subscribe to a Lifeline-supported offering they may not subscribe to another such service. It may be important that potential subscribers be made aware of the fact that not all Lifeline services are currently marketed under the name “Lifeline.”

6. Further, Commission rules and orders specifically limit the amount of support available to qualifying subscribers. Section 54.403(a) of the Commission's rules, for example, establishes the discount amount that ETCs receive for providing Lifeline service to an eligible low-income consumer. When the Commission adopted the first three tiers of Lifeline support in the Universal Service First Report and Order, 62 FR 32862, June 17, 1997, it noted that the selected discount amount would serve as a cap on the amount of support available to qualifying low-income consumers. To the extent that a low-income consumer receives discounts for multiple Lifeline-supported services, this would be inconsistent with the per-consumer support amount that ETCs are authorized to receive pursuant to § 54.403(a).

7. While some argue that the FCC should allow for multiple subsidies per residence, that particular issue is not addressed in this Order. This order instead focuses on a narrower problem—reducing duplicative Lifeline subsidies received by the same individual —and codifies that restriction in FCC rules. Therefore, this order should not be construed to address the one-per-residential address proposal in the NPRM.

8. Most commenters responding to the 2011 Lifeline and Link Up NPRM stress the importance of resolving duplicative claims for Lifeline service. Several commenters note that a process to detect and resolve duplicative claims will provide an appropriate balance between providing services to eligible participants while guarding against waste, fraud, and abuse. Commenters are split, however, on the methods that should be implemented to detect and address duplicative claims. Many commenters, for example, recommend a national database as the best tool to detect duplicative claims for Lifeline support, while others support requiring ETCs to collect unique household-identifying or personal-identifying information from consumers. At the same time, many ETCs recognize the value in adopting a rule to immediately address potential duplicative claims, while we consider broader reforms.

9. Commenters also have differing opinions on the appropriate remedy for resolving a duplicative claim that has been discovered. A number of commenters support the procedures for remedying duplicative claims set forth in the Bureau's January 21st guidance letter or the alternative procedures proposed in the 2011 Lifeline and Link Up NPRM. Other commenters urge the Commission to adopt the Industry Duplicate Resolution Process submitted by a group of ETCs subsequent to release of the 2011 Lifeline and Link Up NPRM. For example, the U.S. Telecom Association recommends that the Commission adopt the Industry Duplicate Resolution Process proposal, noting that the proposal would “provide a mechanism for starting to address duplicate Lifeline accounts prior to the Commission adopting final rules pursuant to the Low-Income NPRM.” Other commenters concur. We agree that it is important for the Commission to take immediate action to adopt a process for resolving duplicative claims identified by USAC. We, therefore, direct the Bureau to work with USAC to implement a process to resolve duplicative claims that is consistent with the ETCs' Industry Duplicate Resolution Process and also includes effective outreach to the subscribers identified by USAC as receiving duplicative support. As discussed further below, we require that consumers found to be receiving Lifeline supported services from two or more ETCs receive written notification of this fact and be given 3535 days from the date listed on the written notification to select one Lifeline service provider. In that notice, consumers also must be given information on how they can continue receiving service under the Lifeline program from the ETC of their choosing. Finally, the ETC(s) not chosen by the consumer or otherwise not chosen through the resolution process, should the consumer not make a choice within the minimum 30-day timeframe, will have five business days to de-enroll the consumer upon receiving notification to do so from USAC.

10. At this time, we decline to adopt certification requirements akin to those contained in certain ETC designation orders. We will continue to evaluate certification options in the context of broader reform contemplated in the 2011 Lifeline and Link Up NPRM.

11. We also amend § 54.405 of our rules and adopt a process for de-enrollment of a Lifeline subscriber for the limited near-term purpose of resolving currently known duplicative claims. The de-enrollment process we adopt requires an ETC to de-enroll a subscriber from its Lifeline program within five business days of receiving de-enrollment notification from USAC. An ETC may continue to serve the subscriber as a non-Lifeline subscriber. We note the importance of ETCs communicating clearly with the consumer that he or she will no longer receive a discounted service, but instead must pay the full price for the service and when such payments will be required. The ETC that de-enrolls a subscriber shall not be entitled to receive federal or state Lifeline reimbursement pursuant to our rules following the date of de-enrollment. We find that the adoption of an immediate de-enrollment rule is necessary to reduce the number of individual subscribers who are receiving Lifeline benefits from more than one service provider at the same time, pending fuller consideration of the issues raised in the 2011 Lifeline and Link Up NPRM.

12. Commenters expressing support for the Industry Duplicate Resolution Process proposal also support the de-enrollment procedure recommended therein. Other commenters recommend that we adopt a notice period—such as the 60 days provided for de-enrollment based on consumer ineligibility—during which consumers may be notified of their impending de-enrollment and, potentially, given an opportunity to cure the problem. In this instance, however, the Administrator (USAC) will send a letter to each subscriber found to be receiving duplicative service, giving them 355 days from the date listed on the letter, which should result in at least 30-days notice after mail-processing time, to choose between their current Lifeline providers or continue receiving service only from the ETC identified by USAC as the default ETC. Under the de-enrollment rule we adopt in this order, a subscriber will maintain a single Lifeline service because, following the minimum 30-day notification period, he or she will only be de-enrolled from the Lifeline program by one of the ETCs from which the subscriber was receiving duplicative Lifeline service. Therefore, unlike the process of de-enrollment for reasons of ineligibility that is currently in place under § 54.405(c), the rule we adopt today is not an ultimate termination of all Lifeline support. As such, we conclude that a notice period of at least 30 days is sufficient and will relieve the unnecessary burden on the Fund of providing duplicative support for individual Lifeline consumers.

13. A few commenters note that states may have their own procedures governing de-enrollment of Lifeline consumers, and recommend that the Commission take these state laws into account. The record is unclear, however, on the scope of any potential conflict between the de-enrollment procedures we adopt herein and state de-enrollment procedures. In situations where a consumer is found to be in receipt of two or more federal subsidies, we believe that a uniform rule applicable to federal Lifeline support will better provide clarity to both ETCs and consumers and will be consistent with our prior rules and orders. Accordingly, we adopt this de-enrollment process as an appropriate and necessary to step towards reducing waste, fraud, and abuse of the federal Lifeline program. Further, because duplicative claims are wasteful and burden the fund, we find that it is in the public interest to swiftly de-enroll consumers who are found to be receiving duplicative federal Lifeline discounts. To the extent that existing state de-enrollment procedures applicable to the federal Lifeline program are in conflict with or serve as an obstacle to implementation of the de-enrollment procedures we adopt herein, they would be preempted.

14. Finally, we note that in the 2011 Lifeline and Link Up NPRM we asked for input regarding the de-enrollment process for several issues, including other administrative reasons. Specifically, we proposed that ETCs be required to de-enroll their Lifeline subscribers when the subscriber does not use his or her Lifeline-supported service for 60 days and fails to confirm continued desire to maintain the service or the subscriber does not respond to the eligibility verification survey. The rule adopted today is not intended to address the issues of administrative disqualification based on non-usage or failure to respond during the verification process. We take this action today to protect the Fund while we continue to evaluate other appropriate proposals and until we adopt a more comprehensive package of reforms in response to the 2011 Lifeline and Link Up NPRM.

15. This report and order adopts new or revised information collection requirements, subject to the Paperwork Reduction Act of 1995 (“PRA”). These information collection requirements will be submitted to the Office of Management and Budget (“OMB”) for review under Section 3507(d) of the PRA. The Commission published a separate notice document elsewhere in this issue of the Federal Register inviting comment on the new or revised information collection requirement(s) adopted in this document. The requirement(s) will not go into effect until OMB has approved it, and the Commission has published a notice announcing the effective date of the information collection requirement(s). In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” In this present document, we have reviewed the comments and assessed the effects of these information requirements, and find that the collection of information requirements will not have a significant impact on small business concerns with fewer than 25 employees.

16. The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

17. As required by the Regulatory Flexibility Act of 1980 (RFA), as amended, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rule Making (NPRM) to this proceeding. The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. The Commission received comments on the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

18. The Commission is required by section 254 of the Telecommunications Act of 1996, as amended, to promulgate rules to implement the universal service provisions of the Act. Consistent with the requirements of the Act, the Commission adopted rules that reformed the universal service support mechanisms so that universal service is preserved and advanced as markets move toward competition. Among other programs, the Commission adopted a program to provide discounts that make basic, local telephone service affordable for low-income consumers. The Commission has not systematically re-examined the universal service Lifeline and Link Up program (Lifeline/Link Up or the program) since the passage of the 1996 Act. During this period, consumers have increasingly turned to wireless service, and Lifeline/Link Up now provides many participants discounts on wireless phone service.

19. In this order we take immediate action to address potential waste in the program by preventing low-income consumers from receiving duplicative Lifeline-supported services. Specifically, we amend §§ 54.401 and 54.405 of the Commission's rules to codify the restriction that an eligible low-income consumer cannot receive more than one Lifeline-supported service at a time. We also amend section 54.405 of the Commission's rules to provide that, upon a finding by USAC that a low-income consumer is the recipient of multiple Lifeline subsidies, any eligible telecommunications carrier (“ETC”) that is not selected to continue providing Lifeline-discounted service to the consumer shall de-enroll that subscriber from participation in that ETC's Lifeline program.

20. In public comments filed in response to the IRFA, issues were raised regarding the Commission's proposal to remedy duplicative claims for Lifeline support and the proposal's effects on small businesses. The National Telecommunications Cooperative Association (NTCA) stated that the Commission's initial proposal to detect and remedy duplicative claims, as set forth in a January 21 guidance letter, would put the burden of eliminating duplicative claims primarily upon ETCs and would constitute an untenable position for small businesses. Specifically, NTCA stated that “the ETCs must chase down the consumer and the consumer will receive at least two confusing notifications. Once the subscriber chooses a provider, that provider must notify USAC and the other ETC that it is the chosen one.” In its Reply Comments, Montana Independent Telecommunications Systems (MITS), an association of rural telecommunications providers, asserted that the proposed rules would require small carriers to assume multiple roles as “fact finders, decision makers, and enforcers,” which would be “costly and unduly burdensome to small telecommunications carriers.” We have taken measures to address these concerns expressed by commenters.

21. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). Nationwide, there are a total of approximately 29.6 million small businesses, according to the SBA. A “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 2002, there were approximately 1.6 million small organizations. The term “small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” Census Bureau data for 2002 indicate that there were 87,525 local governmental jurisdictions in the United States. We estimate that, of this total, 84,377 entities were “small governmental jurisdictions.” Thus, we estimate that most governmental jurisdictions are small.

22. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer and 44 firms had had employment of 1,000 or more. According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most providers of local exchange service are small entities that may be affected by the rules and policies proposed in the Notice. Thus under this category and the associated small business size standard, the majority of these incumbent local exchange service providers can be considered small providers.

23. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers . Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these Competitive LECs, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers can be considered small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 186 have more than 1,500 employees. In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees. In addition, 72 carriers have reported that they are Other Local Service Providers. Seventy of which have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities that may be affected by rules adopted pursuant to the Notice.

24. Interexchange Carriers . Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these Interexchange carriers can be considered small entities. According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of these 359 companies, an estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 employees. Consequently, the Commission estimates that the majority of interexchange service providers are small entities that may be affected by rules adopted pursuant to the Notice.

25. Local Resellers . The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by rules adopted pursuant to the Notice.

26. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of these, an estimated 857 have 1,500 or fewer employees and 24 have more than 1,500 employees. Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by our action.

27. Pre-paid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for pre-paid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these pre-paid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of pre-paid calling cards. Of these, an estimated all 193 have 1,500 or fewer employees and none have more than 1,500 employees. Consequently, the Commission estimates that the majority of pre-paid calling card providers are small entities that may be affected by rules adopted pursuant to the Notice.

28. 800 and 800-Like Service Subscribers. Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of resellers in this classification can be considered small entities. To focus specifically on the number of subscribers than on those firms which make subscription service available, the most reliable source of information regarding the number of these service subscribers appears to be data the Commission collects on the 800, 888, 877, and 866 numbers in use. According to our data, at of September 2009, the number of 800 numbers assigned was 7,860,000; the number of 888 numbers assigned was 5,888,687; the number of 877 numbers assigned was 4,721,866; and the number of 866 numbers assigned was 7,867,736. The Commission does not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, the Commission estimates that there are 7,860,000 or fewer small entity 800 subscribers; 5,888,687 or fewer small entity 888 subscribers; 4,721,866 or fewer small entity 877 subscribers; and 7,867,736 or fewer small entity 866 subscribers. We do not believe 800 and 800-Like Service Subscribers will be affected by our proposed rules, however we choose to include this category and seek comment on whether there will be an effect on small entities within this category.

29. Below, for those services subject to auctions, the Commission notes that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

30. Wireless Telecommunications Carriers (except Satellite). Since 2007, the Census Bureau has placed wireless firms within this new, broad, economic census category. Prior to that time, such firms were within the now-superseded categories of Paging and Cellular and Other Wireless Telecommunications. Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. For the category of Wireless Telecommunications Carriers (except Satellite), Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. Similarly, according to Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service, and Specialized Mobile Radio Telephony services. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Consequently, the Commission estimates that approximately half or more of these firms can be considered small. Thus, using available data, we estimate that the majority of wireless firms can be considered small.

31. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. The Commission auctioned geographic area licenses in the WCS service. In the auction, which commenced on April 15, 1997 and closed on April 25, 1997, seven bidders won 31 licenses that qualified as very small business entities, and one bidder won one license that qualified as a small business entity.

32. Satellite Telecommunications Providers. Two economic census categories address the satellite industry. The first category has a small business size standard of $15 million or less in average annual receipts, under SBA rules. The second has a size standard of $25 million or less in annual receipts.

33. The category of Satellite Telecommunications “comprises establishments primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” Census Bureau data for 2007 show that 512 Satellite Telecommunications firms that operated for that entire year. Of this total, 464 firms had annual receipts of under $10 million, and 18 firms had receipts of $10 million to $24,999,999. Consequently, the Commission estimates that the majority of Satellite Telecommunications firms are small entities that might be affected by our action.

34. The second category, i.e., All Other Telecommunications, comprises “establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing Internet services or voice over Internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.” For this category, Census Bureau data for 2007 show that there were a total of 2,383 firms that operated for the entire year. Of this total, 2,347 firms had annual receipts of under $25 million and 12 firms had annual receipts of $25 million to $49, 999,999. Consequently, the Commission estimates that the majority of All Other Telecommunications firms are small entities that might be affected by our action.

35. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. As noted, the SBA has developed a small business size standard for Wireless Telecommunications Carriers (except Satellite). Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees. According to the 2008 Trends Report, 434 carriers reported that they were engaged in wireless telephony. Of these, an estimated 222 have 1,500 or fewer employees and 212 have more than 1,500 employees. We have estimated that 222 of these are small under the SBA small business size standard.

36. The 2007 Economic Census places these firms, whose services might include voice over Internet protocol (VoIP), in either of two categories, depending on whether the service is provided over the provider's own telecommunications facilities ( e.g., cable and DSL ISPs), or over client-supplied telecommunications connections ( e.g., dial-up ISPs). The former are within the category of Wired Telecommunications Carriers, which has an SBA small business size standard of 1,500 or fewer employees. The latter are within the category of All Other Telecommunications, which has a size standard of annual receipts of $25 million or less. The most current Census Bureau data for all such firms, however, are the 2002 data for the previous census category called Internet Service Providers. That category had a small business size standard of $21 million or less in annual receipts, which was revised in late 2005 to $23 million. The 2002 data show that there were 2,529 such firms that operated for the entire year. Of those, 2,437 firms had annual receipts of under $10 million, and an additional 47 firms had receipts of between $10 million and $24,999,999. Consequently, we estimate that the majority of ISP firms are small entities.

37. This order has two components: clarification of the definition of Lifeline service and establishment of de-enrollment procedures for consumers receiving duplicative Lifeline supported services. These modifications of our rules are necessary to ensure that the statutory goals of section 254 of the Telecommunications Act of 1996 are met and to eliminate waste, fraud, or abuse in the Lifeline program.

38. Clarification of the Definition of Lifeline & Carrier Obligation. In this order, we modify the definition of Lifeline service to clarify that no qualifying low-income consumer is permitted to receive more than one Lifeline subsidy concurrently. This clarification places no additional burdens upon ETCs.

39. De-Enrollment Procedures for Duplicate Service. As part of the effort to reduce waste in the program, by this order, we adopt a rule requiring ETCs to de-enroll any Lifeline subscriber upon notification from the Universal Service Administrative Company (USAC) that the Lifeline subscriber should be de-enrolled from participation in that ETC's Lifeline program because the subscriber is receiving Lifeline service from another ETC. An ETC will be required to de-enroll a subscriber from its Lifeline program within five business days of receiving de-enrollment notification from USAC. Compliance with this requirement will place a burden on ETCs to de-enroll customers upon receiving notice from USAC. However, this burden will be minimal.

40. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives, among others: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

41. We sought to minimize the burdens imposed on small entities where doing so would not compromise the goals of the universal service low-income mechanism. In order to minimize the impact on ETCs, and under the advisement of a number of industry representatives, we have placed the burden of checking for duplicate claims upon USAC, rather than ETCs. Furthermore, the duplicate resolution process set forth in the order requires USAC to notify an ETC which customers should be de-enrolled from the ETC's Lifeline program.

42. The Commission will send a copy of the order, including this FRFA, in a report to be sent to Congress and the Government Accountability Office pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the order, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the order and FRFA (or summaries thereof) will also be published in the Federal Register.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 54 as follows:

Director, Defense Procurement and Acquisition Policy letter dated September 21, 2010, replaced the Defense Logistics Agency with Defense Procurement and Acquisition Policy, Program Development and Implementation, as the responsible office for the maintenance of all order code assignments for use in the first two positions of an order number when an activity places an order against another activity's contract or agreement. In addition, the procedures and addresses for order code monitors are moved to the DFARS companion resource, DFARS Procedures, Guidance, and Information.

The Regulatory Flexibility Act does not apply to this rule because an initial regulatory flexibility analysis is only required for proposed or interim rules that require publication for public comment (5 U.S.C. 603) and a final regulatory flexibility analysis is only required for final rules that were previously published for public comment, and for which an initial regulatory flexibility analysis was prepared (5 U.S.C. 604).

This final rule does not constitute a significant DFARS revision as defined at FAR 1.501-1 because this rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of the Government. Therefore, publication for public comment under 41 U.S.C. 1707 is not required.

The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR part 204 continues to read as follows:

Section 8102 of the DoD and Full-Year Continuing Appropriations, 2011 (Pub. L. 112-10), prohibits the use of Fiscal Year (FY) 2011 funds for any contract (including task or delivery orders and bilateral modifications adding new work) in excess of $1 million, if the contractor restricts its employees to arbitration for claims under title VII of the Civil Rights Act of 1964, or tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.

This rule does not apply to the acquisition of commercial items. Section 8102(b) requires the contractor to certify compliance by subcontractors.

Additionally, enforcement of the mandatory arbitration provisions related to the covered areas, does not affect the enforcement of other aspects of an agreement that is not related to those areas.

This rule allows the Secretary of Defense to waive applicability to a particular contract or subcontract, if determined necessary to avoid harm to national security.

Section 8102 of the DoD and Full-Year Continuing Appropriations, 2011, extends the restrictions of section 8116 of the Defense Appropriations Act for Fiscal Year 2010 (Pub. L. 111-118). In implementing section 8116, public comments were obtained under DFARS Case 2010-D004.

This final rule does not constitute a significant DFARS revision as defined at FAR 1.501-1 because the requirements are already in place and this final rule merely extends the existing DFARS coverage. Therefore, there is no significant cost or administrative impact on contractors or offerors resulting from issuance of this rule and public comment is not required in accordance with 41 U.S.C. 1707(a).

Since DoD anticipates that this will be an ongoing requirement, this rule applies to use of all subsequent fiscal year funds appropriated or otherwise made available under subsequent DoD appropriations acts. If the restriction is removed at a future date, DoD will amend the DFARS accordingly.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule. This final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501 and public comment is not required in accordance with 41 U.S.C. 1707.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Therefore, 48 CFR parts 212 and 222 are amended as follows:

Section 866 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011 (Pub. L. 111-383), enacted on January 7, 2011, authorized the Secretary of Defense to carry out a pilot program to assess the feasibility and advisability of acquiring military-purpose nondevelopmental items in accordance with the streamlined procedures of the pilot program. The authority for this pilot program expires on January 6, 2016. Under this pilot program, DoD may enter into contracts with nontraditional defense contractors for the purpose of—

—Enabling DoD to acquire items that otherwise might not have been available to DoD;

—Assisting DoD in the rapid acquisition and fielding of capabilities needed to meet urgent operational needs; and

—Protecting the interests of the United States in paying fair and reasonable prices for the item or items acquired.

This pilot program is designed to test whether the streamlined procedures, similar to those available for commercial items, can serve as an effective incentive for nontraditional defense contractors to (1) channel investment and innovation into areas that are useful to DoD and (2) provide items developed exclusively at private expense to meet validated military requirements.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows.

DoD is issuing an interim rule to amend the DFARS to implement section 866 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383). Section 866 authorized the Secretary of Defense to establish a pilot program to assess the feasibility and advisability of acquiring military-purpose nondevelopmental items.

The objective of this rule is to establish a new DoD pilot program at DFARS Subpart 212.71, entitled Pilot Program for Acquisition of Military-Purpose Nondevelopmental Items. Under this pilot program, DoD may enter into contracts with nontraditional defense contractors for the purpose of (1) Enabling DoD to acquire items that otherwise might not have been available to DoD; (2) assisting DoD in the rapid acquisition and fielding of capabilities needed to meet urgent operational needs; and (3) protecting the interests of the United States in paying fair and reasonable prices for the item or items acquired. It is anticipated that items similar to commercial all-terrain vehicles or programmable robots, which can be modified for use in a contingency environment, may result from use of this authority. The legal basis is section 866 of the National Defense Authorization Act for Fiscal Year 2011.

Since this is a new pilot program, data to support potential impact to small entities is not yet available. Consistent with the overall purpose of the program to attract nontraditional defense contractors, DoD anticipates that this rule will have a positive economic impact to small entities.

The interim rule affects contractors that are not currently performing and have not performed, for at least the one-year period preceding the solicitation of sources by DoD for the procurement or transaction, any of the following for DoD—

—Any contract or subcontract that is subject to full coverage under the cost accounting standards prescribed pursuant to section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 1502) and the regulations implementing such section; or

—Any other contract in excess of the certified cost or pricing data threshold under which the contractor is required to submit certified cost or pricing data.

This interim rule does not impose any new reporting, recordkeeping or other compliance requirements on contractors. There are no rules that duplicate, overlap or conflict with this rule. There are no known significant alternatives to the rule.

Accordingly, DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601.

DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D034) in correspondence.

The rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comments. The rule implements section 866 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383). Section 866 was effective upon enactment on January 7, 2011. This action is necessary as DoD continues to search for ways to acquire and deploy innovative technologies and solutions to meet urgent operational needs. Without this interim rule, DoD will be unable to test whether the streamlined procedures similar to those available for commercial items can serve as an effective incentive for non-traditional defense contractors to (1) channel investment and innovation into areas that are useful to DOD and (2) provide items developed exclusively at private expense to meet validated military requirements.

Therefore, 48 CFR parts 212 and 252 are amended as follows:

This interim rule amends the Defense Federal Acquisition Regulation Supplement (DFARS) subpart 215.3, Source Selection. It amends DFARS 215.304(c) by adding paragraph (iv) to state that the manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors shall be considered as a part of the source selection process for major defense acquisition programs.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

DoD has performed an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. The interim rule will apply to DoD Major Defense Acquisition Program contractors and subcontractors. As such, it is not expected that this rule will have a significant impact on a significant number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. However, an Initial Regulatory Flexibility Analysis has been prepared and is summarized as follows.

This interim rule amends the DFARS to implement section 812 of the National Defense Authorization Act for FY 2011 (Pub. L. 111-383) (10 U.S.C. 2430 note). Section 812(b)(5) requires appropriate consideration of the manufacturing readiness and manufacturing readiness processes of potential contractors and subcontractors as a part of the source selection process for major defense acquisition programs.

The rule will apply to DoD Major Defense Acquisition Program contractors and subcontractors. Most major defense acquisition programs are awarded to large concerns as they are of a scope too large for any small business to perform. As such, it is not expected that this rule will have a significant impact on a significant number of small entities.

The interim rule imposes no reporting, recordkeeping, or other information collection requirements. The proposed rule does not duplicate, overlap, or conflict with any other Federal rules. There are no known significant alternatives to the rule that would meet the requirements of the statute.

DoD invites comments from small businesses and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 601. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D031) in correspondence.

The rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements section 812 of the National Defense Authorization Act for Fiscal Year 2011, enacted on January 7, 2011. Section 812 requires implementation within 180 days, by July 6, 2011, and an interim rule is required to meet the implementation date. This action is necessary in order to require contracting officers to consider the manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors as a part of the source selection process for major defense acquisition programs. Comments received in response to this interim rule will be considered in the formation of the final rule.

Therefore, 48 CFR part 215 is amended as follows:

DoD Inspector General audit D-2010-052, entitled “Efforts to Prevent Sexual Assault/Harassment Involving DoD Contractors During Contingency Operations,” dated April 16, 2010, provided recommendations for the Under Secretary of Defense for Acquisition, Technology, and Logistics to develop requirements in all DoD contracts supporting contingency operations to ensure contractor employees accompanying U.S. Armed Forces are aware of the definition of “sexual assault.”

A proposed rule was published in the Federal Register at 75 FR 73997, on November 30, 2010. That rule proposed adding at DFARS 252.225-7040(d)(3) a new requirement for compliance with laws and regulations. The proposed change required the contractor to ensure that contractor employees accompanying U.S. Armed Forces be aware of the DoD definition of “sexual assault” as defined in DoD Directive (DoDD) 6495.01, “Sexual Assault Prevention and Response Program.” The rule also proposed to also inform contractor employees accompanying U.S. Armed Forces, that such offenses in the definition are covered under the Uniform Code of Military Justice, Title 10, Chapter 47 ( http://www.constitution.org/mil/ucmj19970615.htm ). DoDD 6495.01, “Sexual Assault Prevention and Response Program,” is available at http://www.dtic.mil/whs/directives/corres/pdf/649501p.pdf.

Two respondents submitted positive comments in response to the proposed rule. These respondents supported DoD's inclusion of the reference to this definition in the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States.

DoD revised the final rule to—

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

DoD certifies that this final rule will not have significant economic impact on a substantial number of small entities within the meaning for the Regulatory Flexibility Act, 5 U.S.C. 604, et seq., because the rule does not impose any additional significant requirements on small businesses.

This DFARS rule requires contractors to ensure their employees are aware of the DoD definition of sexual assault contained in DoDD 6495, Sexual Assault Prevention and Response Program, and how that definition relates to existing contractual conditions, i.e., many of the offenses addressed in the definition are covered under the Uniform Code of Military Justice. DFARS 252.225-7040(e)(2)(iv) previously informed contractors that contractor personnel authorized to accompany U.S. Armed Forces in the field are subject to the jurisdiction of the Uniform Code of Military Justice. Offenses in the definition, which are not covered by the Uniform Code of Military Justice, may nevertheless have consequences to contractor employees under DFARS clause 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, paragraph (h)(1).

A proposed rule published in the Federal Register at 75 FR 73997, on November 30, 2010, invited comments from small businesses, and other interested parties. No comments were received from small entities on the affected DFARS subpart with regard to small businesses.

The rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 chapter 35).

Therefore, 48 CFR part 252 is amended as follows:

This final rule amends definitions of “Caribbean Basin country” and “designated country” at the clauses 252.225-7021, Trade Agreements, and 252.225-45, Balance of Payments Program—Construction Materials Under Trade Agreements.

On October 10, 2010, Curacao and Sint Maarten became autonomous territories of the Kingdom of the Netherlands. Bonaire, Saba, and Sint Eustatius now fall under the direct administration of the Netherlands.

The Netherlands Antilles was designated as a beneficiary country under the Caribbean Basin Initiative (see 19 U.S.C. 2702). According to the initiative, successor political entities remain eligible as beneficiary countries.

Therefore, the definitions have been revised to replace “Netherlands Antilles” with the five separate successor entities.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule.

Therefore, an initial regulatory flexibility analysis has not been performed because an initial regulatory flexibility analysis is only required for proposed or interim rules that require publication for public comment (5 U.S.C. 603) and a final regulatory flexibility analysis is only required for final rules that were previously published for public comment, and for which an initial regulatory flexibility analysis was prepared (5 U.S.C. 604).

This final rule does not constitute a significant FAR (or DFARS) revision as defined at FAR 1.501-1 because this rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of the Government. The rule only reflects the political status of the islands that comprised the Netherlands Antilles. This will have no impact on any entities in the United States. Therefore, publication for public comment under 41 U.S.C. 1707 is not required.

This rule will not change the burden of any of the approved information collection requirements for part 225 currently approved by the Office of Management and Budget under OMB Clearance 0704-0229, Defense Federal Acquisition Regulation Supplement Part 225, Foreign Acquisition, and related clauses.

Therefore, 48 CFR part 252 is amended as follows:

With regard to fireworks approvals, the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180), Section 173.56(j)(3) states that “[t]he manufacturer applies in writing to the Associate Administrator following the applicable requirements in APA Standard 87-1, and is notified in writing by the Associate Administrator that the fireworks have been classed, approved, and assigned an EX number.”

On December 17, 2010, PHMSA published the initial Notice No. 10-9 (75 FR 79085) clarifying its policy, consistent with the HMR, to issue firework classification approvals only to fireworks manufacturers, and accept firework classification applications only from fireworks manufacturers or their designated agents. The Notice also sought comment on that clarification. In today's document, PHMSA is responding to those comments and restating its policy clarification on the fireworks approval program.

The comments received covered various topics, including the economic impact, language barrier issues, jurisdictional issues, implementation time, and the legal issues associated with the Notice itself. Furthermore, commenters also expressed concern on how the policy would affect the EX application volume, the control and distribution of fireworks designs, PHMSA's ability to ensure compliance with and to enforce the clarification, and the relationship with other Federal regulations.

The pyrotechnic industry is a global logistics supply chain comprised of mostly foreign fireworks manufacturers and domestic importers, retailers, distributors, and consumers. The transportation of an explosive (fireworks device) requires an EX classification approval issued by PHMSA, commonly referred to as an EX number. The EX number is a unique identifier that indicates the device has been classed and approved for transportation in the U.S., and is specific to a particular device as specified in 49 CFR 173.56(j) and the APA Standard 87-1.

PHMSA understands that it is a common industry practice for fireworks devices produced by one manufacturer to be marketed and sold under different trade names. Further, each retailer, importer or distributor, in addition to the manufacturer, applies for and receives an EX classification approval for the identical firework device. This practice has resulted in PHMSA processing multiple applications and issuing multiple approvals for the same firework device.

For some time, PHMSA has accepted fireworks applications from manufacturers, importers, retailers and distributors, and has issued the classification approvals to those stakeholders in the pyrotechnic industry. This redundant and burdensome process does not promote the safe transportation of explosives (fireworks devices); instead, it impedes the conduct of business for both the fireworks industry and PHMSA.

In this document, PHMSA is responding to comments on its policy clarification to issue fireworks classification approvals only to fireworks manufacturers. PHMSA believes that this policy will enhance safety by ensuring accountability of the manufacture of the device and reducing the number of duplicate applications and approvals being issued for identical fireworks devices. The manufacturer of the device is the only entity that can ensure the approved formulation is the actual formulation used to create the device.

PHMSA received 18 comments in response to the initial Notice No. 10-9. Some of the commenters requested that we expedite the issuance of this document to finalize the clarification of the policy. We recognize their concerns and have made every effort to publish this document in an expeditious manner. While a minority of the commenters supported the clarification to the fireworks policy in initial Notice 10-9, a majority of the commenters had reservations about it. The comments, as submitted to the docket for the initial Notice No. 10-9 (Docket No. PHMSA-2010-0353), may be accessed via http://www.regulations.gov and were submitted by the following individuals, companies and associations:

PHMSA received ten comments beyond the scope of this document. One commenter requests PHMSA consider waste management of used or defective fireworks when proposing any amendments to regulations related to the transport of fireworks. This document does not propose any regulatory amendments; rather, we are clarifying existing policy. While PHMSA agrees environmental impacts should be considered when proposing amendments to regulations, no regulatory changes were proposed in the Notice, and therefore, waste management of fireworks is beyond the scope of this document.

PHMSA received nine comments suggesting alternative approaches aimed at improving the current fireworks approvals process. These alternative approaches ranged from small modifications and improvements to the current system, to the complete elimination of the requirement for EX numbers for consumer fireworks. PHMSA values input from the stakeholders involved in the fireworks approval process; however, the alternative approaches suggested are beyond the scope of this document and will not be addressed here. The scope of this document is limited to PHMSA's issuance of fireworks approvals only to fireworks manufacturers. While we agree that certain alternative approaches to fireworks approvals merit PHMSA's consideration, we urge those commenters who submitted these beyond-the-scope approaches to request a change in the regulations by filing the recommendations as petitions for rulemakings in accordance with 49 CFR 106.95 and 106.100.

PHMSA received comments both in support of and in opposition to the policy clarification in the initial Notice No. 10-9. A number of these concerns dealt specifically with how PHMSA's implementation of the clarification would affect the pyrotechnics industry. These comments are discussed in detail below.

Implementation. Commenters suggested that if the clarification presented in the initial Notice No. 10-9 were adopted, there would need to be a substantial implementation time. PHMSA received two comments concerned with the amount of time for implementing the clarification and the effect on industry.

PHMSA understands the concerns the fireworks industry has expressed about the ramifications of implementing this action. In response to these concerns PHMSA has devised an implementation plan that addresses these concerns (see section: IV. Summary of Policy Clarification). As of the date of the publication of this document in the Federal Register, classification approval applications will be issued only to the manufacturer. Fireworks approvals applications submitted on behalf of entities other than the manufacturer to PHMSA prior to the publication date of this document in the Federal Register ( i.e. already accepted by PHMSA) will continue to be reviewed, processed, and if approved, issued to the applicant.

Impact on Fireworks EX Application Volume. Specifically, PHMSA received comments regarding what impact the clarification would have on the actual volume of fireworks EX applications received. PHMSA received comments from seven companies opposing the policy clarification asserting that there will be an increase in the volume of applications that PHMSA will have to process. However, one company supported the policy clarification indicating that it is an “effort to reduce redundancy and increase process efficiency.”

PHMSA does not agree with the commenters' concerns pertaining to application volume. We believe that this is a safety and data management issue. Furthermore, we do not make policy decisions of this type based on the potential volume of applications. Nonetheless, PHMSA believes that there would not be an appreciable increase to the number of firework applications received. However, if such an increase occurs, it will be temporary and over time application volume will decrease.

One commenter asserted that an EX approval allows multiple manufacturers to use the same EX number. This is incorrect. The use of the same EX number by multiple manufacturers constitutes a violation of the HMR. Only the manufacturer identified in the approval application is authorized to use the assigned EX number. PHMSA does not issue the same EX approval number to more than one holder/manufacturer.

Language Barriers. A majority of fireworks manufacturers are located outside the U.S. where English is not a first language. Several commenters expressed concern that implementing the policy clarification could be complicated by language barriers present between PHMSA officials and foreign fireworks manufacturers. Commenters cited examples of Chinese companies not understanding why an application is rejected and not being able to correct errors when re-applying.

PHMSA does not agree with the commenters' concerns pertaining to a language barrier. All companies based outside of the U.S. are required to have a U.S. designated agent (see § 105.40) to support the company in various issues, including language translation. PHMSA has issued many approvals to foreign companies without any confusion or misunderstanding as a result of language barriers. When language barriers arise, it is the U.S. designated agent's responsibility to resolve any communication problems and technical issues.

Control and Distribution of Fireworks Designs. Three commenters addressed the effect of initial Notice No. 10-9 on the control and distribution of fireworks design types. U.S. fireworks distributors expressed their concern that they will no longer have exclusive control over their firework products if the clarification presented in the initial Notice No. 10-9 were implemented. These commenters oppose the policy clarification based on possible trademark infringement. The commenters who addressed this issue indicated that, if adopted, the policy clarification would deprive them of their ability “to trademark private label products that are proprietary to U.S. companies.”

PHMSA does not agree with the commenters that the policy clarification would result in trademark infringement. The holder of the EX approval for a firework device bears no relevance to a company's protected trademark. The U.S. Patent and Trademark Office defines a trademark as “a word, phrase, symbol or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.” Trademark infringement occurs when a competitor uses a mark that is identical or confusingly similar to the protected trademark. An EX approval number is assigned by the Associate Administrator to an explosive device that has been evaluated under 49 CFR 173.56. Fireworks EX approval applications are reviewed by transportation specialists who evaluate the composition and safety of the firework device. Thus, a protected trademark and an EX approval number are issued separately by different U.S. agencies for distinctly separate purposes, which are mutually exclusive.

Ability to Ensure Compliance/Enforce. Various commenters suggested that the policy clarification in the initial Notice No. 10-9 could prove difficult for PHMSA to enforce. In addition, commenters suggested that the policy clarification could decrease regulatory clarity and make it more difficult for the regulated entities to comply with the HMR.

One commenter opposed the policy clarification expressing concern that by placing the maintenance of the EX number wholly in the hands of the manufacturer, the U.S. user or seller has no capacity to assure that the numbers are being administered and applied correctly. They state: “it is the importers and end users who are transporting the products in the U.S., not the manufacturers. The importers and end users are the ones who must demonstrate compliance.”

While firework classification approvals will only be issued to fireworks manufacturers, PHMSA will accept fireworks approval applications from the manufacturer's U.S. designated agent on behalf of the manufacturer, as well as the manufacturer itself. PHMSA disagrees that the burden to follow the requirements of the approval falls solely on the importer or end user once it becomes part of the U.S. transportation system. In fact, at that point it is too late to correct a defect with the firework device or any improper use of an EX number. While it is incumbent upon the manufacturer and the importer to ensure the fireworks device meets the EX approval requirements, it is not PHMSA's intent to regulate the relationship between these two entities. All participants throughout the supply chain will be held accountable for their regulatory responsibility. Furthermore, § 171.2(b) provides that “each offeror is responsible only for the specific pre-transportation functions that it performs or is required to perform, and each offeror may rely on information provided by another offeror, unless that offeror knows or, a reasonable person, acting in the circumstances and exercising reasonable care, would have knowledge that the information provided by the other offeror is incorrect.”

One commenter opposed the policy clarification because it is unclear how PHMSA will obtain new resources to be able to conduct a “fitness review” on each factory in China.

PHMSA currently conducts fitness reviews on foreign entities for many types of approval applications. Our standard procedure, after we determine that an application is complete, is to evaluate the application to determine whether the Applicant is qualified to hold the type of approval for which it has applied, in this case, a fireworks approval. During the review, PHMSA checks the application to determine whether the Applicant followed the requirements of the HMR. While we do not typically conduct an onsite inspection of the Applicant's facilities prior to granting or denying an approval application for fireworks, we may conduct an inspection if necessary to determine the Applicant's fitness. Furthermore, the Associate Administrator may modify, suspend, or terminate an approval in accordance with 49 CFR 107.121 if necessary to avoid a risk of significant harm to persons or property.

One commenter opposed the policy clarification because it is likely to divert PHMSA's scarce resources and PHMSA does not have the means to develop a global investigative capability. The commenter claimed this would allow for “front” or “shell” companies to exploit the policy clarification.

PHMSA does not agree with the commenter about its global investigative capability. Part of PHMSA's mission is to implement the best course of action to support the safety of the products produced through shared responsibility and focused accountability. PHMSA currently conducts international as well as domestic inspections. If a company is found to be noncompliant with the HMR, PHMSA may impose civil penalties or seek criminal prosecution for knowing, willful, or reckless violations of the HMR.

One commenter opposed the policy clarification because it would potentially complicate the approvals process.

PHMSA does not agree that the policy clarification would complicate the approvals process. Rather, we believe that the policy clarification simplifies the process. By issuing one EX number for each type of firework device, as opposed to issuing multiple EX numbers for the same fireworks device, we will reduce redundancy of approvals for the same device and increase the overall efficiency of the approvals process. Additionally, by ensuring uniform classification of fireworks devices and eliminating application duplicity, we will reduce the potential risks of the shipment of unapproved fireworks, thereby enhancing the safe transport of fireworks devices.

Regulatory Clarity. PHMSA received several comments concerning regulatory clarity. Commenters are concerned about the definition of manufacturer being different between regulatory areas. One commenter suggested that PHMSA would have a different definition of “manufacturer” for entities who construct packages than that used to define a fireworks device maker. One commenter states “PHMSA would be creating inconsistencies where a firework approval obtained through § 173.56(f) could only be held by the person who formulates or produces the firework while no such limit would apply for fireworks approved through the process used for other explosives.”

PHMSA disagrees with the commenters because it is within the agency's discretion to interpret its own regulations and clarify our policies. However, we may in the future consider adding a definition for manufacturer through notice and comment rulemaking.

Several commenters expressed concern about the possible economic ramifications caused by the implementation of the fireworks approval policy clarification. Although most of the comments received addressed economic impacts indirectly, five commenters explicitly addressed the economic impact of the policy clarification.

Economic Impact. PHMSA received several comments claiming that if PHMSA issues approvals only to manufacturers, it will increase costs, discourage competition, and interfere with trade and commerce. Commenters expressed specific concerns that companies could go out of business and proprietary information could be revealed.

PHMSA does not believe the policy clarification pertaining to the fireworks approvals process will affect costs, competition, or interfere with trade and commerce because we are not changing the regulations pertaining to fireworks approvals. Rather, we are clarifying the existing regulations by advising the public that a manufacturer, or its designated U.S. agent, may submit an approvals application. After review and approval, PHMSA will issue an EX number to the manufacturer specified in the approval application. Despite not being the approval holder, importers and end users may still offer and transport fireworks devices under the EX approval issued to the manufacturer.

Commenters also expressed concern that proprietary information may be released to the public. To determine whether records are releasable, PHMSA complies with the Freedom of Information Act (FOIA), 5 U.S.C. section 552, and any other applicable laws. Should PHMSA receive a FOIA request for information marked “confidential commercial” or where PHMSA has some other reason to believe that confidential commercial information may be contained in the record, Departmental regulations in 49 CFR § 7.17 require that PHMSA consults with the submitter of the information to provide an opportunity to submit any written objections and specific grounds for non-disclosure before PHMSA determines whether to release the information.

Transportation Safety. Four commenters objected to the initial Notice No. 10-9 on the grounds that no safety benefit would be realized from the policy clarification in the application process. One commenter stated “because it is required to identify the product manufacturer on all applications, the Agency has access to manufacturer information regardless of whether the approval is issued to an importer, exporter and/or distributor.” PHMSA disagrees with the commenter's assertion. Issuing EX numbers exclusively to manufacturers will provide greater accountability on the part of the manufacturer.

One commenter stated “we are not aware of any situations where there was a safety or transportation problem attributable to the fact that the EX approval was obtained by the entity that worked with the factory and was responsible for the fireworks once they arrived in the United States.” While PHMSA agrees with the commenter about the safety record of fireworks in transportation, we believe that this policy clarification will nonetheless make fireworks device transportation safer. The manufacturer of the device is the only entity that can ensure the formulation that is approved is the actual formulation used to create the device. Furthermore, eliminating redundant applications for the same fireworks device will reduce the potential risk of unapproved fireworks being transported, thereby enhancing the overall safety of the fireworks devices in transport.

Several commenters expressed concern over the manner in which PHMSA is clarifying its fireworks approvals policy. Other commenters raised concerns regarding the effect the policy clarification would have on other sections of the HMR. A couple of commenters expressed legal concerns regarding the policy clarification. These comments are discussed in detail below.

Manner in which the Clarification was Presented. Three commenters expressed concern with how we presented our policy clarification. Specifically, these commenters suggested that the policy clarification presented in that Notice may be better addressed in a rulemaking action where comments can be addressed in a more substantive manner. Commenters claimed that PHMSA is indicating a regulatory change through that Notice, and thus, should conduct notice and comment rulemaking.

PHMSA is not required under the Administrative Procedure Act to initiate informal rulemaking to clarify a policy. Section 173.56(j) specifically states that the manufacturer applies in writing and is notified by the Associate Administrator that the fireworks have been classed, approved, and assigned an EX-number. It is the responsibility of the manufacturer to sign the application and certify that the device conforms to the APA Standard 87-1, which PHMSA has incorporated by reference in the HMR. In this document, we are clarifying our policy to issue EX approvals to manufacturers only to coincide with the plain language of § 173.56(j).

Effects on the HMR. While, as cited above, some commenters were concerned that the clarification would result in ambiguity in the regulations pertaining to the definition of different types of manufacturers, ( e.g., fiberboard box manufacturers and fireworks manufacturers), commenters also raised concern regarding the potential precedent set by the policy clarification in the initial Notice No. 10-9. Specifically, commenters maintained that the clarification presented in the initial Notice No. 10-9 could affect the definition of “manufacturer” in other parts of the HMR. In addition, concern was raised that this could set a precedent for how explosives, other than fireworks, are treated. One commenter, for example, is concerned that this policy may affect requirements for package manufacturers.

PHMSA does not agree with the commenters that this document would affect other provisions of the HMR. In this document we are clarifying our policy with respect to fireworks approvals only.

Legal Issues. PHMSA received a comment opposing the policy clarification based on the doctrine of laches. The commenter indicated that PHMSA's “neglect to assert a right, the lapse of time associated therewith and resultant disadvantage to another bars the neglecting party from asserting the right.”

PHMSA does not agree with the commenter's application of the doctrine of laches. Laches is the equitable counterpart to the statute of limitations that bars a claim when a delay in bringing the claim is unreasonable and results in prejudice to the opposing party. In general, laches cannot be imputed to the Federal government and is not applicable to an agency's determination to clarify policy.

Another commenter opposed the policy clarification asserting because PHMSA has not thoroughly explained its reasons for changing the policy.

PHMSA agrees that we should provide a reasoned basis for the policy clarification, but disagrees that we have failed to do so. As stated in the initial Notice No. 10-9, we believe issuing fireworks approvals only to manufacturers will enhance safety by ensuring uniform classification of fireworks devices, eliminating application duplicity, and minimizing the potential risks of the shipment of unapproved fireworks.

PHMSA received multiple comments opposing the policy clarification based on our lack of jurisdiction over foreign manufacturers.

PHMSA agrees that we lack jurisdiction over foreign manufacturers who manufacture fireworks, but do not offer them for transportation in commerce. However, the Federal Hazardous Materials Transportation Law (49 U.S.C. 5101, et. seq. ) provides the authority to regulate the safe transportation of hazardous materials in interstate, intrastate, and foreign commerce. If a foreign manufacturer does not merely manufacture the fireworks, but is also an offeror and offers fireworks for transportation in commerce within the U.S., then our regulations would apply and the foreign manufacturer may be held accountable for violations of the HMR. Furthermore, foreign manufacturers may have an economic incentive to obtain EX approvals given the market in the U.S. for foreign fireworks.

One commenter opposed the policy clarification based on Executive Order No. 13563, Improving Regulation and Regulatory Review, dated January 18, 2011. The commenter indicated that, if adopted the policy clarification would not support the spirit of the Executive Order and would create more burdens on both the regulated industry and government.

PHMSA does not agree that the policy clarification would contradict the spirit of the Executive Order, which addresses an agency's adoption of new regulations and does not restrict the agency's ability to interpret its existing regulations or to make policy clarifications.

Based on the comments received and our responses to those comments, PHMSA will proceed to implement the policy clarification discussed in this document. The implementation strategy is detailed below:

1. All EX numbers issued prior to June 29, 2011 will continue to remain in effect.

2. All pending fireworks approval applications submitted to PHMSA prior to June 29, 2011 will continue to be reviewed, processed, and if approved, issued to the applicant.

3. All fireworks approval applications submitted to PHMSA after June 29, 2011 will only be accepted from manufacturers or their designated agents. Designated agents, as specified in § 105.40, may submit applications on behalf of the manufacturer as long as the agent or the manufacturer signs the application and certifies that the device for which approval is requested conforms to APA Standard 87-1, and that the descriptions and technical information contained in the application are complete and accurate, in accordance with § 173.56(j)(3). PHMSA will review and process each application, and if approved, will issue an EX approval number only to the manufacturer specified in the application.