On June 16, 2004, the NRC revised its Enforcement Policy to include an interim Enforcement Policy applicable to licensees that are transitioning to the risk-informed, performance-based fire protection requirement in NFPA 805. However, because of the complexity and evolving issues related to fire protection, the NRC revised its interim Enforcement Policy several times. The following table lists the corresponding Federal Register notices and provides brief descriptions of the associated revisions.

On March 4, 2011, the NRC published SECY-11-0033 (ADAMS Accession No. ML11083A061), “Proposed NRC Staff Approach to Address Resource Challenges Associated with Review of a Large Number of NFPA 805 License Amendment Requests.” In SECY-11-0033, the staff proposed to increase the current resources for the NFPA 805 LARs and to work with industry to develop a schedule for staggering the LAR submittals. In SRM-SECY-11-0033, dated April 20, 2011 (ADAMS Accession No. ML111101452), the Commission approved this staggered approach and instructed the staff to submit a Commission paper with an attached proposed revision to the NFPA 805 interim Enforcement Policy for Commission approval.

Initially, the NRC expected to receive approximately 16 LARs in 2007. However, because of the unforeseen complexity of the transitioning process, the interim Enforcement Policy has undergone a number of revisions that have changed the submittal due date for many licensees. These revisions have created a “grouping effect,” and now the NRC expects approximately 23 LARs by the end of June 2011. The Commission has approved the use of additional resources for NFPA 805 LAR reviews and working with industry to develop and create a staggered LAR submittal schedule. The NRC held a public meeting on April 14, 2011, during which the staff and stakeholders discussed the staggered approach. The meeting focused on (1) The staggered approach to LAR submittals, (2) identifying industry considerations for staggered LAR submittals, and (3) discussing the staff's LAR review approach and adjustment to monthly status meetings.

An industry working group is currently generating a list of transitioning licensees with suggested corresponding LAR submittal dates necessary to support this staggered submittal approach. Once the working group completes the list, the staff will review and decide whether to approve it. The NRC expects the sequencing of the submittals to result in approximately seven LARs by July 1, 2011; 10 additional LARs by July 1, 2012; another 10 LARs by July 1, 2013; and the remainder by July 1, 2014. The NRC will require licensees, with the exception of the first group of licensees scheduled to submit around July 1, 2011, to submit a letter by June 29, 2011, that acknowledges their new commitment date. Enforcement discretion will continue while the staff is processing and responding to the commitment letters.

Once this process is completed, the NRC will hold the licensee accountable for submitting an acceptable LAR on the date as stated in its commitment letter. A failure on the part of the licensee to submit an acceptable LAR on or before the NRC approved date will result in a loss of enforcement discretion. However, licensees with appropriate justification and staff approval may regain enforcement discretion once an acceptable LAR is submitted. If enforcement discretion is not granted, any identified noncompliance with the requirements of Title 10 of the Code of Federal Regulations (10 CFR) 50.48(b) (or the requirements in a fire protection license condition) may be subject to enforcement actions. While the LAR is under review, enforcement discretion will continue as long as the noncompliances meet the criteria as stated in the policy. The NRC staff will maintain the number of scheduled reviews per year. For example, the staff will work with licensees, if necessary, to amend the submittal schedule to substitute one site for another if a submitted LAR does not pass the NRC's acceptance review.

Nuclear safety is the first consideration in any request for additional enforcement discretion. The NRC will continue to apply normal inspection schedules and processes during the transition process (including staggering the LAR submittals) to ensure that licensees maintain their existing fire protection program licensing basis. The approved fire protection program uses numerous levels of defense in depth with regard to fire protection. Most noncompliance issues only affect one level of defense in depth, leaving two or more “layers” of protection to provide significant safety margin. Licensees must address all nonconforming conditions with adequate compensatory measures to ensure fire safety with sufficient defense-in-depth. As a result, the plant preserves nuclear safety because the licensee implements compensatory measures that offset the risk of the nonconforming conditions in accordance with the approved fire protection program. Therefore, extending enforcement discretion should not significantly impact fire safety.

This Policy Statement contains and references information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). These requirements were approved by the Office of Management and Budget, under approval number 3150-0136.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting documents displays a currently valid OMB control number.

In accordance with the Congressional Review Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with OMB's Office of Information and Regulatory Affairs.

Accordingly, the NRC has revised its Enforcement Policy to read as follows:

This section contains the interim Enforcement Policy that the NRC will follow to exercise enforcement discretion for certain noncompliances with the requirements in Title 10 of the Code of Federal Regulations (10 CFR) 50.48, “Fire Protection” (or fire protection license conditions), that are identified as a result of a licensee's transition to the new risk-informed, performance-based fire protection approach included in 10 CFR 50.48(c) and for certain existing identified noncompliances that reasonably may be resolved by compliance with 10 CFR 50.48(c). Under 10 CFR 50.48(c), reactor licensees may voluntarily comply with the risk-informed, performance-based fire protection approaches in National Fire Protection Association Standard 805, “Performance-Based Standard for Fire Protection for Light Water Reactor Electric Generating Plants” (NFPA 805), 2001 Edition (with limited exceptions stated in the rule language).

Enforcement discretion may apply to noncompliances identified during the licensee transition process. This timeframe starts on the date as specified in the licensee's letter of intent to transition to 10 CFR 50.48(c) and ends (1) 3 years after that initial start date or (2) on the date as specified in the licensee's commitment letter, as amended and approved by the NRC. If the licensee is unable to submit its license amendment request (LAR) within the timeframe stated above, it will lose its enforcement discretion. However, licensees with appropriate justification and staff approval may regain enforcement discretion once an acceptable  1 LAR is submitted. If enforcement discretion is not granted, any identified noncompliances may be subject to enforcement action.

Once an acceptable LAR is submitted, enforcement discretion for previously identified noncompliances  2 and any newly identified noncompliances discovered either by the licensee or the NRC while the LAR is under review will continue to be in place until the NRC dispositions the LAR. 3 If the NRC finds the amendment request unacceptable but gives the licensee an opportunity to provide supplemental information, the enforcement discretion will continue while the licensee prepares the supplemental information, provided that it submits the information within the timeframe stipulated by the staff. If the NRC finds the amendment acceptable after receipt of the supplemental information, enforcement discretion will continue until the NRC dispositions the amendment. A licensee that submits an LAR that is not acceptably supplemented or an LAR that was initially characterized as unacceptable with no opportunity to provide supplemental information will lose its enforcement discretion. However, licensees with appropriate justification and NRC approval may regain enforcement discretion once an acceptable LAR is submitted. If enforcement discretion is not granted, any indentified noncompliances may be subject to enforcement action.

Once the NRC accepts an LAR for licensing review, the timeliness and quality of the responses to requests for additional information (RAI) will significantly affect the LAR review schedule. Licensees that do not respond in a timely fashion to staff RAIs or do not provide quality RAI responses may lose enforcement discretion.

If, after submitting the letter of intent to comply with 10 CFR 50.48(c) and before submitting the LAR, a licensee decides not to complete the transition to 10 CFR 50.48(c), the licensee must submit a letter stating its intent to retain its existing licensing basis and withdrawing its letter of intent to comply with 10 CFR 50.48(c). After the licensee's withdrawal from the transition process, the NRC, as a matter of practice, will not take enforcement action against any noncompliance that the licensee corrected during the transition process and will, on a case-by-case basis, consider refraining from taking action if reasonable and timely corrective actions are in progress (e.g., an exemption has been submitted for NRC review). The NRC will disposition noncompliances that the licensee has not corrected, and noncompliances that were identified after the date of the withdrawal letter, in accordance with normal enforcement practices.

Under this interim Enforcement Policy, the NRC will normally not take enforcement action for a violation of 10 CFR 50.48(b) (or the requirements in a fire protection license condition) involving a problem in an area such as engineering, design, implementing procedures, or installation if the violation is documented in an inspection report and meets all of the following criteria:

1. The licensee identified the violation as a result of a voluntary initiative to adopt the risk-informed, performance-based fire protection program under 10 CFR 50.48(c), or, if the NRC identified the violation, the NRC found it likely that the licensee would have identified the violation in light of the defined scope, thoroughness, and schedule of its transition to 10 CFR 50.48(c).

2. The licensee corrected the violation or will correct the violation after completing its transition to 10 CFR 50.48(c). Also, the licensee took immediate corrective action or compensatory measures or both within a reasonable time commensurate with the risk significance of the issue following identification; this action should involve expanding the initiative, as necessary, to identify other issues caused by similar root causes.

3. Routine licensee efforts, such as normal surveillance or quality assurance activities, were not likely to have previously identified the violation.

4. The violation was not willful.

The NRC may take enforcement action when the licensee has not met these conditions or when a violation that is associated with a finding of high safety significance is identified.

Although the NRC may exercise discretion for violations meeting the required criteria, if the licensee failed to make a required report to the agency, then it will normally issue a separate enforcement action for the licensee's failure to make the required report.

In addition, the licensee may have existing identified noncompliances that could reasonably be corrected under 10 CFR 50.48(c). For these noncompliances, the NRC is providing enforcement discretion for the implementation of corrective actions until the licensee has made the transition to 10 CFR 50.48(c), provided that the noncompliances meet all of the following criteria:

1. The licensee has entered the noncompliance into its corrective action program and implemented appropriate compensatory measures.

2. The noncompliance is not associated with a finding that the Reactor Oversight Process significance determination process would evaluate as red, or otherwise it would not be categorized at Severity Level I.

3. The noncompliance was not willful.

4. The licensee submitted a letter of intent by December 31, 2005, stating its intent to transition to 10 CFR 50.48(c).

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). 1 As amended by the Dodd-Frank Act, 2 the Commodity Exchange Act (CEA) provides that a United States financial institution  3 for which there is a Federal regulatory agency  4 shall not enter into, or offer to enter into, a transaction described in section 2(c)(2)(B)(i)(I) of the CEA with a retail customer  5 except pursuant to a rule or regulation of a Federal regulatory agency allowing the transaction under such terms and conditions as the Federal regulatory agency shall prescribe  6 (a “retail forex rule”). Section 2(c)(2)(B)(i)(I) includes “an agreement, contract, or transaction in foreign currency that * * * is a contract of sale of a commodity for future delivery (or an option on such a contract) or an option (other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a)).”  7 A Federal regulatory agency's retail forex rule must treat similarly all such futures and options and all agreements, contracts, or transactions that are functionally or economically similar to such futures and options. 8

This Dodd-Frank Act amendment to the CEA takes effect 360 days from the enactment of the Act. 9 After that date an institution for which the FDIC is the “appropriate Federal banking agency” pursuant to section 3(q) of the Federal Deposit Insurance Act, 12 U.S.C. section 1813(q), hereafter referred to as an FDIC-supervised IDI) may not engage in off-exchange foreign currency futures and options with a customer who does not qualify as an eligible contract participant under the CEA (ECP) except pursuant to a retail forex rule issued by the FDIC. The restrictions in the final rule do not apply to (1) transactions with a customer who qualifies as an ECP, (2) transactions that are spot contracts irrespective of whether the customer is or is not an ECP; or (3) forward contracts between a seller and a buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business. The retail forex rule does, however, apply to “rolling spot” transactions in foreign currency. The discussion of the definition of “retail forex transaction” below elaborates on the distinctions between rolling spot transactions and spot and forward contracts.

Any retail forex rule must prescribe appropriate requirements with respect to disclosure, recordkeeping, capital and margin, reporting, business conduct, and documentation requirements, and may include such other standards or requirements as the Federal regulatory agency determines to be necessary. 10

On September 10, 2010, the Commodity Futures Trading Commission (CFTC) adopted a retail forex rule for persons subject to its jurisdiction. 11 On April 22, 2011, the OCC proposed a retail forex rule for FDIC-supervised IDIs modeled on the CFTC's retail forex rule. 12 On May 11, 2011, the FDIC approved for publication a notice of proposed rulemaking. The NPR was published in the Federal Register on May 17, 2011 and the comment period closed on June 16, 2011. In response to NPR, the FDIC received six comments: Two comments from banks; a comment from a banking trade association; and three comments from individuals.

The FDIC is now adopting the proposed rule text as a final rule with few modifications.

In the preamble to the proposal, the FDIC indicated that retail forex transactions are subject to the Interagency Statement on Retail Sales of Nondeposit Investment Products (NDIP Policy Statement). 13 The NDIP Policy Statement describes the FDIC's expectations for an FDIC-supervised IDI that engages in the sale of nondeposit investment products to retail customers. The NDIP Policy Statement addresses issues such as disclosure, suitability, sales practices, compensation, and compliance.

In the proposal, the FDIC asked for comment on whether application of the NDIP Policy Statement created issues that the FDIC should address.

One commenters said that the NDIP Policy Statement should not apply to retail forex transactions, asserting that the retail forex rule, alone, would be sufficient to protect retail customers, and the imposition of the NDIP Policy Statement on retail forex transactions would create confusion and ambiguity. No specific provisions were identified, however, that create confusion or ambiguity. The commenter further argued that because the NDIP Policy Statement does not apply to CFTC registrants, its application to retail forex transactions would not promote consistent regulatory treatment of retail forex transactions.

The FDIC believes that it is appropriate to apply the NDIP Policy Statement to retail forex transactions. The consumer protections that the NDIP Policy Statement provides are no less important for retail forex transactions than for other nondeposit investment products. Moreover, there is no direct conflict between this rule and the NDIP Policy Statement because the Statement requires FDIC-supervised IDIs to develop policies and procedures to ensure that nondeposit investment product sales are conducted in compliance with applicable laws and regulations. If an FDIC-supervised IDI has questions regarding how the NDIP Policy Statement applies to its retail forex business, it should seek clarification from its examiners.

This section authorizes an FDIC-supervised IDI to conduct retail forex transactions. As mentioned in the proposed rule, the FDIC will become the “appropriate Federal banking agency” for State savings association upon the transfer of the powers of the Office of Thrift Supervision to the FDIC and other federal banking agencies. Accordingly, by virtue of this statutorily-mandated transfer of power, State savings associations will become FDIC-supervised IDIs as of the transfer date (July 21, 2011) and thus will be subject to the FDIC's final retail forex rule.

The FDIC requested comment on whether the retail forex rule should apply to an FDIC-supervised IDI's foreign branches conducting retail forex transactions abroad, whether with U.S. or foreign customers. One commenter responded that there is no U.S. policy interest in applying U.S. consumer protection rules to transactions with non-U.S. residents conducted by foreign branches. Such transactions are subject to foreign regulatory requirements that could be inconsistent with the retail forex rule. Subjecting those transactions to two sets of regulatory requirements would also place FDIC-supervised IDIs at a competitive disadvantage abroad.

One commenter opposed applying the retail forex rule to any transaction conducted out of a foreign branch of a U.S. depository institution, whether with a U.S. or non-U.S. retail customer. The commenter argued that foreign customers and U.S. persons with accounts overseas will be unnecessarily confused by the reach of the U.S. rule, especially when similar accounts at non-U.S. banks may not be subject to margin rules that are part of the retail forex rule. The commenter also argues that, by including foreign branches in its scope, the rule may inadvertently apply to products that were never intended to be covered, because they are not available or offered in the United States.

The FDIC recognizes the concerns raised by the commenter. Retail forex transactions between a foreign branch of an FDIC-supervised IDI and a non-U.S. customer are subject to any applicable disclosure, recordkeeping, capital, margin, reporting, business conduct, documentation, and other requirements of applicable foreign law. Therefore, those transactions are not subject to the requirements of §§ 349.3 and 349.5 to 349.16.

This section defines terms specific to retail forex transactions and to the regulatory requirements that apply to retail forex transactions.

The definition of “retail forex transaction” generally includes the following transactions in foreign currency between an FDIC-supervised IDI and a person that is not an eligible contract participant:  14 (i) A future or option on such a future;  15 (ii) options not traded on a registered national securities exchange;  16 and (iii) certain leveraged, margined, or bank-financed transactions, 17 including rolling spot forex transactions. The definition generally tracks the statutory language in section 2(c)(2)(B) and (C) of the CEA. 18

Certain transactions in foreign currency are not “retail forex transactions.” For example, a spot forex transaction where one currency is bought for another and the two currencies are exchanged within two days would not meet the definition of “retail forex transaction.”  19 Similarly, “retail forex transaction” does not include a forward contract that creates an enforceable obligation to make or take delivery, provided that each counterparty has the ability to deliver and accept delivery in connection with its line of business. 20 In addition, the definition does not include transactions done through an exchange, because in those cases the exchange would be the counterparty to both the FDIC-supervised IDI and the retail forex customer, rather than the FDIC-supervised IDI directly facing the retail forex customer.

The proposed rule sought comment on whether leveraged, margined, or bank-financed forex transactions, including rolling spot forex transactions (so-called Zelener   21 contracts), should be regulated as retail forex transactions; the FDIC preliminarily believed that they should. 22

One commenter supported the inclusion of rolling spot transactions in the definition of “retail forex transactions.” A rolling spot forex transaction nominally requires delivery of currency within two days, like spot transactions. However, in practice, the contracts are indefinitely renewed every other day and no currency is actually delivered until one party affirmatively closes out the position. 23 Therefore, the contracts are economically more like futures than spot contracts, although courts have held them to be spot contracts in form. 24 Like the CFTC's retail forex rule and the OCC's proposed retail forex rule, the final rule's definition includes leveraged, margined, or bank-financed rolling spot forex transactions, as well as certain other leveraged, margined, or bank-financed transactions.

Two commenters sought clarification that forex forwards would not be included in the definition, because transactions that convert or exchange actual currencies for any commercial or investment purpose are a traditional product offered by FDIC-supervised IDIs and do not raise the consumer protection issues associated with futures or rolling spot forex transactions.

The FDIC agrees that a forex forward that is not leveraged, margined, or financed by the FDIC-supervised IDI does not meet the definition of “retail forex transaction.” However, a leveraged, margined, or bank-financed forex forward is a retail forex transaction unless it creates an enforceable obligation to deliver between a seller and buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business  25 or the FDIC determines that the forward is not functionally or economically similar to a forex future or option, as described below.

One commenter sought clarification whether the term “retail forex transaction” includes a product known as a non-deliverable forex forward (NDF). The commenter describes an NDF as a cash-settled forward in which contractual parties are obligated to settle on the settlement date. In an NDF, the commenter explained, instead of taking physical delivery of the underlying foreign currency upon settlement, settlement is made in U.S. dollars based on the difference between the contractual forward rate and fixing rate.

An NDF would not be a covered transaction if a bank's customer were an ECP. Where the counterparty is a non-ECP, that is, a retail customer, an NDF would be a covered transactions if it were entered into on a leveraged or margined basis, or financed by the bank.

The final rule contains a provision that allows the FDIC to exempt specific transactions or types of transaction from the third prong of the “retail forex transaction” definition. The FDIC is concerned that certain traditional banking products, which are distinguishable from speculative rolling spot forex transactions, may inadvertently fall within the definition of “retail forex transaction” as leveraged, margined, or bank-financed forex transactions. This result was not intended by the Dodd-Frank Act, which requires retail forex rules to treat similarly transactions that are functionally or economically similar to forex futures or options. 26 FDIC-supervised IDIs may seek a determination that a given transaction or types of transaction does not fall within the third prong of the “retail forex transaction” definition by submitting a written request to the FDIC.

One commenter asked for confirmation that deposit accounts with foreign exchange features are outside the scope of the rule. The Legal Certainty for Bank Products Act of 2000, as amended by the Dodd-Frank Act, generally exempts “identified banking products” from the CEA. 27 Identified banking products include: Deposit accounts, savings accounts, certificates of deposit, or other deposit instruments issued by a bank; banker's acceptances; letters of credit issued or loans made by a bank; debit accounts at a bank arising from a credit card or similar arrangement; and certain loan participations. 28 Because identified banking products are not subject to the CEA, they are not prohibited by section 2(c)(2)(E)(ii) of the CEA. To provide clarity, the final rule excludes identified banking products from the definition of “retail forex transaction.” Identified banking products that have embedded foreign exchange features, for example a deposit account in which the customer may deposit funds in one currency and withdraw funds in another, are not retail forex transactions.

This section defines several terms by reference to the CEA, the most important of which is “eligible contract participant.” Foreign currency transactions with eligible contract participants are not considered retail forex transactions and are therefore not subject to this rule. In addition to a variety of financial entities, certain governmental entities, businesses, and individuals may be eligible contract participants. 29

This section prohibits an FDIC-supervised IDI and its institution-affiliated parties from engaging in fraudulent conduct in connection with retail forex transactions. This section also prohibits an FDIC-supervised IDI from acting as a counterparty to a retail forex transaction if the FDIC-supervised IDI or its affiliate exercises discretion over the customer's retail forex account because the FDIC views such self-dealing as inappropriate.

The FDIC received no comments to this section, and adopts it as proposed.

This section requires that, before engaging in a retail forex business, as defined in section 349.2, an FDIC-supervised IDI shall provide prior written notice and obtain the FDIC's prior written consent. The notice would be filed with the appropriate FDIC office and would include: (1) A brief description of the FDIC-supervised IDI's proposed retail forex business and the manner in which it will be conducted; (2) the amount of the institution's existing or proposed direct or indirect investment in the retail forex business as well as calculations sufficient to indicate compliance with all capital requirements in section 349.8, discussed below, and all other applicable capital standards; (3) a copy of the institution's comprehensive business plan that includes a discussion of, among other things, conflict of interest and how the operation of the retail forex business is consistent with the institution's overall strategy; (4) a description of the institution's target customers for its proposed retail forex business and related information, including without limitation credit evaluations, customer appropriateness, and “know your customer” documentation; (5) a resolution by the institution's board of directors that the proposed retail forex business is an appropriate activity for the institution and that the institution's written policies, procedures, and risk measurement and management systems and controls address conducting retail forex business in a safe and sound manner and in compliance with this part; and (6) sample disclosures sufficient to demonstrate compliance with section 349.6, discussed below.

The FDIC may request additional information, as necessary, prior to issuing its consent.

For FDIC-supervised IDIs that have an existing retail forex business, the final rule will allow the entity to continue to operate the business for up to six months if it provides the written notice and requests the FDIC's written consent within 30 days of the effective date of this rule.

The FDIC received no comment on this section and adopts it as proposed.

This section requires an FDIC-supervised IDI to close out offsetting long and short positions in a retail forex account. The FDIC-supervised IDI would have to offset such positions regardless of whether the customer has instructed otherwise. The CFTC concluded that “keeping open long and short positions in a retail forex customer's account removes the opportunity for the customer to profit on the transactions, increases the fees paid by the customer and invites abuse.”  30 The FDIC agreed with this concern in the notice of proposed rulemaking.

One commenter indicated that a customer should be given the opportunity to provide instructions with respect to the manner in which the customer's retail forex transaction are offset when: (i) The customer maintains separate accounts managed by different advisors; (ii) the customer maintains separate accounts using different trading strategies; or (iii) the customer employs different trading strategies in one account and lies certain orders to risk-manage that exposure. Two commenters also sought clarification that a customer could provide specific offset instructions in writing or orally, and that such instructions could be on a blanket basis.

The FDIC agrees that a customer should be able to offset retail forex transactions in a particular manner, if he or she so chooses. Paragraph (c) has been modified to provide that, notwithstanding the default offset rules in paragraphs (a) and (b), the FDIC-supervised IDI must offset retail forex transactions pursuant to a customer's specific instructions. Blanket instructions are not sufficient for this purpose, as they could obviate the default rule. However, offset instructions need not be given separately for each pair of orders in order to be “specific.” Instructions that apply to sufficiently defined sets of transactions could be specific enough. Finally, consistent with the changes to section 349.12, offset instructions may be provided in writing or orally provided that any oral instruction be captured by a recording mechanism.

This section requires an FDIC-supervised IDI to provide retail forex customers with a risk disclosure statement similar to the one required by the CFTC's retail forex rule, but tailored to address certain unique characteristics of retail forex in FDIC-supervised IDIs. The prescribed risk disclosure statement would describe the risks associated with retail forex transactions.

Two commenters agreed with the need for a robust risk disclosure statement, but suggested that a shorter, clearer, more direct, and less redundant statement would be more effective. One commenter recommended that the proposed disclosure statement be a sample or safe harbor language for banks to use as they find appropriate.

After careful consideration, the final rule incorporates several changes to the disclosures to eliminate redundancies, address ambiguities, and convey the information more clearly.

The proposal requested comment on whether the risk disclosure statement should disclose the percentage of profitable retail forex accounts.

One commenter said that disclosing the ratio of profitable to nonprofitable retail forex accounts is not useful because those ratios depend on many factors (including the trading expertise of customers) and could suggest that a bank is a more attractive retail forex counterparty than another.

In its retail forex rule, the CFTC requires its registrants to disclose to retail customers the percentage of retail forex accounts that earned a profit, and the percentage of such accounts that experienced a loss, during each of the most recent four calendar quarters. 31 The CFTC explained that “the vast majority of retail customers who enter these transactions do so solely for speculative purposes, and that relatively few of these participants trade profitably.”  32 In its final rule, the CFTC found this requirement appropriate to protect retail customers from “inherent conflicts embedded in the operations of the retail over-the-counter forex industry.”  33 The FDIC agrees with the CFTC and thus the final rule requires this disclosure.

The proposal requested comment on whether the risk disclosure statement should include a disclosure that when a retail customer loses money trading, the dealer makes money.

One of the commenters said that this disclosure is inaccurate because in most cases a bank may immediately hedge retail forex transactions or nets them with similar transactions and therefore does not profit from exchange rate fluctuations. The commenter argued it is more accurate to inform customers that the bank may or does mark-up (or down) transactions or apply commission rates to transactions that will result in income to the bank.

The FDIC understands that the economic model of a retail forex business may be to profit from spreads, fees, and commissions. Nonetheless, because any FDIC-supervised IDI engaging in retail forex transactions is trading as principal, by definition, when the retail forex customer loses money, the FDIC-supervised IDI makes money on that transaction. The FDIC therefore believes that this disclosure is accurate and helps potential retail forex customers understand the nature of retail forex transactions. Similarly, the CFTC's retail forex rule requires a disclosure that when a retail customer loses money trading, the dealer makes money on such trades, in addition to any fees, commissions, or spreads. 34 The final rule includes this disclosure requirement.

The proposal asked whether it would be convenient to banks and retail forex customers to allow the retail forex risk disclosure to be combined with other disclosures that FDIC-supervised IDIs make to their customers.

One commenter asked the FDIC to confirm that banks may add topics to the risk disclosure statement.

The FDIC is concerned that the effectiveness of the disclosure could be diminished if surrounded by other topics. Therefore, the final rule requires the risk disclosure statement to be given to potential retail forex customers as set forth in the rule. FDIC-supervised IDIs may describe and provide additional information on retail forex transactions in a separate document.

One commenter further asked the FDIC to confirm that the risk disclosure statement may be appended to account opening agreements or forms, and that a single signature by the customer on a combined account agreement and disclosure form can be used as long as the customer is directed to and acknowledges the risk disclosure statement immediately prior to the signature line.

The FDIC believes that a separate risk disclosure document appropriately highlights the risks in retail forex transactions, and that requiring a separate signature for the separate risk disclosure appropriately calls a potential retail forex customer's attention to the risk disclosure statement. However, a bank may attach the risk disclosure to a related document, such as the account agreement.

The proposal requested comment on whether the risk disclosure statement should include a disclosure of fees the bank charges retail forex customers.

One of the commenters agreed that the disclosure of fees is appropriate, but should not include income from hedging retail forex customers' positions or income streams not charged to the customer. Moreover, the same commenter stated it is impractical to numerically state the bid/ask spread given that it may vary.

The final rule, like the proposed rule, does not require FDIC-supervised IDIs to disclose income streams not charged to the retail forex customer. However, an FDIC-supervised IDI must do more than simply describe the means by which they earn revenue. To the extent practical, it must quantify the fees, commissions, spreads, and charges it charges the retail forex customer. The FDIC further believes that disclosure of the bid/ask spread is possible in a variety of ways. If an FDIC-supervised IDI bases its prices off of the prices provided by a third party, then the FDIC-supervised IDI may disclose the use of the third party's pricing and the markup charged to retail forex customers. Alternatively, the FDIC-supervised IDI may disclose the bid/ask spread by quoting both the bid and ask prices to retail forex customers prior to entering into a retail forex transaction. These quotes may be provided as part of an electronic trading platform or, after a retail forex customer calls the FDIC-supervised IDI for a retail forex transaction, by providing both a bid and ask price for the transaction.

One of the bank commenters read the proposed disclosure to suggest that a bank cannot seek to recover losses not covered by a customer's margin account via an appropriate dispute resolution forum, and asked the FDIC confirm that this was not the case.

It is not clear how common it will be for a retail forex customer to incur retail forex obligations, including losses, in excess of margin funds. Section 48.9(d)(4) requires an FDIC-supervised IDI, in the event that a retail forex customer's margin falls below the amount needed to satisfy the margin requirement to either: (1) Collect sufficient margin from the retail forex customer; or (2) liquidate the retail forex customer's retail forex transactions. This requirement precludes an FDIC-supervised IDI from allowing customer's retail forex transactions to remain open and continuing to accrue losses after it has determined that additional margin funds are required. The final rule does not forbid an FDIC-supervised IDI, from seeking to recover a deficiency from a retail forex customer by obtaining a money judgment or other enforceable order in an appropriate venue and then exercising its collection rights as a judgment creditor. The disclosure has been revised to make this fact clear.

Finally, the commenter said that the disclosure regarding the availability of FDIC-insurance for retail forex transactions should be clarified.

In the final rule, the disclosure requires an FDIC-supervised IDI to state that retail forex transactions are not FDIC-insured. The commenter agreed with that statement. It noted, however, that margin funds may be insured deposits. The FDIC is charged with interpreting the deposit insurance provisions of the FDI Act, and the insured status of margin funds will turn on whether the funds are held in a way consistent with those provisions, as interpreted by the FDIC. Nevertheless, an FDIC-supervised IDI may disclose the availability of FDIC insurance for retail forex margin accounts in a separate document if permitted by law, including FDIC requirements related to such disclosure and applicable provisions of the NDIP Policy Statement.

This section specifies which documents and records an FDIC-supervised IDI engaged in retail forex transactions must retain for examination by the FDIC. This section also prescribes document maintenance standards. The FDIC notes that records may be kept electronically as permitted under the Electronic Signatures in Global and National Commerce Act. 35

One of the commenters, had a concern with proposed section 349.7(a)(5), which states that immediately upon the written or verbal receipt of a retail forex transactions order, an FDIC-supervised IDI shall prepare a written order memorandum, sometimes referred to as a trade confirmation, for the order. The commenter requested clarification about whether the use of a telephone recording system and the retention of telephone recordings would satisfy such recordkeeping requirements if details of the transaction are affirmed or confirmed with the customer over a recorded telephone line.

After considering this comment, the FDIC has amended section 349.7 to permit the use of oral phone orders provided they are recorded and customers are advised that they are speaking on a recorded line.

Recordkeeping requirements found in section 349.13(a)(4) of the proposed rule were moved into this section to centralize recordkeeping requirements in one section. Furthermore, the recordkeeping requirements for order tickets are now medium-neutral: an FDIC-supervised IDI may prepare an order ticket by recording an oral conversation, for example via a telephone recording system. This change reflects a change to section 349.12 that allows a retail customer to authorize a retail forex transaction orally.

This section requires that an FDIC-supervised IDI that offers or enters into retail forex transactions must be “well capitalized” as defined in the FDIC's prompt corrective action regulation  36 or the FDIC-supervised IDI must obtain an exemption from the FDIC. In addition, an FDIC-supervised IDI must continue to hold capital against retail forex transactions as provided in the FDIC's capital regulation. 37 This rule does not amend the FDIC's prompt corrective action regulation or capital regulation.

Paragraph (a) requires an FDIC-supervised IDI that engages in retail forex transactions, in advance of any such transaction, to collect from the retail forex customer margin equal to at least 2 percent of the notional value of the retail forex transaction if the transaction is in a major currency pair, and at least 5 percent of the notional value of the retail forex transaction otherwise. These margin requirements are identical to the requirements imposed by the CFTC's retail forex rule.

The proposed rule requested comment on whether it should define the major currencies in the final rule, but no comments addressed this issue. The proposed approach to identifying major currencies is adopted in the final rule.

A major currency pair is a currency pair with two major currencies. The major currencies currently are the U.S. Dollar (USD), Canadian Dollar (CAD), Euro (EUR), United Kingdom Pound (GBP), Japanese Yen (JPY), Swiss franc (CHF), New Zealand Dollar (NZD), Australian Dollar (AUD), Swedish Kronor (SEK), Danish Kroner (DKK), and Norwegian Krone (NOK). 38 An evolving market could change the major currencies, so the FDIC is not proposing to define the term “major currency,” but rather expects that FDIC-supervised IDIs will obtain an interpretive letter from the FDIC prior to treating any currency other than those listed above as a “major currency.”  39

For retail forex transactions, margin protects the retail forex customer from the risks related to trading with excessive leverage. The volatility of the foreign currency markets exposes retail forex customers to substantial risk of loss. High leverage can significantly increase a customer's losses and gains. Even a small move against a customer's position can result in a substantial loss. Even with required margin, losses can exceed the margin posted, and if the account is not closed out, and depending on the specific circumstances, the customer could be liable for additional losses. Given the risks that inherent in the trading of retail forex transactions by retail customers, the only funds that should be invested in such transactions are those that the customer can afford to lose.

Prior to the CFTC's rule, non-bank dealers routinely permitted customers to trade with 1 percent margin (leverage of 100:1) and sometimes with as little as 0.25 percent margin (leverage of 400:1). When the CFTC proposed its retail forex rule in January 2010, it proposed a margin requirement of 10 percent (leverage of 10:1). In response to comments, the CFTC reduced the required margin in the final rule to 2 percent (leverage of 50:1) for trades involving major currencies and 5 percent (leverage of 20:1) for trades involving non-major currencies.

The proposal requested comment on whether these margin requirements were appropriate to protect retail forex customers.

One commenter, while not objecting to the amount of margin required, suggested that customers should have some reasonable time to meet margin calls before they are deemed to have defaulted and face a forced liquidation of their positions.

Subject to reasonable collection times as described below, an FDIC-supervised IDI must ensure that there is always sufficient margin in a retail forex customer's margin account for the customer's open retail forex transactions. If the amount of margin in a retail forex customer's margin account is insufficient to meet the requirements of paragraph (a), then the FDIC-supervised IDI must make a margin call to replenish the margin account to an acceptable level. Retail forex customers should have a reasonable amount of time to post required margin for retail forex transactions. The general market practice is for retail forex counterparties to make margin calls at the close of trading on a trading day based on margin levels at the end of that day or at the open of trading on the next trading day based on margin levels at the end of that prior day. If the retail forex customer does not post sufficient margin by the end of the next close of trading, then the retail forex counterparty liquidates the customer's retail forex account. In other words, by the close of business on a given trading day, the margin account must be sufficient to meet the margin requirements as at the end of the prior trading day.

Paragraph (b) specifies the acceptable forms of margin that customers may post. FDIC-supervised IDIs must establish policies and procedures providing for haircuts for noncash margin collected from customers and must review these haircuts annually. However, it may be prudent for FDIC-supervised IDIs to review and modify the size of the haircuts more frequently. The FDIC requested comment on whether the final rule should specify haircuts for noncash margin. The FDIC received no comments on this paragraph and adopts this paragraph as proposed.

Paragraph (c) requires an FDIC-supervised IDI to hold each retail forex customer's retail forex transaction margin in a separate account. This paragraph is designed to work with the prohibition on set-off in paragraph (e), so that an FDIC-supervised IDI may not have an account agreement that treats all of a retail forex customer's assets held by a bank as margin for retail forex transactions.

One commenter requested clarification that this paragraph allows FDIC-supervised IDIs to place margin into an omnibus or commingled account for operational convenience, provided that the bank keeps records of each customer's margin balance.

FDIC-supervised IDIs may place margin collected from retail forex customers into an omnibus or commingled account if the bank keeps records of each retail forex customer's margin balance. A “separate account” is one separate from the retail forex customer's other accounts at the bank. For example, margin for retail forex transactions cannot be held in a retail forex customer's savings account. Funds in a savings account pledged as retail forex margin must be transferred to a separate margin account, which could be an individual or an omnibus margin account. The final rule contains slightly modified language to clarify this intent.

Paragraph (d) requires an FDIC-supervised IDI to collect additional margin from the customer or to liquidate the customer's position if the amount of margin held by the FDIC-supervised IDI fails to meet the requirements of paragraph (a). The proposed rule would have required the FDIC-supervised IDI to mark the customer's open retail forex positions and the value of the customer's margin to the market daily to ensure that a retail forex customer does not accumulate substantial losses not covered by margin.

The proposal requested comment on how frequently retail forex customers' margin accounts should be marked to market.

One commenter asked that the final rules permit marking to market more frequently than daily if the FDIC-supervised IDI's systems and customer agreements permit. The final rule, like the proposed rule, requires marking to market at least once per day. Nothing in paragraph (d) forbids a more frequent schedule.

Paragraph (e) prohibits an FDIC-supervised IDI from applying a retail forex customer's losses against any asset or liability of the retail forex customer other than money or property pledged as margin. An FDIC-supervised IDI's relationship with a retail forex customer may evolve out of a prior relationship of providing financial services or may evolve into such a relationship. Thus it is more likely that an FDIC-supervised IDI acting as a retail forex counterparty will hold other assets or liabilities of a retail forex customer, for example a deposit account or mortgage, than a retail forex dealer regulated by the CFTC. The FDIC believes it is inappropriate to allow an FDIC-supervised IDI to leave trades open and allow additional losses to accrue that can be applied against a retail forex customer's other assets or liabilities held by the FDIC-supervised IDI or an affiliate. However, should a retail forex customer's losses exceed the amount of margin he or she has pledged, this rule does not forbid an FDIC-supervised IDI from seeking to recover the deficiency in an appropriate forum, such as a court of law. The FDIC-supervised IDI would be an unsecured creditor of the retail forex customer with respect to that claim.

One commenter suggested that retail forex customers should be able to pledge assets other than those held in the customer's margin account. For example, a customer could nominate a deposit account as containing margin for its retail forex transactions.

Nothing in this rule prevents retail forex customers from pledging other assets they have at the bank as margin for retail forex transactions. However, once those assets are pledged as margin, the FDIC-supervised IDI must transfer them to the separate margin account. For example, if a retail forex customer pledges $500 in her checking account as margin, then the bank must deduct $500 from the checking account and place $500 in the margin account. The FDIC believes this transfer appropriately alerts retail forex customers to the nature of the pledge. An FDIC-supervised IDI may not evade this requirement by merely taking a security interest in assets pledged as margin: pledged assets must be placed in a separate margin account.

This section requires an FDIC-supervised IDI engaging in retail forex transactions to provide each retail forex customer a monthly statement and confirmation statements.

The proposal sought comment on whether this section provides for statements that would be useful and meaningful for retail forex customers, or whether other information would be more appropriate.

One commenter sought clarification that the statements may be provided electronically, and also suggested that retail forex customers would be better served with continuous online access to account information rather than monthly statements. One commenter recommended that the customer should have the opportunity to opt out of receiving monthly statements (whether paper or electronic) and confirmation statements for each retail forex transaction.

The FDIC encourages FDIC-supervised IDIs to provide real-time, continuous access to account information, and this rule does not prevent FDIC-supervised IDIs from doing so. However, the FDIC believes it is valuable to require FDIC-supervised IDIs to provide retail forex account information to retail forex customers at least once per month. Monthly statements may be provided electronically as permitted under the Electronic Signatures in Global and National Commerce Act. 40

This section prohibits an FDIC-supervised IDI and its institution-affiliated parties from representing that the Federal government, the FDIC, or any other Federal agency has sponsored, recommended, or approved retail forex transactions or products in any way. This section also prohibits an FDIC-supervised IDI from implying or representing that it will guarantee against or limit retail forex customer losses or not collect margin as required by section 349.9. This section does not prohibit an FDIC-supervised IDI from sharing in a loss resulting from error or mishandling of an order, and guaranties entered into prior to effectiveness of the prohibition would only be affected if an attempt is made to extend, modify, or renew them. This section also does not prohibit an FDIC-supervised IDI from hedging or otherwise mitigating its own exposure to retail forex transactions or any other foreign exchange risk.

The FDIC received no comments on this section and adopts it as proposed.

The proposed rule required FDIC-supervised IDIs to have specific written authorization from a retail forex customer before effecting a retail forex transaction. Three commenters said that requiring specific written authorization from a retail forex customer before effecting a retail forex transaction for that customer would be impractical. One of the commenters indicated that such a requirement could be burdensome and detrimental to the customer's interests, for example if the customer cannot, due to technical difficulties, convey written instructions.

The FDIC agrees with this concern, and further notes that the CFTC's retail forex rule does not require written authorization for each retail forex transaction. The final rule requires an FDIC-supervised IDI to obtain a retail forex customer's specific authorization to effect a particular trade. FDIC-supervised IDIs must keep records of authorizations to trade pursuant to this rule and if the customer conveys his or her authorization orally by telephone, the authorization must be preserved by recording.

This section largely follows the trading standards of the CFTC's retail forex rule, which were developed to prevent some of the deceptive or unfair practices identified by the CFTC and the National Futures Association.

Under paragraph (a), an FDIC-supervised IDI engaging in retail forex transactions is required to establish and enforce internal rules, procedures and controls (1) to prevent front running, in which transactions in accounts of the FDIC-supervised IDI or its related persons are executed before a similar customer order; and (2) to establish settlement prices fairly and objectively.

One commenter requested clarification that the prohibition on front running applies only when the person entering orders for the bank's account or the account of related persons has knowledge of unexecuted retail customer orders, and that a bank may comply with this provision by erecting a firewall between the retail forex order book and other forex trading desks.

The final rule requires FDIC-supervised IDIs to establish reasonable policies, procedures, and controls to address front running. This provision is designed to prevent the FDIC-supervised IDIs from unfairly taking advantage of information they gain from customer trades. Effective firewalls and information barriers are reasonable policies, procedures, and controls to ensure that an FDIC-supervised IDI does not take unfair advantage of its retail forex customers. The final rule clarifies paragraph (a) accordingly.

Paragraph (b) prohibits an FDIC-supervised IDI engaging in retail forex transactions from disclosing that it holds another person's order unless disclosure is necessary for execution or is made at the FDIC's request. The FDIC received no comments on this paragraph and adopts this paragraph as proposed.

Paragraph (c) ensures that related persons of another retail forex counterparty do not open accounts with an FDIC-supervised IDI without the knowledge and authorization of the account surveillance personnel of the other retail forex counterparty with which they are affiliated. Similarly, paragraph (d) ensures that related persons of an FDIC-supervised IDI do not open accounts with other retail forex counterparties without the knowledge and authorization of the account surveillance personnel of the FDIC-supervised IDI with which they are affiliated.

One commenter requested confirmation that FDIC-supervised IDIs may rely on a representation of potential customers that they are not affiliated with a retail forex counterparty. Paragraph (c) prohibits an FDIC-supervised IDI from knowingly handling the retail forex account of a related person of a retail forex counterparty. To the extent reasonable, FDIC-supervised IDIs may rely on representations of potential retail forex customers. However, if an FDIC-supervised IDI has actual knowledge that a retail forex customer is a related person of a retail forex counterparty, then no representation by the customer will allow the bank to handle that retail forex account. An FDIC-supervised IDI should inquire as to whether a potential retail forex customer is related to a retail forex counterparty to avoid violating paragraph (c) through willful ignorance.

One commenter also requested clarification that these paragraphs apply only to employees of firms that offer retail forex transactions, and, in the case of banks, only employees of the retail forex business and not any employee of the bank that offers retail forex transactions. The FDIC agrees that the prohibition in paragraph (c) and (d) should only apply to employees working in the retail forex business; paragraphs (c) and (d) are designed to prevent evasion of the prohibition against front running. The final rule clarifies this point.

Paragraph (e) prohibits an FDIC-supervised IDI engaging in retail forex transactions from (1) entering a retail forex transaction to be executed at a price that is not at or near prices at which other retail forex customers have executed materially similar transactions with the FDIC-supervised IDI during the same time period, (2) changing prices after confirmation, (3) providing a retail forex customer with a new bid price that is higher (or lower) than previously provided without providing a new ask price that is similarly higher (or lower) as well, and (4) establishing a new position for a retail forex customer (except to offset an existing position) if the FDIC-supervised IDI holds one or more outstanding orders of other retail forex customers for the same currency pair at a comparable price.

Paragraph (e)(3) does not prevent an FDIC-supervised IDI from changing the bid or ask prices of a retail forex transaction to respond to market events. The FDIC understands that market practice among CFTC-registrants is not to offer requotes, but to simply reject orders and advise customers they may submit a new order (which the dealer may or may not accept). Similarly, an FDIC-supervised IDI may reject an order and advise customers they may submit a new order.

The proposal sought comment on whether paragraph (e)(3) appropriately protected retail forex customers, or whether a prohibition on re-quoting would be simpler.

One commenter argued that the prohibition on re-quoting in paragraph (e)(3) is overly broad and should permit new bids or offers to reflect updated spreads. In the alternative, the commenter suggested prohibiting re-quoting and requiring that, in the event an order is not confirmed, the customer must submit a new order at the then-currently displayed price. As stated above, rather than allowing re-quotes, an FDIC-supervised IDI may reject orders and request that customers submit a new order. Paragraph (e)(3) is consistent with the CFTC's retail forex rule and the FDIC adopts it as proposed.

Paragraph (e)(4) requires an FDIC-supervised IDI engaging in retail forex transactions to execute similar orders in the order they are received. The prohibition prevents an FDIC-supervised IDI from offering preferred execution to some of its retail forex customers but not others.

This section imposes on an FDIC-supervised IDI and its agents, officers, and employees a duty to supervise subordinates with responsibility for retail forex transactions to ensure compliance with the FDIC's retail forex rule.

The proposal requested comment on whether this section imposed requirements not already encompassed by safety and soundness standards. Having received no comment on this section, the FDIC adopts it as proposed.

This section describes the requirements for transferring a retail forex account. Generally, an FDIC-supervised IDI must provide retail forex customers 30 days' prior notice before transferring or assigning their account. Affected customers may then instruct the FDIC-supervised IDI to transfer the account to an institution of their choosing or liquidate the account. There are three exceptions to the above notice requirement: a transfer in connection with the receivership or conservatorship under the Federal Deposit Insurance Act; a transfer pursuant to a retail forex customer's specific request; and a transfer otherwise allowed by applicable law. An FDIC-supervised IDI that is the transferee of retail forex accounts must generally provide the transferred customers with the risk disclosure statement of section 6 and obtain each affected customer's written acknowledgement within 60 days.

The FDIC received no comments to this section and adopts it as proposed.

This section imposes limitations on how an FDIC-supervised IDI may handle disputes arising out of a retail forex transaction. For example, this section would restrict an FDIC-supervised IDI's ability to require mandatory arbitration for such disputes.

The FDIC received no comments to this section and adopts it as proposed.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), generally requires an agency that is issuing a final rule to prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities. The RFA provides that an agency is not required to prepare and publish an initial regulatory flexibility analysis if the agency certifies that the proposed rule will not, if promulgated as a final rule, have a significant economic impact on a substantial number of small entities. Under regulations issued by the Small Business Administration, a small entity includes an FDIC-supervised IDI with assets of $175 million or less. 41 The rule would impose recordkeeping and disclosure requirements on any FDIC-supervised IDI, including one that engages in retail forex transactions with their customers.

Pursuant to section 605(b) of the RFA, the FDIC certifies that this proposed rule will not have a significant economic impact on a substantial number of the small entities it supervises. Accordingly, a regulatory flexibility analysis is not required. In making this determination, the FDIC estimated that there are no banks under $1 billion in assets currently engaging in retail forex transactions with their customers. Therefore, the FDIC estimates that no small banks under its supervision would be affected by the proposed rule.

Further, in response to the NPR, the FDIC received no comments with respect to RFA.

In accordance with section 3512 of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), the FDIC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The information collection requirements contained in the notice of proposed rulemaking were submitted by the FDIC to OMB for review and approval under section 3506 of the PRA and section 1320.11 of OMB's implementing regulations (5 CFR part 1320 et seq. ). In response, OMB filed comments with the FDIC in accordance with 5 CFR 1320.11(c). The comments indicated that OMB was withholding approval at that time. The FDIC was directed to examine public comment in response to the NPRM and include in the supporting statement of the Information Collection Request (ICR) to be filed at the final rule stage a description of how the agency has responded to any public comments on the ICR, including comments maximizing the practical utility of the collection and minimizing the burden. The FDIC did receive several comments addressing the substance and/or method of the disclosure and reporting requirements contained in the rule. These comments and the FDIC's response to the comments are included in the preamble discussion and in a revised Supporting Statement submitted to OMB. The information collection requirements in the final rule are found in sections 349.4-349.7, 349.9-349.10, 349.13, 349.15-349.16.

The FDIC has a continuing interest in comments on its information collections. Therefore, comments are invited on:

(a) Whether the collection of information is necessary for the proper performance of the FDIC's functions, including whether the information has practical utility;

(b) The accuracy of the estimate of the burden of the information collection, including the validity of the methodology and assumptions used;

(c) Ways to enhance the quality, utility, and clarity of the information to be collected;

(d) Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and

(e) Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.

Title of Information Collection: Retail Foreign Exchange Transactions.

Frequency of Response: On Occasion.

Affected Public: Businesses or other for-profit.

Respondents: State nonmember insured banks and foreign banks having insured branches.

The filing process in section 349.4 requires that, prior to initiating a retail forex business, an FDIC-supervised IDI provide the FDIC with prior notice, obtain the FDIC's prior written consent, and submit the documents provided for in proposed section 349.4(c). The FDIC-supervised IDI must also provide other information required by the FDIC, such as documentation of customer due diligence. An FDIC-supervised IDI already engaged in a retail forex business may continue to do so, provided it requests the FDIC's written consent.

Section 349.5, regarding the application and closing out of offsetting long and short positions, requires an FDIC-supervised IDI to promptly provide the customer with a statement reflecting the financial result of the transactions and the name of the introducing broker to the account. The customer must provide specific written instructions on how the offsetting transaction should be applied.

Section 349.6 requires that an FDIC-supervised IDI furnish a retail forex customer with a written disclosure before opening an account and receive an acknowledgment from the customer that it was received and understood. It also requires the disclosure by an FDIC-supervised IDI of its fees and other charges and its profitable accounts ratio.

Section 349.10 requires an FDIC-supervised IDI to issue monthly statements to each retail forex customer and to send confirmation statements following transactions.

Section 349.13(b) allows disclosure by an FDIC-supervised IDI that an order of another person is being held by them only when necessary to the effective execution of the order or when the disclosure is requested by the FDIC. Section 349.13(c) prohibits an FDIC-supervised IDI engaging in retail forex transactions from knowingly handling the account of any related person of another retail forex counterparty unless it receives proper written authorization, promptly prepares a written record of the order, and transmits to the counterparty copies all statements and written records. Section 349.13(d) prohibits a related person of an FDIC-supervised IDI engaging in forex transactions from having an account with another retail forex counterparty unless it receives proper written authorization and copies of all statements and written records for such accounts are transmitted to the counterparty.

Section 349.15 requires an FDIC-supervised IDI to provide a retail forex customer with 30-days prior notice of any assignment of any position or transfer of any account of the retail forex customer. It also requires an FDIC-supervised IDI to which retail forex accounts or positions are assigned or transferred to provide the affected customers with risk disclosure statements and forms of acknowledgment and receive the signed acknowledgments within 60 days.

The customer dispute resolution provisions in section 349.16 require certain endorsements, acknowledgments, and signature language. It also requires that within 10 days after receipt of notice from the retail forex customer that they intend to submit a claim to arbitration, the FDIC-supervised IDI provide them with a list of persons qualified in the dispute resolution and that the customer must notify the FDIC-supervised IDI of the person selected within 45 days of receipt of such list.

Sections 349.7 and 349.13 require that an FDIC-supervised IDI engaging in retail forex transactions keep full, complete, and systematic records and establish and implement internal rules, procedures, and controls. Section 349.7 also requires that an FDIC-supervised IDI keep account, financial ledger, transaction and daily records, as well as memorandum orders, post-execution allocation of bunched orders, records regarding its ratio of profitable accounts, possible violations of law, records for noncash margin, and monthly statements and confirmations. Section 349.9 requires policies and procedures for haircuts for noncash margin collected under the rule's margin requirements, and annual evaluations and modifications of the haircuts.

Estimated PRA Burden:

Estimated Number of Respondents: 3 FDIC-supervised IDIs; 1 service provider.

Total Reporting Burden: 48 hours.

Total Disclosure Burden: 5,326 hours.

Total Recordkeeping Burden: 664 hours.

Total Annual Burden: 6,038 hours.

This final rule takes effect on July 15, 2011. 5 U.S.C. 553(d)(1) requires publication of a substantive rule not less than 30 days before its effective date, except in cases where the rule grants or recognizes an exemption or relieves a restriction. Section 2(c)(2)(E)(ii) of the CEA would prohibit FDIC-supervised IDIs from engaging in retail forex transactions unless this final rule becomes effective on July 16, 2011. This final rule would relieve that restriction and allow FDIC-supervised IDIs to continue to engage in retail forex transactions without delay. Furthermore, under 5 U.S.C. 553(d)(3), an agency may find good cause to publish a rule less than 30 days before its effective date. The FDIC finds such good cause, as the 30-day delayed effective date is unnecessary under the provisions of the final rule. In Section 349.4(c) of the final rule, the FDIC allows FDIC-supervised IDIs a 30-day grace period to inform the FDIC of its retail forex activity, along with up to a six-month window to comply with the provisions of the retail forex rule.

The Riegle Community Development and Regulatory Improvement Act of 1994 (CDRI Act), 12 U.S.C. 4801 et seq., provides that new regulations that impose additional reporting or disclosure requirements on insured depository institutions do not take effect until the first day of a calendar quarter after the regulation is published, unless the agency determines there is good cause for the regulation to become effective at an earlier date. The FDIC finds good cause that this final rule should become effective on July 15, 2011, as it would be in the public interest to require the disclosure and consumer protection provisions in this rule to take effect at this earlier date. If the rule did not become effective until October 1, 2011, then FDIC-supervised IDIs would not be able to provide retail forex transactions to customers to meet their financial needs.

The Office of Management and Budget (OMB) has determined that the Final Rule is not a “major rule” within the meaning of the relevant sections of the Small Business Regulatory Enforcement Act of 1996 (SBREFA), 5 U.S.C. 801 et seq.

Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. No commenters suggested that the proposed rule was materially unclear, and the FDIC believes that the Final Rule is substantively similar to the proposed rule.

For the reasons stated in the preamble, the FDIC adds part 349 to Title 12, Chapter III of the Code of Federal Regulations to read as follows:

On April 15, 2011, the FAA published in the Federal Register a notice of proposed rulemaking to establish controlled airspace at Lincoln City, OR (76 FR 21268). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found the name of the town was listed incorrectly. This action makes that correction. With the exception of editorial changes, and the changes described above, this rule is the same as that proposed in the NPRM.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class E airspace extending upward from 700 feet above the surface, at Samaritan North Lincoln Hospital Heliport, Lincoln City, OR, to accommodate IFR aircraft executing new RNAV (GPS) standard instrument approach procedures at the heliport. This action is necessary for the safety and management of IFR operations. This action also makes a correction in the town name, from Lincoln, OR, to Lincoln City, OR.

The FAA has determined this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, section 106 discusses the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Samaritan North Lincoln Hospital Heliport, Lincoln City, OR.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

On February 28, 2002, the FAA issued a notice of proposed rulemaking seeking to revise the drug and alcohol testing regulations by amending the definition of employee (67 FR 9366, 9377, Feb. 28, 2002). The FAA action addressed those individuals performing safety-sensitive functions under contract who may not have been subject to testing under the drug and alcohol testing regulations established in 1988 and 1994, respectively. Upon review of comments, the FAA, in 2004, issued a supplemental notice of proposed rulemaking to seek comment regarding how small entities would be impacted by this rule (69 FR 27980, May 17, 2004). From the comments received the FAA certified under 5 U.S.C. 605(b) that the rule would not have a significant impact on a substantial number of small entities.

On January 10, 2006, the FAA issued the final rule (71 FR 1666). This rule requires that each person who performs a safety-sensitive aviation function directly for an employer is subject to testing and that each person who performs a safety-sensitive function at any tier of a contract for that employer is also subject to testing. This requirement includes contractors and subcontractors. Contracting companies have two testing options: Option one is for the contracting company to obtain and implement its own FAA drug and alcohol (D&A) testing programs. Under this option, the company would subject the individuals to testing. The other option is for the regulated employer to maintain its own testing programs and subject the individual to testing under these programs. To establish a D&A program a company would need to develop and maintain testing, training, and annual reporting requirements.

To comply with the Regulatory Flexibility Analysis (RFA), and to evaluate the impact on small businesses, the FAA described and estimated the number of affected businesses and estimated the economic impact. In the certification for the final rule the FAA estimated that the costs were minimal, and that contractors would absorb some of these costs. In order to estimate the maximum impact of this regulation on regulated entities, the FAA assumed that all of the additional cost would be passed along to regulated employers. Since costs were minimal, the FAA again certified that the rule would not have a significant economic impact on a substantial number of small entities. 71 FR 1666, 1674 (Jan. 10, 2006)

The Aeronautical Repair Station Association, Inc., (ARSA) and other affected businesses challenged the final rule on several grounds, including the FAA's compliance with the Regulatory Flexibility Act. The entities argued that contractors and subcontractors were directly affected by the final rule, and in failing to consider them as part of the basis for the certification, the FAA failed to comply with the RFA. Upon review, the U.S. Court of Appeals for the District of Columbia upheld “the substance of the 2006 final rule” and remanded “for the limited purpose of conducting the analysis required under the RFA, treating the contractors and subcontractors as regulated entities.” The Court found that contractors and subcontractors were directly affected by the final rule and that the FAA failed to comply with the RFA by not considering them in the analysis. To comply with the court's order, the FAA extended the regulatory flexibility analysis to include contractors and subcontractors and published the analysis for comment on March 8, 2011 (76 FR 12559). The FAA again certified that although the rule would affect a substantial number of small entities, the economic impact on these entities would not be significant.

The FAA received comments from the U.S. Small Business Administration's Office of Advocacy (SBA), Aeronautical Repair Station Association, Inc. (ARSA), Aviation Suppliers Association (ASA), Modification and Replacement Parts Association (MARPA), National Air Transportation Association (NATA), and four individuals. SBA noted that the March 2011 certification relied too heavily on the ARSA survey that was submitted in response to the analysis published for comment on August 24, 2005, as well as the SBA analysis of which entities may be impacted by this rule. ARSA, ASA, MARPA, and NATA also questioned the use of the ARSA survey and whether the FAA had attempted to verify, through other data sources, the information provided by ARSA and SBA to identify the subcontractors that would be impacted by this rule. ARSA asserted that there was no factual basis for the FAA's assumption that these entities employed, on average, 25 individuals, considering that 43% of the entities ARSA surveyed employed 11-50 individuals. SBA stated that the FAA needed to identify all regulated small entities that would be covered by this final rule and provide additional analysis on the size and revenue characteristics of these entities. The FAA has addressed these issues below.

SBA, ARSA, ASA, MARPA, and NATA also raised concerns that the source information for the projected wage, training, education, program development, and annual documentation costs was not provided. ASA and MARPA asserted that the cost estimates failed to account for travel costs for the employee to take the tests, as well as increased rates charged by contract companies for administering these programs, and testing that occurs after an accident. ARSA noted that the FAA should also consider the costs to change existing processes, conduct alcohol and drug testing background checks, as well as the revenue lost when the employee has to undergo testing. MARPA stated that the FAA underestimated the administrative costs of managing the program by assessing this cost based on the assumption that an administrative person on staff would oversee the program, rather than the costs of either outsourcing the administration of the program or assuming that a management employee would be assigned to administer the program.

Finally, ARSA, ASA, and MARPA assert that this final rule does have a significant economic impact. MARPA and ASA noted that the FAA's use of a 2% threshold of annual revenues exceeds SBA's 1% of annual revenues threshold for determining significant impact. ARSA asserts that if the FAA considers the profit margins of these entities, the impact is significant. The FAA has addressed these issues below.

Upon review of the comments and further analysis provided below, the FAA certifies under 5 U.S.C. 605(b) that this rule will not have a significant impact on a substantial number of small entities.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, the RFA requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear. Based on the analysis below, the FAA certifies that this rule does not have a significant economic impact on a substantial number of small entities. While there are a substantial number of affected small entities, the compliance cost is not a significant economic cost. A full discussion follows.

This final rule amends the FAA regulations governing drug and alcohol testing to clarify that each person who performs a safety-sensitive function for a regulated employer by contract, including by subcontract at any tier, is subject to testing. These amendments are necessary because in the 1990s, the FAA issued conflicting guidance about which contractors were subject to drug and alcohol testing. The FAA did not consider any alternatives to this rule because the rule was designed to clarify that the FAA intended that each person who performs a safety-sensitive function for a regulated employer by contract, including by subcontract at any tier, is subject to testing. The FAA specifically addressed this issue in the final rule 71 FR 1666 (January 10, 2006). The applicability of the drug and alcohol requirements to sub-contractors, including those not certificated by the FAA is the sole purpose of the rule. Accordingly, the agency determined in 2006 that no other alternative was available, a decision upheld by the court in the subsequent lawsuit. These matters were addressed by the FAA when publishing the final rule when we said:

Additionally, the FAA expressly discussed comments that subcontractors that are not primarily aviation-related businesses should not be subject to testing. In the preamble to the final rule, the FAA rejected this premise, noting that “[w]hen subcontractors choose to perform safety-sensitive functions for regulated employers, they are choosing to comply with the FAA drug and alcohol testing regulations. The impact these subcontractors have on aviation safety is not related to whether they hold a repair station certificate. Instead, they have an impact because they actually perform safety-sensitive functions.” 71 FR 1673. The FAA went on to note that the commenters provided no data to support the premise that non-certificated subcontractors would cease providing service to the aviation industry. Indeed, in the final regulatory evaluation, the data provided by the commenters showed the majority of such contractors would continue doing business with the aviation industry after the final rule became effective. Id.

For safety reasons, the FAA wanted to ensure that all persons performing safety-sensitive functions were tested. This remains the case today and as such, there are no alternatives to the final rule that could have been considered and implemented.

The final rule is promulgated under the authority described in 49 U.S.C. 45102, which charges the FAA with prescribing regulations to establish programs for drug and alcohol testing of employees performing safety-sensitive functions for air carriers and to take certificate or other action when an employee violates the testing regulations. The final rule does not duplicate or otherwise conflict with another provision of law. A description and an estimate of the number of small entities to which the rule will apply, as well as a description of the projected reporting, record keeping and other compliance costs, is provided below and forms the basis for the FAA's certification under 5 U.S.C. 605(b).

The entities impacted by this rule are repair stations certificated under 14 CFR part 145, and their subcontractors. The size standards for determining whether these entities constitute small businesses vary and the FAA offers the following discussion to support the definition of a small business for this certification.

The Small Business Administration (SBA) has established small business size standards pursuant to the Small Business Act (Act) (Pub. L. 85-236, as amended) and related legislative guidelines. The SBA classifies “small” businesses based on their employment or annual revenue as set forth in the North American Industrial Classification System (NAICS) classifications. See 13 CFR 121.201. Under NAICS 488190 “Other Support Activities for Air Transport”, repair stations, which constitute some of the entities affected by this final rule, are defined as small businesses if they have annual revenues of $7 million or less. Subcontractors, conversely, overlap several industries and have multiple NAICS classifications. In attempting to identify all of the subcontractors impacted by this rule, the FAA examined the submitted list of 21 NAICS codes provided by SBA and ARSA. Using these NAICS codes, the definition of a small business for subcontractors could range, based on the number of employees alone, from 500 to 1,000 employees, or based on annual revenues of $7 million or less. The FAA reviewed all of the NAICS codes and notes that the SBA defines the average industry as having the following standards for a small business: 500 employees for most manufacturing and mining industries, and $7 million in average annual receipts for most non-manufacturing industries. 1 Given the variance in these NAICS codes, the FAA has determined that the appropriate definition for determining whether a subcontractor is a small business under this rule is to use the most conservative criteria set forth in NAICS classification. Thus, the FAA will classify a subcontractor as a small business if it employs 500 employees or fewer, or has annual revenues of $7 million or less. The FAA uses both criteria to analyze the impact on subcontractors.

Certificate holders, such as part 121, 135 and 145 have operating certificates issued by the FAA, allowing the FAA to determine the number of certificate holders impacted by this rule. The FAA National Vital Information Subsystem (NVIS) Air Agency records indicate there are 4,105 part 145 certificated domestic repair stations. To determine how many of these repair stations would be classified as small business under NAICS 488180, the FAA reviewed a recent study completed by the U.S. Transportation Security Administration. 2

In this study, TSA compiled both revenue and employment records from Dun & Bradstreet for approximately 2,276 domestic repair stations. From this total, they identified 2,123 repair stations that meet the small business size standard reflected in NAICS 488190. This analysis indicates that most repair stations are small businesses. Accepting the TSA percentage of small entities for domestic repair stations, the FAA has estimated that out of 4,105 domestic U.S. certificated repair stations, 3,829 are small businesses with revenues of $7 million or less. The FAA has determined that this rule would impact a substantial number of small business repair stations.

After estimating the number of small entity repair stations, we now focus on describing subcontractors impacted by this rule. Many of the subcontracting companies impacted by this rule are not certificated by the FAA. Their primary function is not aviation related, but rather a business outside of aviation. Because these businesses are based on NAICS codes from other industries, the FAA could not easily determine the appropriate codes. The FAA first reviewed the comments submitted by SBA and ARSA in response to the Antidrug and Alcohol Misuse Prevention Programs Regulatory Evaluation including a preliminary list of 21 NAICS codes for suppliers, parts fabricators and metal finishers, and others that may perform safety sensitive repairs and would be considered a subcontractor under the rule. The FAA examined the submitted list of 21 NAICS codes to determine which activities would be covered by this rule. There was some duplication in the codes, reducing the actual number of codes to be examined. The results of this analysis are presented in Table 1.

In addition to the list of NAICS codes, ARSA also provided information on a Non-Certificated Maintenance Subcontractor (NCMS) Survey it conducted. Some of the information from the survey proved to be useful in determining the small business impact on subcontractors, particularly the responses to questions 1 (number of employees), 2 (annual revenue), 3 (an existing contract with a US air carrier to perform maintenance), 4 (type of work). These responses are used, in this analysis, to determine the characteristics of these companies.

The FAA finds it appropriate to start with the responses to question 4, which deals with the work-related functions of the respondents, as a snapshot of some of the types of companies that, would need to be included in this analysis. The FAA grouped the responses to question 4 into the NAICS codes that both ARSA and the SBA provided and the FAA was able to correlate 98 of the 134 survey respondents with these codes; these 98 are shown in Table 1 below. While there are discrepancies with regard to the count, we can validate 98 of the 134 responses. This shows the wide spectrum of businesses providing contracting support.

Table 1 also indicates whether a specific function would require a D&A program. The last column is either marked with “Y” meaning yes, “N” meaning no, and “S” meaning some in this grouping might need such a program, as this work function conceivably could mandate such a program. Companies that have work that is strictly manufacturing will not be required to comply with the D&A testing rules. Several companies mentioned in their survey responses that they do not perform maintenance, and would not be included among companies required to set up and implement D&A testing. For example, the 14 companies characterized as 313320, which involves metal finishing including plating, may need to conduct D&A testing if any of the work they perform is considered maintenance under 14 CFR part 43.

The responses to questions 1 and 2 address the number of employees and the annual revenue reported by the surveyed companies. These responses are helpful in establishing the type of impact that this program will have on these companies. Question 1 asked “How many employees does your company have?” Table 2 summarizes the responses provided by the ARSA survey. All but two of the responses are in the category of 750 or below. The two responses for “1501+” are outliers and, for computational purposes, can be ignored. Approximately 75 of the respondents stated that they employed between 1 and 50 employees, indicating that the majority of subcontracting companies are small entities.

Question 2 of the survey asked about the company's annual revenues; Table 3 summarizes the survey responses:

Most of these companies reported average annual revenue of $7 million or less.

As noted above, given the fact that the contractors and subcontractors are not certificated entities and the variety of work that these contractors perform for repair stations, the FAA believes that this study represents only a fraction of the total number of NCMS that may be impacted by this rule. Given the SBA's average criteria for defining small business as an entity having either 500 employees or less, or having revenue of $7 million or less, depending on the NAICS code, and that most of the businesses in the ARSA survey satisfy these criteria, the FAA has determined that a substantial number of subcontractors will be small entities impacted by this rule.

Having determined that both a substantial number of small business repair stations and subcontractors will be impacted by this rule, the next step is to estimate the economic impact on these entities. The FAA rule requires small businesses to administer random drug tests to those employees who perform safety-sensitive functions. A subcontractor company can obtain coverage under another established program, lowering the cost compared to implementing its own program. In response to SBA's concerns that the program costs were underestimated for subcontractors in the March 2011 certification, the FAA based costs on subcontractors initiating and then implementing their own programs. It is important to note that these costs are much higher than when repair stations or contractors at higher tiers absorb some of the cost of D&A testing for the smaller firms. Moreover, most repair stations have drug and alcohol programs and therefore would not experience a cost burden based on the amendments to this rule. However, to estimate the maximum impact of this regulation on these employers, the FAA assumes that all of the additional cost for D&A testing is absorbed by each NCMS. The costs include: (1) Program development and maintenance, (2) training and education, (3) testing, and (4) annual documentation. The assumptions and calculations are described below and represent the costs associated with a fully-approved DOT drug and alcohol testing program:

General Cost and Salary Assumptions:

Each subcontractor will have to devote resources to developing an antidrug and alcohol misuse prevention testing program. In addition, each of these subcontractors will have to spend time to produce information required for their registration and submit it to the FAA. At the FAA, this information will have to be processed, and entered into the appropriate database. The FAA estimates that development and maintenance of a drug program would require a minimum of 16 additional administrative hours at $21 per hour for a total of $336 per company per year. Data provided by the Office of Aerospace Medicine shows that most companies have administrative support staff administering the program, however, in response to comments from MARPA and ARSA, the FAA also estimated costs using a supervisor ($39.35/hour) as the responsible party. For a supervisor with a minimum of 16 hours, the FAA estimates that the development and maintenance of a drug program would be $629 per year. The FAA believes that the administrative burden on subcontractors will be less than or equal to those of small part 121- or 135-certificate holders. Moreover, to be conservative and not underestimate costs, the FAA used 16 hours of a supervisor's time for administering the program to compute startup program development costs.

Training costs are a combination of supervisor and employee training costs, plus the cost to establish and maintain a training program. For both the antidrug and alcohol misuse prevention programs, the employer will train supervisors to make reasonable cause/suspicion determinations. In addition, supervisors and employees will receive training on the effects and consequences of drug use on personal health, safety, and work environment, as well as the manifestations and behavioral cues that may indicate drug use and abuse. For supervisors, the FAA requires an initial two hours of training; an hour for the drug program and another hour for the alcohol program. For the initial training, adding the supervisor salary ($39.35) for 2 hours to the instructor salary ($26.68) for the same 2 hours of instruction sums to $132 per supervisor. The FAA also requires recurring supervisory training for the drug program. Although there is no time requirement for this training; the FAA expects that the recurring training will be similar to the initial training. Therefore, the FAA estimates that companies will provide an annual hourly refresher course for supervisors. The recurring annual training would be half the cost of the initial training at $66 per supervisor per year. However, the recurring training costs are weighted to include any additional initial supervisory training for an actual recurring cost of $73 per supervisor per year. To include the cost of initial training and the recurring training the FAA averaged these costs over the 10 years analyzed in the Regulatory Evaluation for this rule. The average training costs per year per supervisor is $84.

For employees, companies are only required to provide initial training explaining the program and expectations for employees; a refresher course is recommended but not required. Training for employees is an hour. Cost to train employees is approximately an hour of an employee's time at $34.38 per hour and an hour of the instructor's time ($26.68) for a total of $61.06 per employee per year.

Companies must also establish an education program that includes informational material, videos, etc. Training materials are generally an expense incurred during the start-up phase of a drug and alcohol testing program. Employers can buy a single package of materials, and/or a video, which will be used for both supervisors and employees. There is also an option to use the Internet and/or our Agency materials to provide this training. From information provided by the Office of Aerospace Medicine and the cost of training materials on several Web sites, the FAA estimates that companies could incur an upfront cost for training material of $199 to $400 per company. 8 Since companies reuse these videos, the costs for materials are actually spread out over several years. Spreading the material cost over the same 10 year period as above, the FAA estimates that companies will spend approximately $40 per company per year on training material.

Drug and alcohol tests are required periodically for all employees performing safety sensitive functions. The test costs approximately $45  9 or $35, respectively. Several commenters stated that testing costs range anywhere from $60-$95 because most businesses contract out the administration of the program, including the testing, which results in higher costs. Here the testing cost is smaller because it does not include outsourcing the administration of the program, rather the administration of the program is done internally and those costs are listed under program development, maintenance and annual documentation below. The test includes specimen collection, laboratory processing, and MRO (medical review officer) verification. Testing takes place during an employee's shift. This is time not worked but still paid by the company and is included as part of the testing cost. In the March 2011 certification the FAA estimated that the testing process would take approximately 2 hours. The FAA adopted this standard based on comments to the initial regulatory evaluation published for comment on August 24, 2005. Originally, the FAA estimated that it would only take 45 minutes to conduct these tests. The 45 minutes is composed of 30 minutes of total travel time, and 15 minutes for the drug test. Commenters asserted that this 45 minute timeframe failed to adequately account for travel time. In consideration of these comments, the FAA estimated in the certification published for comment in March 2011 that the total cost of testing is calculated by adding the 2-hour blended wage paid to the employee to the cost of the test. Thus, the total cost of a drug test, which includes the 2-hour testing process with the employee's labor wage for this time as well as travel costs, sums to $113 per employee and $102 per employee for an alcohol testing. This is consistent with previous FAA methodology for determining labor costs attributable to a rule. In its comments to this certification, ARSA suggested that the FAA should not use the employee's wage but rather, should use the labor rate that the company would charge its customers to account for lost revenue while the test is being conducted. The difference between the wage rate and the labor rate is a transfer from the customer to the company and transfers are not to be included as compliance costs based on OMB guidance. Moreover, this is not included because companies are being compensated by their customers.

Each subcontractor has to periodically submit documentation. Subcontractors will be required to report or submit the following documents; training records, reasonable suspicion cases of drug and alcohol misuse, a positive drug or alcohol test, an employee's refusal to submit to a drug or alcohol test, post-accident alcohol tests, and if a post-accident alcohol test is not promptly administered documentation stating the reasoning behind the delay. The FAA estimates that it will cost  10 $1.29 to report each training record, to document each reasonable suspicious case, or to submit every rationale behind tests not being promptly administered. Notification of a positive drug or alcohol test or an employee's refusal to be tested is estimated to take 0.25 administrative hours at an hourly rate of $21 totaling roughly $5 per notification. The FAA projects that these documents will be submitted annually, but each company on average only submits a certain number of reports. Using this average, documentation cost is estimated at $50 per company for the first year and $4.50 per company for subsequent years.

As stated above, for this rule the FAA defines a small business as a company having 500 employees or fewer, or having revenue of $7 million or less. To determine if there would be a significant economic impact on small businesses, the FAA estimated the cost for what is believed to be one of the smallest companies under this definition: A company with 2 employees and 1 supervisor. The FAA summed the cost information provided above for testing, training and education, program maintenance and development, and annual documentation for a total cost of $2280er year. Detailed information on how this number was calculated is provided below.

Per SBA guidance, “in the absence of statutory specificity, what is significant or substantial will vary depending on the problem being addressed, the rule's requirements, and the preliminary assessment of the rule's impact. The agency is in the best position to gauge the small entity impacts of its regulations. Thus, Advocacy relies on legislative history of the RFA for general guidance in defining these terms.”  11 Historically, the FAA uses costs equal to or exceeding 2 percent of annual revenue as a measure of a significant economic impact. For a $2,280 cost to be a significant economic impact, a company would need to have annual revenues of less than $103,000. Given the wages of a supervisor and two employees, these companies would need revenue substantially higher than $100,000 to stay in business. ARSA maintains that measuring the impact on small businesses based on annual revenues is not appropriate. ARSA asserts that the FAA should measure economic impact based on profits. The FAA has reviewed ARSA's suggestion and determined that it is not appropriate for this analysis. Use of annual revenues is consistent with the SBA's measure of the impact on small businesses. See 13 CFR 121.106; 121.201. Thus, based on the projected costs for the smallest of entities that could be affected by this final rule, the FAA concludes no firm would incur a significant economic impact. Accordingly, although a substantial number of small businesses are impacted by this rule, because the economic impact is not significant, under 5 U.S.C. 605(b), I certify, as the FAA Administrator, that this rule will not have a significant economic impact on a substantial number of small entities.

BIS amended the EAR in a final rule on June 19, 2007 (72 FR 33646), creating a new authorization for “validated end-users” (VEUs) located in eligible destinations to which eligible items may be exported, reexported, or transferred (in-country) under a general authorization instead of a license, in conformance with section 748.15 of the EAR.

VEUs may obtain eligible items that are on the Commerce Control List, set forth in Supplement No. 1 to Part 774 of the EAR, without having to wait for their suppliers to obtain export licenses from BIS. Eligible items may include commodities, software, and technology, except those controlled for missile technology or crime control reasons.

The VEUs listed in Supplement No. 7 to Part 748 of the EAR were reviewed and approved by the U.S. Government in accordance with the provisions of section 748.15 and Supplement Nos. 8 and 9 to Part 748 of the EAR. The End-User Review Committee (ERC), composed of representatives from the Departments of State, Defense, Energy and Commerce, and other agencies, as appropriate, is responsible for administering the VEU program. A unanimous vote by the ERC is required to authorize VEU status for a candidate or to add eligible items to an existing authorization. Majority vote of the ERC is required to remove VEU authorization or to remove eligible items from an existing authorization.

In addition to U.S. exporters, Authorization VEU may be used in accordance with the provisions of the EAR by foreign reexporters and by persons transferring in-country, and it does not have an expiration date. VEUs are subject to regular reviews, based on information available to the United States government, to ensure that items shipped under Authorization VEU are used for civilian purposes. In addition, VEUs are subject to on-site reviews as warranted.

As of the date of this rule, pursuant to section 748.15(b) of the EAR, VEUs are only located in the PRC and India.

In this final rule, BIS amends the EAR, Supplement No.7 to Part 748 Authorization Validated End-User (VEU): List of Validated End-Users, Respective Items Eligible for Export, Reexport and Transfer, and Eligible Destinations to add a column that lists Federal Register citations for the respective entries. This rule does not make any substantive changes to Supplement No.7 or elsewhere in the EAR.

The Federal Register citation that appears first for each VEU in the new column added to Supplement No. 7 indicates the initial date on which the authorization for that listed VEU and its respective list of approved “Eligible Items” and “Eligible Destinations” were published in the Federal Register and became effective. Subsequent citations indicate the dates on which amendments to a VEU's authorization were published in the Federal Register and became effective.

Since August 21, 2001, the Export Administration Act has been in lapse and the President, through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp. p. 783 (2002)), as extended most recently by the Notice of August 16, 2010 (75 FR 50681, August 16, 2010), has continued the EAR in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provisions of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule does not involve a collection of information, and, therefore, does not implicate requirements of the PRA.

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

4. The Department finds that there is good cause under 5 U.S.C. 553(b)(A) and (B) to waive the provisions of the Administrative Procedure Act (APA) requiring prior notice and the opportunity for public comment because they are unnecessary. This rule is procedural, which is exempted from the notice and comment requirements of the APA. This rule only adds a column to the existing Supplement No. 7 to Part 748 of the EAR for purposes of providing Federal Register citations for entries in the Supplement to the public. Because these revisions are not substantive changes, it is unnecessary to provide notice and opportunity for public comment. In addition, the 30-day delay in effectiveness required by 5 U.S.C. 553(d) is not applicable because this rule is not a substantive rule. Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the APA or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. Therefore, this regulation is issued in final form.

Accordingly, part 748 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

Cross Vetpharm Group Ltd., Broomhill Rd., Tallaght, Dublin 24, Ireland, filed ANADA 200-488 for the use of AMPROMED-P (amprolium) for poultry, a water-soluble powder used for the treatment of coccidiosis in chickens and turkeys. Cross Vetpharm Group Ltd.'s AMPROMED-P for Poultry is approved as a generic copy of Huvepharma AD's AMPROL 128 (amprolium) 20% Soluble Powder, approved under NADA 33-165. The ANADA is approved as of May 23, 2011, and the regulations in 21 CFR 520.100 are amended to reflect the approval.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

FDA has determined under 21 CFR 25.33 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.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 520 is amended as follows:

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. The safety zones listed in this rule are associated with annual fireworks events. The Coast Guard intends to make these safety zones permanent regulations and has submitted a NPRM for submission to the Federal Register requesting public comments. A delay in publication and the lengthy comment period associated with the process of rulemaking in the Federal Register does not allow time to publish a NPRM followed by a final rule as these events would occur before the rulemaking process was complete. The sponsors are unable to reschedule these events due to other activities being held in conjunction with the fireworks displays and the Fourth of July holiday. Many community members have made holiday plans based on these fireworks events, and changing the date would cause numerous cancelations and hurt small businesses. Rescheduling would not be a viable option because most event venues, entertainers and venders have fully booked summer schedules making rescheduling nearly impossible.

Due to the dangers posed by the pyrotechnics used in these fireworks displays, the safety zones are necessary to provide for the safety of event participants, spectator craft, and other vessels transiting the event areas. For the safety concerns noted, it is in the public interest to have these regulations in effect during the events.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Any delay in the effective date of this rule would expose spectators, vessels and other property to the hazards associated with pyrotechnics used in the fireworks displays.

The legal basis for the temporary rule is 33 U.S.C. 1226, 1231, 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; Public Law 107-295, 116 Stat. 2064; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define safety zones.

The safety zones are being issued to establish temporary regulated areas within the Sector Boston Captain of the Port (COTP) Zone for various fireworks displays.

This temporary rule is necessary to ensure the safety of spectators, vessels and other property from the hazards associated with fireworks displays. The COTP Boston has determined that fireworks displays in close proximity to watercraft and waterfront structures pose a significant risk to public safety and property. Such hazards include obstructions to the waterway that may cause marine casualties and the explosive danger of fireworks and debris falling into the water that may cause death or serious bodily harm. Establishing safety zones around the locations of these fireworks events will help ensure the safety of spectators, vessels and other property and help minimize the associated risks.

The Coast Guard has implemented safety zones for past events and has not received public comments or concerns regarding the impact to waterway traffic from these events.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard determined that this rule is not a significant regulatory action for the following reasons: The safety zones will be of limited duration, are located in waterways that have no deep draft commercial traffic and are designed to avoid, to the extent possible, fishing and recreational boating traffic routes.

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 would 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 safety zones during the enforcement periods stated for each event in the List of Subjects.

These safety zones will not have a significant economic impact on a substantial number of small entities because of the minimal amount of time in which the safety zones will be enforced and vessels will be able to transit around the safety zones. Before the effective periods, we will issue maritime advisories widely available to users of the waterway.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact MST1 David Labadie at the telephone number or e-mail address indicated under the FOR FURTHER INFORMATION CONTACT section of this notice.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under the Federal Food, Drug, and Cosmetic Act (FFDCA) section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-0327 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 12, 2011. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-0327, by one of the following methods:

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

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

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

In the Federal Register of May 26, 2010 (75 FR 29475) (FRL-8826-2), EPA issued a proposal to revoke all the tolerances for residues of the fungicide maneb after receipt and approval of requests for voluntary cancellation by registrants of the last registrations for food uses of maneb in the United States. Also, the proposal provided a 60-day comment period which invited public comment for consideration and for support of tolerance retention under FFDCA standards.

In this final rule, EPA is revoking all the tolerances for the fungicide maneb, with delayed expiration/revocation dates in response to public comments requesting more time to use existing stocks of the canceled registrations. In addition, EPA had proposed in the May 26, 2010 issue of the Federal Register to remove the expired tolerance in 40 CFR 180.110(b) for maneb residues in or on walnut, and reserve that paragraph. However, EPA previously removed that expired tolerance and reserved that paragraph in a final rule published in the Federal Register of June 15, 2011 (76 FR 34883) (FRL-8875-4). Therefore, no further changes are being made to 40 CFR 180.110(b).

In response to the proposal published in the Federal Register of May 26, 2010 (75 FR 29475), EPA received comments during the 60-day public comment period, as follows:

Comments. Commenters from the Regional Vegetable Extension Agent with the University of Florida, the Pesticide Safety Education Program of Oklahoma State University, and two growers requested that maneb use be extended until exhaustion for pepper, lettuce, grapes grown for wine, and leafy vegetables. One commenter requested that maneb use on broccoli, cabbage, and lettuce be extended for 5 years. Most comments received from multiple individual growers and also from the Cranberry Institute, the Department of Plant and Environmental Protection Sciences, College of Tropical Agriculture and Human Resources of the University of Hawaii, Florida Fruit and Vegetable Association, Arizona Pest Management Center, California's Glenn County Department of Agriculture, California's Tehama County Department of Agriculture, and Colorado Department of Agriculture, requested that maneb use be extended (for use on commodities such as almond, broccoli, cabbage, celery, cranberry, eggplant, lettuce, onion, pepper, potato, and tomato) and for timeframes ranging from a few months to over 2 years; i.e., the end of 2012.

Agency response. In the Federal Register of May 26, 2010 (75 FR 29475) (FRL-8826-2), EPA proposed to revoke the maneb tolerances on the date of final rule publication in the Federal Register , which the Agency expected to occur in 2010. Based on the comments received, the Agency agrees that there is a need for more time to exhaust existing stocks of maneb. Therefore, EPA is revoking the tolerances for maneb in 40 CFR 180.110 with the expiration/revocation dates of December 31, 2012. The Agency believes the extended time is sufficient and consistent with the general outlook of the public comments received.

EPA may issue a regulation revoking tolerances under FFDCA section 408(e). EPA's general practice is to revoke tolerances for residues of pesticide active ingredients on crops for which the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) registrations no longer exist and on which the pesticide may therefore no longer be used in the United States. EPA has historically been concerned that retention of tolerances that are not necessary to cover residues in or on legally treated foods may encourage misuse of pesticides within the United States. Nonetheless, EPA will establish and maintain tolerances even when corresponding domestic uses are canceled if the tolerances, which EPA refers to as “import tolerances,” are necessary to allow importation into the United States of food containing such pesticide residues. However, where there are no imported commodities that require these import tolerances, the Agency believes it is appropriate to revoke tolerances for unregistered pesticides in order to prevent potential misuse.

As noted in the DATES section, this regulation is effective on the date of the publication in the Federal Register . In this final rule, EPA is revoking all the maneb tolerances with expiration/revocation dates of December 31, 2012. Based on the comments received during the 60-day public comment period, the Agency believes that the expiration/revocation dates allow users to exhaust existing stocks and allow sufficient time for passage of treated commodities through the channels of trade.

Any commodities listed in the regulatory text of this document that are treated with the pesticides subject to this final rule, and that are in the channels of trade following the tolerance revocations, shall be subject to FFDCA section 408(1)(5), as established by the Food Quality Protection Act (FQPA). Under this unit, any residues of these pesticides in or on such food shall not render the food adulterated so long as it is shown to the satisfaction of the Food and Drug Administration that:

1. The residue is present as the result of an application or use of the pesticide at a time and in a manner that was lawful under FIFRA.

2. The residue does not exceed the level that was authorized at the time of the application or use to be present on the food under a tolerance or exemption from tolerance. Evidence to show that food was lawfully treated may include records that verify the dates that the pesticide was applied to such food.

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

The Codex has not established a MRL for maneb per se, but has MRLs for total dithiocarbamates (which includes the dithiocarbamate maneb), determined as carbon disulfide.

In this final rule, EPA revokes specific tolerances established under FFDCA section 408. The Office of Management and Budget (OMB) has exempted this type of action ( i.e., a tolerance revocation for which extraordinary circumstances do not exist) from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). Nor does it require any special considerations as required by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any other Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-13, section 12(d) (15 U.S.C. 272 note). Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), the Agency previously assessed whether revocations of tolerances might significantly impact a substantial number of small entities and concluded that, as a general matter, these actions do not impose a significant economic impact on a substantial number of small entities. This analysis was published on December 17, 1997 (62 FR 66020) (FRL-5753-1), and was provided to the Chief Counsel for Advocacy of the Small Business Administration. Taking into account this analysis, and available information concerning the pesticides listed in this rule, the Agency hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities. In a memorandum dated May 25, 2001, EPA determined that eight conditions must all be satisfied in order for an import tolerance or tolerance exemption revocation to adversely affect a significant number of small entity importers, and that there is a negligible joint probability of all eight conditions holding simultaneously with respect to any particular revocation. (This Agency document is available in the docket of the proposed rule, as mentioned in Unit II.A.). Furthermore, for the pesticides named in this final rule, the Agency knows of no extraordinary circumstances that exist as to the present revocations that would change EPA's previous analysis. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers, and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

Therefore, 40 CFR chapter I is amended 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 Communications Commission has received OMB approval for the rules contained in information collection OMB Control No: 3060-1151, Pole Attachment Access Rules. The information collection was adopted in the Report and Order and Order on Reconsideration, Implementation of Section 224 of the Act; A National Broadband Plan for Our Future in WC Docket No. 07-245, GN Docket No. 09-51, which appears at 76 FR 26620, May 9, 2011. The effective date of the rules adopted in that Order was published as June 8, 2011, except for 47 CFR 1.1420, 1.1422 and 1.1424, which contain information collection requirements that would not be effective until approved by the Office of Management and Budget. Through this document, the Commission announces that it has received this approval (OMB Control No. 3060-1151, Expiration Date: December 31, 2011), and that 47 CFR 1.1420, 1.1422, and 1.1424 are effective on July 12, 2011.

Pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13, an agency may not conduct or sponsor a collection of information unless it displays a currently valid control number. Notwithstanding any other provisions of law, no person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act (PRA) that does not display a valid control number. Questions concerning the OMB control numbers and expiration dates should be directed to Cathy Williams, Federal Communications Commission, (202) 418-2918, or via the Internet at Cathy.Williams@fcc.gov.

Rules, Regulations and Standards issued by the Cost Accounting Standards Board (Board) are codified at 48 CFR chapter 99. The Office of Federal Procurement Policy (OFPP) Act, at 41 U.S.C. 1502(c) [formerly, 41 U.S.C. 422(g)], requires that the Board, prior to the establishment of any new or revised Cost Accounting Standard (CAS or Standard), complete a prescribed rulemaking process. The process generally consists of the following four steps:

1. Consult with interested persons concerning the advantages, disadvantages and improvements anticipated in the pricing and administration of Government contracts as a result of the adoption of a proposed Standard.

2. Promulgate an Advance Notice of Proposed Rulemaking (ANPRM).

3. Promulgate a Notice of Proposed Rulemaking (NPRM).

4. Promulgate a Final Rule.

The Board notes that the CAS applicability threshold in 48 CFR Chapter 99 (at 48 CFR 9901.306; 9903.201-1, .201-2, 201-3, and 201-4; and 9903.202-1) is not subject to the four-step process required by 41 U.S.C. 1502(c) [formerly, 41 U.S.C. 422(g)(1)] because it is not a Cost Accounting Standard. However, the Board elects to follow some of those requirements in the OFPP Act, at 41 U.S.C. 1502(c) [formerly, 41 U.S.C. 422(g)(1)], i.e., to consult with interested persons concerning the advantages, disadvantages, and improvements anticipated in the pricing and administration of Government contracts as a result of the adoption of any new or revised rule on the CAS applicability threshold, prior to its promulgation.

The Office of Federal Procurement Policy (OFPP), Cost Accounting Standards Board (Board), is today releasing this interim rule to revise the Cost Accounting Standards (CAS) applicability threshold in 48 CFR chapter 99 from “$650,000” to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908) and (41 U.S.C. 1502(b)(1)(B))”, because of a revision to the Truth in Negotiations Act (TINA) threshold for the submission of cost or pricing data as adjusted for inflation by section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) as incorporated into Federal Acquisition Regulation (FAR) 15.403-4(a)(1) by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council on August 30, 2010 (at 75 FR 53129). By revising the CAS applicability threshold so that it directly references the FAR TINA threshold for the submission of cost or pricing data (rather than referencing a stated dollar amount), any future changes to the FAR TINA threshold will automatically apply to the CAS applicability threshold (thereby eliminating the need to revise this regulation to specify a different dollar amount).

Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) requires a periodic adjustment for inflation every five years to the acquisition related thresholds using the Consumer Price Index (CPI) for all urban consumers, except for the Davis-Bacon Act, Service Contract Act, and trade agreement thresholds. The threshold in TINA (10 U.S.C. 2306a(a)(1)(A)(i)) for the submission of cost or pricing data is one of the acquisition related thresholds adjusted for inflation by section 807. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) published a final rule in the Federal Register on August 30, 2010 (75 FR 53129) amending the FAR to implement section 807, including the TINA threshold at FAR 15.403-4, Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 3502 [formerly, 41 U.S.C. 254b]). This FAR final rule was effective October 1, 2010, and revised the TINA threshold from $650,000 to $700,000.

Section 26(f)(2(A) of the OFPP Act (41 U.S.C. 1502(b)(1)(B) [formerly, 41 U.S.C. 422(f)(2)(A)]) addresses the CAS applicability threshold. Section 822 of the 2006 National Defense Authorization Act (Pub. L. 109-163) amended 41 U.S.C. 1502(b)(1)(B) [formerly, 41 U.S.C. 422(f)(2)(A)] to tie the statutory CAS threshold to the threshold for compliance with the TINA requirement to submit cost or pricing data, as set forth in section 2306a(a)(1)(A)(i) of title 10, United States Code. The recent changes to the TINA threshold described above require identical changes to the CAS applicability threshold (i.e., from $650,000 to $700,000). To date, the CAS applicability threshold has been identified in the CAS Board rules as a stated dollar amount. To avoid repeated rulemakings in the future that would update the stated dollar amount, in order to keep the CAS applicability threshold tied to the TINA threshold, the Board is revising the CAS applicability threshold from a stated dollar amount (which has been “$650,000”) to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)).” This revision makes any future changes to the CAS applicability threshold self-executing upon any changes that the FAR makes to the TINA threshold. Thus, because the FAR's TINA threshold is now $700,000, the CAS applicability threshold under this interim rule will be $700,000.

The Paperwork Reduction Act (44 U.S.C. chapter 35, Subtitle I) does not apply to this rulemaking because this rule imposes no additional paperwork burden on offerors, affected contractors and subcontractors, or members of the public which requires the approval of OMB under 44 U.S.C. 3501, et seq. The records required by this interim rule are those normally maintained by contractors and subcontractors who claim reimbursement of costs under government contracts.

Because the affected contractors and subcontractors are those who are already subject to CAS but for the increase in the CAS applicability threshold, the economic impact of this interim rule on contractors and subcontractors is expected to be minor. As a result, the Board has determined that this interim rule will not result in the promulgation of an “economically significant rule” under the provisions of Executive Order 12866, and that a regulatory impact analysis will not be required. For the same reason, the Administrator of the Office of Information and Regulatory Affairs has determined that this interim rule is not a “major rule” under the Congressional Review Act, 5 U.S.C. Chapter 8. Finally, this interim rule does not have a significant effect on a substantial number of small entities because small businesses are exempt from the application of the Cost Accounting Standards. Therefore, this interim rule does not require a regulatory flexibility analysis under the Regulatory Flexibility Act of 1980, 5 U.S.C. chapter 6.

Interested persons are invited to provide input to this interim rule to revise the CAS applicability threshold from “$650,000” to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B))” as a result of the periodic statutory adjustment of the TINA threshold for inflation. Respondents are encouraged to identify, comment and provide information on any issues that they believe are important to the subject. All comments must be in writing, and submitted via facsimile, by e-mail, or by any other means as instructed in the ADDRESSES section.

For the reasons set forth in this preamble, Chapter 99 of Title 48 of the Code of Federal Regulations is amended as set forth below:

The Federal safety statute and regulations for natural gas and hazardous liquid pipeline facilities provide a description of the enforcement authority and sanctions exercised by the Associate Administrator for achieving and maintaining pipeline safety. Pursuant to chapter 601 of Title 49, United States Code, after notice and an opportunity for a hearing, the Associate Administrator may order an operator of a pipeline facility to take necessary corrective action, including revisions to its procedures, and may assess a civil penalty for a violation of a pipeline safety regulation or order (49 U.S.C. 60108(a), 60112, 60117(l), 60118(b), and 60122). The regulations also prescribe the procedures governing the exercise of that authority and the imposition of those sanctions. In general, subpart B of 49 CFR part 190 (190.201-190.239) provides an opportunity for a pipeline operator to submit a written answer and/or request a hearing prior to the issuance of any order that makes a finding of violation, assesses a civil penalty, or requires corrective measures to be taken.

Effective immediately, and to the extent practical, all timely requested hearings will be held before the designated hearing officer or “Presiding Official” within PHMSA.

The person within PHMSA who conducts hearings relating to civil penalty assessments, compliance orders, or safety orders is the designated hearing officer. The person is a senior attorney within the Office of Chief Counsel, on the staff of the Deputy Chief Counsel. To ensure the fairness and impartiality of the proceeding, the hearing officer is outside the line of authority of the Associate Administrator as well as any staff involved in the investigation and prosecution of the enforcement case. The dedicated hearing officer is not engaged personally in any investigative or prosecutorial functions with regard to enforcement matters, such as preparation of notices of probable violation relating to civil penalty assessments and compliance orders, and notices relating to corrective action orders and safety orders.

The roles and responsibilities of the hearing officer are consistent with current statutory and regulatory authority. They include scheduling the hearing, holding pre-hearing conferences as necessary, disposing of procedural requests or similar matters, regulating the course of the hearing, ensuring an opportunity for a full and complete record to be established, making a recommended decision in the matter, and taking any other authorized action where appropriate.

Formerly, hearings were held before several different attorneys from the Office of Chief Counsel and were assigned to an attorney who had no role in the investigation and prosecution of the case being heard. Now, all hearings will be held, to the extent practical, before the designated hearing officer, who will have no role in the investigation and prosecution of any enforcement cases.

To ensure the impartiality and fairness of the decision-making process, a hearing officer is (and has been) held to certain standards regarding “ex parte” communications. An ex parte communication is any informal communication between a party in a pending case and the hearing officer regarding an issue in that case, occurring outside the presence of the other parties and without notice and opportunity for all parties to provide comment or rebuttal. If an enforcement case is pending before a hearing officer, ex parte communications with the hearing officer are not permitted by the operator, its counsel, or agency staff involved in the investigation and prosecution of the case. This applies to communications regarding information, facts, and arguments regarding an issue in the case, but not routine administrative matters, such as scheduling the hearing or providing clarification about the enforcement process. This restriction also does not apply to communications between the parties themselves.

In addition, an individual engaged in the performance of investigative or prosecuting functions for the agency in a case may not, in that or a factually related case, participate in the attorney's recommended decision, but may participate at the hearing as a witness or counsel and submit a recommendation pursuant to § 190.213(b)(4).

Section 190.209 provides that upon receipt of a notice of probable violation, proposed civil penalty, or proposed compliance order, an operator may respond within 30 days by paying the proposed penalty, agreeing to the proposed compliance order, submitting written information in answer to the notice, or requesting a hearing. Sections 190.233 and 190.239 also provide for responding to a notice of proposed corrective action order or notice of proposed safety order, including the option of requesting a hearing.

Pursuant to § 190.211, any request for a hearing must be accompanied by a statement of the issues that the respondent intends to raise at the hearing. The issues may relate to the allegations in the notice, proposed corrective actions, or the proposed civil penalty amount. The request should also indicate whether or not the operator will be represented by counsel at the hearing.

The right to a hearing is waived if not requested within 30 days of receipt of the notice. An operator that submits a written response without specifically requesting a hearing will be deemed to have waived the right to a hearing, but the written material timely submitted will be fully considered in the rendering of a decision in the matter. An operator that requests only to “reserve its right to a hearing” will be subject to the scheduling of a hearing unless the hearing request is withdrawn.

Within a reasonable time after the request for a hearing, the hearing officer will ensure that the respondent has an opportunity to review all materials in the enforcement record pertinent to the issues to be determined. The enforcement record includes the notice and the violation report with exhibits that are comprised of documents gathered during the inspection and any other information included by the inspector that is relevant to the allegations.

The hearing officer will schedule the hearing, provide written confirmation to the parties of the date, time and location, and request a list of anticipated attendees. The hearing officer will also instruct parties that all documents, evidence, or exhibits in support of the case should be exchanged by furnishing a copy to all parties and submitted at least ten days prior to the hearing. Any party intending to introduce documents, evidence, or exhibits during the hearing will also be directed to furnish copies to all parties.

The hearing officer will address all procedural matters, including but not limited to, motions for extensions of time, stipulations in lieu of a hearing on particular issues, or withdrawal of a hearing request. The hearing officer may direct that a request contain sufficient detail, be specific as to the reason(s) for the request, and be served on the appropriate PHMSA regional office.

All hearings are held in accordance with § 190.211 and are conducted in an informal manner. The informal nature of the hearing alleviates the need for the parties to strictly comply with formal rules of evidence and rules of procedures. While the hearings are not “formal,” the hearing officer will take appropriate actions to maintain an appropriate level of fairness and efficiency during the proceeding. In addition, and with the assistance of the parties, the hearing officer will ensure the hearing is conducted cordially and that the parties maintain proper decorum at all times.

Hearings are currently held either telephonically or in person. They may also be held by video teleconference in the future. During the hearing, the operator can expect the region issuing the notice to introduce the allegations and provide an explanation as to the evidence gathered in support. The operator will then have the opportunity to present its own information, facts, evidence, explanations, and arguments in response. The operator may submit any material relevant to the issues under consideration, and may call witnesses on its behalf and examine the evidence and witnesses presented by the region. At the close of the operator's presentation, the hearing officer may allow the presentation of any rebuttal information by the region, and respondents may then respond to that information.

The hearing officer ensures that all parties have an ample opportunity to present their position and supporting evidence, and will end discussion on a topic only once it is clear that all the issues have been fully examined. Questions may be asked by the hearing officer during either party's presentations. In addition, the informal nature of the proceeding allows the parties to ask questions of one another, although parameters may be established to ensure the parties have sufficient uninterrupted time to make their presentations. The hearing officer ensures that discussion stays focused on the relevant and determinative matters in the case and avoids allowing tangential issues to become a distraction. The hearing will last as long as necessary to ensure the parties have ample opportunity to present their case, although the hearing officer will attempt to accommodate the parties' schedules to the extent practicable.

Written materials and evidence presented at the hearing will be collected by the hearing officer for insertion into the record. Hearings are not recorded and are not transcribed, but if requested in advance of the hearing, the respondent may make arrangements for the hearing to be transcribed at its own expense, provided that a copy of the final transcript is submitted for the record. The hearing officer may take notes, including electronic notes and recordings during the hearing, but such personal notes are not part of the official record or maintained by the agency.

At the close of the hearing, the respondent may request an opportunity to submit further written material for inclusion in the record. The hearing officer will allow a reasonable time for the submission of the material, but if the material is not submitted within the time prescribed, the case will proceed to final action without the material.

If post-hearing documents contain new evidence or new arguments, the hearing officer will provide written notification to all parties and direct the parties to respond within a certain amount of time. The hearing officer may also request that additional documents be submitted after the hearing, if necessary, to fully develop the record.

The hearing officer will ensure that all material submitted before and during the hearing is placed in the record. At this stage, the record will include the notice, violation report, written statements by the parties, evidence submitted, list of hearing attendees, any hearing transcript, and any other pre-hearing or post-hearing documents submitted by the parties.

Upon the close of a hearing and receipt of all post-hearing submissions, the hearing officer will prepare a recommended decision to be issued by the Associate Administrator. The restriction on ex parte communications discussed above is especially applicable at this stage of the proceeding, and the hearing officer will not engage in such discussions or communications regarding the case with anyone involved in the prosecution or defense of the notice. The hearing officer's recommended decision may be reviewed by the Deputy Chief Counsel and staff of the Associate Administrator prior to issuance by the Associate Administrator.

Upon signature of the decision by the Associate Administrator, PHMSA will serve the decision upon the respondent and the applicable region in accordance with § 190.5. Decisions by the Associate Administrator are also made publicly available on the PHMSA Enforcement Transparency Web site.

On November 30, 1999, the Center for Marine Conservation (currently called Ocean Conservancy) petitioned us to list North American populations of largetooth and smalltooth sawfish as endangered under the ESA. While the smalltooth sawfish underwent a formal status review (56 FR 12959), on March 10, 2000, we determined the petitioner did not present substantial scientific or commercial information indicating that the petitioned action may be warranted for the largetooth sawfish ( Pristis perotteti ). Specifically, there was no evidence that a North American population of largetooth sawfish existed. The largetooth sawfish was, however, maintained on the candidate species list and later transferred to the new Species of Concern list on April 15, 2004 (69 FR 19975).

On April 21, 2009, WildEarth Guardians petitioned the Secretary of Commerce to list the largetooth sawfish as endangered or threatened throughout its range and to designate critical habitat for this species. The petitioners also requested that we reconsider our previous March 10, 2000, negative finding on listing the North American population.

On July 29, 2009, we published a positive 90-day finding (74 FR 37671) announcing that the petition presented substantial scientific or commercial information indicating the petitioned action of listing the species may be warranted. We announced the initiation of a status review of the species and requested information to inform the agency`s decision on whether to propose the species for ESA listing. Our Southeast Regional Office (SERO) issued two contracts in 2009 to the Florida Museum of Natural History to compile all confirmed records of largetooth sawfish in the U.S. and internationally. The status review (NMFS, 2010) was conducted by the Southeast Fisheries Science Center (SEFSC) and SERO staff. The status review is available electronically at http://sero.nmfs.noaa.gov/pr/Largetoothsawfish.htm . On May 7, 2010, we published a proposed rule (75 FR 25174) to list Pristis perotteti as an endangered species under the ESA. We solicited public comment on the proposed listing for 60 days. We did not hold a public hearing for the proposal.

We are responsible for determining whether the largetooth sawfish is threatened or endangered under the ESA (16 U.S.C. 1531 et seq. ). Section 4(b)(1)(A) of the ESA requires us to make listing determinations based solely on the best scientific and commercial data available after conducting a review of the status of the species and after taking into account efforts being made by any state or foreign nation to protect the species. We have followed a stepwise approach in making this listing determination. As the first of five steps (species determination, extinction risk assessment, threats assessment, protective efforts, status determination), we determined whether the largetooth sawfish is a “species” under the ESA. To be considered for listing under the ESA, a group of organisms must constitute a “species,” which is defined in section 3 of the ESA to include taxonomic species plus “any subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature.”

Next we completed an extinction risk assessment to determine the status of the species, in particular whether it qualified for threatened or endangered status. Section 3 of the ESA defines an endangered species as “any species which is in danger of extinction throughout all or a significant portion of its range” and a threatened species as one “which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” For our extinction risk analysis we follow the general procedure developed by Wainwright and Kope (1999).

In the third step, we assessed the threats affecting the species status. We did this by following the guidance in the ESA that requires us to determine whether any species is endangered or threatened due to any of the following five factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence (section 4(a)(1)(A) through (E)). After analyzing the threats affecting the species, we re-evaluated the extinction status for the species to see if the status changed after the assessment of the five factors.

The fourth step involved an assessment of the efforts being made to protect the species to determine if these efforts are adequate to mitigate existing threats. We evaluated all conservation efforts using the criteria outlined in the joint NMFS and U.S. Fish and Wildlife Service (USFWS) Policy for Evaluating Conservation Efforts When Making Listing Decisions (PECE policy; 68 FR 15100; March 28, 2003) to determine their certainties of implementation and effectiveness. In the final step, we reassessed the preliminary extinction risk assessment conclusion from above to determine if the status of the species had changed based on the PECE analysis.

To evaluate the petitioner's request that we designate critical habitat for the species, we followed the provisions in the ESA and in our implementing regulations (50 CFR part 424). Of particular relevance in this case are provisions that we cannot designate critical habitat in “foreign countries” or areas outside of U.S. jurisdiction and that we shall not designate as critical habitat areas outside of the geographical area presently occupied by a species, unless “a designation limited to its present range would be inadequate to ensure the conservation of the species” (50 CFR 424.12). Furthermore, to designate unoccupied critical habitat, we must also determine that the specific area(s) outside the geographic area currently occupied by the species at the time it is listed are essential to the conservation of the species.

Section 4(b)(1)(B) of the ESA requires us to give consideration to species which: (1) Have been designated as requiring protection from unrestricted commerce by any foreign nation or pursuant to an international agreement; or (2) have been identified as in danger of extinction, or likely to become so within the foreseeable future, by any state agency or by any agency of a foreign nation.

All sawfishes belong to two Genera ( Pristis and Anoxypristis ) in the Family Pristidae of the Order Pristiformes, and are classified as rays (Superorder Batoidea). Sawfishes are distinguished from other rays by the long snout (rostrum) with teeth on either side. Using molecular phylogeny (mitochondrial and nuclear gene analysis) paired with morphological characters, Faria (2007) distinguished seven extant species in the Pristidae. Sawfishes are classified into three morphological groups based on rostrum characteristics: Largetooth, smalltooth, and knifetooth (Garman, 1913). Three species are currently classified in the largetooth “group,” namely P. perotteti, P. microdon, and P. pristis, though difficulties associated with taxonomic identification are known (Faria, 2007; Wiley et al., 2008, Wueringer et al., 2009).

Pristis perotteti has been referred to by other names throughout its range. For instance, it has been called P. antiquorum (as cited in Bigelow and Schroeder, 1953), P. zephyreus (Beebe and Tee-Van, 1941), P. pristis (McEachran and Fechhelm, 1998), or P. microdon (Garman, 1913; Fowler, 1941; Chirichigno and Cornejo, 2001; Vakily et al., 2002). Some scientists consider the eastern Pacific populations to be part of the species P. microdon (Garman, 1913; Fowler, 1941; Chirichigno and Cornejo, 2001), while others consider the eastern Pacific populations to be P. perotteti (Jordan and Evermann, 1896; refs. in Beebe and Tee-Van, 1941; Compagno and Cook, 1995; Camhi et al., 1998; Cook et al., 2005). The species are generally classified based upon location (i.e., P. perotteti occurs in the Atlantic, while P. microdon is in the Indo-Pacific), and there is some evidence that tooth counts may differ (Wueringer et al., 2009). The conserved morphology of sawfishes makes identification difficult in some cases; most species are distinguished by the number of teeth on, and size of, the rostrum, placement of the first dorsal fin in relation to the pectoral fins, and shape of the lower lobe of the caudal fin. However, Faria (2007), used both mitochondrial and nuclear genes to investigate the population structure for all Pristidae. The results from his study indicate that the “largetooth” species P. microdon and P. perotteti are separate species, and that P. microdon occurs in the Pacific, based on their mitochondrial deoxyribonucleic acid sequencing data and differences in external morphology (e.g., rostrum length and horizontal length of the eye). Based on the available taxonomic information on P. perotteti, we have determined the species' range is the eastern and western Atlantic Ocean.

The rostral tooth count per side for P. perotteti ranges from 14 to 22, and the space between the two most posterior teeth is between 4.5 and 8.5 percent of rostrum standard length (Faria, 2007). The origin of the first dorsal fin is forward of the pelvic fin origin, and the lower lobe of the caudal fin is distinct at all maturity stages. The largest known specimen was a 275.6 in (700 cm) total length (TL) female captured in northern Brazilian waters (Almeida, 1999). The only other sawfish species that overlaps in range with P. perotteti is the smalltooth sawfish, P. pectinata. These species are differentiated by the number of teeth on the rostrum (22 to 29 per side for P. pectinata (Wiley et al., 2008), and 14 to 22 per side for P. perotteti (Faria, 2007)), and the rostrum length of P. pectinata is shorter in relation to its body length.

Largetooth sawfish are generally restricted to shallow coastal, estuarine, and fresh waters, although they have been found at depths of up to 400 ft (122 m) in Lake Nicaragua. Largetooth sawfish are often found in brackish water near river mouths and large bays, preferring partially enclosed waters, lying in deeper holes and on bottoms of mud or muddy sand (Bigelow and Schroeder, 1953). This species, like the smalltooth sawfish, is highly mangrove-associated (Burgess et al., 2009). Juvenile smalltooth sawfish are commonly found close to shore on muddy or sandy bottoms (NMFS 2009); however they are commonly observed swimming near the surface in the wild and in aquaria (Cook et al., 2005). Largetooth sawfish move across salinity gradients freely and appear to have more physiological tolerance of freshwater than smalltooth sawfish (Bigelow and Schroeder, 1953; Dahl, 1971; Thorson, 1974; 1976a; all as cited in Thorson, 1982a).

Though their habitats once overlapped in the northern Gulf of Mexico, the largetooth sawfish historically had a more southerly range than the smalltooth sawfish, with what appears to be a more narrow seasonal migration pattern. Mature largetooth sawfish seasonally ventured into waters as far north as U.S. waters of the Gulf of Mexico.

There have been no formal studies examining the age and growth of the largetooth sawfish, though Thorson's (1982a) study of the Lake Nicaragua population estimated size at birth to be 30 in (75 cm) and an early juvenile growth rate of 13.8 to 15.7 in (35 to 40 cm)/year. Thorson (1982a) also estimated age of maturity to be 10 years and size at maturity 118 in (300 cm). Preliminary vertebral growth ring analysis has extrapolated largetooth sawfish ( P. microdon ) lifespan to an estimated maximum age of 51 years (Peverell, 2006), and we determined this to be our best available estimate of largetooth sawfish lifespan. Growth rates of captive sawfish in Colombia averaged 7.7 in (19.6 cm) per year (Bohoroquez, 2001).

The reproductive method of sawfishes is most likely lecithotrophic viviparity; ova are internally fertilized, developing embryos receive nourishment from an external yolk sac, and the pups are born live after the yolk sac is absorbed. The only known reproductive study of largetooth sawfish was from Lake Nicaragua in the 1970s (Thorson, 1976a). This study found that litter size ranged from one to 13 pups, with an average of 7.3 pups per cycle. The gestation period was approximately 5 months, with a biennial reproductive cycle. After gestation, young are born between October and December (Oetinger, 1978). Thorson (1976a) also found that both ovaries appeared to be functional, though the left seemed to be larger and carry more ova. Parturition occurred in October and November and size at birth was between 28.7 and 31.5 in (73 and 80 cm) TL. Thorson (1976a) reported that the smallest gravid female was 120 in (305 cm) TL, and based on this and other observations, reported the size at maturity is estimated to be around 118 in (300 cm) TL. The life history of largetooth sawfish, like most elasmobranchs, is characterized by slow growth, late maturity, and low fecundity, which generally contributes to a low intrinsic rate of population increase.

Simpfendorfer (2000) estimated that largetooth sawfish in Lake Nicaragua had an intrinsic rate of increase (r) of 0.05 to 0.07 per year, with a population doubling time (t x2 ) of 10.3 to 13.6 years. Intrinsic rates of increase below 0.1 are considered low, making species particularly vulnerable to population decline (Musick et al., 2000). The results indicated that if effective conservation measures are put in place for the species and its habitats, recovery to levels with little risk of extinction will take many decades. Since Thorson (1973) hypothesized that many Lake Nicaragua sawfish may live their whole lives in the lake and Faria (2007) reported that the Lake Nicaragua sawfish may be a separate stock, the life history parameters estimated by Simpfendorfer (2000) may be unique to that subpopulation or stock.

No published information is available that quantitatively describes the diet of largetooth sawfish. Bigelow and Schroeder (1953) reported that, in general, sawfish subsist on the most abundant small schooling fishes in the area, such as mullets and small clupeids. There is also some evidence of largetooth sawfish feeding on crustaceans and other small benthic organisms (Bigelow and Schroeder, 1953). In these cases, the rostrum may be used to stir up the bottom sediments to locate prey, and in the case of fish predation, the rostrum may be used to stun or wound the fish in a slashing movement (Bigelow and Schroeder, 1953).

While there is potential for competition between P. perotteti and P. pectinata due to their overlap in range and habitat types, there is no data to support this, and differences in patterns of habitat use and salinity tolerance may adequately partition the niches of these species. Thorson (1970) speculated that the Lake Nicaragua population may have also competed with the bull shark, Carcharhinus leucas, as both were quite prevalent (Thorson, 1970); however, both species have since declined to the point of near extirpation. A Pristis species has been documented within the stomach of a bottlenose dolphin near Bermuda (Bigelow and Schroeder, 1953), in the stomach of a bull shark ( C. leucas) in Australia (Thorburn et al., 2004), and a juvenile smalltooth sawfish was captured with fresh bite marks from what appears to be a bull shark (Tonya Wiley, pers. comm., 2009). The International Union for Conservation of Nature (IUCN) Red List for the largetooth sawfish also states that crocodiles prey on the species (Charvet-Almeida et al., 2007).

Historically, P. perotteti are thought to inhabit warm temperate to tropical marine waters in the eastern and western Atlantic and Caribbean. In the western Atlantic, P. perotteti occurred from the Caribbean and Gulf of Mexico south through Brazil, and in the United States, largetooth sawfish were reported in the Gulf of Mexico, mainly along the Texas coast and east into Florida waters (Burgess and Curtis, 2003; Burgess et al., 2009). Burgess et al. (2009) also state that, based on the evidence, the species rarely occurred in Florida waters and that nearly all records of largetooth sawfish encountered in U.S. waters were limited to the Texas coast. In the eastern Atlantic, P. perotteti historically occurred from Spain through Angola.

Currently, P. perotteti are thought to primarily occur in freshwater habitats in Central (includes Mexico) and South America and West Africa. In Atlantic drainages, largetooth sawfish have been found in freshwater at least 833 miles (1,340 km) from the ocean in the Amazon River system (Manacapuru, Brazil), as well as in Lake Nicaragua and the San Juan River; the Rio Coco, on the border of Nicaragua and Honduras; Rio Patuca, Honduras; Lago de Izabal, Rio Motagua, and Rio Dulce, Guatemala; the Belize River, Belize; Mexican streams that flow into the Gulf of Mexico; Las Lagunas Del Tortuguero, Rio Parismina, Rio Pacuare, and Rio Matina, Costa Rica; Rio San Juan and the Magdalena River, Colombia; the Falm River in Mali and Senegal; the Saloum River, Senegal; coastal rivers in Gambia; and the Geba River, Guinea-Bissau (Thorson, 1974; 1982b; Castro-Aguirre, 1978 as cited in Thorson, 1982b; Compagno and Cook, 1995; C. Scharpf and M. McDavitt, pers. comm., as cited in Cook et al., 2005).

Although the first confirmed record of a U.S. largetooth sawfish was from “the Gulf of Mexico” in 1878 (Burgess et al., 2009), they were likely present prior to this time period. Sawfish encounters were reported in the entire Gulf of Mexico in early popular literature of the late 1800s but the similarities between the smalltooth and largetooth sawfishes limited the ability of non-specialists to discriminate between the two species. Because of this, there is no conclusive data available for largetooth sawfish abundance before fishing and other anthropogenic pressures began to affect their distribution. Recreational fishers in Texas began targeting prize fishes, including large elasmobranchs such as sawfishes, in the 1930s. Photographs taken of these catches were favored in the print media, allowing Burgess et al. (2009), to identify 33 largetooth sawfish in Texas.

Though reported in the United States, it appears that P. perotteti was never as abundant as P. pectinata, with approximately 39 confirmed records (33 in Texas) from 1910 through 1961, and no confirmed sightings in the years since (Burgess et al., 2009). A 1963 newspaper article reporting a shrimp trawler off the coast of Texas taking a “broadbill sawfish” may refer to a largetooth sawfish (Burgess et al., 2009). One specimen was reported between 1916 and 1919 in Louisiana. The capture location and identification as a largetooth sawfish species “presumably from Alabama” was catalogued at the University of Alabama but could not be verified (Burgess et al., 2009). Four individuals from Florida were noted between 1910 and 1960 (Burgess et al., 2009). Two of the reports in Florida were identified by elasmobranch researcher Stewart Springer by rostral tooth counts: One from Key West (1941) and another from Port Salerno (Baughman, 1943; Bigelow and Schroeder, 1953). Port Salerno is on the east coast of Florida, making this capture the only reported largetooth sawfish outside of the Gulf of Mexico in the United States. Another specimen from south Florida was collected by the American Museum of Natural History in 1910. The final record for P. perotteti in Florida was recorded in the Springer and Woodburn (1960) study of Tampa Bay fishes. The dried specimen was on display at the Sea-Orama in the City of Clearwater Beach, but the identification was not verified, and the size of the specimen (Burgess et al., 2009) was much smaller than any other individual captured in U.S. waters. With this exception, all largetooth sawfish captured in the U.S. were 14 feet (4.3 m) in length or larger.

In Texas, largetooth sawfish were primarily found in three regions: Padre Island-Laguna Madre, Corpus Christi-Port Aransas, and Galveston-Freeport (Burgess et al., 2009). Most were caught from 1929 through 1957, though some records may have been duplicated (Baughman, 1943). Ten largetooth sawfish were encountered in the Corpus Christi-Port Aransas region, from 1917 to 1961, though again duplication of records is possible. The highest number of records is from the northeast Texas coast (Galveston) and the lowest number from near the Texas-Mexico border (Padre Island), corresponding to the historical freshwater inflow patterns of the region (Longley, 1994). That is, sighting frequency is positively correlated with higher freshwater flow discharge. While it is likely that the freshwater affinity of this species, especially in comparison to the smalltooth sawfish, attracted the largetooth sawfish to these high outflow areas, these numbers may also be an artifact of higher fishing effort or likelihood of reporting in that area.

Burgess et al. (2009) report captures of largetooth sawfish in Texas were primarily in shallow inshore waters and the majority (65 percent) of those captures noted were taken from fisheries using rod and reel gears. Additionally, shrimp nets (reported as shrimp seines, shrimp net, and shrimp trawls) are the gear type associated with approximately 25 percent of all captures. Where size data could be determined, all largetooth sawfish caught in Texas were greater than 16 ft (4.88 m) TL. Burgess et al. (2009) report all largetooth sawfish found in U.S. waters were large (>14 ft (4.3 m)) and were primarily encountered during periods of warm water (May through October), suggesting that adults of this species mainly utilized Texas waters in the summer (but data on month of capture only exist for 10 records). The last confirmed record of P. perotteti in U.S. waters was from Port Aransas, Texas on June 24, 1961. The last records for other Gulf of Mexico states include Florida in 1941 and Louisiana in 1917. No records of largetooth sawfish were found from Mississippi, and, as stated previously, the one Alabama specimen could not be verified.

Only 33 confirmed records of P. perotteti exist for this region outside of Costa Rica and Nicaragua (Burgess et al., 2009). The lack of data likely stems from several factors, including confusion or ambiguity of identification with smalltooth sawfish and the lack of scientific surveys and popular reports during the time of highest abundance. In total, 5 largetooth sawfish records were from Mexico, 5 from Guatemala, 1 from Honduras, 483 from Nicaragua, 37 from Costa Rica, 7 from Colombia, 6 from Venezuela, 1 from Guyana, 5 from Suriname, 1 from French Guiana, and 1 from Trinidad. Length data was not available for most of these specimens.

Of the known Mexican largetooth sawfish, four were from the southwestern Gulf of Mexico (Tamaulipas, Veracruz, Tabasco, and Campeche), while one was captured at the northeastern tip of the Yucatan Peninsula (Quintana Roo). The mature (17.7 ft (5.4 m in total length), 1764 lbs (800 kg)) Yucatan individual was captured in 1997, which is the northern-most record in recent history. It appears that the last records in the Mexican Gulf of Mexico were prior to 1978, and Caribbean records are very sparse.

No encounters could be substantiated in Belize (Burgess et al., 2009). All five Guatemalan largetooth sawfish were from a survey of Lake Izabal between 1946 and 1947, and sawfishes were reported to be important inland fishes (Saunders et al., 1950). Though reported by Thorson et al. (1966a; 1966b) to be common throughout the area, a claim which was mirrored by local fishers at the time, there are no recent reports of encounters with sawfishes in Guatemala. The lone largetooth sawfish reported from Honduras was acquired from that country, but the true origin of the rostrum and the date of capture could not be confirmed.

The vast majority of P. perotteti records from Costa Rica (34 of 37) and Nicaragua (397 of 483) stem from Thorson's (1982a; 1982b) years of work on the Lake Nicaragua-Rio San Juan system. The San Juan River originates at Lake Nicaragua and runs along the Nicaragua-Costa Rica border until it reaches the Caribbean slightly south of the Nicaraguan border; therefore, movement between the countries was likely. Sawfish were noted in Nicaragua as early as 1529 by a Spanish chronicler (Gill and Bransford, 1877). This species was also reported in Nicaragua by Meek (1907), Regan (1908), Marden (1944), Bigelow and Schroeder (1953), Hagberg (1968), and Baez (1980a; 1980b). A commercial fishery for the largetooth sawfish that began in earnest around 1970 quickly decimated the Lake Nicaragua population (Thorson, 1982a). Low-level sustenance fishing for this species was common before this time, but the Nicaraguan government helped to establish a processing plant in 1970, which processed and sold the meat, fins, and rostra in an efficient manner. In the 1970s, an American supermarket chain (A&P) produced advertisements in their Ohio, Pennsylvania, and Illinois chains which included “Fish Features” listing “Sierra Steaks” using the Spanish name for sawfish, pez sierra, as a fresh fish available in their stores (The Times Recorder, 1975). By 1981, Thorson (1982a) was unable to locate a single live specimen. Thorson (1982a) documented that within a decade the commercial largetooth sawfish fishery had removed the species from shallow water habitats within Lake Nicaragua. The species was relegated to deep water “pockets” remaining in Lake Nicaragua. Commercial fishing for largetooth sawfish in Lake Nicaragua was banned in 2006, but the species is still caught incidentally by fishers netting for other species (McDavitt, 2002). A Lake Nicaragua fisherman reported that he encounters a few sawfish annually (McDavitt, 2002). There are no known Nicaraguan records of the largetooth sawfish outside of the Lake Nicaragua-Rio San Juan-Rio Colorado system (Burgess et al., 2009).

Bussing (2002) indicated that this species was known to inhabit the Rio Tempisque and tributaries of the San Juan basin in Costa Rica. Three occurrences in that river were found in internet searches, one being a 200 lb (90.7-kg) specimen caught recreationally (Burgess et al., 2009). In Colombia, the Magdalena River estuary was the primary source for largetooth sawfish encounters from the 1940s (Miles, 1945), while other records originated from the Bahia de Cartagena and Isla de Salamanca (both marine), and Rio Sinu (freshwater) from the 1960s through the 1980s (Dahl, 1964; 1971; Frank and Rodriguez, 1976; Alvarez and Blanco, 1985). Scientists in the country reported that there have been no sightings of this species in Colombia for about 10 years (Burgess et al., 2009).

Though thought to have once been abundant in some areas of Venezuela (Cervignon, 1966a; 1966b), the last of the four confirmed records of P. perotteti from that country was from 1962. The single records from Guyana, French Guiana, and Trinidad appear to be from the late 1800s and early 1900s. Of the five Suriname accounts, the latest was collected in 1962.

The largetooth sawfish was assessed as critically endangered in Brazil by Charvet-Almeida and Faria (2008). A total of 139 reports are available for this species (Burgess et al., 2009), some from as recently as 2009. Most of the records for which location is known originated in the state of Amazonas (12), which encompasses the middle section of the Amazon River basin along with the confluence of the Rio Negro and Rio Solimoes (in the state of Manaus). The other known locations are from the states of Rio Grande do Norte, Sergipe, Bahia, Espirito Santo, Rio de Janeiro, and Sao Paulo (1 record each), Para (7 records), and Maranhao (3 records). A few more reports were reported in Maranhao (email from Patricia Charvet-Almeida to Shelley Norton, 2010). Para contains the estuary and lower reaches of the Amazon River, and Maranhao is just southeast of Para. Anectodal reports from fishers indicate that they are also caught in Amapa, which is the northernmost state in Brazil (Charvet-Almeida and Faria, 2008).

The Amazon River basin and adjacent waters are traditionally the most abundant known area for largetooth sawfish in Brazil (Bates, 1964; Marlier, 1967; Furneau, 1969); however, scientific collection and fisheries data for this region are very limited, both historically and recently. Sawfishes are captured as bycatch in artisanal and commercial fisheries in northern Brazil (Charvet-Almeida, 2002). Most historic records of largetooth sawfish in the Amazon River (Amazonia) predate 1974. Known lengths ranged from 4.9 to 8.2 ft (1.5 to 2.5 m) in total length. Mathew McDavitt (pers. comm., 2010) notes there is anecdotal evidence that P. perotteti is currently being targeted in Brazil for the lucrative Chinese shark fin trade. A recent popular guide in China for dried seafood products provides descriptions of a dozen or so popular shark fin categories. Based on photographs and descriptions, the category huang jiao (literally: “yellow-glue”) comes from sawfishes, the trade name deriving from its beige color and the especially copious gelatine it produces when cooked. This Chinese dried seafood book gives the current sources for huang jiao fin, noting that the supply from Brazil is favored nowadays due to its comparatively large size.

The Brazilian sawfish populations, which include both P. perotteti and P. pectinata, are found in this region, but are almost exclusively of the largetooth species, are presumably large and abundant compared to those captured in other localities, due to the fact that sawfishes have not yet been extirpated in Brazilian waters to the extent that they have been elsewhere. Presumably both species are caught and sold. No quantification of the exact species or number of captured or sold sawfishes is currently available, though Charvet-Almeida and Faria (2008) reported that as many as 1500 small and medium rostra and 180 large rostra were sold each year in Para alone.

The two most recent largetooth records in Brazil were from Maranhao, one caught by a fisher in 1998 and another in 2009. The latter was a gravid female estimated to be 7 m TL (Burgess et al., 2009). Earlier reports of largetooth sawfish in Maranhao were mostly from the 1980s and 90s (Lessa, 1986; Martins-Juras et al., 1987; Stride and Batista, 1992; Menni and Lessa, 1998; and Lessa et al., 1999). Sawfish are likely caught incidentally by shark fishers in this state and landed for their saws (Almeida et al., 2006).

Records of largetooth sawfish in each of the states south of Maranhao are limited to one each, and the dates of capture are largely unknown, though most appear to be from the nineteenth century. An archeological site in Sao Paulo yielded tooled P. perotteti rostral teeth, though whether they came from locally caught animals, or were traded from the north is unknown. Charvet-Almeida and Faria (2008) concluded that largetooth sawfish are most likely extirpated in most of the states south of Maranhao.

Historical records indicate that largetooth sawfish were once relatively common in the coastal estuaries of West Africa. Verified records exist from Senegal (1841 to 1902), Gambia (1885 to 1909), Guinea-Bissau (1912), Republic of Guinea (1965), Sierra Leone (date unknown), Liberia (1927), Cote d'Ivoire (1881 to 1923), Congo (1951 to 1958), Democratic Republic of the Congo (1951 to 1959), and Angola (1951) (Burgess et al., 2009). Most records, however, lacked species identification and locality data and may have been confused taxonomically with other sawfish species that also occur in the area. Unpublished notes from a 1950s survey detail 12 P. perotteti from Mauritania, Senegal, Guinea, Cote d'Ivoire, and Nigeria, ranging in size from 35 through 276 in (89 through 700 cm) in total length (Burgess et al., 2009).

A more recent status review by Ballouard et al. (2006) reported that sawfishes, including the largetooth sawfish, were once common from Mauritania to the Republic of Guinea, but are now rarely captured or encountered. According to this report, the range of sawfishes has decreased to the Bissagos Archipelago (Guinea Bissau). The most recent sawfish encounters outside Guinea Bissau were in the 1990s in Mauritania, Senegal, Gambia, and the Republic of Guinea. The most recent documented P. perotteti capture was from 2005 in Nord de Caravela (Guinea Bissau), along with anecdotal accounts from fishers of captures off of two islands in the same area (Burgess et al., 2009).

As documented above, the range of the largetooth sawfish has contracted significantly on both sides of the Atlantic. Although no time-series abundance data exists to quantify the extent of the decline of the species throughout its range, we believe that with the substantial number of commercial and recreational fisheries fishing along our U.S. coast, the uniqueness of the species morphology, and because media and internet sites are easily accessible to the public, largetooth sawfish encounters would be noteworthy and reported. Additionally, outreach efforts along the Gulf of Mexico coast in the U.S. for the smalltooth sawfish, which includes printed brochures and signage in local bait shops, marinas, and boat ramps on where and how to report sawfish encounters, should have increased the likelihood of reporting a largetooth sawfish encounter. Access to media and internet sites for reporting largetooth encounters outside the U.S. is most likely less common in some of the remote areas along the coasts of Central America, the Amazonian region of Brazil, and West Africa. Nevertheless, the apparent decrease of sightings over time suggests that the species has undergone severe declines in abundance throughout its range. Moreover, the decline in museum records, negative scientific survey results in the U.S. and Lake Nicaragua, and anecdotal reports from fisher people suggest the trend for the species is declining (Burgess et al., 2009).

In December 2004, the Office of Management and Budget (OMB) issued a Final Information Quality Bulletin for Peer Review establishing minimum standards for peer review. Similarly, a joint NMFS/FWS policy (59 FR 34270; July 1, 1994) requires us to solicit independent expert review from at least three qualified specialists, concurrent with the public comment period. We solicited peer review comments from four scientific peer reviewers. Public comments were received from five commenters. Three commenters supported our decision to list the species as endangered under the ESA, but none of the commenters or peer reviewers indicated they did not support the decision to list the species. Several of the commenters did not support our decision not to designate critical habitat. Two commenters provide information on the occurrence of the species within specific areas. The peer review and public comments are summarized below.

Comment 1: General editorial peer review comments identified some errors in the lack of italicization of the species genus and species name.

Response: We have corrected these errors in the final rule.

Comment 2: No directed research for largetooth sawfish is ongoing in Texas, but Texas Parks and Wildlife Department (TPWD) is conducting surveys which could capture sawfish in Texas waters. TPWD has ongoing standardized fisheries independent and dependent monitoring programs in all of the bay systems and in the Gulf of Mexico along the Texas coastline for the last 35 years. The surveys are conducted using seines, trawls, and gill nets annually. All of the gears used have been found to capture sawfish. Only two sawfish have been recorded during the sampling and they were smalltooth sawfish.

Response: This supports the information in our files on the extirpation of the largetooth sawfish from Texas waters for decades. We have incorporated this information into our files.

Comment 3: TPWD classifies the smalltooth sawfish and largetooth sawfish as endangered or threatened animals and prohibits the killing or take of either species. TPWD also distributes “Shark Identification and Regulations in Texas” brochures that includes information on the prohibition of take of sawfish and also provides information on where to report an encounter. These brochures are distributed from TPWD Field Stations, Law Enforcement Offices, during outreach events, public meetings, public hearings, and upon request. In 2010, NMFS funded the TPWD with section 6 ESA funds to conduct outreach and educational events to promote reporting sawfish captures to the National Sawfish Encounter Database.

Response: Outreach efforts in Texas have been very successful and have resulted in the public reporting of smalltooth sawfish encounters to the National Sawfish Encounter Database, and the reporting of the location of curio saws of largetooth sawfish for the purposes of obtaining genetic information.

Comment 4: The largetooth sawfish will benefit from an endangered species listing, but critical habitat should not be designated or a recovery plan developed, unless the species returns to U.S. waters. Designating critical habitat or developing a recovery plan would be arbitrary and capricious with little scientific merit.

Response: We do not propose to designate critical habitat. We will develop a recovery plan for the largetooth sawfish if we determine that sections 4(f)(1) and 4(a)(1)(A) of the ESA apply. Section 4(f)(1) of the ESA states that “Recovery plans shall be developed unless such plans will not promote the conservation of the species * * *” Section 4 (f)(1)(A) of the ESA also states “Priority will be given to the maximum extent practicable, to those species that will most likely benefit from such plans * * *”

Comment 5: Several reviewers requested we designate critical habitat in foreign countries and one reviewer stated that we can determine the habitat capacity for the species in foreign countries.

Response: We do not have specific information on the habitat capacity for the largetooth sawfish in foreign countries and no law provides us with authority to designate critical habitat in foreign countries (50 CFR 424.12 (h)).

Comment 6: The Convention on International Trade of Endangered Species (CITES) does not include the U.S. in their described distribution of P. perotteti listing, it only includes Brazil, Colombia, El Salvador, Gambia, Guatemala, Guinea Bissau, Honduras, Mali, Nicaragua, Panama, and Senegal.

Response: The range information in CITES is consistent with the information in our files.

Comment 7: Hotspots exist for the species throughout its range. Conservation efforts should be made which include the development of regulations and the redirecting of law enforcement efforts in hotspot areas. Three potential hot spots are Costa Rica, Nicaragua, and Brazil. Additionally, a proposed dredging project in the San Juan River in Nicaragua was identified in a hotspot area that will modify water flow and natural habitats for largetooth and smalltooth sawfish in the area.

Response: NMFS agrees that Costa Rica, Nicaragua, and Brazil appear to be hotspots for the species. We cannot develop regulations or manage law enforcement efforts in foreign countries, but we can provide information to international sawfish researchers and government staff on potential conservation issues or threats to listed species. Prohibitions under section 9 of the ESA apply to all U.S. citizens and U.S. government actions, anywhere.

Comment 8: Although some biologists in Costa Rica believe the largetooth sawfish has been extirpated from the country, recent anecdotal information from fisherman indicate that sawfish (smalltooth or largetooth) are still present in the area.

Response: We do not have any information on recent reports of largetooth sawfish in Costa Rica, but we will follow-up with the reviewer to try to obtain more information on the recent reports.

Comment 9: A recommendation was made to advise local governments, universities, researchers, and non-governmental agencies to become more involved in promoting and funding scientific research throughout the range of the largetooth sawfish. The reviewer also provided a list of potential research efforts that should be considered.

Response: We will work with the IUCN Shark Specialist Group's newly formed Sawfish Conservation Committee, to develop a conservation strategy and plan for all sawfish species, foreign and domestic. The conservation plan should identify actions or research efforts necessary to conserve all species of sawfish.

Comment 10: A reviewer noted that mangrove areas are considered pupping grounds for P. perotteti but provided no data or references in support.

Response: We could not locate specific information on pupping grounds for P. perotteti, but we believe the species may use mangrove habitat for pupping, based on the information known on the use of mangrove habitats as nursery areas for P. pectinata.

Comment 11: Add information into the “Age and Growth” section from a paper written by Simpfendorfer (2000).

Response: Simpfendorfer (2000) provides population growth rate information which is included in the “Reproductive Biology” section. Growth rate information from captive sawfish in Colombia from Bohoroquez (2001) was added to the “Age and Growth” section.

Comment 12: A reviewer did not agree that there is doubt regarding the reproductive method for sawfish.

Response: No reproductive studies on P. perotteti exist in the literature so reproductive method is inferred from studies of closely related sawfishes.

Comment 13: Are foreign records of largetooth sawfish reports from museums or grey literature?

Response: The primary source of foreign records of P. perotteti comes from Burgess et al. (2009). Burgess et al. (2009) used various methods to gather information on the species including personal interviews, literature searches, historic newspaper and magazine searches, and interviews with scientists in museum curators in foreign countries.

Comment 14: A reviewer suggested we change the word “few” to “many” when we discuss the number of decades needed to recover P. perotteti.

Response: We agree, Simpfendorfer (2000), determined it will take several decades to recover the species and changed the text.

Comment 15: A reviewer requested additional citations throughout the document.

Response: The reviewer did not provide suggested citations to add to our document. Information is limited on P. perotteti, and we provided the applicable citations available on the species.

Comment: 16: Rostral teeth counts can overlap between P. perotteti and P. pectinata.

Response: We acknowledge that the rostral teeth counts can overlap between the species, both species can have 22 teeth per side.

Comment 17: A reviewer stated that, based on the limited fisheries data available on P. perotteti, that the statement that P. perotteti was never abundant in U.S. waters should be restated as “never as abundant as P. pectinata.”

Response: We agree with the reviewer statement and changed the text in the final rule.

Comment 18: Guerillas and drug smugglers make it almost impossible to access some areas in Central and South America.

Response: We acknowledge that illegal activities may affect access to areas that support P. perotteti and recent information on the presence of the species in these areas may not be available.

Comment 19: NMFS does not need evidence of habitat loss throughout the species' range to say that habitat loss is a threat outside the U.S. The reviewer also notes that population growth is linked to a world-wide habitat problem that affects all coastal and estuarine species.

Response: We acknowledge that habitat loss is occurring throughout the species' entire range in the proposed and final rule in the “The Present or Threatened Destruction, Modification, or Curtailment of its Habitat or Range” section and we also recognize that habitat losses are occurring range-wide.

Comment 20: A reviewer noted that data may not exist outside of Lake Nicaragua on the exact extent of the species decline but that it is correct to say that severe declines have taken place within its range.

Response: NMFS agrees that no other fishery data exists outside of the Lake Nicaragua fishery data and we agree that significant declines in the species abundance have most likely occurred.

Comment 21: Capture records in the states south of Maranhao are incorrect. A few more reports from other states occurred in the 1970's.

Response: We corrected the information in our final rule.

Comment 22: A score of (3) was very low on our evaluation of “other risk” factors for evaluating extinction risk. Simpfendorfer (2000) indicates recovery would take decades and the species is very, very, vulnerable to fishing gear entanglement, so the reviewer suggests the score should be increased. The reviewer also suggests that fishing gears or risk of entanglement would fit better in the “other risk” evaluation category.

Response: A risk level of 3 equates to a moderate risk, which according to Wainwright and Kope's (1999) is defined as factors that contribute significantly to long-term risk of extinction, but do not alone constitute a danger of extinction in the future. We rated the “other risk” factors, which includes life history characteristics of slow growth and late maturity a 3 because life history alone does not alone constitute a danger of extinction in the future. We did not change our ranking of the “other risks” factors.

Wainwright and Kope (1999) explain the “other risks” factor category as including life history information so we believe this is the correct place for evaluating the life history information. Entanglement and other bycatch are commonly considered in the overutilization factor.

Comment 23: The fishing gear types listed under the “Commercial Fisheries” section of the proposed rule for the shark fishery in Brazil are incorrect. The gear types should be listed as gillnets and trawl nets.

Response: We corrected this error in the final rule.

Comment 24: In Brazil and Nicaragua the species is protected, which means catches and landings are illegal. Harvest limits are not in place and enforcement is a challenge. The reviewer requested we revise the sentence in the “The Inadequacy of Existing Regulatory Mechanisms” section on the protections in Brazil.

Response: We modified the sentence to clarify that the protections do not apply to harvest limits.

Comment 25: Protections in the U.S. for P. pectinata will benefit P. perotteti, should it return to U.S. waters.

Response: We agree because both species are susceptible to the same types of threats, and because we have conservations measures in place for P. pectinata throughout the U.S. historic range of P. perotteti.

Comment 26: Predation is not a threat for the species.

Response: We stated in the proposed rule that no evidence suggests that predation is a threat to the species.

Comment 27: A citation quoted rostral tooth counts incorrectly for Wiley et al. (2008). Rostral tooth counts for P. pectinata should be 22-29 per side.

Response: We corrected the error in the final rule.

Comment 28: Largetooth sawfish has not been documented within the boundaries of any National Park Service unit.

Response: This information has been incorporated into our files.

Comment 29: Pristis perotteti likely disappeared from the area of intervention of the Regional Commission on Fisheries which covers Gambia, Guinea, Guinea Bissau, Mauritania, Senegal, and Sierra Leone, 20 years ago. Investigations conducted in 2005-2006 for the Sharks Sub-Regional Action Plan, Fondation Internationale du Banc d'Arguin, Poverty Reduction Strategy Paper, and Noah Conservation, revealed that recent catches of P. perotteti in West Africa date back to 1970 in Gambia, 1984 in Senegal, 1993 in Guinea, 1995 in Mauritania, and 2000 in Guinea-Bissau. The species was abundant in West Africa until 1970. Additionally, investigators in the seven countries (Gambia, Guinea, Guinea Bissau, Mauritania, Senegal, and Sierra Leone) made no observations of P. perotteti between 2004 and September of 2010.

Response: The commenter's information supports the information in our files regarding the decline of the species in West Africa.

Comment 30: Loss of habitat has contributed to the reduction in range for P. perotteti and habitat loss is affecting the largetooth sawfish throughout its range; consequently a proposed project (Harbour Pointe) in southwest Florida has the potential to remove three acres of mangrove habitat that may impact the P. perotteti and other fishes.

Response: We acknowledge in our proposed rule that habitat loss is a threat to the species. The species is no longer found in U.S. waters so projects proposed in southwest Florida will not affect the species. However, NMFS will consult under section 7 of the ESA on federally authorized or funded projects in southwest Florida, if the effects of the proposed project may affect listed species (e.g. smalltooth sawfish and sea turtles) or their designated critical habitat, under our jurisdiction.

Comment 31: Effects from urban and agricultural activities can directly impact critical habitat but may also have lasting effects on adjacent water resources (i.e., water chemistry, hydrology, salinity, and quality). The commenter also noted that nutrient pollution from urban and agricultural sources can threaten sawfish and other fish species. In particular, the commenter notes that dinoflagellates, for example Pfiesteria species, can cause haemorrhaging, sloughing of the skin tissue and deep ulcerations, and that fish with these symptoms have a higher probability of experiencing mortality. The commenter also suggests that once listed, the recovery plan for the species should follow the goals of the smalltooth sawfish recovery plan for reducing threatening algal blooms, improving water quality, and decreasing red tide events.

Response: As stated in the proposed rule, we have no information indicating that diseases are a threat to the species. NMFS will consider all potential threats to the species if we develop a recovery plan for the species.

Comment 32: Based on the best available scientific reports NMFS cannot conclude confidently that the largetooth sawfish has been extirpated from Florida.

Response: The information in our files indicates the species has not been encountered in Florida since 1941.

Comment 33: Listing of the species should move forward while concurrently considering the prudency of determinability of critical habitat as required under 16 U.S.C. 1533 (a)(3)(A)(i).

Response: We are moving forward with the listing of P. perotteti but are not proposing to designate critical habitat for the species. Please see “Critical Habitat” section below for further explanation on our decision not to designate critical habitat.

Comment 34: Two commenters stated that failing to designate critical habitat within the U.S. jurisdictional waters will deprive largetooth sawfish of its key protections and will inadequately conserve the species. The primary conservation benefit of critical habitat designation is that it provides a separate basis for federal agencies to consult under ESA section 7, 16 U.S.C. 1536(a)(2). Additionally, 50 CFR 424.12(b)(5) requires NMFS to consider historic geographical and ecological distributions of a species and that in the proposed rule to list P. perotteti we fail to do this, and that we elevate only one of the regulatory factors (50 CFR 424.12(b)(4)), “breeding” above all others. The commenter further states that we are ignoring 4 of the 5 factors we are required to consider for critical habitat designation and that it is inappropriate and illegal to do so. The commenter also stated that foraging is an essential biological function that cannot be discounted and requests we consider foraging behaviours as a trigger for designating critical habitat.

Response: We disagree, determining not to designate critical habitat for P. perotteti will not deprive the species of its key protections. Section 3(5)(A)(ii) of the ESA states that “critical habitat” for threatened or endangered species means specific area(s) outside the geographical area occupied by the species at the time it is listed in accordance with the provisions of the Act, upon a determination of the Secretary that such area(s) are essential for the conservation of the species. Using the best available scientific and commercial data we cannot determine an area or areas essential to the conservation of P. perotteti within U.S. jurisdiction. We cannot designate critical habitat in foreign countries or in areas outside U.S. jurisdiction (50 CFR 424.12(h)). See the “Critical Habitat” section for further explanation on our determination not to designate critical habitat. Additionally, regulations at 50 CFR 424.12(b) only apply to identifying occupied areas. For unoccupied critical habitat the required finding is “one or more specific areas are essential to the species conservation.”

Comment 35: Conclusions about largetooth sawfish uses of U.S. waters for seasonal foraging and our determination that the species will most likely never breed in U.S. waters is suspect. The commenter also stated that our reliance on historic accounts of reports of encounters of only large animals (14 ft or larger) to establish no breeding historically occurred in U.S. waters is also speculative.

Response: All encounter records of largetooth sawfish in U.S. waters were reported during the summer months and no juvenile largetooth sawfish have ever been documented from U.S. waters. Additionally, the commenter did not provide any data to support a breeding population of largetooth sawfish ever existed in the U.S.

Comment 36: Two commenters stated that historically, fisherman were only inclined to report the capture of large fish and generally do not report small (juvenile) sawfish so that our determination that U.S. waters does not contain the essential biological features necessary for the species conservation is flawed.

Response: The best available scientific and commercial data does not contain reports of small (juvenile) largetooth sawfish. Juvenile sawfish can range in size from 2-6 ft in total length, based on information taken from the smalltooth sawfish recovery plan. A fish that is 2-6 ft long is not considered by many people as small. Also, based on information in the National Sawfish Encounter Database, located at the Florida Museum of Natural History, reports of smaller sawfish species (not P. perotteti ) have been reported historically, and currently by U.S. and foreign fishers. NMFS is not required to determine if essential biological features exist for the largetooth sawfish when designating unoccupied critical habitat. See “Critical Habitat” section for more details.

Comment 37: A commenter stated that we discount the recovery aspect of a critical habitat designation and that the designation of unoccupied critical habitat is necessary for population growth or foraging behaviour.

Response: Based on the best available scientific and commercial data, including the lack of evidence of a permanent, large population in U.S. waters, we have determined that the species does not require expansion into or re-establishment of use of U.S. habitats for recovery. See “Critical Habitat” section for more details.

Comment 38: A commenter questioned our conclusion in the proposed rule that the protections offered to the endangered U.S. distinct population segment (DPS) of smalltooth sawfish may benefit the largetooth sawfish.

Response: All sawfish species in the U.S. are threatened by similar factors (incidental and directed capture from commercial and recreational fishers, habitat loss, and trade) so conservation efforts directed toward the endangered U.S. DPS of smalltooth sawfish will also promote the conservation of the largetooth sawfish, should it return to U.S. waters.

Comment 39: NMFS should include an analysis on any new and likely significant impacts to largetooth sawfish from the recent BP Deepwater Horizon oil spill, and acknowledge that ongoing and/or future oil and gas production in the Gulf of Mexico is a significant threat to the largetooth sawfish.

Response: Studies are ongoing to determine the impacts from the BP Deepwater Horizon oil spill. No conclusive determinations have been made yet.

Based on the comments received and our review of the proposed rule, we made the changes listed below.

1. We corrected any errors identified by reviewers and commenters.

2. We corrected the error in the “Background” section that stated we completed a status review of the species in 2000.

We first considered whether P. perotteti met the definition of “species” pursuant to section 3 of the ESA as described above. As stated in the taxonomy section above, after reviewing the best available scientific and commercial taxonomic data on the species, we determined that P. perotteti is a “species” and its range is the eastern and western Atlantic Ocean.

We next considered the risk of extinction for P. perotteti to determine whether the species is threatened or endangered as defined above. No quantitative estimate of abundance for the species is known, so methods such as population viability analysis cannot be used to determine the risk of extinction for the species. Therefore, we must use a method to determine the risk of extinction using qualitative information.

Wainwright and Kope (1999) developed methods to assess the risk of extinction for U.S. West Coast salmon. Using the definitions of endangered and threatened in the ESA, they considered a variety of information to assess extinction risks, including abundance, trends, productivity, variability, genetic integrity, and other risks. Wainwright and Kope (1999) further consider the risk to small populations based on potential genetic effects or random demographic effects. They also considered habitat capacity to answer questions about the carrying capacity and whether the carrying capacity can ensure the populations viability. In assessing the risk of extinction using trends, productivity, and variability, Wainwright and Kope (1999) indicate that short- and long-term trends in abundance are the primary indicators of risk. Wainwright and Kope (1999) also assessed the effects of genetic integrity (introduced genotypes, interactions with hatchery fish, or anthropogenic selection) as it relates to evaluating the risk of extinction. Loss of fitness and loss of diversity can occur from random genetic effects and increase the risk of extinction for a species. Wainwright and Kope (1999) also evaluated other risks that are considered for salmonids (disease, predation, and changes in life history). These “other risks” can affect the sustainability of a population. The last factor that Wainwright and Kope (1999) evaluated is the risks associated with recent events. Changes in harvest rates, anthropogenic changes in the environment (habitat degradation or enhancement), or natural events (floods, volcanic eruptions) can pose a risk for species but may not have been adequately considered by looking at the other effects above when there is a time-lag in seeing the effect of recent events.

In addition to analyzing factors that may affect the risk of extinction for salmon, Wainwright and Kope (1999) developed a general quantitative evaluation method to assess both qualitative and quantitative evidence for the various risk factors. In this method, four of the major categories of extinction risk are scored. These four categories are: (1) Abundance, (2) trend, productivity, and variability (TPV), (3) genetic integrity, and (4) “other risks”. The risk categories are scored on a scale from 1 to 5. A score of 1 represents a very low risk and factors (single or multiple factors) scored at this level are unlikely to contribute significantly to risk of extinction. A score of 2 represents a low risk and single factors are unlikely to contribute to extinction alone, but in combination with other factors may be a concern. Scores of 3 represent moderate risk. These factors contribute significantly to long-term risk of extinction, but do not alone constitute a danger of extinction in the near future. Score values of 4 represent increasing risk. This rating indicates the present risk is low or moderate, but is likely to increase to high risk in the future (reflects the ESA definition of threatened). Scores of 5 represent the high risk rating. This factor indicates danger of extinction in the near future.

Biologists at SERO used Wainwright and Kope's (1999) methods to assess extinction risk for P. perotteti. For the abundance category the following were important considerations. Small-population risks for the species were considered to assess the risk of extinction. As detailed above, museum records, negative scientific survey results in the U.S. and Lake Nicaragua, and anecdotal reports from fishers suggest the trend for the species is declining and population size is small. This species is also a K-selected animal which indicates they are usually successful at maintaining relatively small, persistent population sizes in relatively constant environments. We expect changes from random demographic effects are likely to be significant for the species since they are not able to respond rapidly to stochastic events. Information on the distribution of the species was also used as an indicator of abundance. The current distribution for the species is significantly reduced from its historic range. Thus, the existing population of P. perotteti does not adequately represent historic patterns of geographic distribution and this is considered a risk factor for the species. We could not determine the habitat capacity for the species since most of the habitat within the species range is located in foreign countries and we have poor data from those areas. Based on small population risks that could occur from demographic effects and the range constriction that has occurred, we assigned a rating of 5 (high-risk) for the abundance factor.

For the TPV category we considered that the data for the species indicates a declining trend in abundance. A directed fishery existed for the species in Lake Nicaragua but no longer exists today. Reports of the species in Lake Nicaragua are rare. Lack of reports of the species occurrence throughout most of its range, including the U.S. and southern Brazil, also indicates the species abundance has declined from historic levels. Productivity rates are not known for the species but are expected to be declining. Variations in freshwater and marine environments within the species range are difficult to assess. Since reports of the species are rare throughout its range, we expect that productivity is low.

Genetic integrity was not evaluated or scored because we do not have information on the loss of fitness and loss of genetic diversity for the species.

Our evaluation of the “other risks” factor considered information about the species life history characteristics, in particular that the species has slow growth rates, late maturation, low fecundity, and population recovery potential is considered limited. Based on this information, we scored the other risks category as a 3.

Using Wainwright and Kope (1999) methods to determine the risk of extinction for P. perotteti, we believe that abundance and distribution of P. perotteti is likely to continue to decline in the near future. Therefore, we have determined the current threats affecting the species will continue into the future and the species is currently in danger of extinction throughout all of its range.

In this section, we consider the five factors specified in section 4(a)(1) of the ESA that we outlined in our listing determination process above.

Coastal habitat loss throughout the species' historical range is a contributing factor to the species decline. Coastal habitats in the southern U. S. Gulf of Mexico region have experienced and continue to experience losses due to urbanization. Wetland losses in the Gulf of Mexico region of the U.S. averages annual net losses of 60,000 acres (242.8 km 2 ) of coastal and freshwater habitats from 1998 to 2004 (Stedman et al., 2008). Although wetland restoration activities are ongoing in this region of the U.S., the losses significantly outweigh the gains (Stedman et al., 2008). These losses have been attributed to commercial and residential development, port construction (dredging, blasting, and filling activities), construction of water control structures, modification to freshwater inflows (Rio Grande River in Texas), and gas and oil related activities. Riverine systems throughout the species' historical range have been altered or dammed. NOAA's Restoration Center is involved in ongoing coastal restoration activities throughout the Gulf of Mexico to restore coastal habitats. In spite of ongoing efforts to restore coastal habitats, coastal habitat losses will continue to occur.

The status of habitats within the current international range of the species is not well known, but with continued development and human population growth, negative effects on habitat are likely. Ruiz-Luna et al. (2008) acknowledge that deforestation of mangrove forests in Mexico has occurred from logging practices, construction of harbors, tourism, and aquaculture activities. In addition to deforestation, Ruiz-Luna et al. (2008) document that changes in the hydrological systems occurred with opening of the artificial canal in Cuautla, in the state of Nayarit. Valiela et al. (2001) report the total area of mangrove habitats in Brazil has decreased significantly (from 9,653 to 5,174 mi 2 (25,000 to 13,400 km 2 ) ) from 1983 to 1997, with similar trends in Guinnea-Bissau (1,838 to 959 mi 2 (4760 to 2484 km 2 )) from 1953 to 1995. Habitat modification, including mangrove forest removal, is also likely in northern Brazil (Compagno et al., 2006). The areas with the most rapid mangrove declines in the Americas included Venezuela, Mexico, Panama, the United States, and Brazil, while Senegal, Gambia, Sierra Leone, and Guinnea-Bissau showed the largest declines in western Africa (Ruiz-Luna et al. 2008). World-wide mangrove habitat loss was estimated to be 35 percent from 1980 to 2000 (Valiela et al., 2001). There are unconfirmed reports of dam building activities on the Rio San Juan (Nicaragua) system, which could affect the movements of largetooth sawfish in that region. These threats cannot be directly related to the decline of the largetooth sawfish, but habitat loss is a known factor contributing to the decline of many freshwater and marine species, including the endangered U.S. distinct population segment (DPS) of smalltooth sawfish.

Sawfishes are very vulnerable to most fishing gears, and were historically caught by gillnets, trawls, seines, and lines (Compagno et al., 2006). Most targeted catches of largetooth sawfish in Texas in the 1930s were from recreational hook and line, but they were also caught incidentally by shrimp trawls and seines (Burgess et al., 2009). The Lake Nicaragua commercial fishery for largetooth sawfish consisted mostly of gillnet boats (Thorson, 1982a), and the commercial small coastal shark fishery in Brazil mainly utilizes gillnets and some trawl nets (Charvet-Almeida, 2002). Today the main threat to the largetooth sawfish is most likely from bycatch mortality, though sawfishes may be targeted opportunistically in some areas (Brazil) when the occasion arises. The current scarcity of sawfish may inhibit targeted fisheries that might occur in spite of international trade bans. However, if caught as bycatch they are most likely retained because of the value of their parts (e.g., the rostra, teeth, and fins). For example McDavitt's (2006) review of eBay sales of rostra estimate a total of 200 rostra per year are sold, with a value of more than US $25,000.

Historically, recreational hook and line fishers targeted large elasmobranchs, including sawfishes, as trophies in Texas (Burgess et al., 2009). Elsewhere in the U.S., abundance was likely never high enough for recreational fishers to encounter this species, much less target it. Because of its current distribution, which is mostly in developing nations, the largetooth sawfish is unlikely to be encountered by recreational fishers, with possible rare exceptions of tourists in these areas. There is no current information on the use of sawfish species for subsistence fishing, though it was noted in Brazil that the meat was often sold in local fish markets, while the other products (rostra, fins) were sold internationally (Charvet-Almeida, 2002).

There is very little information available about the trade of sawfish products in general, especially the largetooth sawfish. Largetooth sawfish were listed under Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 2007, which prohibits the commercial trade of largetooth sawfish parts (see Regulatory Mechanisms section below). In 2006, eBay banned the sale of smalltooth sawfish on their online auction site; however, the ban was not established for all sawfish species. A survey by McDavitt and Charvet-Almeida (2004) of sawfish rostra on eBay (before the ban) found that large rostra command prices of over $1,000 (US). An informal web search in November 2009 turned up several sawfish rostra for sale online to international buyers, some listed as “largetooth”, along with sites selling cockfighting spurs made from South American sawfish teeth. It is apparent that largetooth and smalltooth sawfishes are still landed and sold illegally in northern Brazil (Charvet-Almeida pers. comm., 2009). It was previously observed that sawfish rostra from small individuals were sold to tourists, while damaged or cut rostra were used for local folk medicine (McDavitt and Charvet-Almeida, 2004). The larger rostra were sold in international cockfighting markets, as the rostral teeth were used as spurs. The larger rostra were also purchased by Asian shark fin buyers, most likely for medicine or curios. The proportion of largetooth sawfish in these markets is unknown, though as many as 180 large Pristis spp. rostra were sold per year at a single market in northern Brazil in the early 2000s (McDavitt and Charvet-Almeida, 2004). With little enforcement of regional and international laws, the practice of landing sawfishes may continue in Brazil, though the extent of any international trade since the CITES listing is unknown. No confirmed reports of P. perotteti in aquaria exist currently. No seizures of largetooth sawfish in international trade have occurred since its CITES listing (Sharon Lynn (USFWS) pers. comm.).

The only published studies on life history and movements of the largetooth sawfish were conducted by Thorson in the 1970s and 1980s in Costa Rica and Nicaragua (Thorson, 1970; 1973; 1974; 1976a; 1976b; 1978; 1982a; 1982b; 1987; Thorson et al., 1966a; 1966b). While many live largetooth sawfish were tagged by Thorson in this time period, it seems that most of the biological data were obtained from dead specimens that were purchased from commercial fishers. Most areas where the largetooth sawfish now occurs suffer from lack of biological sampling due to logistical difficulties and most likely low research funding. However, there is some scientific information being collected by researchers in Brazil, mostly from fish markets, where sawfishes are illegally landed and sold.

No commercial or scientific data exists on diseases that may affect the largetooth sawfish and all information related to predation is listed above in the “Largetooth Sawfish Natural History” section. There is no evidence that unusual levels of disease or predation are a threat to the species.

Protective measures covering trade in the largetooth sawfish ( P. perotteti ) are implemented internationally under Appendix I of CITES, making non-domestic trade of parts or whole animals illegal. Additional Federal, state, and national laws in the United States, Nicaragua, and Brazil are designed to protect the species from harvest and sale locally and internationally. The Nicaraguan government officially banned commercial fishing for largetooth sawfish in Lake Nicaragua in 2006. The Brazilian Environment Ministry listed P. perotteti in Appendix I of the “Instrucao Normativa numero 05,” meaning that the species is considered endangered and therefore cannot be landed or sold. Enforcement of these regulations in Brazil and Nicaragua is difficult due to the length of the coastline, extensive internal waterways, lack of enforcement personnel, and the need for more efficient tools. Sawfish abundance within other parts of their current range is depleted so targeted fisheries are unlikely; however, those caught as bycatch are probably kept due to their value. Thus, illegal foreign trade of sawfish parts may be ongoing (efforts may be reduced due to CITES), in Nicaragua and Brazil and elsewhere, in spite of the CITES listing and national laws, due to lack of enforcement and the high value of sawfish parts.

The status of largetooth sawfish protection in western Africa is mostly unknown, though Guinnea-Bissau has created six official Protected Areas, which were established in 2005 (UNEP, 2008). Among these areas are several island chains and deltas with intertidal muddy sand banks and mangroves, which are ideal sawfish habitat. Nevertheless, existing regulations in this part of the world may be inadequate to protect and restore populations of largetooth sawfish.

Though not currently found in U.S. waters, existing regulations and measures put in place to protect the smalltooth sawfish could also benefit the largetooth sawfish, should it return into the northern most extent of its historical range in North America. The U.S. DPS of smalltooth sawfish ( P. pectinata ) was listed as endangered on April 1, 2003. Both the smalltooth and largetooth sawfish are susceptible to similar threats (e.g., bycatch in various fisheries and habitat loss) so protections for the smalltooth sawfish will benefit the largetooth sawfish. In response to the listing of the U.S. DPS of smalltooth sawfish, Texas implemented a ban on harvest of largetooth sawfish because of the possibility of misidentification. The trading of any largetooth sawfish parts is banned by state laws in both Florida and Louisiana. No directed research for largetooth sawfish is ongoing in Texas, but Texas Parks and Wildlife Department (TPWD) is conducting surveys which could capture sawfish in Texas waters. TPWD has ongoing standardized fisheries independent and dependent monitoring programs in all of the bay systems and in the Gulf of Mexico along the Texas coastline for the last 35 years. The surveys are conducted using seines, trawls, and gill nets annually. These are all gears that have been found to entangle sawfish. Only two sawfish have been recorded during the sampling and they were both smalltooth sawfish. Additionally, Florida (only in the Gulf of Mexico) and Texas do not allow gillnet fishing in state waters less than 9 miles (14.5 km) from shore, and Alabama restricts gillnet fishing within less than 3.5 miles (5.6 km) from shore.

In summary, the high value of sawfish parts, weak enforcement, and lack of adequate protections for largetooth sawfish habitat mean that existing regulations are inadequate to protect the species from further declines.

Largetooth sawfish have slow growth rates, late maturity, a long life span, and low fecundity rates. The largetooth sawfish is a more k-selected type species, with an intrinsic rate of population increase below 1.0 (Simpfendorfer, 2000). K-selected animals are usually successful at maintaining relatively small, persistent population sizes in relatively constant environments. Conversely, they are not able to respond rapidly to additional sources of mortality, such as overexploitation and habitat degradation. Because of this, the risk of extinction remains high without effective conservation plans put into place.

Red tide may also be a human amplified factor that could affect the species. Red tide is caused by an increase of toxic, naturally occurring microscopic blooms of plankton and is a coastal phenomenon which is caused by environmental conditions. Factors that are especially favorable include warm surface temperatures, high nutrient content, low salinity, and calm seas. Rain followed by sunny weather in the summer months is often associated with red tide blooms. We do not have specific information on red tide effects upon largetooth sawfish but we do have a report of a smalltooth sawfish that was found dead along the west coast of Florida during a red tide event (National Sawfish Encounter Database, 2009).

After considering the 5 factors above from section 4(a)(1) of the ESA we determined that the species is in danger of extinction throughout all of its range.

As a requirement of the ESA, current or future conservation efforts that have yet to be implemented or to show effectiveness to protect and recover largetooth sawfish must be evaluated under the PECE Policy (see above). This policy is designed to determine whether any conservation efforts that have been recently adopted or implemented or proposed, but not yet proven to be successful, will result in recovering the species to the point at which listing is not warranted or contribute to forming a basis for listing a species as threatened rather than endangered (68 FR 15101; March 28, 2003). The PECE policy established two basic criteria to be met before an action could be considered to help improve the conservation status of a species: (1) The certainty that the conservation efforts will be implemented, and (2) the certainty that the efforts will be effective.

Ongoing conservation efforts for the smalltooth sawfish may benefit the conservation of the largetooth sawfish if it returns to U.S. waters. The Smalltooth Sawfish Recovery Plan was finalized in 2009. The Smalltooth Sawfish Recovery Plan lays out specific guidelines for federal and state agencies to follow. Among the recovery plan's objectives are to minimize harm caused by human interactions and to protect and restore habitats. Since both species are susceptible to similar threats, implementation of the Smalltooth Sawfish Recovery Plan will provide conservation benefits for the largetooth sawfish if it returns to U.S. waters. Additionally, in 2010, NOAA funded coastal restoration activities in Texas and Louisiana using appropriations from The American Recovery and Reinvestment Act of 2009, which will restore habitats used by sawfish when completed. Both of these projects meet the criteria of the PECE for certainty of implementation and effectiveness. However, we have determined that these conservation efforts will not alter the extinction risk of the species.

NMFS is responsible for determining whether the largetooth sawfish ( P. perotteti ) is threatened or endangered under the ESA (16 U.S.C. 1531 et seq. ) Accordingly, we have followed a stepwise approach as outlined above in making this listing determination for the largetooth sawfish. We determined that P. perotteti is a valid species with a range in the eastern and western Atlantic Ocean. We then reviewed the status of the species and the threats to its status using the five-factor analysis described above. Next, we assessed efforts being made to protect the species, determining if these efforts are adequate to mitigate existing threats.

The largetooth sawfish ( P. perotteti ) faces ongoing threats from habitat alteration, bycatch, trade, and the inadequacy of existing regulatory mechanisms to address and reduce habitat alterations, bycatch, and trade. The species range has constricted so that it has not been seen in the U.S. since 1961. A similar range constriction is apparent at the southern extreme of the species' historical range. The species has not been reported from southern Brazil for almost a century. All of the threats attributed to the species decline are ongoing, except for the directed largetooth sawfish fishery in Lake Nicaragua. The Lake Nicaragua fishery collapsed presumably when the sawfish population collapsed. These ongoing threats exist throughout the species current range (Central and South America and West Africa) and existing regulatory mechanisms in place are insufficient to protect the species from further decline. No current or proposed conservation activities will be enough to sufficiently improve the species status. Based on our review, therefore, we find that the species is in danger of extinction throughout all of its range and should be listed as endangered.

Conservation measures provided for species listed as endangered or threatened under the ESA include recovery actions (16 U.S.C. 1533(f)), Federal agency consultation requirements (16 U.S.C. 1536), and prohibitions on taking and, where appropriate, critical habitat designations (16 U.S.C. 1538). Recognition of the species' plight through listing promotes conservation actions by Federal and state agencies, foreign entities, private groups, and individuals.

Section 7(a)(2) of the ESA requires Federal agencies to consult with NMFS to ensure that activities authorized, funded, or carried out by those agencies are not likely to jeopardize the continued existence of the species or destroy or adversely modify critical habitat. We anticipate very few section 7 consultation requirements for Federal agencies given the species' current distribution and abundance.

Critical habitat is defined in section 3 of the ESA (16 U.S.C. 1532(5)) as: (1) The specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the ESA, on which are found those physical or biological features (a) essential to the conservation of the species and (b) that may require special management considerations or protection; and (2) specific areas outside the geographical area occupied by a species at the time it is listed in accordance with the provisions of section 4 of the Act, upon a determination that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures needed to bring the species to the point at which listing under the ESA is no longer necessary. Regulations require that we shall designate critical habitat in areas outside the geographical area presently occupied by a species only when a designation limited to its present range would be inadequate to ensure the conservation of the species (50 CFR 424.12 (e)). We cannot designate critical habitat in foreign countries or other areas outside U.S. jurisdiction (50 CFR 424.12 (h)).

The best available scientific and commercial data, as discussed above, identifies the geographical area occupied by P. perotteti as Central and South America and West Africa. Since these areas are entirely outside U.S. jurisdiction, we cannot designate critical habitat in the geographical area occupied by the species. We can designate critical habitat in unoccupied areas in the U.S.

Section 3(5)(C) of the ESA specifies that except in those circumstances determined by the Secretary, critical habitat shall not include the entire geographical area which can be occupied by the threatened or endangered species. We do not consider this section to stop or prevent the designation of unoccupied critical habitat because we are restricted from designating critical habitat outside U.S. jurisdiction.

In evaluating the applicability of section 3 of the ESA (16 U.S.C. 1532(5)) for unoccupied critical habitat, we must determine that the specific areas outside the geographical area occupied by the species at the time it is listed, are essential to the conservation of the species. Very little information is available on the specific areas occupied historically by P. perotteti in U.S. waters. Information in the status review document suggests the species made narrow seasonal migrations into U.S. waters. The majority of the records of the largetooth sawfish in U.S. waters are from three regions in Texas: Padre Island-Laguna Madre, Corpus Christi-Port Aransas, and Galveston-Freeport. The highest concentration of the species was in the Galveston area. Additionally, we believe that based on historic rarity of the species in U.S. waters, and since the U.S. represented a very limited portion of the species historic range, re-establishment back into U.S. waters is not required for the species recovery. We have reviewed all of the best available scientific and commercial data on P. perotteti and its habitat and cannot identify a specific unoccupied area or areas in the U.S. that are essential to the conservation of the species.

In summary, the best available scientific and commercial information on the species does not indicate that unoccupied area(s) are essential to the conservation of P. perotteti, therefore, no critical habitat designation is currently being proposed.

ESA section 9(a) and 16 U.S.C. 1538 (a)(1)(B) take prohibitions apply to all species listed as endangered. These include prohibitions against the import, export, use in foreign commerce, or “take” of the species. Take is defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” These prohibitions apply to all persons subject to the jurisdiction of the United States, including in the U.S. or on the high seas.

On July 1, 1994, we and the USFWS published a series of policies regarding listings under the ESA, including a policy to identify, to the maximum extent possible, those activities that would or would not constitute a violation of section 9 of the ESA (59 FR34272). The intent of this policy is to increase public awareness of the effect of this listing on proposed and ongoing activities within the species' range. We identify, to the extent known, specific activities that will not be considered likely to result in violation of ESA section 9, as well as activities that will be considered likely to result in violation. Activities that we believe could result in violation of section 9 prohibitions against “take” of the largetooth sawfish include, but are not limited to, the following: (1) Importation, (2) exportation, (3) take any such species within the U.S. or the territorially seas of the U.S., (4) sale, (5) delivery that directly or indirectly affect endangered species, and (6) take any such species on the high seas. These prohibitions apply to all individuals, organizations, and agencies subject to U.S. jurisdiction.

ESA sections 10(a)(1)(A) and 10(a)(1)(B) provide NMFS with authority to grant exceptions to the section 9 take prohibitions. Section 10(a)(1)(A) scientific research and enhancement permits may be issued to entities (Federal and non-Federal) conducting research that involves a take of listed species. We have issued section 10(a)(1)(A) research and enhancement permits for other listed species for these purposes. ESA section 10(a)(1)(B) incidental take permits may be issued to non-Federal entities performing activities that may incidentally take listed species.

The ESA also provides some exceptions to the prohibitions, without permits, for certain antique articles and species held in captivity at the time of listing. ESA section 10(h) allows antique articles of listed species to be excluded from essentially all the ESA prohibitions as long as they are at least 100 years old and meet certain other specified conditions. Section 9(b)(1) provides a narrow exemption for animals held in captivity at the time of listing: those animals are not subject to the import/export prohibition or to protective regulations adopted by the Secretary, so long as the holding of the species in captivity, before and after listing, is not in the course of a commercial activity; however, 180 days after listing there is a rebuttable presumption that the exemption does not apply. Thus, in order to apply this exemption, the burden of proof for confirming the status of animals held in captivity prior to listing lies with the holder. The section 9(b)(1) exemption for captive wildlife would not apply to any progeny of the captive animals that may be produced post-listing.

On July 1, 1994, NMFS and USFWS published a series of policies regarding listings under the ESA, including a policy for peer review of scientific data (59 FR 34270; July 1, 1994), the Office of Management and Budget (2004) Bulletin on Peer Review. The intent of the peer review policies is to ensure that listings are based on the best scientific and commercial data available. We formally solicited the expert opinion of four appropriate and independent specialists regarding scientific or commercial data or assumptions related to the information considered for listing. We conclude that these experts' reviews satisfy the requirements for “adequate [prior] peer review” contained in the Bulletin (sec. II.2.) as well as the Services joint policy.

A complete list of the references used in this final rule is available upon request (see ADDRESSES ).

The 1982 amendments to the ESA, in section 4(b)(1)(A), restrict the information that may be considered when assessing species for listing. Based on this limitation of criteria for a listing decision and the opinion in Pacific Legal Foundation v. Andrus, 675 F. 2d 825 (6th Cir. 1981), we have concluded that ESA listing actions are not subject to the environmental assessment requirements of the National Environmental Policy Act (NEPA) (See NOAA Administrative Order 216-6).

As noted in the Conference Report on the 1982 amendments to the ESA, economic impacts cannot be considered when assessing the status of a species. Therefore, the economic analysis requirements of the Regulatory Flexibility Act are not applicable to the listing process. In addition, this final rule is exempt from review under Executive Order 12866. This final rule does not contain a collection-of-information requirement for the purposes of the Paperwork Reduction Act.

E.O. 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific consultation directives for situations where a regulation will preempt state law, or impose substantial direct compliance costs on state and local governments (unless required by statue). Neither of those circumstances is applicable to this final listing determination.

We have conferred with the U.S. Department of State to ensure appropriate notice is given to foreign nations within the range of the species. We intend to continue engaging in informal and formal contacts with the U.S. State Department.

For the reasons set out in the preamble, 50 CFR part 224 is amended as follows:

This document announces that based on the best available information recently obtained from the fishery and information on past effort, the directed fishing harvest allocation for the second allocation period (July 1-September 14) will be reached and therefore directed fishing for Pacific sardine is being closed until September 15, 2011. Fishing vessels must be at shore and in the process of offloading at the time of closure. From 12:01 a.m., July 12, 2011 through September 14, 2011, Pacific sardine may be harvested only as part of the live bait fishery or incidental to other fisheries, with the incidental harvest of Pacific sardine limited to 30-percent by weight of all fish caught during a trip.

NMFS manages the Pacific sardine fishery in the U.S. exclusive economic zone (EEZ) off the Pacific coast (California, Oregon, and Washington) in accordance with the Coastal Pelagic Species (CPS) Fishery Management Plan (FMP). Annual specifications published in the Federal Register establish the harvest guideline (HG) and allowable harvest levels for each Pacific sardine fishing season (January 1-December 31). If during any of the seasonal allocation periods the applicable adjusted directed harvest allocation is projected to be taken only incidental harvest is allowed, and for the remainder of the period, any incidental Pacific sardine landings will be counted against that period's incidental set aside. In the event that an incidental set-aside is projected to be attained, all fisheries will be closed to the retention of Pacific sardine for the remainder of the period via appropriate rulemaking.

Under 50 CFR 660.509, if the total HG or these apportionment levels for Pacific sardine are reached at any time, NMFS is required to close the Pacific sardine fishery via appropriate rulemaking and it is to remain closed until it re-opens either per the allocation scheme or the beginning of the next fishing season. In accordance with § 660.509 the Regional Administrator shall publish a notice in the Federal Register announcing the date of the closure of the directed fishery for Pacific sardine.

The above in-season harvest restrictions are not intended to affect the prosecution of the live bait portion of the Pacific sardine fishery.

This action is required by 50 CFR 660.509 and is exempt from Office of Management and Budget review under Executive Order 12866.

NMFS finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) for the closure of the directed harvest of Pacific sardine. For the reasons set forth below, notice and comment procedures are impracticable and contrary to the public interest. For the same reasons, NMFS also finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effectiveness for this action. This measure responds to the best available information and is necessary for the conservation and management of the Pacific sardine resource. A delay in effectiveness would cause the fishery to exceed the in-season harvest level. These seasonal harvest levels are important mechanisms in preventing overfishing and managing the fishery at optimum yield. The established directed and incidental harvest allocations are designed to allow fair and equitable opportunity to the resource by all sectors of the Pacific sardine fishery and to allow access to other profitable CPS fisheries, such as squid and Pacific mackerel.

Many of the same fishermen who harvest Pacific sardine rely on these other fisheries for a significant portion of their income.

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

The 2011 PSR sideboard limit established for Amendment 80 vessels subject to sideboard limits in the Western Regulatory Area of the GOA is 467 metric tons (mt), as established by the 2011 and 2012 harvest specifications for groundfish of the GOA (76 FR 11111, March 1, 2011).

In accordance with § 679.20(d)(1)(v)(A), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the PSR sideboard limit established for Amendment 80 vessels subject to sideboard limits in the Western Regulatory Area of the GOA is sufficient to support a directed fishing allowance. Therefore, the Regional Administrator is establishing a sideboard directed fishing allowance for PSR as 462 mt in the Western Regulatory Area of the Gulf of Alaska. The remaining 5 mt in the Western Regulatory Area of the Gulf of Alaska will be set aside as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(v)(C), the Regional Administrator finds that this Amendment 80 sideboard directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for the 2011 PSR sideboard limit by Amendment 80 vessels subject to sideboard limits in the Western Regulatory Area of the GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of PSR by Amendment 80 vessels subject to sideboard limits in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 6, 2011.

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

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

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

The 2011 TAC of northern rockfish in the Western Regulatory Area of the GOA is 2,573 metric tons (mt) as established by the final 2011 and 2012 harvest specifications for groundfish of the GOA (76 FR 11111, March 1, 2011).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2011 TAC of northern rockfish in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 2,473 mt, and is setting aside the remaining 100 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for northern rockfish in the Western Regulatory Area of the GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of northern rockfish in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 6, 2011.

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

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

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

NMFS closed directed fishing for Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA under § 679.20(d)(1)(iii) on July 3, 2011 (publication in the Federal Register pending).

NMFS has determined that approximately 190 metric tons of Pacific ocean perch remain in the directed fishing allowance. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C), and (a)(2)(iii)(D), and to fully utilize the 2011 directed fishing for Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA, NMFS is terminating the previous closure and is reopening directed fishing for Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA. This will enhance the socioeconomic well-being of harvesters dependent upon Pacific ocean perch in this area. The Administrator, Alaska Region (Regional Administrator) considered the following factors in reaching this decision: (1) The current catch of Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery and, (2) the harvest capacity and stated intent on future harvesting patterns of vessels participating in this fishery.

In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance will be reached after 48 hours. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA effective 1200 hrs, A.l.t., July 9, 2011.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent and relevant data only became available as of July 6, 2011.

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

Without this in-season adjustment, NMFS could not allow the fishery for Pacific ocean perch by trawl catcher vessels participating in the rockfish entry level fishery in the Central Regulatory Area of the GOA to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until July 22, 2011.

This action is required by § 679.20 and § 679.25 and is exempt from review under Executive Order 12866.