In the Federal Register of January 6, 2011 (76 FR 737), FDA issued a notice of proposed rulemaking (NPRM) to establish a procedure for requesting an exemption from the substantial equivalence requirements of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) applicable to tobacco products. This final rule establishes procedures for requesting an exemption under section 905(j)(3) of the FD&C Act (21 U.S.C. 387e(j)(3)). Among the procedures included in this final rule is the requirement that a request for an exemption and all information supporting the request be submitted in an electronic format. The final rule also addresses FDA's review of an exemption request and establishes procedures for rescinding an exemption. The final rule adds these requirements at § 1107.1 (21 CFR 1107.1).

The FD&C Act requires manufacturers to obtain an order under section 910(c)(1)(A)(i) of the FD&C Act (21 U.S.C. 387j(c)(1)(A)(i)) before they may introduce a new tobacco product into interstate commerce unless either: (1) FDA has issued an order finding the new tobacco product to be substantially equivalent to an appropriate predicate tobacco product and in compliance with the requirements of the FD&C Act or (2) the tobacco product is exempt from the requirements related to substantial equivalence under a regulation issued under section 905(j)(3) of the FD&C Act (see also section 910(a)(2)(A); 21 U.S.C. 387j(a)(2)(A)). This final rule is issued under section 905(j)(3)(B) of the FD&C Act, which requires that FDA issue regulations to implement the provision on exemptions from the substantial equivalence requirements of the Tobacco Control Act by July 1, 2011. (21 U.S.C. 387e(j)(3)(B); section 6 of the Tobacco Control Act). Section 905(j)(3)(A) of the FD&C Act provides that FDA may exempt from the requirements relating to the demonstration of substantial equivalence, tobacco products that are modified by adding or deleting a tobacco additive, or by increasing or decreasing the quantity of an existing tobacco additive, if FDA determines that: (1) The modification would be a minor modification of a tobacco product that can be sold under the FD&C Act; (2) a substantial equivalence report is not necessary to ensure that permitting the tobacco product to be marketed would be appropriate for protection of the public health; and (3) an exemption is otherwise appropriate.

We considered all of the comments to the NPRM and the information submitted with the comments. After considering the comments and to clarify the information to be submitted in an exemption request, we have changed proposed § 1107.1(b) to state that an exemption request must identify the tobacco product(s) that is the subject of the exemption request and, as required by part 25 (21 CFR part 25), include an environmental assessment. On our own initiative, we also made minor edits to the introductory language in proposed § 1107.1(b) to more clearly state that all submissions need to be legible and in the English language. As discussed in the NPRM, FDA will provide information on its Web site on submitting an exemption request in an electronic format that FDA can review, process, and archive ( e.g., information on electronic media and methods of transmission) ( http://www.fda.gov/TobaccoProducts/default.htm ).

In response to comments expressing concern regarding the potential burden of requesting an exemption and after reconsidering the burden estimates, we have revised the burden estimates to more accurately reflect what we believe the burden will be for requesting an exemption. This is discussed in further detail in sections VII and VIII of this document.

We received 13 comments on the NPRM. Comments were received from individuals, a trade association, and tobacco product manufacturers. To make it easier to identify comments and our responses, the word “Comment,” in parentheses, will appear before each comment, and the word “Response,” in parentheses, will appear before each response. We have combined similar comments under one comment. In addition, several sets of comments included comments on the “Guidance for Industry and FDA Staff—Section 905(j) Reports: Demonstrating Substantial Equivalence for Tobacco Products” (76 FR 789, January 6, 2011); those comments will be considered as part of FDA's review of that document.

(Comment 1) Several comments generally objected to the rulemaking, stating, for example, that there “should not be an exemption for the product” and suggesting instead that tobacco products be removed from the market. We received one comment that expressed concern about using the term “approval” with respect to tobacco products because it implies that FDA sanctioned the product.

(Response) The issuance of a rule implementing the substantial equivalence exemption provision of the FD&C Act is explicitly required by section 905(j)(3)(B) of the FD&C Act. The statute requires FDA to implement the exemptions provision through rulemaking. This regulation fulfills that directive by establishing the procedures manufacturers must follow in order to request an exemption from the substantial equivalence provisions of the law. Neither the proposed nor final rule uses the term “approval.”

(Comment 2) One comment stated that we failed to satisfy our statutory obligation to implement the FD&C Act and its provision authorizing exemptions from the statute's substantial equivalence requirements. This comment continued by stating that the proposed rule was not a meaningful attempt to comply with the statutory directive “to issue regulations to implement” the exemption provision and that, at most, the proposed rule “would act as a placeholder to allow FDA to defer indefinitely its responsibilities under section 905(j)(3)(B).” The comment stated that the proposed rule failed to give the exemption provision either meaningful substantive content or a viable procedural pathway. The comment also stated that this “dereliction” was concerning given the amount of time that has passed since the Tobacco Control Act was enacted.

(Response) We disagree with these comments. The statute requires FDA to implement the exemptions provision through rulemaking. This regulation fulfills that directive by establishing the procedures manufacturers must follow in order to request an exemption from the substantial equivalence provisions of the law. The rule provides a premarket pathway that will facilitate granting exemptions for tobacco products with minor modifications to additives that meet the statutory criteria. Many of the comments provided us with detailed information about the wide range of modifications made to tobacco product additives; these comments support the need for an exemption regulation that will accommodate various minor modifications to additives that meet the exemption criteria.

(Comment 3) One comment suggested that the rulemaking does not further the objectives of the Tobacco Control Act and will require the unnecessary expenditure of FDA and industry resources on submissions that have no bearing on the goals sought to be achieved by the Tobacco Control Act.

(Response) We disagree. The exemption pathway is a significant part of the regulatory scheme Congress enacted to achieve the goals of the Tobacco Control Act. The FD&C Act, as amended by the Tobacco Control Act, requires that new tobacco products undergo some type of premarket review by the FDA. This premarket review may be through a premarket application (section 910(b) of the FD&C Act; 21 U.S.C. 387j(b)), a substantial equivalence report (section 905(j); 21 U.S.C. 387e(j)), or a request for an exemption from the substantial equivalence requirements (section 905(j)(3)) (section 910(a)(2); 21 U.S.C. 387j(a)(2)). To ensure appropriate oversight over tobacco products, it is crucial that FDA have information about modifications to additives in tobacco products in order to determine whether the modifications are minor and, accordingly, whether it is appropriate to exempt the tobacco product from the substantial equivalence requirements of the statute (assuming the other required findings can be made).

(Comment 4) Some comments stated that FDA needs to address the meaning of “new tobacco product” before issuing a final exemption regulation. One commenter stated that “simply repeating the language of the statute is insufficient,” noting that the statutory definition of “new tobacco product” includes the term “modification” and, depending on how broadly the term “modification” is interpreted, “potentially thousands of products that Congress intended to grandfather could be swept into the category of `new tobacco products' simply because they have undergone routine, consistency-maintaining adjustments that have no public health significance.” The commenter further stated that the lack of notice regarding the meaning of the terms “new tobacco product” and “modification” raises due process and Administrative Procedure Act concerns because it is “difficult for interested persons to provide meaningful commentary on a proposed exemption from requirements applicable only to `new tobacco products' when FDA has not revealed its understanding of what constitutes a `new tobacco product.'”

(Response) The FD&C Act, as amended in 2009 by the Tobacco Control Act, defines “new tobacco product” at section 910(a)(1) as “any tobacco product (including those products in test markets) that was not commercially marketed in the United States as of February 15, 2007; or any modification (including a change in design, any component, any part, or any constituent, including a smoke constituent, or in the content, delivery or form of nicotine, or any other additive or ingredient) of a tobacco product where the modified product was commercially marketed in the United States after February 15, 2007.” The definition expressly states that a new tobacco product includes “any” modification of a tobacco product where the modified product was commercially marketed in the United States after February 15, 2007. Therefore, FDA disagrees with the suggestion in the comments that the term “new tobacco product” has not been sufficiently defined.

(Comment 5) Some comments stated that there are categories of routine, consistency-maintaining adjustments that are not intended to alter the chemical or perception properties of the product and that, therefore, should not be treated as modifications for which a premarket application, substantial equivalence report, or exemption request should be required. The comments cited to various provisions of the FD&C Act, such as the good manufacturing practice provisions under section 906(e) of the FD&C Act and the notifications under section 904(c) (21 U.S.C. 387d(c)), as support for their view that these “routine consistency maintaining adjustments” are not “modifications” for which premarket review is required, because these other provisions are intended to ensure that we receive information on these types of adjustments and, consequently, these provisions would otherwise be rendered meaningless. Other comments similarly stated that adjustments made in response to variations in manufacturing, and differences in materials from lot to lot that are necessary to maintain consistent product characteristics, should not be considered modifications. Some comments identified specific adjustments that should not be considered modifications, including specific adjustments to compensate for the inherent variability of tobacco, the need for multiple suppliers for components, and adjustments made at the supplier's initiative to maintain consistency. The comments stated that if “modification” were interpreted to include these adjustments, “that excessively broad interpretation would result in hundreds of legally marketed products being swept into the statutory and regulatory regime for `new tobacco products' even though they would not have changed in any meaningful way” and that this would impose severe burdens on both FDA and industry. One comment noted that a dictionary definition of “modification” supported excluding these “adjustments” from the scope of modification.

(Response) As previously discussed, the FD&C Act defines the term “new tobacco product” as specifically including any modification of a tobacco product where the product was commercially marketed after February 15, 2007. The statutory definition is not limited to modifications intended to have a certain effect or that are more than a routine adjustment of the product. While FDA agrees that the FD&C Act's reporting obligations and other requirements related to tobacco products would apply to tobacco products modified as the commenters suggest, we disagree that these various requirements suggest that these types of modifications would not subject the modified tobacco product to the premarket requirements for new tobacco products. Manufacturers and interested parties should refer to FDA's Web site for guidance on current enforcement policies related to premarket requirements for tobacco products ( http://www.fda.gov/TobaccoProducts/default.htm ).

(Comment 6) Some comments stated that a broad construction of “modification” in the definition of new tobacco product would allow FDA to eliminate grandfathered products because, for example, consistency-maintaining changes are routinely made to “grandfathered” products to ensure continued consistency of the tobacco product.

(Response) We use the term “grandfathered” to refer to those tobacco products that were commercially marketed in the United States as of February 15, 2007. Under the FD&C Act, a “grandfathered” product is not a “new tobacco product” and is not subject to the statute's premarket requirements unless the product has been modified after February 15, 2007. The statute provides that if there has been “any modification (including a change in design, any component, any part, or any constituent, including a smoke constituent, or in the content, delivery, or form of nicotine, or any other additive or ingredient) of [the] tobacco product where the modified product was commercially marketed in the United States after February 15, 2007” the modified product is considered a “new tobacco product,” and is subject to the premarket requirements. (Section 910(a)(1); 21 U.S.C. 387j(a)(1).) This rule is consistent with that provision.

(Comment 7) Some comments stated that the proposed rule envisions an application and approval process for obtaining exemptions that is “procedurally indistinguishable from the process for obtaining a substantial equivalence order.”

(Response) We disagree with these comments because, as provided in § 1107.1, the information required for a new product in an exemption request is significantly different from the information submitted in a substantial equivalence report. Furthermore, after examining the detailed comments and information submitted to the NPRM, including information on the range of modifications made to tobacco products, we have reconsidered the estimates of the numbers and hours of submissions. We do not expect that an exemption request will be as lengthy or detailed as a 905(j) substantial equivalence report. We believe that the exemption pathway will be an efficient pathway to market when used for tobacco products with minor modifications to additives, where the modifications meet the criteria in section 905(j)(3) of the FD&C Act and where tobacco product manufacturers provide the information required in § 1107.1. Sections VII and VIII of this document provide additional information on the revised burden estimates.

(Comment 8) Several comments suggested that FDA define “minor modification.”

(Response) FDA declines to include in the rule a specific definition of the term “minor” because the meaning of the term may vary depending on the type of tobacco product. To enable FDA to determine whether a particular modification is minor and therefore may be exempted from the substantial equivalence requirements, the manufacturer must submit the information in § 1107.1(b), including information explaining why the modification is minor. Given that this program is just beginning, FDA does not have the experience needed at the present time to provide a useful definition of “minor modifications.” Although FDA is not defining “minor modifications” in this rule, as FDA gains experience in evaluating exemption requests, FDA will consider issuing a rulemaking defining minor modifications.

(Comment 9) Several comments suggested that FDA should use the 510(k) program applicable to medical devices as a model in implementing the substantial equivalence and exemption provisions. For example, the comments suggested that FDA place the burden on manufacturers to make the initial determination as to whether the modification is minor according to the criteria in section 905(j)(3) of the FD&C Act. The comments continued by suggesting that FDA could issue a guidance with a decision-tree to facilitate the identification of changes that would not generally require FDA premarket review. Other comments suggested that reports regarding changes that do not impact public health should not be required to be reported to FDA, but rather should be documented by the manufacturer in a memorandum to file, similar to the requirements for medical devices cleared through premarket notifications (510(k)s).

(Response) FDA did consider the requirements applicable to medical devices when developing this rule, but concluded those requirements are inconsistent with section 905(j)(3) of the FD&C Act. Section 905(j)(3) specifically requires FDA to make certain findings, including a determination of whether the modification would be a minor modification of a tobacco product that can be sold under the FD&C Act, when determining whether to exempt a tobacco product from the requirement to demonstrate substantial equivalence.

(Comment 10) Several comments also suggested that FDA revise the proposed rule to create actual categories of minor modifications, or identify specific modifications, that meet the statutory criteria for exemption. The comments suggested that specific categories of changes could be exempted under section 905(j)(3) of the FD&C Act, including changes intended to ensure consistency or minor blend changes ( e.g., to ensure that the specifications of a tobacco product are consistently met), changes that do not raise public health concerns ( e.g., changes to additives that have been deemed by FDA as not harmful to health or changes reported to FDA under section 904(c)), changes in “commodity” ingredients ( e.g., changes in ingredient suppliers or use of interchangeable ingredients obtained from different manufacturers which are within pre-defined specification tolerances for use in the tobacco product), changes in packaging text or graphics where the manufacturer does not know whether, or does not intend that, the ingredient will become incorporated in the consumed product. One comment stated that, once the Agency decides to grant an exemption request for a particular additive, it should establish a categorical exemption for a range of levels of that additive that would then apply to all similar products ( e.g., all cigarettes or all smokeless tobacco products). One comment suggested that the Agency develop a generic catalog of minor modifications that are classed by tobacco product type and manufacturing process upon which small manufacturers could rely in asserting that product modifications are exempt from the substantial equivalence requirements.

(Response) As discussed previously, in developing the proposed rule, we considered various approaches, including whether to include categories of exemptions in this initial rulemaking, but determined that we do not currently have sufficient information to enable us to make the findings required by the statute to support establishing categories of exemptions. However, we believe this information will develop as we review exemption requests and we intend to establish categories of exemptions when we have such information.

We have changed proposed § 1107.1(b) to clarify that a request for an exemption must identify the tobacco product(s) that is/are the subject of the exemption request. Although we are not establishing categories of exemptions at this time, manufacturers may submit one exemption request for multiple tobacco products if the request identifies the specific products and the information submitted under § 1107.1(b) applies to all the specified products. Finally, a manufacturer may submit an exemption request for a tobacco product(s) for a minor modification of an additive if the manufacturer specifies a range with a maximum and minimum as has been typically used for that tobacco product; again, the request must include the information required in § 1107.1(b) in order for us to make the necessary findings.

As discussed in the NPRM, FDA intends to provide technical and other nonfinancial assistance to small tobacco product manufacturers in complying with the premarket requirements of sections 905 and 910 of the FD&C Act, along with other requirements of the FD&C Act. Small tobacco product manufacturers may contact FDA at smallbiz.tobacco@fda.hhs.gov for assistance. Additionally, FDA is considering the best way to provide information about what kinds of modifications have been determined to be minor. One option might be to create a public database of exemption determinations that may help inform manufacturers when preparing exemption requests. We would appreciate feedback from manufacturers about whether they would be concerned about disclosure of exemption determinations and whether disclosing them would provide useful information. The other option would be for FDA to issue guidance in Question and Answer form which could be updated with new information on a regular basis.

(Comment 11) One comment suggested that the final rule should allow an exemption request to cover multiple products or a category of products and allow for modifications within a certain range. As one example, the comment suggested that, if supported by appropriate toxicological data, an exemption should allow a manufacturer to add a particular ingredient to any of its cigarette products up to a specified level, without requiring the manufacturer to file a substantial equivalence report or a separate exemption request for each product. Some comments urged adoption of a final rule that would establish a process focused on whether the addition of, or an increase in, the amount of an additive would increase the toxicity of the tobacco product. Similarly, other comments suggested that an exemption is appropriate when certain types of minor modifications would not increase the inherent public health risks of the product.

(Response) As discussed previously, a single exemption request may be submitted for multiple tobacco products. Note that manufacturers must identify each tobacco product proposed to be included within the exemption and include the information required by § 1107.1(b) in the request. Also, a manufacturer may submit an exemption request for a tobacco product(s) for a modification of an additive within a specified range. As provided in § 1107.1(c), the Agency's determination on whether to grant an exemption request will be based on whether the criteria in section 905(j)(3) of the FD&C Act are met.

(Comment 12) One comment stated that the language of section 910(a)(2)(A)(ii) of the FD&C Act “contemplates that exemptions from substantial equivalence will be categorical in nature, based on general regulations promulgated ex ante” and the statute does not require an affirmative “order.”

(Response) We disagree with the comment suggesting that section 910(a)(2)(A)(ii) requires categorical exemptions; the language the comment refers to states that an order under section 910(c)(1)(A)(i) for a new tobacco product is required unless “the tobacco product is exempt from the requirements of section 905(j) pursuant to a regulation issued under section 905(j)(3).” This rule implements section 905(j)(3)'s exemption provision by establishing a pathway for manufacturers to seek exemptions from the substantial equivalence requirements of the FD&C Act. An exemption granted through this pathway would be an exemption “pursuant to a regulation issued under section 905(j)(3).” The rule is also consistent with language in section 905(j)(3) of the FD&C Act requiring FDA to make specific determinations, and language in section 905(j)(1)(A)(ii) of the FD&C Act that indicates that FDA must affirmatively “grant” an exemption.

(Comment 13) Some comments requested that the Agency use its general rulemaking authority under section 701(a) of the FD&C Act to broaden the rule to include exemptions for more than just the addition or deletion of a tobacco additive, for example, to exempt minor modifications resulting from a company's change in vendors, blend maintenance adjustments, or adjustments in cigarette ventilation to maintain consistent strength of taste in response to agronomic variations. Similarly, some comments stated that FDA could issue other types of exemptions based on the “where otherwise appropriate” language in section 905(j)(3) of the FD&C Act. For example, the comment suggested we rely on this language to issue industry-wide exemptions for materials and/or components that are mandated by state or Federal law (such as Fire Safe Compliance paper).

(Response) Under section 905(j)(3), FDA may exempt from the requirements relating to the demonstration of substantial equivalence only tobacco products that are modified by adding or deleting a tobacco product additive, or increasing or decreasing the quantity of an existing tobacco additive, if FDA makes three specific findings. One of these findings is that the exemption is otherwise appropriate. Thus, under the statutory language, exemptions from substantial equivalence requirements are limited to modifications of additive levels; the “otherwise appropriate” language is not a separate ground for exempting a tobacco product from the substantial equivalence requirements of the statute.

(Comment 14) Some comments suggested that the reduction or elimination of an additive should be categorically exempt from the substantial equivalent requirements. These comments referred to section 904(c)(3), which requires manufacturers to notify FDA within 60 days after entering a product into the market when a manufacturer “eliminates or decreases an existing additive, or adds or increases an additive that has by regulation been designated by the Secretary as an additive that is not a human or animal carcinogen, or otherwise harmful to health under intended conditions of use.” One comment suggested that the final rule should categorically exempt such modifications in recognition of the Congressional determination that additions or increases of “designated” additives do not require premarket review before a manufacturer enters a product into the market. The comment also suggested merging the exemption process with the “designation” process under section 904(c)(3).

(Response) As discussed previously, we do not have sufficient information at this time to establish categorical exemptions, although we intend to establish categorical exemptions as information develops. Thus, comments related to the designation of additives that are not human or animal carcinogens as being one category of modifications that should be exempted are premature and outside the scope of this regulation.

(Comment 15) One comment discussed the proposed certification provision and noted that Congress excluded any consideration of behavioral effects from the substantial equivalence evaluation and in the evaluation of exemption requests for minor modifications. Similarly, other comments requested clarification that the rule would not require tobacco manufacturers to conduct behavioral research because the proposed rule might be read as meaning that a manufacturer would need to conduct behavioral research on minors in order to evaluate a product's appeal to minors. One comment stated that the data and certification requirements pose insurmountable practical problems because the comment did not believe that sufficiently sensitive tools exist to measure addictiveness, appeal to, or use by, minors. The comment stated, however, that toxicity data would likely be needed to evaluate some minor modification exemption requests and that data should be presented in a truthful manner. The comment suggested that if the Agency believes a certification is necessary, a more appropriate requirement would be similar to 21 CFR 807.87(k) (this provision requires that a premarket notification (510(k)) include a statement that the submitter believes, to the best of his or her knowledge, that all data and information submitted are truthful and accurate and that no material fact has been omitted).

(Response) We did not intend for the proposed rule to imply that behavioral research must be conducted or submitted to support a certification. Rather, the rule requires only that the certification summarize the supporting evidence, which could be a literature review, previous studies, or other information. The certification is intended to provide us with assurance that there is a basis for making the findings required by section 905(j)(3) of the FD&C Act.

(Comment 16) Several comments stated that the proposed rule would create an enormously burdensome process, similar to a premarket application, for minor modifications to tobacco products. For example, several comments noted that, if finalized, the rule would require a tobacco product manufacturer to submit three reports to FDA regarding the requested minor modification: The initial minor modification report, a 905(j)(1)(A)(ii) report, and a separate report under section 904(c)(2) or (c)(3) for any change in a tobacco additive. One comment stated that this would create a duplicative process that would exceed the requirements for new tobacco product applications and modified risk tobacco products, and other comments stated that the reporting of certain changes to additives in section 904(c)(2) would be rendered meaningless. Some comments stated that the process established in the proposed rule—requiring submission of an exemption request and, once granted, submission of a report under section 905(j)(1)(A)(ii) of the FD&C Act—is more burdensome and potentially lengthier than submission of a 905(j) substantial equivalence report or a premarket tobacco application.

(Response) These comments refer in part to the requirement that a manufacturer who obtains an exemption is also required to report to FDA under section 905(j)(1)(A)(ii) of the FD&C Act (this requirement is not addressed in this rulemaking). Specifically, section 905(j)(1)(A)(ii) of the FD&C Act requires the applicant to report to FDA at least 90 days prior to introducing or delivering for introduction into interstate commerce the tobacco product that is the subject of the exemption, the basis for the applicant's determination that “the tobacco product is modified within the meaning of [section 905(j)(3)], the modifications are to a product that is commercially marketed and in compliance with the requirements of this Act, and all of the modifications are covered by exemptions granted by FDA pursuant to [section 905(j)(3)].” In addition, this submission must describe “action taken by [the applicant] to comply with the requirements under section 907 (21 U.S.C. 387g) that are applicable to the tobacco product” (section 905(j)(1)(B) of the FD&C Act). As noted earlier, the FD&C Act does set up distinct notification and reporting requirements, including those in sections 904(c) and 905(j)(1)(A)(ii), related to additives. In addition, in some cases the statute does require manufacturers to make multiple submissions before they may market a new tobacco product. We expect, however, that the overall exemption pathway to market will be less burdensome than the substantial equivalence or premarket application pathways to market. In addition, as discussed previously, a single exemption request may be submitted for multiple tobacco products, as long as each tobacco product is identified and the information required by § 1107.1(b) is submitted with the request. Also, a manufacturer may submit an exemption request for a modification of an additive within a specified range, which would minimize potential burden and duplication of information. Moreover, a manufacturer may submit the information required by 904(c)(2) in conjunction with the submission of a section 905(j)(1)(A)(ii) report.

(Comment 17) Several comments noted that the proposed process provided no time limit for FDA review of exemption requests and, consequently, a manufacturer may have to wait a long time for FDA to review its request for an exemption for a minor modification to its tobacco product. One comment suggested that FDA should make a decision on an exemption request within 90 days. This comment also suggested that one way to achieve more efficient review would be to allow a manufacturer to provide the notification required under section 905(j)(1)(A)(ii) at the same time FDA reviews the exemption request (submitting the information for an exemption request with the report under 905(j)(1)(A)(ii)); another comment suggested that the manufacturer document the exemption in its files rather than submit the section 905(j)(1)(A)(ii) report. These comments suggested that these approaches would eliminate the inefficiency of requiring an Agency decision on an exemption request before a manufacturer could submit a 90-day notification under section 905(j)(1)(A)(ii) of the FD&C Act.

(Response) We agree that review of exemption requests should occur in a timely manner, and we do not expect the review process to be lengthy if the request includes the information stated in § 1107.1(b). We do not expect that the information submitted in an exemption request will be as lengthy or detailed as in a 905(j) substantial equivalence report. We understand that concerns regarding the length of time needed to prepare a submission were due in large part to the burden estimates in the NPRM; as discussed previously, however, we have revised our burden estimates. More discussion on the burden estimate can be found at sections VII and VIII of this rulemaking.

We disagree, however, that the report under section 905(j)(1)(A)(ii) of the FD&C Act could be made in conjunction with an exemption request under § 1107.1 or that documenting the information specified in section 905(j)(1)(A)(ii) in the manufacturer's files would be appropriate. Section 905(j) requires that each person who proposes to begin the introduction or delivery for introduction into interstate commerce for commercial distribution a new tobacco product must submit either a report under section 905(j)(1)(A)(i) demonstrating that the new tobacco product is substantially equivalent to an appropriate predicate product, or a report under section 905(j)(1)(A)(ii) stating the basis for their determination that the product is modified within the meaning of section 905(j)(3), the modifications are to a commercially marketed product, and that the modifications are covered by exemptions granted by FDA. Thus, documenting the information in the manufacturer's files would not be appropriate. Furthermore, the information required in a report under section 905(j)(1)(A)(ii) that “all of the modifications are covered by exemptions granted by [FDA]” will not be available until FDA grants the exemption; thus, the report under section 905(j)(1)(A)(ii) may not be submitted simultaneously with the exemption request.

(Comment 18) One comment proposed an alternative rule that would require manufacturers to report to FDA “a baseline list” that would include “maximum use levels” of each additive in each product, the maximum use levels (MULs) of each tobacco type used in that category, and the established ranges for all other design parameters used in products in that category.” The comment suggested that FDA could use these reports to create a composite list of MULs and established design parameter ranges for each product category based on information from grandfathered products and other legally marketed products. The composite list would be published in the Code of Federal Regulations. Manufacturers would be required to submit changes to its baseline list to reflect any new tobacco products the manufacturer has legally introduced into the market. Through an amendment process, tobacco manufacturers could increase MULs or expand design parameter ranges when there is evidence that use levels or design parameters are “generally recognized as appropriate for public health.” The comment stated that its proposal would also clarify that adjustments to tobacco products that are not intended to alter the chemical or perception properties of the product are not “modifications” and thus do not make the product a new tobacco product subject to premarket requirements.

(Response) In general, we disagree that this alternative would appropriately implement section 905(j)(3) of the FD&C Act. We note, for example, that a key premise of the alternative is the definition of “modification” which, in the alternative, would be defined, with certain exceptions, as “any change made by a tobacco product manufacturer * * * that is intended to or does alter the chemical or perception properties of the product.” This definition is inconsistent with the language of section 910(a) of the FD&C Act, which does not include intent as an element of the definition of “modification.”

(Comment 19) Some comments suggested that, because regulations implementing section 905(j)(3) are not yet in place, FDA should exercise enforcement discretion for tobacco products that might use that pathway to market when the regulations are in place. These comments suggested that exemptions from reporting are essential to a workable system and FDA is bound to receive a significant volume of submissions for minor and inconsequential changes to tobacco products before such exemptions are issued.

(Response) This final rule implements the exemption provision pathway to market and renders this comment moot.

(Comment 20) One commenter requested an extension of the comment period.

(Response) FDA declines to extend the comment period in an effort to ensure that the exemption pathway becomes available as required by statute. As indicated in the preamble to the proposed rule, however, FDA anticipates that there will be further guidance and rulemakings on this topic and will request comment accordingly.

For the effective date of this final rule see the DATES section of this document.

Section 905(j)(3)(A) of the FD&C Act provides that FDA may exempt from the requirements relating to the demonstration of substantial equivalence tobacco products that are modified by adding or deleting a tobacco additive, or increasing or decreasing the quantity of an existing tobacco additive, if FDA determines the modification would be a minor modification of a tobacco product that can be sold under the FD&C Act; a substantial equivalence report is not necessary to ensure that permitting the tobacco product to be marketed would be appropriate for protection of the public health; and an exemption is otherwise appropriate. Section 905(j)(3)(B) of the FD&C Act requires that FDA issue regulations to implement the provision on exemptions from the substantial equivalence requirements of the Tobacco Control Act. FDA is issuing this rule as required by section 905(j)(3)(B) of the FD&C Act. Additionally, section 701(a) of the FD&C Act (21 U.S.C. 371) gives FDA general rulemaking authority to issue regulations for the efficient enforcement of the FD&C Act.

The Agency has determined under § 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is not an economically significant regulatory action under Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the exemption pathway put into place by this rule provides an option that potentially reduces costs, the Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

FDA received several comments covering such topics as the accuracy of FDA's assessment of social costs and benefits, the accuracy of burden estimates, compliance with requirements such as Executive Order 12866 and the Regulatory Flexibility Act, and the effect of this rule on small businesses.

(Comment 21) One comment stated that bringing a modified product to market under the proposed exemption pathway could cost as much or possibly more than filing a section 905(j) report alone because the Agency estimated that requesting an exemption and filing a section 905(j) report would each require 360 hours. Bringing a product to market under an exemption would require both submissions.

(Response) This comment reflects some misunderstanding of the nature of the reports submitted under 905(j) of the FD&C Act with and without substantial equivalence exemptions. In the absence of an exemption, a report demonstrating substantial equivalence under section 905(j)(1)(A)(i) must be submitted. If an exemption has been requested and granted, a report must still be submitted under section 905(j)(1)(A)(ii), but it will cite the exemption(s) in place of demonstrating substantial equivalence. The 360-hour estimate refers to a section 905(j) report demonstrating substantial equivalence. A report citing an exemption would be far shorter.

(Comment 22) One comment stated that FDA incorrectly concluded that the proposed rule was not significant under Executive Order 12866.

(Response) FDA should have stated that the proposed rule was not economically significant. We have added that statement to the final rule.

(Comment 23) One comment argued that FDA's conclusion that the proposed rule does not impose social costs is “irrational,” “erroneous,” and “so unreasonable as to be arbitrary and capricious.” The comment further stated that FDA “inappropriately stacks the deck” by using a baseline scenario in which there are no exemptions and that by this reasoning, “it is literally impossible for its exemption rule to impose costs, regardless of how burdensome or byzantine an exemption pathway the rule sets forth.” In light of the statutory mandate to implement exemptions, the no-exemption scenario cannot be treated as the baseline. Finally, the comment argued that FDA had not complied with its obligation to rationally consider the costs of the rule compared with alternative means of implementing exemptions.

(Response) FDA disagrees that the proposed rule would impose social costs. The current regulatory framework requires submission of a substantial equivalence report (or a premarket application) before introducing any new tobacco product, and without rulemaking this framework would continue into the future. Substantial equivalence reports have a substantial burden, preliminarily estimated at 360 hours. Use of this baseline is appropriate and does not “stack the deck.” The Office of Management and Budget's (OMB's) Circular A-4 states that the baseline “should be the best assessment of the way the world would look absent the proposed action.” Without this rule, all new tobacco products would be required to submit a premarket application or substantial equivalence report.

We do not argue that under the stated baseline it is literally impossible for this exemption rule to impose costs. We acknowledge the theoretical possibility that uncertainty regarding the kinds of product modifications that may be granted an exemption and the amount of supporting evidence that will be required as the basis for an exemption could impose additional social costs. We think this is extremely unlikely, especially in the long run, because uncertainty will be reduced as manufacturers gain experience with the regulatory regime. Although the theoretical possibility exists that this rule could increase costs in the short run, we therefore do not anticipate that it will increase costs in the long run.

The comment seems to imply that a regulatory alternative in which certain types of modifications are automatically exempted should be used as the baseline. This suggestion confuses the choice of baseline with an analysis of alternatives. Nevertheless, FDA recognizes that there are regulatory alternatives, such as identifying categories of modifications that are exempt, that could have reduced costs more than this rule will. That is why in the future, when the Agency has sufficient information to do so, FDA may identify categories of modifications that are exempt.

This comment may be reacting to the apparent lack of cost savings under the exemption pathway, or the perceived large cost of both the exemption and substantial equivalence pathways. As discussed elsewhere in this preamble, FDA now believes it significantly overestimated the burden of requesting an exemption. Our current estimate, based on new information, indicates that the exemption pathway will offer cost savings.

(Comment 24) One comment argued that based on the history of FDA's 510(k) Program, it is clear that the broad interpretation of the section 905(j) reporting mandate embodied in current guidance (“Guidance for Industry and FDA Staff—Section 905(j) Reports: Demonstrating Substantial Equivalence for Tobacco Products” (76 FR 789, January 6, 2011)) will “impose an incredible and unnecessary administrative burden on the Agency and the tobacco product manufacturing industry.” Many of the submissions will be unnecessary for protection of the public health. FDA estimated that 905(j)(3) reports will cost $35,000 each, “evidencing the burden on industry of an onerous reporting mandate.”

(Response) FDA acknowledges that tobacco product manufacturers may face new challenges in complying with the various provisions of the Tobacco Control Act. However, this rule will not impose any new obligations on manufacturers. In the absence of this rule, all modifications leading to new tobacco products would require the demonstration of substantial equivalence (if not submission of a premarket application), as discussed previously in this document. This rule provides an alternative pathway to substantial equivalence and premarket applications for marketing new tobacco products and may reduce both industry costs and the burden on FDA of reviewing submissions.

(Comment 25) A comment argued that the approach taken in FDA's impact analysis is legally deficient because it would allow the Agency to skirt its obligations under the Regulatory Flexibility Act by assuming any regulation issued to implement substantial equivalence exemptions is cost free. The comment further stated that FDA can only avoid the requirements of the Regulatory Flexibility Act by certifying that the rule will not have a significant impact on a substantial number of small businesses and that such a certification must be reasonably supported.

(Response) FDA disagrees that the Agency has skirted any obligations under the Regulatory Flexibility Act. FDA proposed to certify that the rule would not have a significant impact on a substantial number of small entities because compared to the appropriate baseline, the rule would offer an alternative channel that may reduce costs. See the Response to Comment 23 for a discussion of the baseline on this issue.

(Comment 26) A comment argued that the approach taken in FDA's impact analysis is legally deficient because it would allow the Agency to skirt its obligations under Executive Order 12866 by assuming any regulation issued to implement substantial equivalence exemptions is cost free. FDA must rationally compare the costs and benefits of the proposed rule and consider reasonable alternatives. After assessing costs and benefits FDA must proceed “only upon a reasoned determination that the benefits of the intended regulation justify its costs.”

(Response) FDA disagrees. For regulatory actions which are not economically significant, Executive Order 12866 requires a statement of potential costs and benefits. FDA has rationally compared the costs and benefits of the proposed rule according to the correct baseline, as explained in the Response to Comment 23. An analysis of regulatory alternatives is only required for economically significant rules.

(Comment 27) A comment argued that the approach taken in FDA's impact analysis is legally deficient because it would allow the Agency to skirt its obligations under the Administrative Procedure Act. “FDA's assumption that the cost of its proposed rule is zero demonstrates that FDA's assessment of social costs is so unreasonable as to be arbitrary and capricious.”

(Response) FDA disagrees with the assertion that the Agency's assessment of social costs is unreasonable, arbitrary, or capricious. See the Response to Comment 23 for a discussion about the baseline for details.

(Comment 28) A comment argued that FDA's impact analysis is unreasonable because after incorrectly concluding that the proposed rule is costless, FDA conducts a cursory impact analysis quantifying the cost of preparing an exemption request.

(Response) FDA concluded that the proposed rule was highly unlikely to impose social costs. We do not conclude or state that preparing and submitting a request for exemption would be without cost. The question of interest in the impact analysis is the cost of marketing a new tobacco product through the exemption pathway compared to the cost of marketing a new tobacco product through the substantial equivalence pathway. FDA provided an estimate of the absolute cost of obtaining an exemption to allow the reader to make additional comparisons.

(Comment 29) A comment argued that FDA's impact analysis is unreasonable and “so misguided as to demonstrate that FDA has no real understanding of the practical consequences of its proposed rule for the industry it is charged with regulating.”

(Response) FDA disagrees that the analysis is misguided or that the Agency has no understanding of the industry it is charged with regulating. However, the Agency does acknowledge that because statutory deadlines compelled us to start developing a rule for substantial equivalence exemptions before substantial equivalence reporting requirements went into effect, there was considerable uncertainty surrounding our estimates as well as the process itself. For this reason we repeatedly requested comment throughout the preliminary impact analysis. Because we have gained additional information and experience since publishing the proposed rule, we have revised our estimates as discussed in the paragraphs that follow.

(Comment 30) Multiple comments asserted that FDA's impact analysis is unreasonable and dramatically underestimates the costs and burdens associated with the proposed rule. One comment stated that if FDA takes the position that routine, minor adjustments to maintain consistency trigger the need for an exemption or substantial equivalence report, then FDA's best estimate that 50 exemption requests will be submitted per year is “absurdly low.” Multiple comments indicated that there will be at least several hundred exemption requests submitted per year, possibly several thousand. One comment stated that it is arbitrary to estimate that 50 of 233 new products introduced each year would be the subject of an exemption request; FDA's approach based on counting new products is flawed because manufacturers will have to file potentially hundreds of exemption requests each year for existing tobacco products; and, the estimate that FDA will request additional information for 40 requests per year is also far too low.

(Response) The estimates referred to by this comment are not estimates of the cost of this rule, but estimates of the absolute cost of preparing exemption requests. As described in the preliminary regulatory impact analysis, this rule offers a potentially cost-reducing additional pathway for marketing a subset of new tobacco products.

Based on the original estimate that 233 new products are introduced each year, FDA disagrees that it was arbitrary to choose 50 as our best estimate of how many exemption requests we would receive. Because the statute sets specific criteria for when exemptions may be granted, we can clearly expect that not all new products would be eligible.

Since publication of the proposed rule, FDA has gained additional information from viewing comments and initial substantial equivalence reports and through other activities within the usual scope of operation for FDA's Center for Tobacco Products. We now know more about the range and frequency of modifications that are made to tobacco products. Based on this new information, we have revised upward the number of exemption requests we expect to receive to 500 per year. We now anticipate requesting additional information for 150 of these requests.

(Comment 31) Comments argued that FDA provided “no basis whatsoever,” “reasonable or otherwise” for its estimates that it will take 360 hours to prepare an exemption request and 50 hours to respond to a request for additional information. Comments further argued that these estimates are arbitrary and capricious and do not comply with requirements under the Paperwork Reduction Act (the PRA), the Regulatory Flexibility Act, and Executive Order 12866; preparing these submissions will take substantially longer than estimated; and the lack of basis for the burden estimate is clear because the same burden estimate, 360 hours, was used for demonstration of substantial equivalence and requesting a substantial equivalence exemption.

(Response) The estimates referred to by this comment are not estimates of the cost of this rule, but estimates of the absolute cost of preparing an exemption request. FDA disagrees that these estimates are too low and are completely without basis. The processes FDA is implementing for substantial equivalence reports and substantial equivalence exemptions are completely new, so there is considerable uncertainty around the time that such submissions will take to prepare. The estimates in the proposed rule represented the Agency's best estimates at the time, based on the requirements set out in the rule and other submission processes administered by the Agency. There was no ideal submission process to which to compare a substantial equivalence exemption request. Although comments have asserted that the time it takes to request an exemption was underestimated, no alternative estimates were provided. The fact that the burden estimates were originally the same for demonstrating substantial equivalence and requesting an exemption reflected an effort to be conservative in estimating the cost savings offered by this rule and uncertainty surrounding these burdens.

Since publication of the proposed rule, FDA has gained additional information from reviewing comments and initial substantial equivalence reports and through other activities within the usual scope of operation for FDA's Center for Tobacco Products. We now know more about the range of modifications that are made to tobacco products and are persuaded that we overestimated the time that will be required to prepare and submit an exemption request. Based on the limited information required relative to a substantial equivalence report, we now estimate that an exemption request for a suitable product, meeting the requirements set forth in this rule, could be prepared in 12 hours, and that a response to a request for additional information could be prepared in 3 hours. For more detail see section VIII of this document.

(Comment 32) One comment argued that FDA does not show how costs will be reduced through this rule because the cost of demonstrating substantial equivalence is not estimated.

(Response) As noted by many comments, FDA initially estimated that demonstrating substantial equivalence and requesting an exemption would each take 360 hours, which would imply that on average costs would not actually be reduced by this rule (though costs could certainly be reduced for some subset of potentially eligible new tobacco products). The initial estimate of the time required to prepare a substantial equivalence report is currently being updated based on initial submissions to the Agency, but we anticipate that the updated estimate will remain substantially higher than our downwardly revised estimate of the cost of preparing an exemption request.

(Comment 33) Comments argued that uncertainty about the circumstances under which FDA would request additional information makes it more difficult for manufacturers to determine whether it will be less costly to request an exemption and that FDA should provide additional information regarding the types of modifications that will be considered for exemption requests. One comment further argued that spending 360 hours on an exemption request that is ultimately denied, and then submitting a substantial equivalence report, wastes resources.

(Response) FDA disagrees that it is prudent to provide additional information at this time regarding the types of modifications that will be considered for an exemption, as explained elsewhere in the preamble. We also note that based on current information, we estimate the burden of submitting an exemption request to be far lower than initially estimated. the cost of responding to a request for additional information will also be lower than initially estimated, and fewer resources will be expended if an exemption request is ultimately denied. Nevertheless, it is up to the individual manufacturer to make a reasoned determination as to whether the likelihood that an exemption is granted justifies the cost of submitting an exemption request. The criteria set forth in the statute and this rule will form the basis for that determination.

(Comment 34) A comment argued that in estimating the time required to prepare an exemption request, FDA has not considered the “massive amount of confusion and uncertainty” that will stem from the lack of clear definition of “minor modification” or clear standards for what modifications would be eligible for exemptions.

(Response) The statute and this rule plainly state that only modifications pertaining to tobacco product additives could be eligible for an exemption. The time we have estimated that it takes to submit an exemption request reflects the reality that we have not set up categories of modifications which are automatically exempt. Instead the manufacturer must provide an explanation as to why the modification should be exempt, following the requirements of this rule.

(Comment 35) A comment asserted that FDA discounts the possibility that overall submission costs could increase as a result of the uncertainty generated by the proposed rule and pointed out that FDA does not estimate the annual number or percentage of exemption requests it expects to deny. The comment argues that because the number of exemption requests will far exceed 50 per year, the number of requests denied due to inadequate information regarding the exemption criteria will be higher than FDA anticipates. The comment further states that “having failed to provide any meaningful guidance on the exemption criteria in the nearly 2 years since the Family Smoking Prevention and Tobacco Control Act was signed into law, FDA cannot blithely assume that the criteria will somehow become clear in time to save manufacturers from incurring major, unnecessary costs in preparing exemption requests that are denied because they are found not to meet criteria that FDA has not divulged.” A similar comment argues that the cost savings of this rule are merely theoretical.

(Response) FDA disagrees with the characterization that the Agency discounted the possibility that overall submission costs could increase. This possibility was discussed in the preliminary analysis precisely because the Agency did not feel it should be ignored. FDA maintains the conclusion that in the long run, absolute costs for preparing exemption requests will certainly not exceed the baseline costs for demonstrating substantial equivalence because manufacturers always have the option available of demonstrating substantial equivalence for these products. Manufacturers can limit the number of exemption requests which are ultimately denied by adhering to the criteria for an exemption set forth in the statute and this rule. Only modifications pertaining to additives could possibly be eligible. Although costs could theoretically be generated in the near term, this is unlikely because the cost savings likely to result from a single exemption is high relative to the cost of preparing a single exemption request.

While we agree that the number of exemption requests will be higher than initially estimated, we do not attempt to estimate the number (or proportion) that will ultimately be denied because it depends on the quality and suitability of the submissions. In light of currently available information, the exemption pathway is reasonably expected to offer cost savings.

(Comment 36) Comments argued that due to the high estimated cost of preparing exemption requests, FDA should assist small businesses by setting up categorical exemptions and developing a catalog of minor modifications (by product type and manufacturing process) that are exempt from substantial equivalence requirements.

(Response) Our reasons for not setting up categorical exemptions at this time are discussed elsewhere in the preamble. FDA reiterates that this rule activates an additional pathway for marketing new tobacco products, providing manufacturers with an option that may reduce costs. Therefore this rule imposes no incremental burden from which to provide relief.

However, FDA also acknowledges that setting up categorical exemptions or developing a catalog of minor modifications could offer greater potential cost savings for tobacco product manufacturers, many of which are small, in complying with requirements under the Tobacco Control Act. That is why the Agency may choose to set up categorical exemptions in the future when there is more information about what categories would be appropriate.

(Comment 37) Manufacturers commented that FDA should issue industry-wide exemptions from 905(j) requirements, or 910 requirements if applicable, for modifications that are required to comply with a change in state or Federal law because not exempting such modifications could cause small manufacturers to go out of business and would place an undue burden on small manufacturers.

(Response) FDA disagrees that declining to broaden the scope of the exemption pathway places an undue burden on small manufacturers. FDA reiterates that this rule establishes an additional pathway for marketing new tobacco products, providing manufacturers with an option that may reduce costs. Therefore this rule imposes no incremental burden from which to provide relief. For changes in additives, small manufacturers may request an exemption. The absolute cost of requesting an exemption is expected to be far less than originally estimated, and the potential cost savings relative to demonstrating substantial equivalence far greater. Although broadening the scope of the exemption pathway could offer a larger potential reduction in costs, FDA declines to do so as explained elsewhere in the preamble.

(Comment 38) Manufacturers commented that the estimated 360 hours it would take to prepare an exemption request would be an unduly burdensome requirement to place on small manufacturers for the addition or deletion of an additive, or a change in the quantity of an additive. The comments stated that small manufacturers do not have in-house scientists or engineers who can spend all their time preparing exemption requests and could be driven out of business by this requirement.

(Response) As discussed previously in this document, FDA has revised downward the estimate of the time it takes to prepare an exemption request. FDA reiterates that because this rule activates an alternative pathway for marketing new tobacco products that may reduce costs, it imposes no incremental burden from which to provide relief. Regardless of whether the preparation of submissions to FDA is done entirely in-house or with the help of contractors, the cost should not increase as a result of this rule. Small manufacturers would have to prepare substantial equivalence reports for all new products (not requiring a premarket application) in the absence of this rule. Small manufacturers may realize some savings by submitting exemption requests for a subset of their new products rather than demonstrating substantial equivalence.

Under the current regulatory framework, tobacco product manufacturers must submit to FDA either a premarket application or a report under section 905(j)(1)(A)(i) demonstrating substantial equivalence to an appropriate predicate product, and FDA must issue the appropriate corresponding order, before a new tobacco product may be introduced or delivered for introduction into interstate commerce. This rulemaking activates a third option, the substantial equivalence exemption pathway for marketing new tobacco products. Compared with the cost associated with the current baseline, this rule may result in cost savings if tobacco manufacturers request, and are granted, substantial equivalence exemptions for some new tobacco products.

This final rule may potentially apply to any tobacco product manufacturer or importer whose products are regulated under the Tobacco Control Act. Statistics of U.S. Businesses data indicate that there are 20 domestic cigarette manufacturers and 46 other tobacco product manufacturers (U.S. Census, 2009). Because other tobacco product manufacturers would include cigar and pipe tobacco manufacturers, not all 46 firms represent manufacturers that are currently regulated under the Tobacco Control Act. 1 An unknown number of importers would be affected. 2 It is possible that not all potentially affected manufacturers and importers will choose to request exemptions.

The number of new products introduced in a given year is the theoretical maximum number that could be introduced under a substantial equivalence exemption. However, some new products may not be substantially equivalent to an appropriate predicate tobacco product and will require premarket authorization under section 910(c), in which case they will certainly not be eligible for an exemption. The remaining products could demonstrate substantial equivalence in a 905(j)(1)(A)(i) report. Under this final rule, a subset of those substantially equivalent products will be eligible for possible introduction into interstate commerce through the substantial equivalence exemption pathway.

FDA considers AC Nielsen scanner data, industry comments, and experience from substantial equivalence reports submitted since passage of the Tobacco Control Act in order to estimate the number of exemptions that may be requested on an annual basis. We assume the average number of new products introduced annually will be approximately the same going forward as in recent years. However, it is also possible that requirements imposed by the Tobacco Control Act will lead manufacturers to introduce new products at a lower rate in the future.

Using AC Nielsen scanner data covering late 2007 to late 2009, FDA counts a Universal Product Code (UPC) as introduced in 2008 if total dollar sales in late 2007 were zero, but total dollar sales in 2008 were greater than zero. With this definition, FDA finds that 628 new cigarette UPCs, 215 new chewing tobacco UPCs, 36 new smoking tobacco UPCs (excluding pipe tobacco), and 36 new cigarette paper UPCs were introduced in 2008. This sums to an estimated 915 new UPCs in 2008.

Unique UPCs are often assigned to different types of packaging for otherwise identical products. In the preliminary regulatory impact analysis, FDA excluded from consideration new UPCs that appeared to be for products that differed from existing products only in packaging. In response to comments stating that our initial approach undercounted new tobacco products because of the extremely minor changes that are often made to existing products, we consider all new UPCs in this final regulatory impact analysis. The number of new UPCs still may not accurately reflect the number of new tobacco products if enough modifications are so minor that they do not trigger a UPC change. FDA does not know the extent to which this may be the case, but based on comments from industry and experience with substantial equivalence reports, relatively minor modifications are more common than originally thought.

As outlined previously, some new products may require premarket authorization under section 910(c), and an unknown proportion of the remaining products would be introduced through the exemption pathway. This rule does not require a one-to-one correspondence between the exemption requests and new products introduced through the exemption pathway. Based on the number and content of substantial equivalence reports FDA has received so far, FDA estimates that in the first years after the procedure is in place, 500 exemption requests will be submitted per year covering 750 new tobacco products. This number has been revised upward substantially from the estimate in the preliminary regulatory impact analysis as FDA has learned from industry comments and from substantial equivalence reports that tobacco product manufacturers make many small modifications to their products which may qualify for an exemption. FDA anticipates requesting additional information to support 150 of those exemption requests. This number is uncertain because it depends on the quality of the initial requests.

The main effect of this final rule would be a potential reduction in the costs of introducing new tobacco products compared with the current baseline. Under the baseline scenario, all new products that do not undergo premarket review under section 910(c) must submit a substantial equivalence report under section 905(j)(1)(A)(i). If an exemption request is submitted and granted, a manufacturer would be able to submit a different 905(j) report in which, under section 905(j)(1)(A)(ii), a discussion of the exemption(s) is used in place of the demonstration of substantial equivalence. On a per-product basis, when one exemption request covers one new tobacco product, the cost savings attributable to this rule equals the difference between the cost of demonstrating substantial equivalence and the cost of both requesting an exemption and submitting a report under section 905(j)(1)(A)(ii). 3 The savings could be greater in cases in which a single exemption request is used for multiple products.

FDA has concluded that we significantly overestimated the burden of requesting a substantial equivalence exemption as we prepared the proposed rule. The estimate, 360 hours, was based in part on other submission processes the Agency has direct experience with, but there was no ideal existing submission process to which to compare a substantial equivalence exemption request. We did not yet have experience reviewing the substantial equivalence reports this pathway provides an exemption from. Since publication of the proposed rule, we have gained additional information from reviewing comments and initial substantial equivalence reports and through other activities within the usual scope of operation of FDA's Center for Tobacco Products. We now know more about the range of modifications that are made to tobacco products. Based on the limited information required to be submitted relative to a substantial equivalence report, we now estimate that preparing an exemption request will require 12 hours for the requirements of § 1107.1(b)(1) through § 1107.1(b)(8). We also estimate an additional 12 hours will be required to prepare the environmental assessment, for a total of 24 hours. For more detail on the estimate, see section VIII of this document, which explains that an exemption request does not require a comparison to a predicate or inclusion of information on multiple characteristics, but rather requires limited information for the product that is the subject of the exemption request and on the modification of the additive.

Based on the requirements set forth in the codified language, FDA anticipates that preparation of most sections would require technical scientific and engineering expertise. Legal input and review would also play a role. Therefore, in valuing the time cost, FDA uses the weighted average of tobacco manufacturing industry-specific hourly wages for life, physical, and social science occupations ($30.91), architecture and engineering occupations ($40.93), and legal occupations ($71.83) (Ref. U.S. BLS, 2010). FDA assigns these occupational categories weights of 40 percent, 40 percent, and 20 percent. The resulting composite wage is $43.10. FDA then doubles this amount to $86.20 to account for benefits and overhead. Multiplying this wage by the burden estimates above yields a cost per exemption request of $1,034 for the requirements of § 1107.1(b)(1) through § 1107.1(b)(8) and an additional $1,034 for the environmental assessment, or a total of $2,069. FDA anticipates that when it asks a manufacturer to provide additional information in support of an exemption request, it will take an average of 3 hours to prepare the additional information. Using the same hourly cost of labor, providing additional information is estimated to result in an additional cost of $259.

Under the Tobacco Control Act, completion of the substantial equivalence pathway for marketing a new tobacco product requires submission of a report under section 905(j)(1)(A)(ii). This is a basic requirement that is expected to take 3 hours. Valued at a wage of $86.20, it would then cost $259 to submit one report under section 905(j)(1)(A)(ii).

In the case that one exemption request covers one product and the exemption is granted without a request for additional information, the substantial equivalence exemption pathway (consisting of an exemption request, including an environmental assessment, and a subsequent report under section 905(j)(1)(A)(ii) for a product embodying one modification) would take 27 hours at a cost of $2,328. These are elective costs in that firms will not choose this pathway unless the potential savings relative to demonstrating substantial equivalence justifies the risk of submitting an exemption request that is ultimately denied. The preliminary time burden estimate for submitting a substantial equivalence report under section 905(j)(1)(A)(i) was 360 hours. This estimate is currently being updated based on the initial submissions to the Agency, but for a new tobacco product satisfying the criteria for an exemption, we anticipate that the burden of preparing a substantial equivalence report and an environmental assessment will continue to be appreciably higher than the burden described previously for utilizing the exemption pathway.

Based on FDA's expectation that 500 exemption requests will be received per year, the absolute cost of preparing exemption requests would be $517,224 for the requirements of § 1107.1(b)(1) through § 1107.1(b)(8) and an additional $517,224 for the environmental assessments. The absolute cost of replying to requests for additional information would be $38,792 if, as anticipated, we ask for additional information supporting 150 of the 500 requests. If these exemptions are cited in the 905(j)(1)(A)(ii) reports for 750 new products, those reports would cost an additional $193,959. If all these exemptions were granted, the total savings attributable to this rule would be the difference between the cost of bringing all 750 products to market through the substantial equivalence pathway and the sum of the four costs enumerated above. However, the cost savings is expected to be lower because it is unlikely that all the requested exemptions would be granted.

In order to grant an exemption, FDA must find, among other things, that a report demonstrating substantial equivalence would not be necessary to ensure that permitting the tobacco product to be marketed would be appropriate for protection of the public health. Furthermore, an exemption could be rescinded if found to be inappropriate, and the process for rescission would depend on whether there is a serious risk to public health. Therefore, FDA does not anticipate that setting up this mechanism for obtaining substantial equivalence exemptions will result in costs to public health.

Under this final rule, there may still be some uncertainty on the part of manufacturers about what kinds of product modifications may be granted an exemption and how much supporting evidence will be required as the basis for an exemption. If some manufacturers are more conservative in requesting exemptions than FDA would be in granting them, they may not fully avail themselves of the potential cost savings. Alternatively, if some manufacturers are too optimistic about what types of modifications will be exempt, they will incur higher costs because they will have to submit substantial equivalence reports in addition to having submitted unsuccessful exemption requests.

FDA acknowledges the theoretical possibility that overall submission costs could increase as the result of this uncertainty. This would happen if so many unsuccessful exemption requests were submitted that the excess costs associated with them exceeded any cost savings from exemptions that were granted. This situation is unlikely to occur, especially in the long run. The cost of submitting an exemption request is expected to be low relative to the potential savings. As time goes on and manufacturers gain experience with submission costs and the requirements that must be met for exemptions, they might continue to submit unsuccessful exemption requests, but this would increasingly be a well-informed choice based on an accurate estimation of the probability of being granted an exemption and the excess cost of preparing an unsuccessful request compared with the cost savings attributable to an exemption. Moreover, it is possible that some of the information compiled for an exemption request would be reused as part of a demonstration of substantial equivalence, thus reducing the effort expended in preparing both types of submissions.

In summary, the substantial equivalence exemption requirements laid out in this final rule offer an additional channel for legally introducing new tobacco products that result from minor modifications of tobacco products that can be sold under the FD&C Act. Successfully introducing a product through this channel is expected to reduce costs. If manufacturers do not want to risk having to submit substantial equivalence reports in addition to having submitted unsuccessful exemption requests, they may choose to maintain the status quo and not pursue substantial equivalence exemptions.

The Tobacco Control Act requires that tobacco product manufacturers obtain either a marketing authorization order under section 910(c) or an order under section 910(a)(2) finding the new tobacco product to be substantially equivalent to an appropriate predicate tobacco product before introducing a new product into interstate commerce. Although this requirement is costly, the option of requesting an exemption as set forth in this final rule provides an alternative pathway that potentially reduces costs. Manufacturers of new tobacco products may choose not to use this alternative pathway to market their products. Therefore, this final rule imposes no incremental burden from which to provide relief and will not have a significant impact on a substantial number of small entities.

This final rule contains information collection requirements that are subject to review by OMB under the PRA (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown in the paragraphs that follow with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

Title: Exemptions from Substantial Equivalence Requirements for Tobacco Products, Final Rule.

Description: In this final rule, a pathway would be established by FDA for manufacturers to request exemptions from the substantial equivalence requirements of the FD&C Act. As it acquires more information about the additives in tobacco products from which to establish categories of exemptions, FDA may issue additional regulations or guidance on this subject. This rule would implement section 905(j)(3) of the FD&C Act, under which FDA may exempt tobacco products that are modified by adding or deleting a tobacco additive, or increasing or decreasing the quantity of an existing tobacco additive, if FDA determines that: (1) The modification would be a minor modification of a tobacco product that can be sold under the FD&C Act, (2) a report is not necessary to ensure that permitting the tobacco product to be marketed would be appropriate for protection of the public health, and (3) an exemption is otherwise appropriate.

The rule also explains that an exemption request may be made only by the manufacturer of a legally marketed tobacco product for a minor modification to that manufacturer's product and the request (and supporting information) must be submitted in an electronic format that FDA can process, review, and archive. In addition, the request and all supporting information must be legible and in (or translated into) the English language.

Under the rule, an exemption request must be submitted with supporting documentation and contain the manufacturer's address and contact information; identification of the tobacco product(s); a detailed explanation of the purpose for the modification; a detailed description of the modification; a detailed explanation of why the modification is a minor modification of a tobacco product that can be sold under the FD&C Act; a detailed explanation of why a report under section 905(j)(1)(A)(i) intended to demonstrate substantial equivalence is not necessary to ensure that permitting the tobacco product to be marketed would be appropriate for the protection of the public health; a certification summarizing the supporting evidence and providing the rationale for why the modification does not increase the tobacco product's appeal to or use by minors, toxicity, addictiveness, or abuse liability; other information justifying an exemption; and an environmental assessment under part 25 prepared in accordance with § 25.40.

As described previously, the request must contain a certification by a responsible official summarizing the supporting evidence and providing the rationale for the official's determination that the modification will not increase the product's toxicity, addictiveness, or appeal to/use by minors; and include other information justifying an exemption. This information will enable FDA to determine whether the exemption request would be appropriate for the protection of the public health. This final rule also includes a procedural mechanism for rescinding an exemption where necessary to protect the public health. In general, FDA would rescind an exemption only after providing the manufacturer notice of the proposed rescission and an opportunity for an informal hearing under part 16 (21 CFR part 16). However, FDA may rescind an exemption prior to notice and opportunity for a hearing under part 16 if the continuance of the exemption presents a serious risk to public health. In that case, FDA would provide the manufacturer an opportunity for a hearing as soon as possible after the rescission.

FDA will review the information submitted in support of the request and determine whether to grant or deny the request based on whether the criteria specified in the statute are satisfied. If FDA determines that the information submitted is insufficient to enable it to determine whether an exemption is appropriate, FDA may request additional information from the manufacturer. If the manufacturer fails to respond within the timeframe requested, FDA will consider the exemption request withdrawn.

Description of Respondents: Manufacturers of tobacco products who are requesting an exemption from the substantial equivalence requirements of the FD&C Act, as amended by the Tobacco Control Act.

Comments: FDA received several comments related to the PRA in response to its proposed rule (76 FR 737). Several comments noted that the hours per response were the same for both an exemption request and the submission of a 905(j) substantial equivalence report, which indicated that the exemption pathway would not be less burdensome than the substantial equivalence report. Some comments stated that the estimated hours suggested a very burdensome process, and other comments suggested that the estimated hours were too low given the information required by § 1107.1.

The estimated hours per response in the NPRM were based on Agency experience and approved information collections for other types of submissions to the FDA, although those also vary greatly depending on the statutory requirements and there was no exact parallel for this process. The estimated hours for the exemption request also reflected considerations that initial exemption requests may take longer to prepare, until knowledge and experience with the pathway develops. We believed that 360 hours per exemption request would be at the high end of the estimated hours per response, but did not want to underestimate the hours per response particularly at the outset of the process before experience with requesting exemptions develops. The comments to the NPRM provided FDA with a much better sense of the range of modifications that are made to tobacco products and after reviewing the information, we believe we overestimated the hours that would be needed to prepare an exemption request. Our revised estimates reflect the fact that the preparation and submission of an exemption request differs significantly from preparation of a substantial equivalence report under section 905(j)(1)(A)(i). For example, the preparation of an exemption request does not require a comparison to a predicate or inclusion of information on multiple characteristics, but rather requires more limited information for the product that is the subject of the exemption request and on the modification of the additive.

Additionally, several comments to the proposed rule stated that the number of exemption requests may be much higher than the 50 indicated in the proposed rule with some comments suggesting as high as hundreds or thousands depending on the scope of modifications that might use the pathway. After considering potential use of this process as indicated by the comments, we are increasing that number of requests to 500 on a yearly basis.

One comment also suggested that the proposed rule was not compliant with the PRA because there was no practical utility for the information collected and there is no plan for the efficient and effective use of the information to be collected. We disagree with these comments because, as several comments to the proposal noted, the regulation follows the statutory language, including the findings that FDA must make when determining whether it may make an exemption determination. The information that the rule requires is information that FDA needs in order to make the required findings, for example, information as to whether the modification is minor. Without the information required by the rule, FDA will not have the information necessary to determine whether an exemption is appropriate.

Table 1 describes the annual reporting burden as a result of the provisions set forth in this final rule. Based on comments and information on the NPRM, FDA estimates that it will receive 500 exemption requests annually and that it will take a manufacturer 12 hours to prepare an exemption request. FDA estimates that it would need to request additional data for 150 of these requests in part due to the fact that it is a new process, and that it will take 3 hours to prepare a response to a request for additional data. FDA anticipates using the rescission authority to respond to one issue of concern related to an exemption determination each year (the burden hours for § 1107.1(d) are included under part 16 hearing regulations and are not included in the burden estimates in Table 1 of this document).

FDA is also including an estimation of the burden associated with preparing the report required by section 905(j)(1)(A)(ii) of the FD&C Act. FDA estimates that it will take 3 hours to prepare the report required by section 905(j)(1)(A)(ii), which requires a manufacturer to submit a report at least 90 days prior to making an introduction or delivery into interstate commerce for commercial distribution of a tobacco product, with the basis for the manufacturer's determination that the tobacco product is modified within the meaning of the exemption provision (section 905(j)(3)), the modifications are to a product that is commercially marketed and in compliance with the FD&C Act, the modifications are covered by exemptions granted under section 905(j)(3), and action taken to comply with any applicable requirements of section 907. FDA is also including an estimation of the burden associated with preparing an environmental assessment under part 25 prepared in accordance with the requirements of § 25.40, as referenced in § 1107.1(b)(9). FDA estimates that it will take 12 hours to prepare the environmental assessment.

The information collection provisions of this final rule have been submitted to OMB for review. Prior to the effective date of this final rule, FDA will publish a notice in the Federal Register announcing OMB's decision to approve, modify, or disapprove the information collection provisions in this final rule. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the Agency concludes that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

The following references have been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. (FDA has verified the Web site addresses, but we are not responsible for any subsequent changes to the Web sites after this document publishes in the Federal Register ).

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 16 and 1107 are amended to read as follows:

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.”

Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not using the notice of proposed rulemaking (NPRM) process. The Coast Guard received notice of the U.S. Wakeboard Nationals event on May 11, 2011. This short notice did not allow the time needed to publish a NPRM and provide a comment period. Delaying this rule by publishing a NPRM would be impracticable because this rule is needed to protect vessels and mariners from the safety hazards associated with the scheduled demonstration.

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 this rule by providing a full 30 days notice would be impracticable because immediate action is needed to protect vessels and mariners from the safety hazards associated with a wakeboard competition.

From July 20 through July 24, 2011, World Sports and Marketing will sponsor the U.S. Wakeboard Nationals between Mile 856.0 and 855.0 on the Upper Mississippi River in Minneapolis, Minnesota. This event presents safety hazards to the navigation of vessels between Mile 856.0 and 855.0, extending the entire width of the river.

The Coast Guard is establishing a safety zone for all waters of the Upper Mississippi River, Mile 856.0 to 855.0, Minneapolis, Minnesota and extending the entire width of the river. Entry into this zone is prohibited to all vessels and persons except U.S. Wakeboard Nationals participants and those persons and vessels specifically authorized by the Captain of the Port Upper Mississippi River. This rule is effective from 8 a.m. on July 20, 2011 through 6 p.m. on July 24, 2011. This rule will be enforced daily from 9 a.m. until 5:30 p.m. on July 20 through 24, 2011. The Captain of the Port Upper Mississippi River will inform the public through broadcast notice to mariners of all safety zone requirements, changes, and enforcement periods.

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 this area, the effect of the rule is not significant because this rule will be in effect for a limited time period and notifications to the marine community will be made through local 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 will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit the Upper Mississippi River, Mile 856.0 to 855.0 after 8 a.m. on July 20, 2011 through 6 p.m. CDT on July 24, 2011. This safety zone will not have a significant economic impact on a substantial number of small entities because this rule will only be in effect for a limited period of time.

If you are a small business entity and are significantly affected by this regulation, please contact Chief Petty Officer Bryan Klostermeyer, Sector Upper Mississippi River at (314) 269-2566.

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 businesses. 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 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 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 established a temporary safety zone. An environmental analysis checklist and a categorical exclusion determination will be available in the docket where indicated under ADDRESSES .

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

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

We are finalizing approval of revisions to the Louisiana SIP, submitted by the LDEQ from 1996-2006. The revisions affect the Louisiana Administrative Code, the official compilation of Agency rules for the State of Louisiana. The revisions apply to LAC 33:III, Chapters 1, 7, 9, 11, 13, 14, 15, 19, 21, 23, 25, 30, 60, and 61. These revisions were submitted for approval during the years 1996-2006. The revisions make corrections or changes that align the SIP with State and Federal regulations.

The State of Louisiana submitted numerous SIP revisions for EPA approval from the years 1996 to 2006.

The revisions were submitted to EPA according to the schedule in Table 1.

The revisions being approved are comprised of format changes, nonsubstantive regulatory wording changes, content or substantive changes, and incorporations by reference (IBR) of Federal rules. Format changes are revisions that affect the overall structure and arrangement of the LAC. These changes, among other things, involve moving an item from one section to another, repealing and replacing whole chapters, renumbering, repositioning contents. Nonsubstantive regulatory wording changes are revisions that do not dramatically affect the content of the rule but do add clarity. These changes, among other things, may appear in the form of corrections for typographical errors, grammatical errors, minor language changes, updating revisions, and changing reference citations that clarify the current rule. Content or substantive changes are revisions that alter the original meaning of the rule in a noticeable or significant manner. These revisions, among other things, may be in the form of an addition of a compound on an exemption list, modifications to requirements, fee increases, or creation of new requirements. Incorporation by reference revisions make the State's rules consistent with Federal regulations by referring to the Federal requirements that apply.

The revisions being acted upon are described in detail in the Technical Support Document and listed in the Incorporation By Reference (IBR) Table located at the end of this document.

The most notable format changes were made in Chapters 60, 61, and 65. These Chapters were repealed and the contents moved to other existing chapters. Although we proposed to approve the repeal of Chapter 65, we will not be finalizing that repeal in this action. The contents of Chapter 65 were moved to Chapter 2, and we are not acting on Chapter 2 at this time. We will act on the repeal of Chapter 65 when we act on the revisions to Chapter 2. Highlights of certain content or substantive changes are summarized in section V.

Some revisions submitted by the state during the years of 1996-2006 are not being acted upon by the EPA at this time for several reasons: (1) EPA plans to review and act upon several revisions, such as Chapter 2 and Chapter 5, in a separate action; (2) Some submitted revisions did not require further action because they were either superseded by subsequent submittals, made moot by prior approvals, already approved (Chapter 6), replaced by other program rules (sections 1901-1935), or submitted for clarifying purposes; and (3) EPA is not acting on certain revisions in LAC 33:III, sections 927, 1109, 1507, 1509, 2103, 2104, 2107, 2120, 2129, 2133, 2160, 2531, and a resubmittal of 2156-2160 because the State requested that we not act on certain revisions in a letter dated January 25, 2011. In the last case, we find that not acting on these revisions does not affect the approvability of the other revisions under consideration. We are also not acting on LAC 33:III, sections 1901-1935 (vehicle inspection and maintenance) because the program for which these rules were written was never implemented, and we subsequently approved a substitute program in 67 FR 60594, September 26, 2002.

We note that in our proposal (February 25, 2011, 76 FR 10544) we inadvertently included in Table 2 a revision to Section 1507 that had been withdrawn by the State in the above-referenced letter dated January 25, 2011. We stated that this section had been withdrawn by the State in our proposal. Hence, section 1507 does not appear in the IBR Table at the end of this action.

The rule revisions submitted were examined for consistency with Federal policy, regulations, and the Clean Air Act. Each rule revision referred to in the IBR Table was reviewed separately and found to be approvable on its own merits. A detailed evaluation of each of the approved rules is contained in the Technical Support Document for this rulemaking.

In Chapter 7, ambient air quality standards were updated to reflect Federal standards that were current at the time of the revision.

All of chapter 19 was repealed. This chapter contained vehicle inspection and maintenance (I/M) rules that became obsolete when the I/M program was finally authorized and administered under the existing rules of the state safety inspection program. The I/M rules in chapter 19 had not been submitted for approval into the SIP, so no backsliding is implied by the repeal. In addition, clean fuel fleet rules were repealed from this chapter. Although these rules had been approved into the SIP, stationary source VOC (volatile organic compound) rules were substituted for the clean fuel fleet program, so no backsliding occurred. See 64 FR 38577, July 19, 1999.

There were a number of substantive changes in chapter 21. Under storage of volatile organic compounds (section 2103) LDEQ added (1) VOC requirements for Calcasieu and Pointe Coupee Parishes, (2) other acceptable methods for determining true vapor pressure, (3) additional record keeping requirements to verify compliance, and (4) an allowance for maintaining VOC control equipment. New requirements for crude oil and condensate in section 2104 add VOC control requirements for “flash gas” emissions from facilities that produce oil and natural gas, process natural gas, and transmit natural gas, which are consistent with the CAA.

The marine vapor recovery exemption in section 2108 is lowered to 25 tons per year to ensure RACT (Reasonably Available Control Technology) is in place. Similarly, the revisions to the waste gas disposal rules in section 2115 make sure RACT is in place for these vent streams.

The list of compounds exempt from VOC control requirements in section 2117 is expanded to keep the list up to date with the Federal list of exempted compounds. Changes in section 2122, Fugitive Emissions Control for Ozone Nonattainment Areas, improve the rule by making it more consistent with the Federal Leak Detection and Repair Program (LDAR) requirements.

The VOC requirements for vapor degreasers are strengthened in section 2125. Section 2129 concerning perchlorethylene is rescinded because EPA exempted “perc” from VOC control. St. Mary Parish is now included in the areas where filling of gasoline storage vessels is controlled in section 2131. A revision to section 2133 lowers the exemption threshold for gasoline bulk plants.

The following sections change the major source threshold from 50 to 25 tons per year (tpy) in the nonattainment parishes and 50 tpy in Pointe Coupee and Calcasieu Parishes: section 2143 pertaining to graphic arts and rotogravure and flexographic processes, 2147 that limits the VOC emissions from SOCMI (synthetic organic chemical manufacturing industry) reactor processes and distillation operations, 2149 that limits the VOC emissions from batch processes, 2151 that limits VOC emissions from cleanup solvent processes, and 2153 that limits VOC emissions from industrial wastewater. By lowering the applicability level, the revisions ensure that RACT is in place on 25 tpy and greater sources as required for severe ozone nonattainment areas.

We received comments in support of this rulemaking from the Louisiana Chemical Council. We also received a comment letter from a private citizen that was not relevant to this rulemaking.

Lastly, we received comments from the Environmental Integrity Project (EIP). In general, EIPs comments focus on whether Louisiana has adequate funding to properly implement the proposed SIP revisions and that the state's Title V fees are inadequate. We believe the comments are not relevant to the specific rule revisions being approved here. These rule revisions are in large part administrative type changes and revisions that provide clarity to the state's base rules. They do not address fees or Title V. The EIP also commented that the revisions being approved in this action interfere with applicable requirements of the Clean Air Act. The commenter did not provide specific examples where the revisions interfere with applicable requirements. The Technical Support Document found in the Docket examines in detail each rule revision to determine if the change adversely impacts the SIP. The revisions fall into four categories listed above in section III. A majority of the revisions are format changes, nonsubstantive word changes, or incorporation by reference of Federal rules. The rules that contain substantive revisions are summarized in section V of this document. For details on the substantive rule revisions please see the TSD. Based on the analyses in the TSD, we conclude that these SIP revisions do not interfere with applicable requirements of the Act.

We are finalizing approval of rule revisions to LAC 33:III, Chapters 1, 7, 9, 11, 13, 15, 19, 21, 22, 23, 25, 30, 60, and 61 as part of the Louisiana SIP as they appear in the IBR Table below.

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

40 CFR part 52 is amended as follows:

The SIP is a living document which the State revises as necessary to address its unique air pollution problems. Therefore, EPA from time to time must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference Federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997 Federal Register document. On February 25, 2005 (70 FR 9450), EPA published a document in the Federal Register beginning the new IBR procedure for Pennsylvania, including Philadelphia and Allegheny Counties. On January 3, 2007 (72 FR 200), and March 25, 2009 (74 FR 13014), EPA published updates to the IBR materials for Pennsylvania.

Since the publication of the last IBR update, EPA has approved the following regulatory changes to all sections of the following Pennsylvania and Allegheny County regulations:

1. Additions of the following regulations in 25 PA Code, article III:

a. Chapter 130 (Standards for Products), subchapter B (Consumer Products), sections 130.217 and 130.338.

b. Chapter 145 (Interstate Pollution Transport Reduction), subchapter A (General Provisions), section 145.8.

c. Chapter 145, subchapter D (CAIR NO X and SO 2 Trading Programs—General Provisions), sections 145.201 through 145.205, 145.211 through 145.213, and 145.221 through 145.223.

2. Revisions to the following regulations in 25 PA Code, Article III:

a. Chapter 121 (General Provisions), section 121.1 (Definitions).

b. Chapter 129 (Standards for Sources, Additional NO X requirements), sections 129.201, 129.202, and 129.204.

c. Chapter 130 (Standards for Products), subchapter B (Consumer Products), sections 130.201, 130.202, 130.211, 130.213, 130.214, 130.215, 130.331, 130.332, 130.334, 130.335, 130.371, 130.372, 130.373, 130.411, 130.412, 130.414, 130.452, 130.453, 130.454, 130.455, 130.457, 130.458, 130.460, 130.462, 130.465, 130.471.

d. Chapter 130, subchapter C (Architectural and Industrial Maintenance Coatings), section 130.602.

e. Chapter 145 (Interstate Pollution Transport Reduction), subchapter B (Emissions of NO X From Stationary Internal Combustion Engines), section 145.113.

f. Chapter 145, subchapter C (Emissions of NO X From Cement Manufacturing), section 145.143.

1. Additions of the following regulations in Article XXI:

a. Part A (General), section 2101.20 (definitions added).

b. Part E (Source Emission and Operating Standards), subpart 7 (Miscellaneous VOC Sources), sections 2105.77, 2105.78, and 2105.79.

2. Revisions to the following regulations in Article XXI:

a. Part E (Source Emission and Operating Standards), subpart 1 (VOC Sources), section 2105.10.

b. Part E, subpart 2 (Slag, Coke, and Miscellaneous Sulfur Sources), section 2105.21.

c. Part G (Methods), section 2107.11.

d. Part H (Reporting, Testing & Monitoring), section 2108.03.

In this action, EPA is doing the following:

1. Correcting typographical errors in Title 25, the first entry of Section 123.22 (“Title/subject” column) and Section 129.93 (“State citation” column).

2. Correcting typographical errors in Title 67, Section 177.22 (“Title/subject” column) and the heading entitled “Registration Recall Procedure for Violation of §§ 177.301-177.305 (Relating To On-Road Testing).”

1. Adding text in the “Additional explanation/§ 52.2063 citation” columns to help distinguish the four entries for article XXI, part A, section 2101.20 (Definitions).

2. Correcting a typographical error in the title heading for Article XXI, Part E, Subpart 2.

3. Revising the text in the “Additional explanation/§ 52.2063 citation” column for Regulation 2105.21.

1. Revising the heading in the second column from “Permit No.” to “Permit Number.”

2. Correcting the Federal Register citation in the “EPA approval date” column for Tarkett, Incorporated and Hacros Pigments, Inc.

1. Removing the words “OFR error” found in the “Name of non-regulatory SIP revision” and “Applicable geographic area” columns for the entry “Continuous Source Testing Manual.”

2. Correcting the date format in the “EPA approval date” column for the entry “Carbon Monoxide Maintenance Plan—Philadelphia County.”

3. Correcting the date format in the “State submittal date” column for the entry “8-Hour Ozone Maintenance Plan and 2002 Base Year Emissions Inventory—Tioga County.”

1. Revising the heading in the second column from “Permit No.” to “Permit Number.”

2. Correcting the date format in the “EPA approval date” column for the following entries: USX/US Steel Group—Fairless Hills, Rockwell Heavy Vehicle, Inc.—New Castle Forge Plant, and Mercersburg Tanning Co.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations and incorrect table entries.

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

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

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

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

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

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

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

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

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

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

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

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

EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Pennsylvania SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” update action for Pennsylvania.

40 CFR part 52 is amended as follows:

Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The words or initials Act, CAA, or Clean Air Act mean or refer to the Clean Air Act, unless the context indicates otherwise.

(ii) The words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

(iii) The initials SIP mean or refer to State Implementation Plan.

(iv) The words Oregon and State mean the State of Oregon.

On July 18, 1997, EPA promulgated new NAAQS for 8-hour ozone and for fine particulate matter (PM 2.5 ). This action is being taken, in part, in response to the promulgation of the 1997 8-hour ozone and PM 2.5 NAAQS. Section 110(a)(1) of the CAA requires states to submit a SIP revision to address a new or revised NAAQS within 3 years after promulgation of such standards, or within such shorter period as EPA may prescribe. Section 110(a)(2) lists the elements that such new SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions.

Section 110(a)(2)(D)(i) of the CAA requires that a SIP must contain adequate provisions prohibiting any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in any other state; (2) interfere with maintenance of the NAAQS by any other state; (3) interfere with any other state's required measures to prevent significant deterioration of air quality; or (4) interfere with any other state's required measures to protect visibility. This action addresses the fourth prong, section 110(a)(2)(D)(i)(II).

In the CAA Amendments of 1977, Congress established a program to protect and improve visibility in the national parks and wilderness areas. See CAA section 169(A). Congress amended the visibility provisions in the CAA in 1990 to focus attention on the problem of regional haze. See CAA section 169(B). EPA promulgated regulations in 1999 to implement sections 169A and 169B of the Act. These regulations require states to develop and implement plans to ensure reasonable progress toward improving visibility in mandatory Class I Federal areas  1 (Class I areas). 64 FR 35714 (July 1, 1999); see also 70 FR 39104 (July 6, 2005) and 71 FR 60612 (October 13, 2006).

On December 20, 2010, the State of Oregon submitted to EPA a State Implementation Plan (SIP) revision addressing the interstate transport requirements for visibility for the 1997 ozone and PM 2.5 NAAQS, see CAA § 110(a)(2)(D)(i)(II), and the requirements of the Regional Haze program at 40 CFR 51.308. (Regional Haze SIP submittal).

On March 8, 2011, EPA published a notice in which the Agency proposed to approve the Oregon SIP revision as meeting the requirements of both section 110(a)(2)(D)(i)(II) of the CAA and the Regional Haze requirements set forth in sections 169A and 169B of the Act and in 40 CFR 51.300-308 with the exception of Chapter 11, Oregon Reasonable Progress Goal Demonstration and Chapter 12, Long-Term Strategy. 76 FR 12651. (Notice of Proposed Rulemaking or NPR). For Oregon's Reasonable Progress Goal Determination and Long-Term Strategy, EPA did not propose taking any action.

EPA received a number of comments on the proposed action to approve certain elements of the Regional Haze SIP submittal. Comments in support were received from: The Citizens' Utility Board of Oregon; International Brotherhood of Electrical Workers Local 125; Morrow County; and Portland General Electric Company (PGE). Adverse comments were received by two entities: The National Parks and Conservation Association (NPCA); and Pacific Environmental Advocacy Center (PEAC). The comments submitted by NPCA incorporated multiple comments which were previously submitted to Oregon Department of Environmental Quality (ODEQ) on some of the prior proposals the State was previously considering. Some of these comments related to options, closure timeframes or evaluations which were previously considered by ODEQ but were not included in the final Regional Haze SIP submission. Accordingly, because these now superseded aspects of ODEQ's BART analysis or determination are not before EPA, a response to the comments about those options is not necessary. The following discussion summarizes and responds to the relevant comments received on EPA's proposed SIP action and explains the basis for EPA's final action.

Comment: The Citizens' Utility Board commented that the ODEQ BART rules for the PGE coal-fired electric power plant at Boardman, Oregon (PGE Boardman or Boardman facility) allow for cost effective pollution controls which will reduce air pollution generated by the facility, including air pollutants which contribute to haze in Class 1 areas. The commenter states that the rules also require the Boardman facility to be shut down by December 31, 2020 and the shut down allows the State of Oregon to move forward with its goals to reduce carbon emissions statewide and will protect utility customers from the costs and risks that will be associated with carbon regulation. The commenter further stated that the Best Available Retrofit Technology (BART) rules approved by the ODEQ are the product of several years of work resulting from a collaborative process involving state agencies, environmental organizations, consumer groups, local governments, and other stakeholders. The rules result in significant reductions in air pollution, while allowing Oregon to pursue important state policies targeted towards reducing carbon emissions, and keeping electric rates affordable.

Response: EPA acknowledges the comment and notes that there will be a significant reduction in NO X and SO 2 from the Boardman facility due to the BART controls for those pollutants, and the further reasonable progress limits for SO 2 in 2018. Also, ceasing to use coal at the Foster-Wheeler boiler by end of 2020, will result in a additional reduction of NO X , SO 2 , and carbon dioxide emissions from the facility and significant cumulative visibility improvement in all impacted Class I areas.

Comment: International Brothers of Electrical Workers Local 125 commented that the Boardman facility is more than an electrical generating plant and that the city of Boardman and county of Morrow are dependent on this a facility for a substantial portion of its revenue. Boardman's citizens and Morrow County's resident recognize that the facility will cease using coal by the end of 2020, but are hopeful that alternative fuel sources will be approved to continue operations beyond 2020.

Response: EPA recognizes the facility's importance to the community. The approved rules do not prevent the facility owners from using alternate fuel or from constructing a new power source. If the Boardman facility is powered with alternative fuels or if a new facility is constructed all applicable CAA requirements, including New Source Performance Requirements (NSPS) and Prevention of Significant Deterioration (PSD) emission control requirements, must be met. The emission netting basis and plant site emission limits (PSELs) used in determining whether a modification to facility must meet PSD requirements, will be reduced to zero when the Foster-Wheeler boiler at the facility permanently ceases to burn coal. OAR 340-223-0030(1)(e).

Comment: Morrow County commented that they support EPA's approval of Oregon's Regional Haze SIP submittal and stated that the 10 year timeframe in the BART rule provides adequate time to put reliable replacement generation in place, protects this region and the state from the economic blow that would result from an earlier closure and is an appropriate balance of environmental and economic interests of Oregon and its citizens. The County further stated that the SIP accomplishes their wish to have environmental standards in place that will preserve the beauty of the area for future generations by reducing emission of NO X , SO 2 , and mercury, during the plant's remaining lifetime and ending all coal-related emissions from the Boardman facility at least 20 years ahead of schedule.

Response: EPA acknowledges this comment.

Comment: PGE commented that it believes that the ODEQ BART rules for the Boardman facility achieve the proper balance of environmental benefits, the cost to customers and the reliability of the PGE electrical power system. PGE states it found that it is possible to secure greater environmental benefits with a better balance of cost and risk by transitioning the Boardman facility away from coal at least 20 years ahead of schedule. PGE believes that the ODEQ Boardman BART rule includes significant and cost-effective emission control measures to improve visibility and ensure that the Boardman plant will cease coal-firing by December 31, 2020.

Response: EPA believes that the BART controls required for PGE Boardman will result in a significant reduction in haze that impacts Class I areas through 2020. Then, ceasing to burn coal at the facility will result in additional and significant reductions in SO 2 and NO X emissions from Boardman at that time, and well as substantial reductions in carbon dioxide emissions. Further, ceasing to burn coal by no later than December 31, 2020, will result in cumulative visibility improvements in all 14 impacted Class I areas. See Regional Haze SIP submittal, Appendix D at D-171.

Comment: Comments were submitted claiming an inappropriate double-counting of “remaining useful life” by ODEQ to justify lesser pollution control requirements as BART for the Boardman facility.

Response: ODEQ did not double-count the remaining useful life of the plant in the PGE Boardman BART analysis. As ODEQ explained, closure of the plant is not, by itself, considered BART. Rather, the closure date establishes the remaining useful life of the plant which is used to determine the cost effectiveness of the various control technologies. See Regional Haze SIP submittal, Appendix D at D-125. See also Appendix Y to Part 51—Guidelines for BART Determinations Under the Regional Haze Rule (BART Guidelines), Section D. step 4.k.1. (70 FR 39156 (July 6, 2005)). A decision to cease burning coal by 2020 shortens the expected useful life of the coal-burning Foster-Wheeler boiler by 20 years when compared to its expected useful life of 2040. ODEQ documented its method for incorporating remaining useful plant life in determining cost effectiveness of control technologies. See Regional Haze SIP submittal, Appendix D at D-125 and D-131. The BART Guidelines specifically provide that the remaining useful life of a source may affect the annualized costs of retrofit controls and explains that “where the remaining useful life is less than the time period for amortizing costs, you should use this shorter time period in your cost calculations.” 70 FR 39169. Thus, ODEQ appropriately applied the BART Guidelines when it considered the remaining useful life of the Foster-Wheeler boiler when evaluating the cost effectiveness of the control technologies. In addition, EPA notes that ODEQ's conclusion regarding cost effectiveness for SO 2 controls, specifically Semi-dry Flue Gas Desulfurization (SDFGD) versus Dry Sorbent Injection (DSI) technologies, varied appropriately depending on the plant closure date. See EPA Assessment of ODEQ Determination of Best Available Retrofit Technology for the PGE Coal Fired Power Plant in Boardman, Oregon (EPA Boardman BART Assessment) January 18, 2011.

Comment: One comment stated that a compilation of BART analyses across the United States reveals that the average cost per deciview (dv) proposed by either a state or a BART source is $14 to $18 million, with a maximum of $51 million per dv proposed by South Dakota at the Big Stone power plant. The commenter noted that ODEQ has chosen $10 million/dv as a cost criterion, which is somewhat below the national average.

Response: ODEQ selected a dollars/dv cost effectiveness threshold of $10 million/dv based on what it considered the most relevant cost effectiveness figures available from similar coal-fired power plants in other parts of the country. See Regional Haze SIP submittal, Appendix D—Table 16 (D-137) for the estimated dollars/dv of the various control technologies. EPA notes that the comment is consistent with EPA's review of dollars/dv cost effectiveness data compiled by the National Park Service (NPS) available for a variety of coal-fired facilities located across the country. The NPS data show that ODEQ's dollar/dv threshold is below the average cost for BART NO X and SO 2 control technologies selected for other coal-fired power plants in the country. In EPA's view, however, the dollars/dv metric is a difficult one to apply consistently across BART sources given the variability in the number of Class I areas impacted by emissions from a BART source and the number of days of impacts at each area. In assessing the reasonableness of a state's BART determination, EPA does not consider it appropriate to focus on a bright-line threshold such as a dollars/dv cost effectiveness threshold but rather on the full range of relevant factors. In reviewing the BART determination for the Boardman facility, EPA has accordingly taken into account not only ODEQ's analysis of dollars/dv, but also the range of visibility impacts associated with the various control options.

Comment: One comment expressed concern with the way in which the incremental cost analysis is used by ODEQ. It stated that to use incremental costs properly, they must be compared to incremental costs for similar situations.

Response: The Regional Haze SIP submittal shows that that ODEQ estimated the incremental cost and average cost effectiveness of the various control options considered in its cost analysis for determining BART. ODEQ first calculated the average cost effectiveness of each technology, and then calculated the incremental cost of going from the most cost effective technology to each of the more stringent technically feasible control technologies. See Regional Haze SIP submittal, Appendix D—Table 8 at D-132 and Cost effectiveness table on D-168. The approach used by ODEQ to determine average and incremental cost effectiveness is consistent with the procedure outlined in the BART Guidelines. See 70 FR 39167. Given the source-specific nature of a BART determination and the emphasis not only on the costs of control, but other factors such as the degree of visibility improvement resulting from the use of controls and the remaining useful life of the facility, comparisons of incremental costs across sources are often not meaningful in making BART determinations.

Comment: Multiple comments were submitted concerning the cost effectiveness calculations. The comments expressed concern regarding the dismissal of controls that are cost-effective even with the State's $7,300/ton and $10 million/dv thresholds claiming that semi-dry flue gas desulfurization (SDFGD), selective non-catalytic reduction (SNCR), and selective catalytic reduction (SCR) were eliminated from consideration as BART for PGE Boardman through inappropriately inflated costs, inclusion of costs not allowed by EPA's Cost Control Manual, underestimated control effectiveness, and arbitrarily and shortened equipment life due to excessively long assumed installation times.

Response: As explained in the SIP submittal, ODEQ evaluated and considered the costs, control efficiencies of the various control technologies, and expected equipment life in its BART determination. ODEQ used an independent contractor (ERG) to evaluate PGE's cost estimates for the Boardman facility and concluded that while PGE's estimates were significantly higher than ERG's, PGE's estimates better reflected real world costs, and were appropriate for the PGE Boardman BART analysis. More specifically, ERG concluded that the actual cost of retrofits is, in general, higher than the estimates provided by the EPA's Cost Control Manual. ODEQ explained that difference is due to a dramatic increase is labor and material costs in recent years. See Regional Haze SIP submittal, Attachment 7.2, ODEQ response to comments, I.1.a-c, for more detail.

In reviewing ODEQ's BART determination, EPA recognized that the cost estimates ODEQ relied on included two capital cost line items that are not normally included when using the EPA Cost Control manual. The effect of including these two line items is that the capital costs are likely “at the high end” of the capital cost range estimate. See EPA Boardman BART Assessment at 2. To assess the impact of ODEQ's decision to include these items in the cost estimate, EPA further evaluated the cost effectiveness value for SDFGD without including the two capital cost line items, and concluded that the cost effectiveness of SDFGD would drop from $5,535/ton to $4,810/ton. Although EPA considers the $4,810/ton to better reflect the true cost of SDFGD, we conclude that the $725/ton difference between the two estimates would not materially affect ODEQ's evaluation. EPA notes that the incremental visibility improvement between SDFGD and DSI-1 (0.4 lb/mmBtu) would only be 0.4 dv at the most impacted Class I area. Additionally, EPA found that with an SO 2 limit of 0.3 lb/mmBtu in 2018, the incremental visibility improvement between the two control technologies would only be 0.26 dv in the most impacted Class I area. In addition, while SDFGD would achieve a cumulative visibility improvement of 10.6 dv in all impacted Class I areas and DSI-1  2 would achieve a cumulative visibility improvement of 7.0 dv and DSI-2  3 would achieve a cumulative improvement of 9.3 dv in 2018, when the facility ceases to burn coal at the end of 2020, the cumulative visibility improvement would be 31.46 dv. See Regional Haze SIP submittal, Appendix D at D-137, 168 and 171. When choosing between the two technologies, it is reasonable for the state to consider the sizable capital cost difference between SDFGD and DSI, and the relatively small incremental visibility improvement between the two technologies in light of the shutdown of the unit in 2020. In EPA's view, ODEQ's final selection of BART would not have changed even if the cost effectiveness had been adjusted to reflect the EPA Cost Manual.

Regarding the comments concerning control effectiveness of SCR, SNCR, and SDFGD technologies, ODEQ determined the control effectiveness of these control options by evaluating actual emissions data from other sources employing similar types controls, taking into consideration that BART limit must be achieved at all times for a retrofit installation at Boardman. ODEQ's evaluation determined that the Boardman facility could not achieve the lower emission rate suggested by the commenter. See Regional Haze SIP submittal, Appendix D at D-14 through D-18, and Attachment 7.2, ODEQ response to comments 1I.1.b.

Comment: A commenter notes that on September 1, 2010, Oregon released a proposed rulemaking for public comment that included BART requirements for PGE Boardman based on a variety of closure dates, including 2020. The comment claims that the September 2010 proposal required installation of SDFGD and SNCR for a 2020 shutdown but that the requirements for a 2020 closure date were relaxed significantly in the plan EPA proposes to approve. The commenter does not believe there is sufficient justification for this relaxation of BART and states the relaxation appears arbitrary.

Response: As mentioned above, EPA's action relates to the BART determinations contained in the Regional Haze Plan that was submitted to EPA on December 20, 2010. EPA explained the basis for its decision to approve ODEQ's BART determination in the notice of proposed rulemaking. 76 FR at 12660-12662. Although ODEQ may have considered establishing more stringent BART emission limits at an earlier point, this does not provide a basis for disapproving its final BART determination.

Comment: A commenter stated that it is unclear whether the current regulatory language proposed by ODEQ would actually result in the “closure” of the Boardman facility because each closure option states that it only applies to the “Foster-Wheeler boiler” at Boardman. To ensure no other coal-fired boiler could be installed at Boardman the commenter requested ODEQ to strike the commercial name of the boiler from OAR 340-223-0020 through OAR 340-223-0090 and replace it with either “any coal-fired boiler” or “the Boardman coal-fired power plant.”

Response: The State rules are clear in that they apply to the Foster-Wheeler boiler which is the only coal-fired unit at the Boardman facility. The rules do not prevent the plant owners from applying for a permit to construct a new power plant at the facility or to use the existing equipment with different fuel. See Oregon Regional Haze SIP submittal Attachment 1.1 at 8-9. However any new facility or change in the operations would need to be permitted in compliance with the CAA requirements. Further, the rules explain that notwithstanding the definition of netting basis and the process for reducing plant site emission limits (PSEL) in the Oregon rules, the netting basis and the PSEL are reduced to zero on the date which the boiler permanently ceases to burn coal. See OAR 340-223-0030(1)(e). Thus, as ODEQ explained to the Environmental Quality Commission, “Any new facility or repowering of the existing coal-fired boiler would be permitted as a new facility without relying on the reductions from the existing plant and in compliance with all applicable state and federal requirements, including modern air pollution controls and air quality impact analysis.” See Regional Haze SIP submittal, Attachment 1.1 at 9.

Comment: Multiple commenters explained that if ODEQ decides that the SO 2 emission limit, based on DSI, is BART for PGE Boardman, it should require PGE to design and install the DSI system to achieve 90% efficiency and require that PGE optimize its effectiveness for the duration of its operation.

Response: ODEQ established SO 2 BART limits for the Boardman facility based on an estimated 35% minimal efficiency of DSI in removing SO 2 from the flue gas. A similar comment regarding DSI efficiency was made to ODEQ during the State public comment period. In response ODEQ stated:

Comment: One comment stated that DSI for PGE Boardman for the shutdown within five years of EPA approval of the SIP may well be an appropriate cost effective technology choice capable of reducing SO 2 emissions in a manner consistent with BART requirements. Similarly, a commenter states that ODEQ should require that PGE install DSI “as expeditiously as practicable” and contends it could be installed in a year's time.

Response: As explained above, ODEQ determined that DSI is a cost effective control technology for SO 2 . The Oregon BART rule at OAR 340-223-0030 (1)(b)(A) requires that the Boardman facility achieve an SO 2 emission limit of 0.4 lbs/mmBtu by July 1, 2014, about two years ahead of the five-year maximum time allowed by the CAA for the installation of BART. As ODEQ explains, “The proposed compliance date [of July 1, 2014] allows PGE three years to design the DSI system and conduct the pilot study, which may involve evaluation of several types of sorbent materials and injection locations, along with particulate matter stack testing.” See Regional Haze SIP submittal, Attachment 7.2, response to comment I.7. Given the uncertainties associated with the use of DSI on a plant such as Boardman, installing DSI in this timeframe satisfies the requirement of “as expeditiously as practicable” and is within the timeframe specified in the CAA.

ODEQ determined that the Boardman facility need install any additional emission controls if the Foster-Wheeler boiler is shut down within five years of approval of the SIP. ODEQ did not consider DSI as a required control technology for this scenario. See Regional Haze SIP submittal, Appendix D at D-142. EPA agrees with ODEQ's conclusion that it would be unreasonable to require the installation of DSI for such a short period of operation before shutting down.

Comment: One comment stated that the capital and operating costs of DSI for Boardman were overstated. Some comments explained that although ODEQ has not provided sufficient data on the costs of DSI, it is possible that DSI could also meet ODEQ's cost-effectiveness threshold, even if used for only a few years as in the case were the Boardman facility were to shut down within five years of EPA final approval of the SIP.

Response: ODEQ's analysis for determining the capital and direct annual costs for DSI are described on pages D-130-131 of Appendix D of the Regional Haze SIP submittal. EPA's Boardman BART Assessment acknowledged that PGE's capital cost estimates for various control technologies are “likely at the high end of the range for capital cost estimates,” but as discussed above, even if the cost estimates are at the high end, considering the cost differential between DSI and SDFGD, and given the visibility improvements associated with selecting DSI based on an early shut down, the variation in cost estimates was not determinative. Therefore, EPA believes that the methods used by ODEQ to determine effectiveness and cost of DSI, and a determination not to require DSI if the Boardman facility ceases to burn coal within five years of EPA's approval, are reasonable and within the State's discretion. See also the response to comment above.

Comment: One comment stated that DSI is a technically feasible control technology at PGE Boardman. This comment explained that (1) the size of the coal-fired unit is inconsequential as to whether DSI is technically feasible, and (2) while DSI is not in widespread use on larger boilers like the Boardman facility, that is most likely due to availability of sorbents, costs, and SO 2 control effectiveness when compared to other SO 2 control technologies like semi-dry or wet scrubbers, not technical feasibility.

Related comments suggest that it is improper for ODEQ to discard DSI as technically infeasible merely because its installation triggers addition legal obligations under the Clean Air Act (or State law). In the commenter's view, ODEQ cannot conclude that DSI is technically infeasible because it would interfere with PGE's compliance with state mercury reduction goals, or result in adverse impacts to the particulate matter air quality standards. The comment states that as a legal matter PGE must comply with requirements associated with Regional Haze, and those intended to prevent significant deterioration of air quality and any requirements to reduce hazardous pollutants such as mercury. In the commenter's view, even if DSI were genuinely technically infeasible, PGE would not be entitled to the de facto exemption from BART that it requests because the ODEQ has an obligation to identify, and prescribe, a technically feasible BART limit.

Response: As explained above, ODEQ determined that DSI is technically feasible for PGE Boardman. Although ODEQ was not aware of a similar sized unit with a DSI system, this control technology has been used on smaller units that also included fabric filters which contribute to improved efficiency of the DSI system. However, ODEQ's BART determination does not require the installation of a new fabric filter system, which would cost about an additional $100 million, but instead relies on the use of the existing ESP at the Boardman facility. Furthermore, there is additional question regarding DSI performance because of the size of the ducts between the air heater and the ESP. These ducts are much larger at the Boardman Plant than the ducts on smaller power plants where DSI has been demonstrated. This adds to the uncertainty in DSI performance because it is more difficult to adequately disperse the sorbent reagent in larger ducts and still maintain enough residence time for the sorbent to react with the SO 2 . Thus, there is some uncertainty as to how well DSI will work on this particular facility. See Regional Haze SIP submittal, Appendix D at D-129, D-169 and D-170 (ODEQ's basis for projected DSI system efficiency).

Although ODEQ concluded that DSI is technically feasible, it also took into consideration that DSI at this size and type of facility may result in unacceptable levels of PM or mercury emissions. This could result in potential additional costs if the levels of these pollutants were high enough to require additional controls. Specifically, ODEQ recognized that a significant increase in PM2.5 emissions was a possible outcome of installing DSI, and that if this occurred, the installation would be subject to the PSD requirements. The resulting BACT or air quality impact analysis would require additional controls which would increase the cost of DSI. Regional Haze SIP submittal, Appendix D at D-142 and D-170. Thus, rather than avoiding other legal requirements, ODEQ considered them in its overall cost effectiveness evaluation of the technology. ODEQ did not exclude the technology because it might trigger other legal obligation but considered them in the overall evaluation of what was the most reasonable BART for this facility.

Comment: One commenter stated that Oregon did not appropriately consider the lower emission limitation of 0.3 lb/mmBtu (DSI-2) as BART, but instead only considered it to meet reasonable further progress by 2018. The commenter explained that the DSI-2 limitation was not identified as technologically infeasible or cost prohibitive for BART, and that ODEQ has provided no reason why the study of DSI-2 cannot be conducted “as expeditiously as practicable” but no later than five years after EPA approves the state SIP.

Response: ODEQ determined that due to uncertainties associated with DSI-1 performance at a large coal fired-facility the size of Boardman without a baghouse, the higher, more conservative limit of 0.40 lb/mmBtu could be achieved with a high degree of certainty in 2014, whereas the lower limit of 0.3 lb/mmBtu would not be achieved with DSI-2 until 2018, when future refinements in the DSI system performance could be achieved, possibly in combination with ultra-low sulfur coal or supplemental fuels, such as biomass. Regional Haze SIP submittal, Appendix D at D-169- D-170; 76 FR 12662. See also response to comment above.

Comment: One commenter stated that loopholes in Oregon's Administrative Rules (OAR 340-223-0010 through 340-223-0080) included provisions that would inappropriately remove the requirement for DSI. In the commenter's view the condition under which DSI would not be required, including a post-BART determination of technical infeasibility or the triggering of additional CAA obligations should not be allowed to preclude the installation of BART, which is by definition technically feasible. The commenter also asks that in approving Oregon's SIP submittal, EPA interpret the conditions contained in OAR 340-223-0030(3) as requiring EPA approval or concurrence with ODEQ's determinations prior to implementation of relaxed standards. Additionally, a commenter questions whether the provision would require or allow any public comment on ODEQ's determination that DSI-1 or DSI-2 is technologically infeasible, would inhibit compliance with Oregon's mercury rules, or would trigger PSD applicability.

Response: As explained above, ODEQ determined that DSI is a technically feasible SO 2 control technology for PGE Boardman and that it can achieve 0.4 lb/mmBtu at a removal efficiency of about 35%. Regional Haze SIP submittal, Appendix D at D-127-128. While ODEQ determined that DSI was technically feasible, it also acknowledged that the technology has only been demonstrated at smaller boilers than the one at the Boardman facility. 4 Thus, the State determined it was appropriate to require additional studies. The rules being approved today provide that technical studies to evaluate the SO 2 limits, and the potential side effects of those limits, must be conducted in accordance with a plan that is preapproved by ODEQ. These studies will fully evaluate and review the effectiveness and use of DSI technology at this facility. See OAR 340-223-0030(2), see also Regional Haze SIP submittal, Attachment 7.2 at 17. The rules first establish a limit of 0.40 lb/mmBtu by July 1, 2014 and 0.30 lb/mmBtu by July 1, 2018. Then the rules describe the specific conditions under which the SO 2 limit of 0.40 lb/mmBtu or 0.30 lb/mmBtu may be exceeded. OAR 340-223-0030(3). Specifically, the rules provide that if upon completion of the specified pilot studies, the results shows that DSI is not capable of achieving the BART limit of 0.4 lb/mmBtu (between July1, 2014 and June 30, 2018) or 0.30 lb/mmBtu (between July 1, 2018 and December 31, 2020), or would prevent compliance with specified mercury limits or cause a significant air quality impact for PM10 or PM2.5, the SO 2 emission limit may be modified up to 0.55lb/mmBtu through a modification to the facility's Title V permit. The rule being approved today is clear as to what conditions must be satisfied in order for the source to exceed the 0.4 lb/mmBtu or 0.3 lb/mmBtu limits. The rule provides, that if applicable, the study may propose a limit that exceeds the 0.4 lb/mmBtu or 0.3 lb/mmBtu limits based on reduction of the sulfur dioxide emission limits to the maximum extent possible through the use of DSI or other SO 2 control system of equal or lower cost, including but not limited to the use of low sulfur coal, provided that the proposed emission limit may not exceed 0.55lb/mmBtu heat input as a 30-day rolling average. The conditions and parameters under which the 0.3 lb/mmBtu or 0.4 lb/mmBtu emission limits may be exceeded, are spelled out in the rule and were considered by EPA in its review of the proposed rule. Those conditions and parameters, including the alternate upper limit of 0.55 lb/mmBtu, are being approved today and additional approval by EPA is not necessary.

Regarding the commenter's concern relating to the opportunity for public input into this potential change in emission limits, the rule allows for the PGE Boardman's Title V operating permit to be modified to include a federally enforceable permit limit based on the performance of DSI demonstrated by the pilot study, as performed according to OAR 340-223-0030(2)(c). Thus, before the 0.4 lb/mmBbtu or 0.3 lb/mmBtu emission limits may be exceeded, the source would need to comply with the conditions in OAR 340-223-0030(3) including submitting a complete application for a Title V permit modification. The permit modification would be considered a significant permit modification under OAR 340-218-0180 and a category 3 permit under Oregon Title V rules. See OAR 340-218-0210(1). A category 3 permit is subject to the procedures in OAR 340-209-0030(3)(c) which include general public notice, opportunity for public comment and EPA review. In addition, the results of the pilot study, the technical basis and the recommended alternative limit would be provided to the public for review and comment during the Title V modification process.

Comment: The commenter also asks EPA to re-evaluate the environmental benefits from Oregon's SIP submittal based on the emission limit and reductions that EPA approval of the SIP would actually require: 0.55 lb/mmBtu, which the Oregon SIP submittal does require to be met, regardless of the results of the pilot studies.

Response: The visibility improvements to Class I areas impacted by PGE Boardman were based on the SO 2 and NO X BART emission limits to be achieved by 2014, and on further reasonable progress emission limits for SO 2 achieved by 2018. The SO 2 BART limit of 0.40 lb/mmBtu is the applicable limit as of July 1, 2014 unless specific conditions are satisfied and ODEQ approves an alternate limit. See OAR 340-223-0030(2)(c)(E). Additionally, ODEQ explains that an alternate limit must not exceed 0.55 lb/mmBtu in order to achieve at least a 0.5 dv improvement in visibility in Mt. Hood Wilderness Area. See Id. and the Regional Haze SIP submittal, Appendix D “Control Effectiveness” table at D-168 and text on D-170. Thus, the State considered the visibility improvements associated with a 0.55 lb/mmBtu and the additional analysis requested by the commenter is not necessary.

Comment: One commenter stated that visibility improvements and potential improvements in other non-air quality-related impacts in the region would occur as a result of the installation of SCR at the Boardman facility and should be taken into consideration in determining BART the facility. This commenter further explained that NO X emissions can contribute to excess nitrogen in ecosystems, which can alter the chemical balance of the soils and waterbodies with serious consequences for plant and animal life. For these reasons, the commenter concluded, ODEQ must require installation of SCR and new low NO X burners with overfire air as BART for the Boardman facility.

Response: The estimated visibility improvements that could be achieved over current conditions with each combination of technically feasible controls were taken into consideration in determining BART for Boardman. See 76 FR 12611. More specifically, ODEQ determined that LNB and MOFA are BART for NO X because they are cost effective and provided a 1.45 dv improvement at Mt. Hood Wilderness Area (the most impacted Class I area) and a cumulative visibility improvement of 8.75 dv in all 14 impacted Class I areas. ODEQ determined that DSI is BART for SO 2 because it is cost effective and provides a significant (0.96 dv) improvement at Mt. Hood Wilderness Area and a 7.4 dv improvement in all impacted Class I areas by July 1, 2014. For further comparison of visibility improvement associated with the various control technologies and timeframes see the Regional Haze SIP submittal, Appendix D, at D-169-172. The contribution of the facility's NO X emissions to excess nitrogen in ecosystems, were not taken into account in the PGE Boardman BART analysis. However, it would be extremely difficult to quantify, or even to qualitatively assess, the impacts of added nitrogen from one source on an ecosystem. The impacts of deposition related effects such as nutrient enrichment and eutrophication vary considerably across ecosystems. EPA does not consider it unreasonable for ODEQ to have not taken these impacts into account in making its BART determination.

Comment: One commenter urged the Department to consider and maintain the 2018 and five year closure options for the Boardman facility. The commenter requested that ODEQ also look at additional cost-benefit and technical analysis for the 2018 option.

Response: ODEQ's final Regional Haze SIP submittal includes rules which allow PGE Boardman to either cease burning coal within five years of EPA's approval of the rules or to cease burning coal by December 31, 2020. PGE must notify ODEQ in writing no later than July 1, 2014 if it chooses to cease coal burning within 5 years of this action. If it chooses that option, one set of emission limits apply; however, if it chooses to continue operating until December 31, 2020, more stringent emission limits apply. A 2018 shutdown option was considered by ODEQ but removed from the final SIP submittal because PGE indicated that it intended to operate the Boardman facility until the end of 2020, and because ODEQ has no authority to require a facility to shut down by a certain date under the BART Rule absent a commitment by the source to do so.

Comment: A commenter stated that the regulation should specify that if PGE continues to operate the Boardman facility as a coal-fired facility after its selected closure deadline the operating permit for the facility shall be deemed void. The commenter also requested that to avoid any uncertainty regarding the availability of relief due to non-compliance, the regulation should explicitly state that the state, EPA and citizens may apply for both injunctive and civil penalty relief.

Response: A violation of a federally enforceable state rule or permit is subject to liability as provided in section 113 of the CAA, 42 USC 7413, and would be addressed as appropriate under applicable state or federal law. Additional language to restate the existing authority is not necessary.

Comment: One commenter requested that EPA correct or remove certain factual statements that were included in the notice of proposed rulemaking. Specifically, the commenter requested changes to state that PGE Boardman is a 617 megawatt (MW) plant instead of 584 MW plant and that it commenced construction on “December 6, 1979” instead of in “1975”.

Response: EPA agrees that the PGE Boardman coal fired power plant is capable of producing about 617 MW of electricity, not 584 MW. According to ODEQ's BART report, construction on the PGE Boardman plant began in 1975. However, the first air contaminant discharge permit from ODEQ to PGE for Boardman was dated December 6, 1979.

Comment: One commenter stated that for the five-year closure option at Boardman, ODEQ should require additional interim controls that would reduce emissions in the remaining five remaining years of operation.

Response: OAR 340-223-0080 provides alternate requirements in the event the owner elects to permanently cease burning coal within five years of EPA's SIP approval. Under this alternative, the NO X emission limit of 0.23 lb/mmBtu applies beginning July 1, 2011, unless the source satisfies the requirements in OAR 430-223-0080(2)(a) and it is demonstrated by December 31, 2011, that the emission limit of 0.23 lb/mmBtu cannot be achieved with combustion controls, in which case the ODEQ may grant an extension to July 1, 2013. OAR 340-223-080(2)(a).

Comment: One commenter requested that the NO X , SO 2 and PM emission limits for PGE Boardman include emission limits during startup and shutdown.

Response: The BART rules include do startup and shutdown emission limits for the Boardman facility. See OAR 340-223-0030(1)(d). These limits, which are three-hour rolling averages, are: Sulfur dioxide, 1.20 lb/mmBtu, Nitrogen oxide, 0.70 lb/mmBtu, and particulate matter emissions must be minimized to the extent practicable pursuant to approved startup and shutdown procedures in accordance with OAR 340-214-0310.

Comment: As stated above, NPCA incorporated into their comments a number of comment letters that had previously been submitted to ODEQ. Many of the comments contained in these letters relate to emission limits or comments about technologies associated with the “no closure” option provided in prior versions of OAR 340-223-0050, 0060, and 0070, and ODEQ's BART determination based on PGE operating the coal-fired boiler at the Boardman facility until 2040.

Response: The Oregon Regional Haze Plan submitted to EPA included revisions to the State's regional haze rules at OAR 340-223-0010 through 340-223-0080. In this action, EPA is taking final action to approve a revision to the Oregon SIP which incorporates OAR 340-223-0010 through 340-223-0080 and specifically includes OAR 340-223-0030. As provided in OAR 340-223-0050, and as explained in the notice of proposed rulemaking, upon EPA's final approval of OAR 340-223-0030, OAR 340-223-0060 and 340-223-0070 are repealed as a matter of law. 76 FR 12662-12663. Thus, compliance with the “no closure option” or operating until 2040 is no longer an alternative. Therefore, the BART determination associated with that option is no longer relevant and responses to comments regarding it are unnecessary.

EPA is approving the BART measures in the Oregon Regional Haze plan as meeting the requirements of section 110(a)(2)(D)(i)(II) of the Clean Air Act with respect to the 1997 8-hour ozone and 1997 PM2.5 NAAQS. In addition, EPA is approving portions of the Oregon Regional Haze Plan, submitted on December 20, 2010, as meeting the requirements set forth in section 169A of the Act and in 40 CFR 51.308(e) regarding BART. EPA is also approving the Oregon submittal as meeting the requirements of 40 CFR 51.308(d)(2) and (4)(v) regarding the calculation of baseline and natural conditions for the Mt. Hood Wilderness Area, Mt. Jefferson Wilderness Area, Mt. Washington Wilderness Area, Kalmiopsis Wilderness Area, Mountain Lakes Wilderness Area, Gearhart Mountain Wilderness Area, Crater Lake National Park, Diamond Peak Wilderness Area, Three Sisters Wilderness Area, Strawberry Mountain Wilderness Area, Eagle Cap Wilderness Area, and Hells Canyon Wilderness Area, and the statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any mandatory Class I Federal Area.

Oregon Revised Statute 468.126, which remains unchanged since EPA last approved Oregon's SIP, prohibits ODEQ from imposing a penalty for violation of an air, water or solid waste permit unless the source has been provided five days' advanced written notice of the violation and has not come into compliance or submitted a compliance schedule within that five-day period. By its terms, the statute does not apply to Oregon's Title V program or to any program if application of the notice provision would disqualify the program from Federal delegation. Oregon has previously confirmed that, because application of the notice provision would preclude EPA approval of the Oregon SIP, no advance notice is required for violation of SIP requirements.

Oregon has not demonstrated authority to implement and enforce the Oregon Administrative rules within “Indian Country” as defined in 18 U.S.C. 1151. “Indian country” is defined under 18 U.S.C. 1151 as: (1) All land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation, (2) all dependent Indian communities within the borders of the United States, whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a State, and (3) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same. Under this definition, EPA treats as reservations trust lands validly set aside for the use of a Tribe even if the trust lands have not been formally designated as a reservation. Therefore, this SIP approval does not extend to “Indian Country” in Oregon. See CAA sections 110(a)(2)(A) (SIP shall include enforceable emission limits), 110(a)(2)(E)(i) (State must have adequate authority under State law to carry out SIP), and 172(c)(6) (nonattainment SIPs shall include enforceable emission limits).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator 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. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it 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).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the rule neither imposes substantial direct compliance costs on tribal governments, nor preempts tribal law. Therefore, the requirements of section 5(b) and 5(c) of the Executive Order do not apply to this rule. Consistent with EPA policy, EPA nonetheless provided a consultation opportunity to Tribes in Idaho, Oregon and Washington in letters dated January 14, 2011. EPA received one request for consultation, and we have followed-up with that Tribe. This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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 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 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 September 6, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule 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).)

Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

I. Background

In FR Doc. 2011-10568 of May 6, 2011 (76 FR 26490), there were a number of technical errors that are identified and corrected in the “Correction of Errors” section below. The provisions in this correction notice are effective as if they had been included in the document published May 6, 2011. Accordingly, the corrections are effective on July 1, 2011.

On page 26490, we made several typographical errors in the “Table of Contents” section, and on pages 26493 through 26539, we made typographical errors to the corresponding section headings under section “II. Provisions of the Final Rule and Responses to Comments.” In the final rule preamble language, we combined section “II.A” and section “II.B” to remove redundancy in the language and titled the new combined section “II. A Overview of the January 7, 2011 Hospital Inpatient VBP Program Proposed Rule.” We inadvertently failed to reflect this combination in the table of contents and corresponding headings in the preamble language. Therefore, in section III. of this correction notice, we correct these errors.

On pages 26513 and 26516, we made technical and typographical errors with the numerical values expressed in Tables 5 and 7, respectively. In these tables, we are adjusting the “n” value used to calculate the achievement threshold and benchmark values listed in the tables, which properly reflects the performance standards we have finalized for the hospital value-based purchasing program. Therefore, in section III. 6. and 7. of this notice, we are correcting these errors in the tables.

In FR Doc. 2011-10568 of May 6, 2011 (76 FR 26490), make the following corrections:

1. On page 26490, the “Table of Contents” section is corrected to read as follows:

2. On page 26494, in the third column; the section heading “C. Performance Period” is corrected to read “B. Performance Period”.

3. On page 26495, in the third column; the section heading “D. Measures” is corrected to read “C. Measures”.

4. On page 26511, in the first column; the section heading “E. Performance Standards” is corrected to read “D. Performance Standards”.

5. On page 26513, in the first column; the section heading “F. Methodology for Calculating the Total Performance Score” is corrected to read “E. Methodology for Calculating the Total Performance Score”.

6. On page 26513, Table 5 is corrected to read as follows:

7. On page 26516, Table 7 is corrected to read as follows:

8. On page 26527, in the first column; the section heading “G. Applicability of the Value-Based Purchasing Program” Hospitals is corrected to read “F. Applicability of the Value-Based Purchasing Program to Hospitals”.

9. On page 26531, in the first column; the section heading “H. Exchange Function” is corrected to read “G. The Exchange Function”.

10. On page 26534, in the second column; the section heading “I. Hospital Notification and Review Procedures” is corrected to read “H. Hospital Notification and Review Procedures”.

11. On page 26536, in the third column; the section heading “J. Reconsideration and Appeal Procedures” is corrected to read “I. Reconsideration and Appeal Procedures”.

12. On page 26537, in the first column; the section heading “K. FY 2013 Validation Requirements for Hospital Value-Based Purchasing” is corrected to read “J. FY 2013 Validation Requirements for Hospital Value-Based Purchasing”.

13. On page 26538, in the first column; the section heading “L. Additional Information” is corrected to read “K. Additional Information”.

14. On page 26539, in the second column; the section heading “M. QIO Quality Data Access” is corrected to read “L. QIO Quality Data Access”.

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we can waive this notice and comment procedure if the Secretary finds, for good cause, that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice.

Section 553(d) of the APA ordinarily requires a 30-day delay in effective date of final rules after the date of their publication in the Federal Register . This 30-day delay in effective date can be waived, however, if an agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued.

This notice merely corrects technical and typographic errors in the Hospital Inpatient Value-Based Purchasing Program final rule that was published on May 6, 2011 and becomes effective on July 1, 2011. The changes are not substantive changes to the policies or payment methodologies. Therefore, we believe that undertaking further notice and comment procedures to incorporate these corrections and delaying the effective date of these changes is unnecessary. In addition, we believe it is important for the public to have the correct information as soon as possible, and believe it is contrary to the public interest to delay the dissemination of it. For the reasons stated above, we find there is good cause to waive notice and comment procedures and the 30-day delay in the effective date for this correction notice.

The Secretary is responsible for implementation of the Native American Graves Protection and Repatriation Act, including the issuance of appropriate regulations implementing and interpreting its provisions. See 25 U.S.C. 3001 et seq.

The Native American Graves Protection and Repatriation Act (NAGPRA) addresses the rights of lineal descendants, Indian Tribes, and Native Hawaiian organizations to certain Native American human remains, funerary objects, sacred objects, and objects of cultural patrimony. NAGPRA defines “Indian tribe” as “any tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village (as defined in, or established pursuant to, the Alaska Native Claims Settlement Act) (43 U.S.C. 1601 et seq. ), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians” (25 U.S.C. 3001(7)).

The Department of the Interior (Department) published the initial rules to implement NAGPRA on December 4, 1995 (60 FR 62158). These rules defined “Indian tribe” to include, in addition to any Alaska Native village, any Alaska Native corporation (43 CFR 10.2(b)(2)).

From July 2009 to July 2010, at the request of Congress, the Government Accountability Office (GAO) conducted a performance audit to address the status of NAGPRA implementation among Federal agencies. In its report, Native American Graves Protection and Repatriation Act: After Almost 20 Years, Key Federal Agencies Still Have Not Fully Complied with the Act (Report no. GAO-10-768 (July 2010); GAO Report), the GAO recommended, among other things, that the National NAGPRA Program, in conjunction with the Department's Office of the Solicitor, reassess whether any Alaska Native corporations should be considered as “eligible entities for purposes of carrying out NAGPRA. * * *” (GAO Report, at 55).

The recommendation and analysis in the GAO report have engendered significant uncertainty on the part of museums and Federal agencies concerning the status of Alaska Native corporations under NAGPRA. The Department has received a number of questions including whether Alaska Native corporations may assert claims for human remains and other cultural items; whether the NAGPRA requirements for consultation with Indian Tribes apply to Alaska Native corporations; whether Alaska Native corporations are authorized under the law to bring matters to the NAGPRA Review Committee; and whether Alaska Native corporations can be recipients of grants authorized by NAGPRA.

To address these questions, and as recommended by GAO, the Department's Office of the Solicitor examined the legal basis for the existing regulatory provision that included Alaska Native corporations as Indian Tribes under the Act. The opinion of the Solicitor's Office is posted on the National NAGPRA Program's Web site at http://www.nps.gov/history/nagpra/DOCUMENTS/Solicitors_Memo_ANCSA_03182011.pdf. The Solicitor's Office found that Congress did not import the definition of “Indian tribe” into NAGPRA verbatim from the Indian Self Determination and Education Assistance Act (25 U.S.C. 450b; ISDEAA). Whereas the ISDEAA definition includes Alaska Native corporations, the NAGPRA definition does not. According to the legislative history of NAGPRA, the definition of “Indian tribe” in the Act was deliberately changed from that in the ISDEAA in order to “delete[ ] land owned by any Alaska Native Corporation from being considered as `tribal land' ” (136 Cong. Rec. 36,815 (1990)). The Solicitor's Office “therefore strongly recommend[ed] that the regulatory definition of `Indian tribe' be changed as soon as feasible to conform to the statutory definition.” This interim final rule implements that recommendation by deleting the regulatory definition of “Indian tribe.” The effect of the removal of the definition from the regulations is that we will now use only the statutory definition of “Indian tribe” in implementing NAGPRA.

This document is not a significant rule and has not been reviewed by the Office of Management and Budget under Executive Order 12866.

(1) This rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.

(3) This rule does not materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights or obligations of their recipients.

(4) This rule does not raise novel legal or policy issues.

The Department of the Interior certifies that this rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

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 or more.

b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local or Tribal government agencies, or geographic regions.

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 rule does not impose an unfunded mandate on State, local, or Tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local or Tribal governments, or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

Under the criteria in Executive Order 12630, this rule does not have significant takings implications. A takings implication assessment is not required. No taking of personal property will occur as a result of this rule.

Under the criteria in Executive Order 13132, this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism summary impact statement. A Federalism summary impact statement is not required.

Under the criteria in Executive Order 13175 we have evaluated this rule and determined that it has no potential effects on Federally recognized Indian Tribes.

This regulation does not contain information collection requirements, and a submission under the PRA is not required.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under NEPA is not required because the rule is covered by a categorical exclusion under 43 CFR 46.210(i), “Policies, directives, regulations, and guidelines: that are of an administrative, financial, legal, technical, or procedural nature; or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case.” We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

In developing this rule, we did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 105-554).

The rule is not a significant energy action under the definition in Executive Order 13211. A statement of Energy Effects is not required.

The Department is publishing this rule as an interim final rule with request for comment, but without prior notice and opportunity for comment, as allowed by the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)). Under this provision, an agency may issue a regulatory action without notice and an opportunity for comment when the agency, for good cause, finds that the notice and comment procedures are “impracticable, unnecessary or contrary to the public interest.” The Department for good cause finds that prior notice and comment are unnecessary because this rule amends the existing rule to conform with the Act. See, e.g., Komjathy v. National Transp. Safety Bd., 832 F.2d 1294, 1296-1297 (DC Cir. 1987), and Gray Panthers Advocacy Committee, et al. v. Sullivan, 936 F.2d 1284 (DC Cir. 1991). Under 5 U.S.C. 553(d)(3), the Department for good cause finds that this rule should be made effective upon publication in the Federal Register , rather than after the usual 30-day period. This finding is based on the uncertainty caused by the GAO report described above and the need to ensure compliance with the requirements of the Act.

The Department is requesting comments on this interim final rule. The Department will review any comments received and anticipates responses to comments in either a new final rule or in a future proposed rulemaking also addressing other substantive changes to the regulations found at 43 CFR part 10.

This interim final rule was prepared by staff of the National NAGPRA Program and of the Office of the Solicitor, Divisions of Parks and Wildlife and Indian Affairs.

It is the policy of the Department of the Interior, whenever practicable, to afford the public an opportunity to participate in the rulemaking process. Accordingly, interested persons may submit written comments regarding this interim final rule to the address noted at the beginning of this rulemaking.

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.

In consideration of the foregoing, the Department of the Interior amends 43 CFR part 10 as follows:

The Federal Emergency Management Agency (FEMA) makes the final determinations listed below of the modified BFEs for each community listed. These modified BFEs have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Federal Insurance and Mitigation Administrator has resolved any appeals resulting from this notification.

The modified BFEs are not listed for each community in this notice. However, this final rule includes the address of the Chief Executive Officer of the community where the modified BFE determinations are available for inspection.

The modified BFEs are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq., and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.

These modified BFEs are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in those buildings. The changes in BFEs are in accordance with 44 CFR 65.4.

National Environmental Policy Act. This final rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

Executive Order 13132, Federalism. This final rule involves no policies that have federalism implications under Executive Order 13132, Federalism.

Executive Order 12988, Civil Justice Reform. This final rule meets the applicable standards of Executive Order 12988.

Accordingly, 44 CFR part 65 is amended to read as follows:

The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Federal Insurance and Mitigation Administrator has resolved any appeals resulting from this notification.

This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community. The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

National Environmental Policy Act. This final rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

Executive Order 13132, Federalism. This final rule involves no policies that have federalism implications under Executive Order 13132.

Executive Order 12988, Civil Justice Reform. This final rule meets the applicable standards of Executive Order 12988.

Accordingly, 44 CFR part 67 is amended as follows:

1. Submitting Classified Business Information (CBI). Do not submit this information to EPA through http://www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI, and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket.

Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for Preparing Your Comments. When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

• Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree, suggest alternatives, and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment period deadline identified.

The EPA recently transitioned from the National Institutes of Health's Contractor Performance System (CPS) to the Department of Defense's Contractor Performance Assessment Reporting System (CPARS). As a result, the requirement to use CPS is being removed from the EPAAR and applicable CPARs instructions are being added. In addition, all past performance requirements are being moved from subpart 1509 to 1542 in order to align with past performance information in the FAR.

This final rule makes the following changes: (1) Remove EPAAR 1509-170, Contractor Performance Evaluations; (2) Remove EPAAR clause 1552.209-76, Contractor Performance Evaluations; (3) Add EPAAR 1542.15, Contractor Performance Information; (4) Add EPAAR 1552.242-71, Contractor Performance Evaluations.

This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b).

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impact of today's proposed rule on small entities, “small entity” is defined as: (1) A small business that meets the definition of a small business found in the Small Business Act and codified at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; or (3) a small organization that is any not-for-profit enterprise which is independently owned and operated, and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, because the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. Since documenting past performance is applicable to large and small entities, this rule will not have a significant economic impact on small entities. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

This rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Any private sector costs for this action relate to paperwork requirements and associated expenditures that are far below the level established for UMRA applicability. Thus, this rule is not subject to the requirements of sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed action from State and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). Thus, Executive Order 13175 does not apply to this action. In the spirit of Executive Order 13175, and consistent with EPA policy to promote communication between EPA and Tribal governments, EPA specifically solicits additional comment on this proposed rule from Tribal officials.

EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

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) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment.

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. Section 804 exempts from section 801 the following types of rules (1) rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.

Therefore, 48 CFR Chapter 15 is amended as set forth below:

In the final rule published on May 9, 2011 (FR Doc. 2011-10510, 76 FR 26854), the following corrections are made:

Atlantic bluefin tuna, bigeye tuna, albacore tuna, yellowfin tuna, and skipjack tuna (hereafter referred to as “Atlantic tunas”) are managed under the dual authority of the Magnuson-Stevens Act and ATCA. ATCA authorizes the Secretary of Commerce (Secretary) to promulgate regulations, as may be necessary and appropriate, to implement ICCAT recommendations. The authority to issue regulations under the Magnuson-Stevens Act and ATCA has been delegated from the Secretary to the Assistant Administrator for Fisheries, NMFS.

Background information about the need for modification of the BFT base quotas for all domestic fishing categories, the 2011 BFT quota specifications, and amendment of the Atlantic tuna fisheries management measures was provided in the preamble to the proposed rule (76 FR 13583, March 14, 2011) and is not repeated here.

The total amount of available annual quota is determined by the ICCAT-recommended U.S. baseline BFT quota after consideration of overharvest/underharvest from the previous fishing year and any accounting for estimated dead discards of BFT. At the time the proposed rule was prepared, NMFS used the 2009 estimate of 160 mt as a proxy for potential 2011 dead discards because the BFT dead discard estimate for 2010 was not yet available. The 2010 dead discard estimate, 122.3 mt, became available from the NMFS Southeast Fisheries Science Center during the comment period. Estimates of dead discards are only available for the Longline category at this time. Estimates from other BFT gear types and fishing sectors that are not observed at sufficient levels for estimation and that do not report via a logbook are not included in this calculation. Use of the 2010 estimate as a proxy for estimated 2011 dead discards in the final rule is appropriate because it is the best available and most complete information NMFS currently has regarding dead discards.

In the proposed rule, under each baseline quota alternative, NMFS also set out its calculation of “available” annual quota and its proposed allocation of that available quota among the commercial and recreational domestic fishing categories ( i.e., quota specifications), and its proposed methodology for handling dead discards. NMFS proposed a calculation and allocation methodology consistent with the 2006 Consolidated HMS FMP and implementing regulations, but different than the methodology used for the past 4 years. NMFS received comments on the proposed allocation methodology both at public hearings and in writing during the public comment period. NMFS considered the comments (summarized in the Response to Comments section below) and the updated (2010) dead discard estimate, and after public discussion and input has decided to account for dead discards in a different manner to establish the 2011 BFT quota specifications as described below. Note that these considerations are for the 2011 quota specifications only.

To set the final 2011 BFT quota specifications, NMFS has decided to account up front ( i.e., at the beginning of the fishing year) for half of the estimated dead discards, using the recent 2010 estimate rather than the 2009 estimate used at the proposed rule stage. In the proposed rule, NMFS had proposed to subtract from the overall quota all of the estimated dead discards up front and then allocate the remaining quota among the fishery categories, even though the United States is not required by ICCAT or current regulations to account for the total amount of dead discards until the end of the fishing season. In the final rule, NMFS is accounting for half of the estimated pelagic longline dead discards up front and deducting that portion of expected longline discards directly from the Longline category quota. Accounting for dead discards in the Longline category in this way may provide some incentive for pelagic longline fishermen to reduce those interactions that may result in dead discards. Also in response to public comment, NMFS is applying half of the 94.9 mt of 2010 underharvest that is allowed to be carried forward to 2011 to the Longline category and maintaining the other half in the Reserve category. NMFS intends to maintain this underharvest in the Reserve category as needed until later in the fishing year for maximum flexibility in accounting for 2011 landings and dead discards.

NMFS took into consideration a broad range of public comment on the quota specification methodology and allocations in designing this final action. NMFS considers this action to be a transitional approach from the method used over the past 4 fishing years. Current regulations provide that the dead discard estimate may, but is not required to be, subtracted from the annual U.S. quota, and NMFS previously opted to deduct that estimate at the beginning of the year when the quota specifications were established. These final specifications are consistent with HMS regulations, are a logical outgrowth of the originally proposed calculation methodology, and would not affect the base quotas analyzed in Alternatives A1 and A2 of the EA/RIR/FRFA. For the directed fishing categories, this final rule maintains the directed categories at their baseline quotas, which reflect application of the allocation scheme established in the Consolidated Atlantic Highly Migratory Species Fishery Management Plan (Consolidated HMS FMP) to the 2011 baseline U.S. BFT quota (923.7 mt). All landings and dead discards will be accounted for and reported to ICCAT, and NMFS will make any ICCAT-required adjustments to future U.S. BFT quotas, as necessary.

Specifically, to set the final 2011 BFT quota specifications, NMFS first applies the percentages in the Consolidated HMS FMP allocation scheme to the overall U.S. quota of 923.7 mt to obtain the baseline category quotas for the different categories ( i.e., the General, Harpoon, Purse Seine, Angling, Longline, Trap, and Reserve categories). NMFS then deducts half of the 2010 dead discard estimate of 122.3 mt ( i.e., 61.2 mt) from the 2011 baseline Longline category quota of 74.8 mt and applies half of the 94.9 mt allowed to be carried forward to 2011 to the Longline category, i.e., 74.8−61.2 + 47.5 = 61.1 mt adjusted Longline subquota (not including the 25-mt allocation set aside by ICCAT for the NED). NMFS will add the remainder of the 2010 underharvest that can be carried forward to 2011 (47.4 mt) to the Reserve category's baseline allocation of 23.1 mt, for an adjusted Reserve category quota of 70.5 mt. For the directed fishing categories, NMFS is not making any adjustments to the allocations that result from applying the scheme established in the Consolidated HMS FMP to the 2011 baseline U.S. BFT quota. Quota specifications for 2012 would be addressed in a separate, future action using information on 2011 BFT landings and the best available dead discard estimate at that time.

Regarding the Atlantic tunas transfer-at-sea regulations, and in response to public comment, NMFS adds the words “or other gear” to further clarify that “transfer” includes moving a tuna from fishing gear or other gear in the water from one vessel to another.

NMFS establishes final 2011 quota specifications as follows (and as shown in Table 1): General category—435.1 mt; Harpoon category—36 mt; Purse Seine category—171.8 mt; Angling category—182 mt; Longline category—61.1 mt; and Trap category—0.9 mt. The amount allocated to the Reserve category for inseason adjustments, and potential quota transfers, scientific research collection, and accounting for potential overharvest in any category except the Purse Seine category, would be 70.5 mt.

The General category quota of 435.1 mt would be divided further into the time-period allocations established in the Consolidated HMS FMP. Thus, 23.1 mt (5.3 percent) would be allocated to the General Category for the period beginning January 1, 2011, and ending January 31, 2011; 217.6 mt (50 percent) for the period beginning June 1, 2011, and ending August 31, 2011; 115.3 mt (26.5 percent) for the period beginning September 1, 2011, and ending September 30, 2011; 56.6 mt (13 percent) for the period beginning October 1, 2011, and ending November 30, 2011; and 22.6 mt (5.2 percent) for the period beginning December 1, 2011, and ending December 31, 2011.

The Angling category quota of 182 mt would be further divided, pursuant to the area subquota allocations established in the Consolidated HMS FMP, as follows: School BFT—94.9 mt, with 36.5 mt to the northern area (north of 39°18′ N. latitude), 40.8 mt to the southern area (south of 39°18′ N. latitude), plus 17.6 mt held in reserve; large school/small medium BFT—82.9 mt, with 39.1 mt to the northern area and 43.8 mt to the southern area; and large medium/giant BFT—4.2 mt, with 1.4 mt to the northern area and 2.8 mt to the southern area.

The Longline category would be further divided in accordance with the North/South allocation percentages ( i.e., no more than 60 percent to the south of 31° N. latitude) in the Consolidated HMS FMP. Thus, the Longline category quota of 61.1 mt would be subdivided as follows: 24.4 mt to pelagic longline vessels landing BFT north of 31° N. latitude, and 36.7 mt to pelagic longline vessels landing BFT south of 31° N. latitude. NMFS would account for landings under the 25-mt NED allocation separately from other Longline category landings.

NMFS reinstates target catch requirements for pelagic longline vessels fishing in the NED. This action removes the exemption from target catch requirements that effectively has applied in the NED since November 2003. NMFS is removing the provision that allows unlimited retention of commercial-sized BFT taken incidental to fishing for other species in the NED up to the amount allocated for the NED (currently 25 mt). Instead, the same target catch limits apply in all areas ( i.e., both inside and outside of the NED) as follows: One large medium or giant BFT ( i.e., measuring 73 inches (185 cm) or greater) per vessel per trip may be landed, provided that at least 2,000 lb of species other than BFT are legally caught, retained, and offloaded from the same trip and are recorded on the dealer weighout slip as sold; two large medium or giant BFT may be landed incidentally to at least 6,000 lb of species other than BFT; and three large medium or giant BFT may be landed incidentally to at least 30,000 lb of species other than BFT.

NMFS clarifies the regulations regarding Atlantic tunas possession at sea and landing to specify that as long as the fork of the tail remains intact, the upper and lower lobes of the tail may be removed (as shown in Figure 1). This change balances the need for maintaining a standardized method of measuring Atlantic tunas with the request to allow Atlantic tunas to be stored at sea in a more efficient manner. This rulemaking does not affect the measurement methodology or requirements for species other than Atlantic tunas.

NMFS clarifies the intent of the Atlantic tunas transfer-at-sea regulations and prohibitions by adding a sentence to the regulatory text regarding transfer at sea of Atlantic tunas that would read: “Notwithstanding the definition of `harvest' at § 600.10, for the purposes of this part, `transfer' includes, but is not limited to, moving or attempting to move an Atlantic tuna that is on fishing or other gear in the water from one vessel to another vessel.” In the future, NMFS may make similar clarifications regarding transfer at sea for other Atlantic highly migratory species via separate actions pertaining to those species.

NMFS received approximately 2,000 written comments representing approximately 4,000 individuals or organizations, and oral comments were received from the approximately 400 participants who attended the six public hearings (in Barnegat, NJ; Manteo, NC; Gloucester, MA; Silver Spring, MD; Portland, ME; and Fairhaven, MA). The majority of the comments received opposed the 2011 BFT quota specifications as proposed. Below, NMFS summarizes and responds to all comments made specifically on the proposed rule. In addition, NMFS received comments on issues that were not part of this rulemaking. These comments are summarized under “Other Issues” below.

Comment 1: NMFS should implement the ICCAT-recommended U.S. quota.

Response: NMFS agrees. Implementing the ICCAT-recommended baseline U.S. BFT quota is necessary for the United States to be in compliance with the current ICCAT western BFT Recommendation, consistent with ATCA. The western Atlantic BFT Total Allowable Catch (TAC), which includes the U.S. quota, is expected to allow for continued BFT stock growth under the both the low and high stock recruitment scenarios considered by ICCAT's Standing Committee on Research and Statistics (SCRS).

Comment 2: It is arbitrary and capricious for NMFS to adopt quotas relying on the ICCAT western BFT recommendation. A 2008 independent review found ICCAT ineffective at controlling catch and that ICCAT management objectives have not been met. By relying entirely on ICCAT recommendations to set quotas, NMFS has “spurned its legal obligations under the Magnuson-Stevens Act,” specifically violating National Standard 1, which requires that conservation and management measures shall prevent overfishing while achieving, on a continuing basis, the optimum yield from each fishery, and National Standard 2, which requires that conservation and management measures shall be based upon the best scientific information available. NMFS should not rely solely on ICCAT stock assessments.

Response: NMFS disagrees that adoption of the ICCAT-recommended quota for western BFT is arbitrary and capricious or violates National Standards 1 and 2. NMFS considers the information considered by SCRS in the BFT stock assessments to constitute the best information currently available on which to make BFT fishery management decisions.

The United States is working with other ICCAT Contracting Parties to prevent BFT overfishing and overfished conditions for both stocks while providing reasonable opportunities to fish. At its 2010 annual meeting, ICCAT adopted TACs and other conservation and management measures that are within the range of scientific advice that SCRS provided to ICCAT for both the western and eastern Atlantic stocks. Over the past several years, ICCAT has taken steps to strengthen its control of the eastern Atlantic bluefin tuna fishery, including a shorter fishing season, further reductions in fishing capacity, and stronger monitoring and compliance measures. ICCAT's 2010 assessment of the eastern BFT stock indicated that maintaining catches at the current TAC will likely allow biomass to increase if compliance with the current management measures continues. The latest stock assessment concluded that the current western Atlantic TAC should allow spawning stock biomass to increase under both high and low productivity scenarios. The western Atlantic fishery has also had a long history of compliance. In addition, the current ICCAT BFT recommendations for both the western and eastern stocks have a provision that would suspend all bluefin fisheries if SCRS detects a serious threat of stock collapse.

Further, NMFS manages BFT under the dual authority of the Magnuson-Stevens Act and ATCA. ATCA mandates that no regulation promulgated may have the effect of increasing or decreasing any allocation or quota of fish to which the United States agreed pursuant to an ICCAT recommendation.

Comment 3: NMFS should reduce significantly, or eliminate, quotas for fisheries targeting BFT and take immediate measures to reduce incidental mortality.

Response: NMFS is required under the Magnuson-Stevens Act and ATCA to provide U.S. fishing vessels with a reasonable opportunity to harvest the ICCAT-recommended quota. NMFS allocates the U.S. quota among categories to ensure that available fishing opportunities are distributed over as wide a range as possible with regard to time of year, geographic area, and type of participation while maintaining consistency with BFT conservation and management measures. Both the recent action to require the use of weak hooks by pelagic longline vessels fishing for HMS in the Gulf of Mexico and the action in this final rule to reinstate target catch requirements in the NED are consistent with the agency's efforts to address bycatch issues and manage BFT catch and landings within available quotas.

Comment 4: NMFS must consider the scientific information presented in the petition to list BFT as endangered or threatened under the Endangered Species Act (ESA), and CBD's comments on the 90-day finding, before issuing final conservation and management measures, including quotas, for BFT.

Response: Much of the information that was considered in the BFT listing petition status review was also considered by ICCAT and by NMFS in setting the BFT TAC and category quotas, respectively. NMFS proposed and is finalizing these management measures to be effective for June 2011, when ICCAT Recommendation 10-03 enters into force. Although the two efforts were conducted in parallel, the agency's fishery management obligations, including establishing the 2011 quota specifications, continued under ATCA and the Magnuson-Stevens Act during the status review process.

On May 27, 2011, NOAA announced that listing BFT as endangered or threatened is not warranted at this time (76 FR 31556, June 1, 2011). NOAA has committed to revisit this decision by early 2013, when more information will be available about the effects of the Deepwater Horizon BP oil spill, the 2012 SCRS BFT stock assessment, and the 2012 ICCAT BFT recommendations. NOAA also announced on May 27, 2011, that it is formally designating both the western Atlantic and eastern Atlantic and Mediterranean stocks of BFT as “species of concern” under the ESA. This places the species on a watch list for concerns about its status and threats to the species.

Comment 5: NMFS should not deduct the dead discard estimate from the base quota. To account for pelagic longline BFT dead discards off the U.S. base quota is unfair as it would result in reduced quotas for the more selective, directed fishing categories, and be a de facto reallocation of quota shares from those established in the Consolidated HMS FMP. It would also be economically damaging to the directed fisheries and support industries, and likely would result in shorter seasons and lower retention limits. NMFS is not managing for optimum yield when it allows the Longline category's landings and dead discards to total approximately 28 percent of the U.S. quota.

Response: The United States must account for dead discards, regardless of which fishery they occur in, to comply with ICCAT recommendations. The only dead discard data currently available comes from the longline fishery. Existing BFT quota regulations state that NMFS may subtract dead discards from the U.S. quota and make the remainder available to vessels subject to U.S. jurisdiction. This is an allowable methodology under existing regulations, and was not a new proposal in this rulemaking.

However, as described above, following consideration of public comment and the availability of updated dead discard estimates, NMFS has decided to account for one half of the dead discard estimate up front and directly off the Longline category quota, which will mitigate potential economic impacts commenters associated with adjusting the baseline quota for dead discards. For the directed fishing categories, NMFS is applying the allocation scheme established in the Consolidated HMS FMP to the 2011 baseline U.S. BFT quota with no further adjustments.

It is important to consider that the BFT quota allocations in the Consolidated HMS FMP were based on historic landings and were established initially in 1992. Baseline quotas were modified in 1995 and 1997 but have remained the same since implementation of the 1999 FMP when a separate discard allowance was provided for in the ICCAT BFT recommendation. Following ICCAT's elimination of the dead discard allowance and change to include dead discards within TACs in 2006, NMFS has not modified the allocation scheme to include dead discards into the baseline quotas. The United States has accounted for this mortality as part of the domestic specification calculation process for the last several years and reports dead discard estimates to ICCAT annually. This is one of many issues the agency intends to consider in its review of BFT management in the near future. Regarding the concern about this accounting method creating shorter fishing seasons and lower retention limits, specifically for the recreational BFT fishery in 2011, the inseason actions implemented in April ( i.e., retention limit adjustment and closure of the southern area BFT trophy fishery) were based on recent changes in the fishery and size of bluefin tuna available to fishermen, not the proposed quota specifications. Finally, NMFS would like to clarify that accounting for dead discards as proposed or as finalized does not alter the Longline category's allocation of the U.S. quota. As proposed and finalized, the Longline category's allocation per the Consolidated HMS FMP is 8.1 percent to allow for landings of BFT, not dead discards. The pelagic longline fleet does not benefit economically from the BFT they must discard dead.

Comment 6: NMFS should not deduct the dead discard estimate from the overall quota ( i.e., “off the top”) because it would provide no incentive for the pelagic longline fishery to reduce BFT interactions and dead discards. NMFS should account for these dead discards within the Longline category quota, and, generally, should hold each category accountable for its overharvests.

Response: As discussed above, in these final quota specifications, NMFS is accounting for half of the estimated dead discards within the Longline category up front. This action may provide some incentive for pelagic longline fishermen to reduce BFT interactions that may result in dead discards. Reinstating target catch requirements in the NED also may serve as a disincentive to fish in areas where BFT interactions could be high.

As discussed below, the pelagic longline fishery is currently the only fishery for which sufficient data is collected to estimate dead discards. However, an unknown level of dead discards occurs in directed BFT fishing fisheries as well and NMFS will consider how best to modify data collection programs to provide dead discard estimates in the future.

Comment 7: NMFS should consider implementing a 25-percent to 50-percent reduction of the allocated quota to the Longline category for one or more years. The longliners know there need to be some changes, although it would not be appropriate to cut out the pelagic longline fishery entirely.

Response: NMFS does not eliminate the quota for the Longline category in the final rule, although some of the approaches recommended in the comments on the proposed rulemaking would have had that effect. As discussed above, NMFS is accounting for half of the estimated pelagic longline dead discards up front and deducting that portion of expected longline discards directly from the Longline category quota. Accounting for dead discards in the Longline category in this way may provide some incentive for pelagic longline fishermen to reduce those interactions that may result in dead discards. Reinstating pelagic longline target catch requirements for retaining BFT in the NED may also have a similar effect.

Comment 8: The proposed quota specifications are not consistent with the ICCAT provision that Contracting Parties shall minimize dead discards to the extent practicable. Allocating a disproportionate share of the BFT quota to the sector (pelagic longline) that causes the most discards is inconsistent with ICCAT mandates. The proposed quota specifications also ignore the obligations of the 1982 United Nations Convention on the Law of the Sea, the 1995 United Nations Fish Stocks Agreement, and the 1995 Food and Agriculture Organization Code of Conduct, which call for minimizing catch of non-target species.

Response: The U.S. quota finalized in this action is consistent with ICCAT Recommendation 10-03, the Magnuson-Stevens Act, and ATCA. The U.S. pelagic longline fleet fishes directly for swordfish and Atlantic tunas such as yellowfin tuna and catches BFT incidentally. Dead discards are the result of domestic and international restrictions on the size of BFT that may be retained and requirements that certain amounts of target species ( e.g., swordfish and other tunas) be landed in order to keep any BFT. If small BFT are caught, or if insufficient target species have been caught, BFT must be discarded, and some are discarded dead. The agency has historically implemented a series of management measures designed to regulate the incidental catch of BFT in non-directed Atlantic fisheries. Additionally, NMFS currently imposes a time and area closure for the month of June to prevent BFT longline interactions off the mid-Atlantic coast. As discussed above, NMFS recently finalized a rule requiring the use of weak hooks in the Gulf of Mexico pelagic longline fishery to minimize BFT interactions, is reinstating target catch requirements in the NED through this action, and also will consider options for further regulatory changes to reduce dead discards in the future. Regarding the 1982 United Nations Convention on the Law of the Sea, the 1995 United Nations Fish Stocks Agreement, and the 1995 Food and Agriculture Organization Code of Conduct for Responsible Fisheries, NMFS does not consider this action to be inconsistent with those instruments.

Comment 9: Under ATCA, NMFS is authorized to adopt regulations necessary and appropriate to carry out the purposes and objectives of ICCAT. NMFS has been violating ATCA by allowing a de facto “incidental catch” fishery in the Gulf of Mexico, in violation of the ICCAT recommendation to prohibit directed fishing targeting BFT in that area.

Response: NMFS prohibits directed fishing for BFT in the Gulf of Mexico. However, some level of BFT catch is unavoidable during directed fishing for yellowfin tuna and swordfish. NMFS has historically implemented a series of management measures designed to regulate and limit the incidental catch of BFT in non-directed Atlantic fisheries.

Comment 10: Allocating a disproportionate portion of the BFT quota to the Longline category, which catches BFT only as bycatch, violates National Standard 4, which prohibits discrimination in the allocation of fishing privileges.

Response: National Standard 4 includes provisions that measures shall not discriminate between residents of different states and that allocations shall be fair and equitable to all fishermen. NMFS is allocating the baseline U.S. BFT quota consistent with the Consolidated HMS FMP allocation scheme. The action does not discriminate between residents of different states in the allocation of fishing privileges. It is important to note that the directed fishing categories currently do not have the same monitoring requirements as the pelagic longline fleet ( e.g., for logbooks and observers) and that improvements in directed fishery data collection could result in changes to the dead discard estimate and to the future management of those fisheries.

In the proposed 2011 quota specifications, NMFS' goal was to balance the objectives of accounting for dead discards proactively, distributing fishing opportunities in a manner consistent with the Consolidated HMS FMP allocation scheme, and allowing continued operation of commercially valuable fisheries for swordfish and other tunas while controlling the landings of the incidental BFT catches. Through the final action, as described above, NMFS has used an approach that accounts for a portion of the dead discard estimate up front, holds a portion of the unharvested 2010 BFT quota that is allowed to be carried forward to 2011 in the Reserve category for maximum flexibility for end-of-year accounting, and maintains directed fishing categories at their baseline quotas, which reflect application of the allocation scheme established in the Consolidated HMS FMP to the 2011 baseline U.S. BFT quota.

Comment 11: Perpetuating BFT dead discards does not serve the primary values of the BFT resource—food production and recreational opportunities—and thus violates National Standard 5, which requires that conservation and management measures consider efficiency in the utilization of fishery resources.

Response: NMFS considers efficiency in the utilization of the BFT resource across user groups, consistent with National Standard 5. To meet the multiple goals for the BFT fishery, NMFS considers the importance of all of the national standards when making fishery management decisions, including those intended to provide reasonable fishing opportunities to a wide range of users and gear types, coastwide, throughout the calendar year. Due to restrictions on size and retention limits, some amount of discards is inevitable and some amount of the BFT released are already dead or do not survive.

Comment 12: Because the proposed rule did not propose that bycatch be avoided or reduced, it violates National Standard 9, which requires that conservation and management measures minimize bycatch.

Response: The main purpose of the proposed rule was to implement the 2010-ICCAT recommended baseline U.S. BFT quota. The quota specifications were proposed to account for underharvest allowed to be carried forward to 2011 and to account for dead discards. The Consolidated HMS FMP and its implementing regulations minimize bycatch and bycatch mortality to the extent practicable in several ways. Most recently, on April 5, 2011, NMFS published a final rule to require weak hook use in the Gulf of Mexico pelagic longline fishery (76 FR 18653). That action and the action in this final rule to reinstate target catch requirements in the NED are part of the agency's efforts to address bycatch issues and manage BFT catch and landings within available quotas. In addition, the accounting for half of the anticipated dead discards up front from the Longline category in this action may provide some incentive for pelagic longline fishermen to reduce those interactions that may result in dead discards. NMFS may identify additional measures to be taken in the future resulting from further management review.

Comment 13: NMFS should account for dead discards as proposed. This approach is consistent with the method used for the last several years and would allow continued participation in the fishery by all user groups. The 8.1-percent Longline category allocation established in the FMP was based only on historical landings, not catch ( i.e., landings and discards). NMFS should continue to explore ways to convert dead discards to landings. Furthermore, NMFS should refer to dead discards as “regulatory discards” since it is domestic regulations that force pelagic longline fishermen to waste BFT bycatch.

Response: From 2007 through 2010, NMFS deducted the estimate of dead discards up front, but directly from the Longline category. In those years, NMFS was able to follow this approach while also providing a landings quota for the Longline category because of large underharvests and the fact that ICCAT allowed an amount equal to half of the U.S. quota to be carried forward to the following year. At the time the proposed rule was prepared, NMFS determined that the same approach would be impracticable given the change in the amount of underharvest that could be carried forward to 2011 ( i.e., from 50 percent of the U.S. quota to 10 percent, or from approximately 475 mt to 95 mt). NMFS considers the approach used for these final 2011 quota specifications to be a transitional approach from the method used over the past four fishing years. NMFS acknowledges the implications of the change in the ICCAT western BFT recommendation in 2006 for the pelagic longline fishery, and is attempting to balance the needs of the pelagic longline fleet to continue operations for the directed swordfish and Atlantic tunas fisheries with the needs of directed BFT fishery participants.

Comment 14: The pelagic longline fleet is critical in providing domestic swordfish and Atlantic tunas product and catch data used in highly migratory species stock assessments, and has contributed to scientific sampling efforts. Curtailing longline effort based on BFT bycatch could result in the loss of U.S. swordfish quota (if not used) to other ICCAT Contracting Parties that do not use safe handling and release practices, consequently having negative impacts to sea turtles and mammals, as well as billfish.

Response: NMFS acknowledges the role of the pelagic longline fishery in providing domestic fish products and important data for HMS stock assessments, such as indices of abundance on the high seas. NMFS recognizes the conservation efforts of the U.S. longline fleet as well as the concerns about potential loss of quota to countries with less protective measures for protected species. Through these final specifications, NMFS is accounting for half of the estimated dead discards against the Longline category up front but also is providing half of the available underharvest to the Longline category to balance the need for continued directed longline operations for swordfish and Atlantic tunas with the need to account for dead discards within the U.S. BFT quota.

Comment 15: Use of the 2009 pelagic longline dead discard estimate as a proxy for 2011 dead discards is inappropriate, in part because the estimate is nearly two years old, and in part because 2009 may have been an anomalous year for pelagic longline BFT catches.

Response: Since the proposed rule was published, NMFS has received and is now using the 2010 dead discard estimate. NMFS considers the 2010 dead discard estimate to be the best information available. By maintaining a portion of the 2010 BFT underharvest (allowed to be carried to 2011) in the Reserve category rather than allocating that amount now, NMFS is maximizing its flexibility regarding accounting for total 2011 landings and dead discards. As the season progresses, NMFS will have more 2011 information to use in making inseason transfer decisions as well as more data on pelagic longline BFT interactions, including dead discards.

Comment 16: In considering a proxy for the 2011 estimate, NMFS should calculate the anticipated reduction in dead discards from required use of weak hooks in the Gulf of Mexico.

Response: NMFS agrees that the recent implementation of the weak hook requirement for pelagic longline vessels in the Gulf of Mexico should reduce BFT bycatch and dead discards in the Gulf of Mexico. However, because the weak hook requirement was not effective until May 5, 2011, mid-way through the BFT spawning season (April through June), NMFS currently lacks the data appropriate to make such calculations. This, combined with uncertainties regarding post-release mortality, makes it difficult to quantify now the effect of the weak hook requirement on incidental BFT catch in the Gulf of Mexico. Therefore, the 2010 dead discards estimate is the best available proxy at this time. NMFS will continue to examine this issue and take appropriate action to account for any reductions in dead discards that result from the weak hook rule implementation.

Comment 17: The dead discard estimation methodology is unclear, and there are concerns that the extrapolation method may be amplifying the level of discards.

Response: The United States applies the SCRS-approved methodology to calculate and report dead discards for both stock assessment purposes and quota compliance purposes. The amount of dead discards is generated by estimating discard rates from data collected by NMFS' Pelagic Observer Program and extrapolating these estimates using the effort (number of hooks) reported in the Pelagic Logbooks. This methodology is applied within each time/area stratum ( e.g., catch rates from the Gulf of Mexico are used to estimate discards from the Gulf of Mexico, not the NED). Estimates of dead discards from other gear types and fishing sectors that do not use the pelagic longline vessel logbook are unavailable at this time and thus are not included in this calculation. Changes to the approved method likely would require consideration and approval by the SCRS prior to U.S. implementation.

Comment 18: It is not mandatory for NMFS to project and account for U.S. dead discards at the start of year. ICCAT requires accounting for 2011 landings and dead discards in 2012.

Response: The ICCAT requirement is for countries to report total annual catch (landings and dead discards) in the year following the subject fishing year, i.e., report in the summer of 2012 the 2011 total. Since the change in the ICCAT recommendation to eliminate the dead discard allowance, NMFS has taken a precautionary approach in proactively deducting the estimate of dead discards up front when establishing the final quota specifications for each year. NMFS must also balance its obligation to provide reasonable opportunity to harvest the U.S. quota with the fact that the ICCAT western BFT recommendation includes a provision for reduction of a Contracting Party's quota by 100 percent of the amount in excess of the quota and by 125 percent if overharvest occurs for a second year. As described above, in this final action, NMFS is taking the proactive measure of accounting for half of the estimated pelagic longline dead discards up front and deducting that portion of expected longline discards directly from the Longline category quota. Regardless of the specifications details in the final rule, the total 2011 U.S. BFT landings and pelagic longline dead discards will be accounted for and reported to ICCAT, and NMFS would make any ICCAT-required adjustments to future U.S. BFT quotas, if necessary.

Comment 19: NMFS should find a way to account for at least some portion of the dead discard estimate using the 285 mt of 2010 underharvest that the United States is unable to carry forward under the current ICCAT BFT Recommendation.

Response: In the 2010 BFT final quota specifications, NMFS deducted 172.8 mt (the 2008 dead discard estimate, used as a proxy for estimated 2010 dead discards) up front from the 2010 Longline category baseline quota. It would be inappropriate and inconsistent with the ICCAT BFT Recommendation to account for 2011 estimated dead discards with the amount of 2010 adjusted BFT quota that was unharvested and cannot be carried forward to 2011.

Comment 20: The Massachusetts Division of Marine Fisheries commented that the proposed quota allocation ( i.e., providing each quota category its FMP-based share of a quota that has been adjusted up front to account for anticipated dead discards in the pelagic longline fishery) attempts to maintain traditional FMP-based allocations without accounting for the changing nature of the BFT fisheries. The Purse Seine category, which has been allocated 18.6-percent of the U.S. quota, has not landed its full quota since 2003 and has had virtually no landings since 2005. Therefore, strict adherence to allocations based on the FMP-based allocations makes little sense, in the short-term, given the unlikelihood that this category will land its quota share. NMFS should use inseason management authority to temporarily reallocate unused quota to address discards.

Response: Under the current quota regulations, NMFS is obligated, regardless of their recent inactivity, to make equal allocations of the available Purse Seine category BFT subquota among the Purse Seine category vessels that have requested their 2011 allocations. However, within a fishing year, NMFS may transfer quotas among categories using determination criteria based on consideration of the regulatory determination criteria regarding inseason adjustments and other relevant factors provided under § 635.27(a)(8), such as: The catches of the particular category quota to date and the likelihood of closure of that segment of the fishery if no adjustment is made; review of dealer reports, daily landing trends, and the availability of the BFT on the fishing grounds; the projected ability of the vessels fishing under the particular category quota to harvest the additional amount of BFT before the end of the fishing year; and the effects of the adjustment on accomplishing the objectives of the fishery management plan. Thus, if the Purse Seine subquota is not used, NMFS has the option to transfer that quota allocation to other categories, if appropriate.

Comment 21: The directed BFT fishery participants have successfully avoided dead discards and should not be adversely affected, through reduced quotas and fishing opportunities, in the process of accounting for dead discards for the incidental pelagic longline fishery.

Response: Although NMFS recognizes that commercial fishermen and recreational anglers generally attempt to avoid discarding BFT, some amount of discards is inevitable due to restrictions on size and retention limits, and some amount of the BFT released are already dead or do not survive. As discussed above, the pelagic longline fishery is currently the only fishery for which sufficient data is collected to estimate dead discards. Data collection programs may need to be modified to provide more accurate dead discard estimates in the future. The topic of post-release mortality received substantial attention at the 2010 ICCAT meeting and NMFS anticipates that the issue will be a focus at the 2012 ICCAT meeting when the western BFT Recommendation is renegotiated. Regarding the potential impact of the proposed action on inseason BFT management, see response to Comment 5.

Comment 22: All user groups have discards, some of which are dead, and NMFS should initiate or expand studies to examine dead discard and release mortality rates in the all fishing categories. We should have our own national estimates rather than becoming subject to estimates from other BFT fisheries that may not be comparable to U.S. BFT fisheries.

Response: NMFS agrees that examination of dead discard and release mortality estimates rates in all fishing categories is warranted and will explore methods to account for this mortality in the near future.

Comment 23: Transfers of U.S. quota to other ICCAT Contracting Parties should be out of the question, particularly since the United States may be quota limited in 2011. Transferring quota would decrease opportunities to U.S. fishermen and may have negative impacts on protected species.

Response: The United States has not received any request for transfer of BFT quota from another ICCAT Contracting Party. At this point, NMFS is allocating fully the U.S. baseline and adjusted quotas, including to the Reserve category, for domestic management purposes. Although no transfers are anticipated at this time, if NMFS were later to consider a transfer of U.S. quota to another ICCAT Contracting Party, NMFS would publish a separate action in the Federal Register , which would provide the details of the proposed transaction, including factors such as the amount of quota to be transferred, the projected ability of U.S. vessels to harvest the total U.S. BFT quota before the end of the fishing year, the potential benefits of the transfer to U.S. fishing participants (such as access to the EEZ of the receiving Contracting Party for the harvest of a designated amount of BFT), potential ecological impacts, and the Contracting Party's ICCAT compliance status. Additional NEPA analysis would be prepared, as appropriate, to analyze any additional action.

Comment 24: NMFS should implement target catch requirements for pelagic longline vessels fishing in the NED. Limiting the number of BFT that may be retained and landed would serve as a disincentive to target BFT or to fish in areas where interactions could be high.

Response: NMFS agrees and is reinstating target catch requirements in the NED in this final rule.

Comment 25: NMFS should not implement the target catch requirements that apply coastwide for pelagic longline vessels within the NED. The 25-mt quota that ICCAT allocated for bycatch during pelagic longline fishing in the vicinity of the management area boundary was intended to be managed and accounted for distinctly from the U.S. share of the western BFT TAC. Pelagic longline vessels do not target BFT; there are sets on swordfish where the bycatch of BFT cannot be avoided. Furthermore, 2009 was an anomaly with regard to BFT landings in the NED, which generally have been under 10 mt annually. Implementing the target catch requirements that apply coastwide could have the unintended result of increasing BFT dead discards. NMFS should instead consider multi-year accounting for NED landings or a higher trip limit, such as 10 fish.

Response: NMFS must implement ICCAT management measures as they are presented in the formal ICCAT recommendations, including the western BFT recommendation. NMFS acknowledges that the 2009 level of BFT interactions in the NED may have been abnormally high and that the pelagic longline fleet is not targeting BFT. Nonetheless, NMFS maintains that reinstating target catch requirements in the NED may serve as a disincentive for a vessel owner or operator to fish in areas where BFT interactions could be high, or to extend a fishing trip in order to retain additional BFT. NMFS expects that implementing the same target catch requirements in all areas will decrease the likelihood that the Longline category quota is harvested prematurely, which could have economic impacts particularly on those vessels that do not fish in the NED. It also would be consistent with ongoing agency efforts to better align pelagic longline catch with Consolidated HMS FMP objectives and quota allocations.

Comment 26: Allowing for Atlantic tuna tails to be trimmed as NMFS proposed is an easy, common-sense measure that will make handling and storage of tunas in fish holds more efficient.

Response: NMFS' proposal to allow removal of the upper and lower lobes of the tail was intended to balance the need to preserve the sole method for measuring Atlantic tunas, i.e., Curved Fork Length, which is taken by measuring to the fork of the tail, with the need for both commercial and recreational participants to store these fish as efficiently as possible. Therefore, NMFS is finalizing the measure as proposed.

Comment 27: It is important that vessels be able to properly store the fish to preserve fish quality, and trimming the lobes would not help for giant BFT that may not fit in the hold. NMFS should allow the tail to be cut but require that the skin be left intact. The tail could then be folded for slushing purposes but be folded back to allow for a proper measurement.

Response: NMFS acknowledges the importance to properly store fish to preserve their quality and also recognizes that allowing the removal of the upper and lower tail lobes may not assist storage in all instances, especially for giant BFT. However, to facilitate enforcement of size limits and to preserve the sole method for measuring Atlantic tunas, NMFS has opted not to allow the tail to be cut prior to being offloaded at this point in time.

Comment 28: The proposed clarification is necessary to close a regulatory loophole. NMFS should further clarify that transfer includes moving a tuna from fishing or other gear in the water from one vessel to another.

Response: NMFS agrees with this comment and has clarified the regulatory text accordingly. The intent of this clarification is to ensure that fishermen are informed that transferring Atlantic tunas at sea, either by transferring the actual fish, or by transferring fish that remain in water, is prohibited. This also includes moving an Atlantic tuna using some sort of other gear, e.g., using a poly ball to transfer a fish.

Comment 29: NMFS should not overburden itself with further regulations like this that are very difficult to enforce.

Response: NMFS acknowledges that some regulations may be more difficult to enforce than others. However, this change in the regulations is intended to clarify, and enhance the enforceability of, existing regulations controlling effort, including daily retention limits. These effort controls are vital to ensuring all fishery participants have a reasonable opportunity to harvest Atlantic tunas regardless of their geographic or temporal engagement with the fishery. This clarification is also intended to preserve the allocation percentages, both within and across the various quota categories, by constraining landings to individual category quotas. As this change does not impose a new requirement, but merely clarifies and enhances the enforceability of existing regulations, NMFS does not consider it overly burdensome.

NMFS received comments on the issues outlined under the eight subheadings below. These suggestions are beyond the scope of this rulemaking. However, in light of the issues involving U.S. quotas and domestic allocations, pelagic longline dead discards, the need to account for dead discards that result from fishing with other gears, and bycatch reduction objectives, as well as public comment, NMFS intends to undertake a comprehensive review of BFT management in the near future to determine whether existing management measures need to be adjusted to meet the multiple goals for the BFT fishery.

NMFS received comments requesting implementation of various actions to address pelagic longline BFT bycatch, including: establish bycatch caps or other incentives to reduce bycatch, such as those based on U.S. northeast species management ( e.g., closure of directed fishery when a “choke species” limit is met) or Canadian highly migratory species management ( e.g., exclusion zones and quota transfers); establish time/area closures in the Gulf of Mexico; implement dynamic area management; expand the weak hook requirement beyond the Gulf of Mexico (although many expressed this step would not be effective or appropriate); require the fleet to use buoy gear or greensticks in the Gulf of Mexico; increase observer coverage and/or real-time monitoring of landings and dead discards, including via VMS; prohibit retention of BFT for sale by pelagic longline vessels; change the FMP allocation to reflect both landings and dead discards; change the allocation scheme to one that promotes fishing with selective fishing gears; adjust the minimum size for BFT retention and implement other regulatory changes that would allow conversion of BFT dead discards to landings, including in the NED. The Massachusetts Division of Marine Fisheries commented that allocation schemes that result in the failure of U.S. fishermen to land the U.S. quota while discarding dead BFT will negatively impact domestic interests in the future. Several commenters recognize the challenge of maximizing swordfish quota utilization with minimizing BFT discards. Many commenters expressed concern that without a bycatch cap and with expected BFT stock growth, pelagic longline BFT interactions would increase. Dead discards could grow without limit, potentially representing a majority of the U.S quota, thereby compromising the directed fisheries.

NMFS received comment that, as the BFT quota is small, NMFS should change all BFT permits from open access to limited access. Regarding swordfish revitalization, NMFS received comment that implementation of an HMS handgear permit would help increase swordfish quota utilization by gears more selective than pelagic longline, thus reducing potential BFT bycatch and dead discards.

NMFS received numerous comments that it should use “inseason quota transfers” that were actually recommendations to reallocate quota in a matter inconsistent with the Consolidated HMS FMP.

NMFS received comments that recreational landings must be tracked in a more timely fashion. Programs like the Massachusetts landing census pilot program, currently under development, should be implemented in all states as soon as possible.

NMFS received comments that the U.S. delegation should further consider domestic BFT fishery needs (for all HMS fisheries) when setting the U.S. position at ICCAT, that the U.S. delegation should renegotiate the BFT Recommendation, including quotas and the amount of underharvest allowed to be carried forward from one year to the next, should pursue two-year balancing periods for the base quota and NED allocation, and, wherever possible, maximize its ability to fully use the quota over a given period.

NMFS received comments that the current management system, which allows a substantial portion of the U.S. quota to be discarded dead, contradicts agency consideration of the petition to list BFT as threatened or endangered under the Endangered Species Act.

NMFS received a petition from the Center for Biological Diversity, with the names of more than 22,000 people who have pledged not to eat Atlantic and Southern BFT (fished around Australia) and to boycott restaurants with BFT on the menu in order to reduce consumer demand for and conserve both species. The Center for Biological Diversity launched the boycott following the November 2010 ICCAT meeting.

The North Carolina Division of Marine Fisheries encourages NMFS to (1) implement the 2009 proposed BFT management measure that would allow the General category season to extend past January 31 if January General category subquota remains available, and (2) establish a separate subquota for the months of February and March, potentially assigning unused prior year quota to that period. This would allow for greater utilization of available U.S. BFT quota.

The Assistant Administrator for Fisheries, NMFS, has determined that this final action is consistent with the Magnuson-Stevens Act, ATCA, and other applicable law, and is necessary to achieve domestic management objectives under the Consolidated HMS FMP.

There is good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effective date for the BFT quotas and 2011 BFT quota specifications in this action, because delaying this rule's effectiveness is both impracticable and unnecessary. ICCAT Recommendation 10-03 entered into force on June 14, 2011, and the United States at the November 2010 meeting of ICCAT agreed to establish the baseline annual U.S. quota of 923.7 mt by that date. Because the recommended effective date has already passed, it is critical that the quota be implemented immediately upon publication of the final rule, in order that NMFS and the United States comply with our international obligations. Furthermore, without the waiver for the 30-day delayed effectiveness period, the codified baseline annual U.S. BFT quota of 952.4 mt and related subquotas (allocated per quota allocations established in the Consolidated HMS FMP) would remain in effect, and thus the required reduction in quota would not be implemented for BFT, which has recently been listed as a species of concern. Delaying the effective date is also unnecessary. This rule does not add or modify any regulatory requirements for the affected entities. Because the entities affected by this rule need not undertake any modifications to their property or practices in order to come into compliance with this rule, it is unnecessary to delay this rule's effectiveness to allow entities to modify their practices to come into compliance with the rule.

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

In compliance with section 604 of the Regulatory Flexibility Act (RFA), a Final Regulatory Flexibility Analysis (FRFA) was prepared for this rule. The FRFA incorporates the Initial Regulatory Flexibility Analysis (IRFA), a summary of the significant issues raised by the public comments in response to the IRFA, and NMFS responses to those comments, and a summary of the analyses completed to support the action. The full FRFA and analysis of economic and ecological impacts are available from NMFS (see ADDRESSES ). A summary of the FRFA follows.

In compliance with section 604(a)(1) of the RFA, the purpose of this rulemaking, consistent with the Consolidated HMS FMP objectives, the Magnuson-Stevens Act, and other applicable law, is to implement and allocate the ICCAT-recommended U.S. quota for 2011 and 2012; adjust the 2011 U.S. quota and subquotas to account for unharvested 2010 quota allowed by ICCAT to be carried forward to 2011, and to account for a portion of the estimated 2011 dead discards up front; reinstate pelagic longline target catch requirements for retaining BFT in the Northeast Distant Gear Restricted Area; amend the Atlantic tunas possession-at-sea and landing regulations to allow removal of tail lobes; and clarify the transfer-at-sea regulations for Atlantic tunas.

Section 604(a)(2) of the RFA requires agencies to summarize significant issues raised by the public in response to the IRFA, the agency's assessment of such issues, and a statement of any changes made as a result of the comments.

NMFS received numerous comments on the proposed rule (75 FR 13582, March 14, 2011) during the comment period. A summary of these comments and NMFS' responses are included in Chapter 14 of the EA/RIR/FRFA and are included above. Although NMFS did not receive comment specifically on the IRFA, NMFS received some comments expressing concern about the economic impact of the 2011 BFT quota specifications, as proposed.

Several commenters stated that the proposed deduction of the dead discard estimate from the U.S. BFT baseline quota would result in a de facto reallocation of quota shares from those established in the Consolidated HMS FMP, which would be economically damaging to the directed fisheries. As described above, following consideration of public comment and the availability of updated (2010) dead discard estimates, NMFS has decided to account for one half of the dead discard estimate up front and directly against the Longline category quota, through the specifications process, which will mitigate some of the economic impacts associated with adjusting the baseline quota for dead discards. For the final 2011 quota specifications, this rule maintains the directed categories at their baseline quotas, which reflect application of the allocation scheme established in the Consolidated HMS FMP to the 2011 baseline U.S. BFT quota. For the Longline category, NMFS deducts half of the 2010 dead discard estimate of 122.3 mt from the 2011 baseline Longline quota and applies half of the underharvest allowed to be carried forward to 2011 ( i.e., 74.8 − 61.2 + 47.5 = 61.1 mt). This resulting 61.1 mt quota for the Longline category does not include the 25-mt allocation for the NED. NMFS holds the remainder of the 2010 underharvest allowed to be carried forward to 2011 (47.4 mt) within the Reserve category, for an adjusted Reserve category quota of 70.5 mt. NMFS intends to maintain this underharvest in the Reserve category until later in the fishing year for maximum flexibility in accounting for 2011 landings and dead discards.

Section 604(a)(3) of the RFA requires agencies to provide an estimate of the number of small entities to which the rule would apply. The implementation of the ICCAT-recommended baseline annual U.S. BFT quota would apply to all participants in the Atlantic BFT fisheries, all of which are considered small entities by the Small Business Administration, because they either had average annual receipts less than $4.0 million for fish-harvesting, average annual receipts less than $6.5 million for charter/party boats, 100 or fewer employees for wholesale dealers, or 500 or fewer employees for seafood processors. As shown in Table 5, there are over 32,000 vessels that held an Atlantic HMS Charter/Headboat, Atlantic HMS Angling, or an Atlantic tunas permit as of October 2010. These permitted vessels consist of commercial, recreational, and charter vessels as well as headboats.

Reinstatement of target catch requirements in the NED would affect those Longline category permitted vessels that fish in the NED. As shown in Table 9, over the last 5 years, an annual total ranging from 6 to 10 vessels have reported trips in the NED and an annual total ranging from 4 to 8 vessels have landed BFT from the NED. However, to the extent that this action could avoid the need for fishery interruption due to insufficient BFT quota availability, it could affect all 248 Longline category permitted vessels.

Clarification of the Atlantic tunas landing-form and transfer-at-sea regulations would be informative to owners and operators of Atlantic-tunas permitted vessels and Atlantic HMS-permitted vessels fishing for tunas, although material impacts are not expected to occur from the related changes in this action.

Under section 604(a)(4) of the RFA, agencies are required to describe any new reporting, record-keeping and other compliance requirements. The action does not contain any new collection of information, reporting, record keeping, or other compliance requirements.

Under section 604(a)(5) of the RFA, agencies are required to describe any alternatives to the rule which accomplish the stated objectives and which minimize any significant economic impacts. These impacts are discussed below and in Chapters 4 and 6 of the EA/RIR/FRFA. Additionally, the RFA (5 U.S.C. 603(c)(1)-(4)) lists four general categories of “significant” alternatives that would assist an agency in the development of significant alternatives. These categories of alternatives are: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) use of performance rather than design standards; and (4) exemptions from coverage of the rule for small entities.

In order to meet the objectives of this rule, consistent with the Magnuson-Stevens Act, ATCA, and the ESA, NMFS cannot establish differing compliance requirements for small entities or exempt small entities from compliance requirements. Thus, there are no alternatives discussed that fall under the first and fourth categories described above. NMFS does not know of any performance or design standards that would satisfy the aforementioned objectives of this rulemaking while, concurrently, complying with the Magnuson-Stevens Act. As described below, NMFS analyzed several different alternatives in this rulemaking and provides rationale for identifying the preferred alternatives to achieve the desired objective. The FRFA assumes that each vessel within a category will have similar catch and gross revenues to show the relative impact of the action on vessels.

NMFS has estimated the average impact that the alternative to establish the 2011 and 2012 BFT quota for all domestic fishing categories would have on individual categories and the vessels within those categories. As mentioned above, the 2010 ICCAT recommendation reduced the U.S. baseline BFT quota for 2011 and 2012 to 923.7 mt and provides 25 mt for incidental catch of BFT related to directed longline fisheries in the NED. This action would distribute the baseline quota of 923.7 mt to the domestic fishing categories based on the allocation percentages established in the Consolidated HMS FMP.

In 2010, the annual gross revenues from the commercial BFT fishery were approximately $8.9 million. As of October 2010, there were 8,311 vessels permitted to land and sell BFT under four commercial BFT quota categories (including HMS Charter/Headboat vessels). The commercial categories and their 2010 gross revenues are General ($7.8 million), Harpoon ($202,643), Purse Seine ($0), and Longline ($878,908).

For the allocation of BFT quota among domestic fishing categories, NMFS analyzed a no action alternative and Alternative A2 (preferred alternative) which would implement the 2010 ICCAT recommendation. NMFS considered a third alternative (A3) that would have allocated the 2010 ICCAT recommendation in a manner other than that designated in the Consolidated HMS FMP. Alternative A3 would result in quota reallocation among categories. The Consolidated HMS FMP addressed several aspects of the changing BFT fishery and included modification to time period subquotas and authorized gear for use in BFT fisheries, among other things. Further consideration of the information provided by the 2010 BFT stock assessment, international deliberations during and after the 2010 ICCAT meeting, and observed changes in the fishery ( e.g., relative year class strength and fish availability) may provide further insight into the larger fishery issues raised by this alternative, and could result in future regulatory or FMP amendments. For the purpose of this analysis, modifications to domestic management of BFT outside the limitations of the Consolidated HMS FMP and current ICCAT recommendations do not satisfy the purpose and need for the action. Additionally, preparation of an FMP amendment would not be possible in the brief period of time between receipt of the ICCAT recommendation, which occurred in late November 2010, and the start of the 2011 fishing year, the bulk of which begins in June.

Therefore, Alternative A3 was considered but not analyzed. But, if an FMP amendment were feasible, positive economic impacts would be expected to result on average for vessels in any permit categories that would receive a greater share than established currently in the FMP, and negative economic impacts would be expected to result on average for vessels in permit categories that would receive a lesser share than established in the FMP. Impacts per vessel would depend on the temporal and spatial availability of BFT to participants.

As noted above, Alternative A2 would implement the 2010 ICCAT recommendation in accordance with the Consolidated HMS FMP and consistent with ATCA, under which the United States is obligated to implement ICCAT-approved quota recommendations, as necessary and appropriate. The preferred alternative would implement this quota and have slightly positive impacts for fishermen. The no action alternative would keep the quota at pre-2010 ICCAT recommendation levels (approximately 29 mt more) and would not be consistent with the purpose and need for this action, the Consolidated HMS FMP, and ATCA. The economic impacts to the United States and to local economies would be similar in distribution and scale to 2010 ( e.g., annual commercial gross revenues of approximately $8.9 million, as described above), or recent prior years, and would provide fishermen additional fishing opportunities, subject to the availability of BFT to the fishery, in the short term. In the long term, however, stock growth may be hindered and negative impacts would result.

It is difficult to estimate average potential ex-vessel revenues to commercial participants, largely because revenues depend heavily on the availability of large medium and giant BFT to the fishery. Section 6 of the EA/RIR/FRFA describes potential revenue losses per commercial quota category based on each category's baseline quota reduction and price-per-pound information from 2010 ( i.e., $206,251 for the General category, $13,944 for the Harpoon category, $25,150 for the Longline category, and $1,093 for the Trap category); although the Purse Seine category had no BFT landings in 2010, potential revenue losses of $69,639 were estimated. As described in Section 4 of the EA/RIR/FRFA, because the directed commercial categories have underharvested their subquotas in recent years, particularly 2004-2008, the potential decreases in ex-vessel revenues above overestimate the likely actual economic impacts to those categories relative to recent conditions. Additionally, there has been substantial interannual variability in ex-vessel revenues per category in recent years due to recent changes in BFT availability and other factors. Generally, the interannual differences in ex-vessel revenues per category have been larger than the potential impacts described above.

Data on net revenues of individual fishermen are lacking, so the economic impact of the alternatives is averaged across each category. This is an appropriate approach for BFT fisheries, in particular because available landings data (weight and ex-vessel value of the fish in price-per-pound) allow NMFS to calculate the gross revenue earned by a fishery participant on a successful trip. The available data do not, however, allow NMFS to calculate the effort and cost associated with each successful trip ( e.g., the cost of gas, bait, ice, etc. ) so net revenue for each participant cannot be calculated. As a result, NMFS analyzes the average impact of the alternatives among all participants in each category.

Success rates vary widely across participants in each category (due to extent of vessel effort and availability of commercial-sized BFT to participants where they fish) but for the sake of estimating potential revenue loss per vessel, category-wide revenue losses can be divided by the number of permitted vessels in each category (see Table 5). Because HMS Charter/Headboat vessels may fish commercially under the General category quota and retention limits, Charter/Headboat permitted vessels are considered along with General category vessels when estimating potential General category ex-vessel revenue changes. Potential ex-vessel revenue losses (per vessel) as a result of this rule's implementation are estimated as follows: General category (including HMS Charter/Headboat vessels): $26; Harpoon category: $480; Longline category (incidental): $101; Trap category (incidental): $182; and Purse Seine category: $13,928. Section 6 describes potential revenue losses per commercial quota category based on each category not having access to quota that would be available through the carrying forward of 2010 underharvest, were it not for the ICCAT recommendation that limits the amount of underharvest that may be carried forward to 10 percent of a Contracting Party's total quota beginning effective for 2011. Potential ex-vessel revenue losses (per vessel) resulting from this change are estimated as follows: General category (including HMS Charter/Headboat vessels): $107; Harpoon category: $4,808; Longline category (incidental): $1,014; Trap category (incidental): $519; and Purse Seine category: $139,278. These values likely overestimate potential revenue losses for vessels that actively fish and are successful in landing at least one BFT.

The reinstatement of target catch requirements for pelagic longline vessels in the NED could, as described in Section 6.6.2, would result in a potential loss to the Longline category fishery of $341,228. If this reduction is calculated for the universe of vessels participating in the NED over the last 5 years (range of 6-10 vessels), it would represent average potential ex-vessel reductions of $34,123-$56,871 per vessel. If the reduction is calculated across Longline category vessels, it would be $1,376 per vessel. In Section 6.6.2, acknowledging that the 2009 number of BFT taken in the NED in 2009 may have been anomalous, NMFS also provided a figure for potential revenue loss of $42,408. This would represent average potential ex-vessel reductions of $4,241-$7,068 per vessel. If the reduction is calculated across Longline category vessels, it would be $171 per vessel.

However, the preferred alternative is expected to result in the most positive short and long-term economic impacts for the majority of BFT fishery participants, including Longline category participants, as it would increase the likelihood that the Longline category quota will be available through the end of the year, without interruption, and decrease the potential need for reallocation from directed quota categories or quota reductions in subsequent years to cover Longline category excesses.

The other considered alternative was a no action alternative (maintaining the de facto exemption from target catch requirements for pelagic longline vessels fishing in the NED). The no action alternative risks exceeding the available Longline category quota, particularly in years where availability of commercial-sized BFT is high in the NED during directed pelagic longline activity for target species.

The modifications to the regulations concerning Atlantic tunas possession at sea and landing and Atlantic tunas transfer at sea are intended to facilitate Atlantic tunas storage and provide clarification, respectively. While these changes would apply to all vessels holding Atlantic tunas, HMS Charter/Headboat, and HMS Angling category permits (totaling approximately 33,000 vessels), they are not expected to have significant economic impacts. Therefore, NMFS has not analyzed alternatives beyond the preferred alternatives and no action. Specific estimates of economic impacts of these preferred alternatives are not quantifiable.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, NMFS has prepared a brochure summarizing fishery information and regulations for Atlantic tuna fisheries for 2011. This brochure also serves as the small entity compliance guide. Copies of the compliance guide are available from NMFS (see ADDRESSES ).

For the reasons set out in the preamble, 50 CFR part 635 is amended as follows: