The Engine and Propeller Directorate (EPD) of the Aircraft Certification Service has engaged in discussions with the public regarding compliance with § 33.7 for new fuel and oil certification projects. As a result of those discussions the EPD made a draft policy memorandum available to the public for comment. The draft policy memorandum proposed guidance for Aircraft Certification Offices (ACOs) and the Engine Certification Office (ECO) when evaluating compliance with the standards for aviation fuel and oil operating limitations of Part 33 of Title 14 of the Code of Federal Regulations (14 CFR part 33). The draft policy specifically addressed compliance with paragraphs (b)(2), (b)(3), (c)(2), and (c)(3) of § 33.7 for engine type certification, major design change, and supplemental type certification projects.

The draft was made available on March 8, 2010, and after evaluating the comments received, the EPD posted a final policy memorandum to FAA's Regulatory and Guidance Library (RGL) on July 7, 2011. The final policy memorandum differed from the draft policy in three respects. First, the final policy contained some non-material additions, edits, and formatting changes principally to recognize the role that military standards play in evaluating compliance with § 33.7, and added an additional ATSM International (ASTM) standard to the list of recognized standards. Second, the format of paragraph 4.c. of the final memorandum was changed so as to clarify that the new policy memorandum does not materially alter the current position of the EPD to (1) accept as an adequate demonstration of compliance to § 33.7 an ASTM or Society of Automotive Engineers (SAE) standard, and (2) more precisely define the standard specifications considered equivalent to an ASTM or SAE standard specification. And, third, to add a new paragraph 4.d., which replaced the proposed paragraph 4.d., that more accurately described the EPD's oversight role in such projects by clarifying that all projects to add fuels or lubricants as operating limitations are significant, rather than just those that propose the use of equivalent specifications. That policy memorandum was posted to RGL as policy ANE-2010-33.7-5, dated July 7, 2011.

After the final policy posted to RGL, the FAA received a number of questions from the public concerning the revision to draft paragraph 4.d., which had contained a statement that certification projects that do not propose to use an ATSM or SAE standard would be evaluated by the EPD to determine equivalency to the historically used standards. The final policy memorandum relied on a sentence in paragraph 5 to cover that statement in draft paragraph 4.d. As stated above, this change more accurately described the EPD's role in the oversight of projects to add fuels or lubricants as operating limitations. The EPD intended that the specific guidance for proposals not based on industry consensus standards was accommodated by the existing language in paragraph 5 of the memo, and, therefore, it was unnecessary to duplicate that specific guidance in paragraph 4.d. The elimination of the specific guidance regarding proposals not based on industry consensus standards was not intended to imply that the FAA would summarily reject those so-called non-standard proposals. As significant projects, the EPD would continue to address all projects to add fuels or lubricants as operating limitations on a case by case basis in order to rationally evaluate their demonstration of compliance with § 33.7, which is consistent with the current practice. With the above changes, the published version of the memo neither explicitly accepted nor rejected those projects outside the scope of the specific policy, such as the non-standard proposals. However, Paragraph 5 of the memo maintained the accommodation of those projects by specifying they be coordinated with the EPD, which was consistent with the intent of the original version of the policy memo.

Even though the EPD did not intend any material change in the policy from the revised wording of proposed paragraph 4.d., the EPD has elected to withdraw the final policy memorandum ANE-2010-33.7-5, dated July 7, 2011, and to re-post to the RGL an amended final policy that returns paragraphs 4.c. and 4.d. to the form that appeared in the draft policy and eliminates the new paragraph 4.d. This amended final policy memorandum was posted to the RGL on July 26, 2011, as policy ANE-2010-33.7-5A.

Discussion

On June 16, 2011, we issued AD 2011-12-51, Amendment 39-16735 (76 FR 37251, June 27, 2011). To address an unsafe condition, that AD prohibited operation of the affected airplanes. That AD corresponds to Emergency Airworthiness Directive 2011-0102-E, dated May 26, 2011, issued by the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, to correct an unsafe condition for the specified products.

Since we issued AD 2011-12-51, we have been advised of the development of new modifications that will address the unsafe condition. We have determined that these modifications are necessary to allow these airplanes to resume operation. The EASA issued Emergency AD 2011-0114-E, dated June 16, 2011, to supersede AD 2011-0102-E. The EASA subsequently revised that AD with EASA AD 2011-0114R1, dated June 23, 2011. The EASA subsequently revised that AD with EASA AD 2011-0114R2, dated July 7, 2011 (referred to after this as “the MCAI”), which states:

Dassault has issued Mandatory Service Bulletin 7X-211, Revision 2, including New Standard Installation Checklist and Appendix A, dated June 22, 2011, including FCS Data Loading Procedure, Issue D, dated May 28, 2010; Mandatory Service Bulletin 7X-212, Revision 2, dated July 7, 2011; Service Bulletin 7X-213, dated June 22, 2011; Falcon 7X Airplane Flight Manual, Revision 12, dated June 16, 2011; and Dassault Aviation, Falcon 7X Maintenance Manual, Falcon 7X—Chapter 5-40-00 after Rev 01, dated June 10, 2011 (Commonly referred to as Dassault Change Proposal (CP) CP009 to Chapter 5-40-00 of Dassault Falcon 7X Maintenance Manual). The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

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

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

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because of the possibility of an uncontrolled pitch trim runaway during descent, which could result in loss of control of the airplane. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2011-0631; Directorate Identifier 2011-NM-134-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

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

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

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

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

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

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

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to the specified products. That NPRM published in the Federal Register on February 10, 2011 (76 FR 7513). The NPRM proposed a general visual inspection for cracks and holes of the main equipment center (MEC) drip shields, and repairs if necessary; installation of a fiberglass reinforcing overcoat; and, for certain airplanes, installation of stiffening panels to the MEC drip shields.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal and the FAA's response to each comment.

Both UPS and Boeing requested that we revise the NPRM to require that actions be done in accordance with Boeing Alert Service Bulletin 747-25A3588, Revision 1, dated April 7, 2011. The NPRM referred to Boeing Alert Service Bulletin 747-25A3588, dated July 19, 2010, as the appropriate source of service information for the required actions.

We agree. Boeing Alert Service Bulletin 747-25A3588, Revision 1, dated April 7, 2011, removes airplane RT101 from this service information effectivity and provides operators with additional material options. The procedures remain unchanged. We revised paragraphs (c), (g), (g)(1), and (g)(2) in this final rule to refer to Boeing Alert Service Bulletin 747-25A3588, Revision 1, dated April 7, 2011. We added new paragraph (h) to the final rule to give credit for actions done before the effective date of this AD in accordance with Boeing Alert Service Bulletin 747-25A3588, dated July 19, 2010, and re-identified subsequent paragraphs accordingly.

UPS stated concern with Boeing's ability to provide adequate modification kits to all affected operators within the proposed 24-month compliance time. UPS justified its concern by stating that the NPRM acknowledges it would affect an estimated 41 airplanes of U.S. registry. UPS stated that worldwide, there are more than 150 Model 747-400F airplanes that are affected by the referenced service information and many may attempt to accomplish this modification within the 24-month compliance time. At the time, Boeing had indicated it had materials available to produce only 6 kits, and will require 190 days lead time to replenish the stock. As the referenced service information specifies to install the parts provided in the kit by part number, an alternative method of compliance (AMOC) would be required for any operators needing to fabricate their own modification parts from raw materials, if Boeing is unable to provide the required modification kits in a timely basis for the proposed installation.

We infer that UPS is requesting that we extend the proposed compliance time. Boeing Alert Service Bulletin 747-25A3588, dated July 19, 2010; and Revision 1, dated April 7, 2011; were both coordinated between Boeing and the FAA. Proposed methods of compliance and the compliance time were weighed versus uncorrected risks in determining an acceptable and feasible corrective action. Boeing is most familiar with its ability to supply operators with instructions and kits to meet AD compliance, and determined it would be capable of reasonably achieving a 24-month compliance time with the proposed methods, when both Boeing Alert Service Bulletin 747-25A3588, dated July 19, 2010; and Revision 1, dated April 7, 2011; were drafted and approved. Although kits may not be available immediately for every airplane, Boeing has advised us that it is capable of creating and delivering additional kits for operators to use within the AD compliance time.

Once we issue this AD, any person may request approval of an AMOC under the provisions of paragraph (i) of this AD. We have not changed this AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the change described previously. We also determined that this change will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 41 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary repairs that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these repairs.

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(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),

(3) Will not affect intrastate aviation in Alaska, and

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on May 4, 2011 (76 FR 25259). That NPRM proposed to correct an unsafe condition for the specified products.

The MCAI for Model A300-600 and A310 series airplanes states:

The MCAI for Model A318, A319, A320, and A321 series airplanes states:

The MCAI for Model A330 and A340 series airplanes states:

You may obtain further information by examining the MCAI in the AD docket.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

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

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

Based on the service information, we estimate that this AD will affect about 1,004 products of U.S. registry. We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $100 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the AD on U.S. operators to be $271,080, or $270 per product.

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

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

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

History

On June 7, 2011, the FAA published in the Federal Register a notice of proposed rulemaking to modify controlled airspace at Forsyth, MT (76 FR 32879). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

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 Part 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 modifying Class E airspace extending upward from 700 feet above the surface, at Tillitt Field Airport, Forsyth, MT, to accommodate IFR aircraft executing RNAV (GPS) standard instrument approach procedures at the airport. This action also corrects a typographical error in the regulatory text of the Class E airspace area by correcting `lat. 46°05′00″ N., long. 106°210′3″ W.' to `lat. 46°05′ 00″ N., long. 106°21′ 03″ W.'. This action is necessary for the safety and management of IFR operations. Except for administrative changes, and the changes listed above, this rule is the same as that proposed in the NPRM.

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 additional controlled airspace at Tillitt Field Airport, Forsyth, MT.

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

The Virginia Graeme Baker Pool and Spa Safety Act (VGB Act), 15 U.S.C. 8001 et seq., was signed into law on December 19, 2007, and became effective on December 19, 2008. The VGB Act's purpose is to prevent drain entrapment and child drowning in swimming pools and spas.

The VGB Act requires that each swimming pool or spa drain cover manufactured, distributed, or entered into commerce in the United States conform to the entrapment protection standards of the ANSI/ASME A112.19.8 performance standard or any successor standard regulating such swimming pool or spa drain cover. 15 U.S.C. 8003(b). The standard in existence at the time the VGB Act was passed was ANSI/ASME A112.19.8-2007. The VGB Act provides that if a successor standard is proposed, ASME must notify the Commission of the proposed revision. Id. The Commission, if it determines that the proposed revision is in the public interest, shall incorporate the revision into the standard, after providing 30 days' notice to the public. Id.

On August 11, 2008 and October 22, 2009, ASME approved two addenda to ANSI/ASME A112.19.8-2007, namely, ASME A112.19.8a-2008 and ASME A112.19.8b-2009 (collectively referred to herein as “addenda”). On February 17, 2011, the Association of Pool and Spa Professionals (APSP) approved the ANSI/APSP/IAPMO-16 2011 standard, a successor standard to ASME/ANSI A112.19.8-2007, which is substantively identical to ANSI/ASME A112.19.8-2007 and its two addenda. (In April 2011, IAPMO terminated its status as co-secretariat to the ANSI/APSP/IAPMO-16 2011 standard, so ANSI/APSP/IAPMO-16 2011 became ANSI/APSP-16 2011.) On March 18, 2011, ANSI/ASME began the process of withdrawing the A112.19.8-2007 standard. We have reviewed the successor standard, ANSI/APSP-16-2011, made comparisons to the requirements in ANSI/ASME A112.19.8-2007, and assessed whether the changes are in the public interest.

There were two substantive changes between the ANSI/ASME A112.19.8-2007 standard and ANSI/APSP-16 2011, each of which was made in the addenda to ANSI/ASME A112.19.8-2007. The other changes to the standard were minor and were made primarily to add clarity to the standard. We discuss the substantive changes in this part of the preamble.

The Ultraviolet Light Exposure Test (UV test) subjects the plastic drain fitting material to the damaging effects of UV rays that accompany sun exposure when the drains are installed in pools and spas. (“Fitting” is a term used in ANSI/ASME A112.19.8-2007 instead of “cover.” ANSI/ASME A112.19.8-2007 indicates that “cover” is an obsolete term.) Tests for the structural integrity of the drain fitting are performed after the drain fittings are exposed to UV light degradation. The structural integrity tests subject the drain fitting to forces expected under normal use and to excessive forces expected under extreme conditions.

In ANSI/ASME A112.19.8-2007, the UV test is conducted by a single method. According to section 3.2 of ANSI/ASME A112.19.8-2007, 12 new drain fittings are placed in a UV test chamber and exposed to UV light and water spray, according to the protocol in ASTM G154, Standard Practices for Operating Fluorescent Light Apparatus for UV Exposure of Non-metallic Materials. When the drain fitting is too large to fit in a test chamber, representative sections are tested to the intent of the structural integrity tests. This means that the test procedures in the structural integrity tests must be adapted to suit the diminished size/shape of the drain fitting section.

Changes to the UV testing were made in ANSI/ASME A112.19.8a-2008 and were carried over to ANSI/APSP-16 2011. ANSI/ASME A112.19.8a-2008 includes two UV test methods. Test Method 1 follows the general full-sample UV exposure in ASME A112.19.8-2007, with the addition of two more choices for the UV exposure protocol, specifically, ASTM G155, Standard Practice for Operating Xenon Arc Light Apparatus for Exposure of Non-Metallic Materials; and ASTM G153, Standard Practice for Operating Enclosed Carbon Arc Light Apparatus for Exposure of Nonmetallic Materials. Test Method 2 is an alternate UV exposure test. Here, the fitting polymeric material is molded into small uniform specimens. Half of the specimens are exposed to UV light and water spray, and half are not exposed. The exposed and unexposed (virgin) material specimens are then tested for tensile strength and impact resistance. The samples of the material must retain at least 70% of the virgin value (meaning that the samples, when tested, must retain at least 70% of the tensile strength and impact resistance values of the unexposed material) when the tensile strength and impact resistance tests are performed. The intensification factor, K, is defined as the inverse of the lowest retained portion. Thus, for example, if 80% of the tensile strength is retained in the exposed material and 85% of the impact resistance, then the intensification factor is K=1/0.80=1.25.

Complete (as sold) fittings are then tested to the structural integrity tests in sections 3.3 through 3.8 in ANSI/ASME A112.19.8-2007. For Test Method 1, the UV-exposed drain fitting is tested in the structural tests to the forces and pressures specified. This is essentially the same procedure from the ASME A 112.19.8-2007 standard. For Test Method 2, the complete drain fitting, which has not been “weathered” in the UV exposure chamber, is tested in the structural tests to the forces and pressures specified, multiplied by the intensification factor, K. Because only the representative sample was weathered in the UV chamber, the intensification factor, K, is then used on the complete (as sold) fittings to simulate the weathering of the complete fitting. ANSI/APSP-16 2011 has substantially the same language and requirements for the Ultraviolet Light Exposure Test as the ASME A112.19.8a-2008 addendum.

The alternate Test Method 2 in ANSI/APSP-16 2011, incorporating the ANSI/ASME A112.19.8a-2008 Addendum, offers more consistent treatment for large drain fittings that do not fit into standard UV exposure chambers. The use of material tests to predict the structural integrity of entire products is an established industry protocol. We find that this change in test methods is in the public interest because it will enhance test repeatability for large drain fittings.

Self-contained spas are manufactured products that include drain fittings and pumps. UL 1563, Standard for Safety for Electric Spas, Equipment Assemblies, and Associated Equipment, Sixth Edition, July 16, 2009, requires that all suction fittings are flow rated to ANSI/ASME A112.19.8-2007 and are installed in multiples, such that the suction from the pump cannot be isolated to one blocked fitting. The relevance of UL 1563 is that it contains similar requirements for multiple layers of entrapment protection to those in the VGB Act, but in the controlled environment of a single manufactured system. In addition to multiple drains, UL 1563 requires that the suction fittings be installed with separation on different planes, more than 3 feet apart, or have a suction limiting vent or gravity drainage system. Thus, system flows are split between two or more suction fittings that cannot both be blocked by the same body. Similarly, for hair entanglement, the split flow reduces the flow and entrapment potential at each suction fitting. Because spas have limited available space, the split suction allows smaller suction fittings and at the same time maintains the high flows required for the function of the product.

In ANSI/ASME A112.19.8-2007, the product flow rating is the lesser of the ratings achieved in the hair and body entrapment tests in sections 4 and 5 of the standard. Each suction fitting is tested by direct connection to a test pump. Self-contained spa fittings are tested like any other suction fitting. The multiple-suction fitting requirements in UL 1563 are ignored. In ANSI/ASME A112.19.8-2007, the test flow is the total system flow from the pump and not the flow through individual suction fittings. As a result, suction fittings in self-contained spas that always perform in multiples are tested in isolation in ANSI/ASME A112.19.8-2007, without the mitigating effect of another source of water to the pump. The resultant flow ratings have been significantly lower in the hair tests, typically due to the hair entering and blocking the pipe behind the single spa suction fitting.

In ANSI/ASME A112.19.8b-2009, self-contained spa fittings are treated as a special case in the hair tests. In the new section 4.2.2.1, self-contained spa fittings are installed in pairs. One fitting is tested for hair entrapment, while the other is free flowing. The pull from the water is less because the pump can pull water from the unblocked suction fitting. The new test models the actual installation of self-contained spa fittings, as required in UL 1563. The body block test remains unchanged with no special treatment for spa fittings. ANSI/APSP-16 2011 has substantially the same language and requirements as ASME A112.19.8b-2009 for self-contained spa fittings.

ANSI/APSP-16 2011, incorporating the ASME A112.19.8b-2009 addendum, corrects a severe ratings test in ASME A112.19.8-2007 for self-contained spa fittings. Modeling the requirements in UL 1563 ensures that manufactured spa drains are not isolated with a pump and thus, have multiple layers of safety. This change in test methods recognizes the UL 1563 spa drain requirements and is a more representative test of actual manufactured spas. We find the change to be in the public interest.

Under the Administrative Procedure Act (5 U.S.C. 553(b)(B)), a notice of proposed rulemaking is not required when an agency, for good cause, finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. The successor standard, ANSI/APSP-16-2011, is substantively identical to ANSI/ASME A112.19.8-2007 and its two addenda, and, as stated in part A of this preamble, ASME is in the process of withdrawing ANSI/ASME A112.19.8-2007. It is, therefore, important to have a successor standard in place before ANSI/ASME completes its withdrawal of ANSI/ASME A112.19.8-2007 so that each swimming pool or spa drain cover manufactured, distributed, or entered into commerce in the United States continues to conform to entrapment protection standards. We are giving 30 days' notice of the incorporation of this successor standard by providing for an effective date 30 days following the rule's publication.

This rule does not impose any information collection requirements. Accordingly, this rule is not subject to the Paperwork Reduction Act, 44 U.S.C. 3501-3520.

The Commission's regulations provide a categorical exemption for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement as they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c)(2). This rule falls within the categorical exemption.

Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a “consumer product safety standard under [the CPSA]” is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the State requirement is identical to the Federal standard. (Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the Commission for an exemption from this preemption under certain circumstances.) Section 8003(a) of the VGB Act provides that the requirements in section 8003(b) of the VGB Act “shall be treated as a consumer product safety rule issued by the Consumer Product Safety Commission under the Consumer Product Safety Act.” Therefore, this rule will invoke the preemptive effect of section 26(a) of the CPSA when it becomes effective.

For the reasons stated above, the Commission amends title 16 of the Code of the Federal Regulations as follows:

We are adopting an updated EDGAR Filer Manual, Volume I, Volume II, and Volume III. The Filer Manual describes the technical formatting requirements for the preparation and submission of electronic filings through the EDGAR system. 1 It also describes the requirements for filing using EDGARLink Online, 2 and the Online Forms/XML Web site.

The revisions to the Filer Manual reflect changes within Volume I entitled EDGAR Filer Manual, Volume I: “General Information,” Version 10 (August 2011), Volume II entitled EDGAR Filer Manual, Volume II: “EDGAR Filing,” Version 17 (August 2011), and Volume III entitled EDGAR Filer Manual Volume III: “N-SAR Supplement” Version 2 (August 2011). The updated manual will be incorporated by reference into the Code of Federal Regulations.

The Filer Manual contains all the technical specifications for filers to submit filings using the EDGAR system. Filers must comply with the applicable provisions of the Filer Manual in order to assure the timely acceptance and processing of filings made in electronic format. 3 Filers may consult the Filer Manual in conjunction with our rules governing mandated electronic filing when preparing documents for electronic submission. 4

The EDGAR system will be upgraded to Release 11.2 on August 1, 2011 and will retire the offline EDGARLink tool and the associated templates. As communicated in a notice posted on April 26, 2011 on the Information for EDGAR Filers Web page ( http://www.sec.gov/info/edgar.shtml ), starting August 1, 2011, filings created by the offline tool EDGARLink client or those constructed by filers according to the EDGAR XFDL Technical Specification will no longer be accepted by EDGAR. The EDGARLink Online Application, available from the EDGAR Filing Web site ( https://www.edgarfiling.sec.gov/ ), must be used to file all submissions previously supported by the offline EDGARLink tool. Those filers that use the EDGAR XFDL Technical Specification to create filer-constructed submissions without the use of the EDGARLink tool, and wish to do the same outside of the EDGARLink Online Application, can do so by following the EDGARLink Online XML Technical Specification, available from the Information for EDGAR Filers Web page.

New submission form types 13H, 13H-A, 13H-Q, 13H-I, 13H-T, and 13H-R will be added to the EDGAR Filing Web site and will be available for use if the Commission adopts a final rule associated with Proposing Release No.34-61908. If adopted by the Commission, the submission form types will be accessible by selecting a “File 13H” link on the EDGAR Filing Web site. These non-public submissions will not be disseminated by EDGAR.

The Commission has proposed rulemaking that would amend Form N-PX so that institutional investment managers would be able to use Form N-PX to report their proxy votes on certain executive compensation matters. For institutional investment managers, new submission form types N-PX-CR, N-PX-NT, N-PX-VR and their amendments will be added on EDGARLink Online for use if the proposed amendments are adopted.

The Commission has also proposed rulemaking that would amend Form N-PX to add a new submission form type N-PX-FM for use by registered management investment companies that include proxy votes of institutional investment managers. New submission form type N-PX-FM will be added to EDGARLink Online for use if the proposed amendments are adopted. Additionally, existing EDGARLink Online submission form types N-PX and N-PX/A, will no longer support co-registrants and can only be filed by registered management investment companies. These submission types will be available to filers on November 1, 2011, or later, pending additional Commission rulemaking related to the amendments to Form N-PX.

The validation rules for submission form type N-MFP and its variants have been updated to require “Item 5” (Name of Administrator) and “Item 6” (Name of Transfer Agent) and to allow “Report Date” to be the last business day of the month or any calendar day of the month after the last business day of the month. Previously, the “Report Date” had to be the last business day of the month. In addition, Form N-MFP submissions will be disseminated 60 calendar days after the last calendar day of the Report Date month. Previously, they were disseminated 60 calendar days after the Report Date listed in the submission.

The OMB expiration date on Forms 3, 4, 5, and 25-NSE will be updated. Forms 3 and 4 will be updated to November 30, 2011; Form 5 will be updated to January 31, 2014; and Form 25-NSE will be updated to January 31, 2012.

The Point-to-Point Protocol transmission method, used to connect to the EDGAR Filing Web site using direct dial lines via modem in case Internet is not available, will be terminated. Filers will use the EDGAR Filing Web site, via the Internet, to submit filings in EDGAR.

Four additional applicant types will be available for the filers to select when completing the Form ID to apply for EDGAR access codes. These additional applicant types are Institutional Investment Manager (Form 13F Filer), Investment Company (or insurance product separate account) or Business Development Company, Large Trader, and Non-Investment Company Applicant under the 1940 Act.

The filer manual is also being revised to address software changes made previously in EDGAR. The updates include addition of new 8-K Item 1.04 (Mine Safety—Reporting of Shutdowns and Patterns of Violations) and addition of new Exhibit 95 (Mine Safety Disclosure Exhibit) for submission form types 10-K, 10-K/A, 10-KT, 10-KT/A, 10-Q, 10-Q/A, 10-QT, 10-QT/A, 20-F, 20-F/A, 40-F, and 40-F/A5. The 8-K Item and the Exhibit 95 will be available for use if the Commission adopts a final rule associated with Proposing Release No. 34-63548.

Filers may upload the required notarized authentication document in PDF when completing the process to “Convert Paper Only Filer to Electronic Filer” from the EDGAR Filer Management Web site ( https://www.filer management.edgarfiling.sec.gov ).

Because the Commission establishes a company record on EDGAR for approved Broker-Dealer Registration Applications and creates a central index key (CIK) for that company, Broker-dealers, who may be required to file certain forms electronically on EDGAR, should complete the process to “Convert Paper Only Filer to Electronic Filer”, from the EDGAR Filer Management Web site, instead of completing the Form ID (see EDGAR Filer Manual, Volume I, General Information for details). This is because the Form ID should be completed by those for which a CIK has not already been established on EDGAR. Once a Broker-Dealer has completed this process and received the necessary access codes, they will be able to file electronically on EDGAR.

In addition, EDGAR was previously updated to support the US GAAP 2011 Taxonomy. And, Appendix G has been revised to give clearer guidance to Form 13F filers to facilitate the correct preparation, assembling, and submission of these filings.

Along with adoption of the Filer Manual, we are amending Rule 301 of Regulation S-T to provide for the incorporation by reference into the Code of Federal Regulations of today's revisions. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.

You may obtain paper copies of the updated Filer Manual at the following address: Public Reference Room, U.S. Securities and Exchange Commission, 100 F Street, NE., Room 1543, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. We will post electronic format copies on the Commission's Web site; the address for the Filer Manual is http://www.sec.gov/info/edgar.shtml.

Since the Filer Manual relates solely to agency procedures or practice, publication for notice and comment is not required under the Administrative Procedure Act (APA). 6 It follows that the requirements of the Regulatory Flexibility Act  7 do not apply.

The effective date for the updated Filer Manual and the rule amendments is August 5, 2011. In accordance with the APA, 8 we find that there is good cause to establish an effective date less than 30 days after publication of these rules. The EDGAR system upgrade to Release 11.2 is scheduled to become available on August 1, 2011. The Commission believes that establishing an effective date less than 30 days after publication of these rules is necessary to coordinate the effectiveness of the updated Filer Manual with the system upgrade.

We are adopting the amendments to Regulation S-T under Sections 6, 7, 8, 10, and 19(a) of the Securities Act of 1933, 9 Sections 3, 12, 13, 14, 15, 23, and 35A of the Securities Exchange Act of 1934, 10 Section 319 of the Trust Indenture Act of 1939, 11 and Sections 8, 30, 31, and 38 of the Investment Company Act of 1940. 12

In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:

The Route 1 & 9 Bridge has a vertical clearance of 40 feet at mean high water, and 45 feet at mean low water in the closed position. The existing drawbridge operating regulations are listed at 33 CFR 117.739(b). The waterway is predominantly used by commercial operators.

On December 13, 2010, the owner of the bridge, New Jersey Department of Transportation, requested a temporary deviation to facilitate bridge painting operations.

On January 27, 2011, the Coast Guard published a temporary deviation (76 FR 4819) from the operation regulations. The temporary deviation allowed the bridge owner to require a two hour advance notice for bridge openings and several closures of short duration to facilitate bridge painting.

As a result of severe winter weather in 2011, the bridge painting project fell behind schedule; therefore, the bridge painting work will not be completed by July 31, 2011, when the first temporary deviation will expire.

We received a request for a second temporary deviation from the bridge owner on June 13, 2011, requesting authorization to allow the bridge to remain in the closed position from August 1, 2011 through September 30, 2011, to facilitate completion of the bridge painting work. We were not able to grant a temporary deviation for the additional 60 days requested because that would exceed the maximum of 180 days allowable for temporary deviations from the operation regulations.

Therefore, under this temporary deviation the bridge may remain in the closed position for 58 days from August 1, 2011 through September 27, 2011, to facilitate completion of the bridge painting. Vessels able to pass under the closed draw may do so at any time.

The waterway users were advised of the second 58 day temporary deviation necessary to complete the bridge painting. No objections were received.

In accordance with 33 CFR 117.35(e), the bridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Coast Guard did not receive necessary information regarding the fireworks display until July 14, 2011. As a result, the Coast Guard did not have sufficient time to publish an NPRM and to receive public comments prior to the fireworks display. Any delay in the effective date of this rule would be contrary to the public interest because immediate action is needed to minimize potential danger to the public during the fireworks display.

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

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

On September 3, 2011, a Labor Day weekend fireworks display is scheduled to take place in Myrtle Beach, South Carolina. The fireworks will be launched from Apache Pier, which is located on the Atlantic Ocean. The fireworks display is scheduled to commence at 9:30 p.m. and conclude at 9:45 p.m.

The safety zone encompasses all waters of the Atlantic Ocean within a radius of 1,000 feet of Apache Pier in Myrtle Beach, South Carolina. This safety zone will be enforced from 9 p.m. on September 3, 2011, 30 minutes prior to the scheduled commencement of the fireworks display at approximately 9:30 p.m., to ensure the safety zone is clear of persons and vessels. Enforcement of the safety zone would cease at 10:15 p.m. on November 19, 2011, 30 minutes after the scheduled conclusion of the fireworks display, to account for possible delays. If the event is postponed due to inclement weather, then this rule will be enforced from 9 p.m. until 10:15 p.m. on September 4, 2011.

Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port Charleston or a designated representative. Persons and vessels desiring to enter, transit through, anchor in, or remain within the safety zone may contact the Captain of the Port Charleston by telephone at 843-740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative. The Coast Guard will provide notice of the safety zone by Marine Safety Information Bulletin, Broadcast Notice to Mariners, and on-scene designated representatives.

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

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

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

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: The owners or operators of vessels intending to enter, transit through, anchor in, or remain within that portion of the Atlantic Ocean encompassed within the safety zone from 9 p.m. until 10:15 p.m. on September 3, 2011 and September 4, 2011. For the reasons discussed in the Executive Order 12866 and Executive Order 13563 section above, this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the establishment of a temporary safety zone that will be enforced for a total of one hour and 15 minutes. 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:

Definitions

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

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

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

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

(iv) The words State or Colorado mean the State of Colorado, unless the context indicates otherwise.

(v) The initials OAP mean or refer to Colorado's 8-Hour Ozone Attainment Plan, which Colorado submitted on June 18, 2009.

On July 18, 1997, EPA promulgated a revised 8-hour ozone standard of 0.08 parts per million (ppm) (62 FR 38855). Ozone is formed from the photochemical reaction of nitrogen oxides (NO X ) with volatile organic compounds (VOCs). Under EPA regulations (40 CFR part 50, Appendix I), the 1997 0.08 ppm 8-hour ozone NAAQS is attained when the 3-year average of the annual fourth highest daily maximum 8-hour average ambient ozone concentrations is less than or equal to 0.08 ppm. Forty CFR part 50, Appendix I, section 2.3, directs that the third decimal place of the computed 3-year average be rounded, with values equal to or greater than 0.005 rounding up. Thus, under our regulations, a computed 3-year average ozone concentration of 0.085 ppm is the smallest value that is considered to be greater than 0.08 ppm and a violation of the standard.

On April 30, 2004, we designated areas as attaining or not attaining the 1997 8-hour ozone NAAQS. As part of that rule, we deferred the effective date of nonattainment designations for multiple areas of the country, including the DMA/NFR area. These areas, which were called Early Action Compact (EAC) areas, agreed to follow a program to achieve early reductions of emissions in order to attain the 1997 8-hour standard no later than December 31, 2007 (69 FR 23857). Because the DMA/NFR area violated the 1997 8-hour standard based on air quality data from 2005-2007, the nonattainment designation for the area became effective on November 20, 2007. The DMA/NFR nonattainment area includes Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties, and portions of Larimer and Weld Counties (40 CFR 81.306).

Our regulations addressing EAC areas that failed to attain the 1997 8-hour ozone standard by December 31, 2007 required that Colorado submit an attainment demonstration SIP for the 1997 8-hour standard (40 CFR 81.300(e)(3)(ii)(D)). Colorado submitted its attainment demonstration SIP for the DMA/NFR area on June 18, 2009 as part of a larger SIP submission. This submittal consisted of the following parts:

• 8-Hour Ozone Attainment Plan (OAP), which includes monitoring information, emission inventories, a modeled attainment demonstration using photochemical grid modeling, a weight of evidence analysis, and 2010 motor vehicle emissions budgets (MVEBs) for transportation conformity.

• Revisions to Regulation Number 3, Parts A, B, and C.

• Revisions to Regulation Number 7. 1

• Revisions to Colorado's Ambient Air Quality Standards Regulation.

On July 21, 2010 (75 FR 42346), we published our proposed action regarding Colorado's revisions. We proposed to approve Colorado's 2010 attainment demonstration for the 1997 8-hour ozone NAAQS, the motor vehicle emissions budgets contained in the OAP, and all other aspects of the OAP except the last paragraph on page IV-1 and the first paragraph on page IV-2, the words “federally enforceable” in the second to last paragraph on page V-6, and the reference to Attachment A in the Table of Contents and on page IV-3.

We proposed to approve the revisions to Colorado Regulation Number 3, parts A and B. We proposed to disapprove the revisions to Colorado Regulation Number 3, part C.

We proposed to approve the following portions of the revisions to Colorado Regulation Number 7:

• Revisions to Sections I through XI, except for Colorado's repeal of Section II.D.

• Revisions to Sections XIII through XVI.

We proposed to disapprove the following portions of the revisions to Colorado Regulation Number 7:

• Colorado's proposed repeal of Section II.D.

• Revisions to Section XII.

We proposed to disapprove the revisions to Colorado's Ambient Air Quality Standards Regulation.

In our proposed action, we fully explained the bases for our proposed approvals and disapprovals. See 75 FR 42351 (July 21, 2010). We received one letter commenting on our proposed rule.

On September 10, 2010, Colorado withdrew from our consideration the proposed revisions to Regulation Number 3, Part C, and Colorado's Ambient Air Quality Standards Regulation. Consequently, we are not taking final action on the proposed disapproval of Regulation Number 3, Part C, and Colorado's Ambient Air Quality Standards Regulation.

In September 2010, Colorado discovered that its 2008 photochemical grid modeling for the OAP contained inaccurate coordinates for some point sources. Colorado re-ran the model with the correct coordinates and submitted the revised modeling results to us in October 2010.

On December 17, 2010 (75 FR 78950), we published a notice in the Federal Register in which we announced the availability of Colorado's revised modeling and provided an opportunity for public comment through January 18, 2011, including comment on how the revised modeling might affect our determinations in our July 21, 2010 proposed rulemaking. As we explained in our December 17, 2010 notice, the revised modeling predicted design values for 2010 that remained below the 85.0 ppb ozone NAAQS; for the SIP's 2010 base case, the maximum projected design values were found at the Rocky Flats North and Fort Collins West monitoring sites—84.7 ppb ozone at both locations. This is 0.2 ppb lower than Colorado's 2008 modeling projected using incorrect point source locations. We concluded that the revised modeling supported the conclusions that we proposed in July 2010 regarding the 2008 modeling. See 75 FR 78952. We received no comments in response to our December 17, 2010 notice.

We received one letter from WildEarth Guardians (WEG) commenting on our July 2010 proposed action. In this section EPA responds to the significant adverse comments made by WEG. We have carefully considered the comments, and nothing in them has caused us to change our action from what we proposed.

Comment No. 1 —WEG asserts that EPA gave Colorado a “major break” by deferring the nonattainment designation for the DMA/NFR area under EPA's EAC program. Instead of having to attain in 2007, Colorado got to defer the attainment date until 2010. According to WEG, EPA allowed the State to delay clearing the air and avoid more stringent clean up requirements.

EPA Response— WEG's comments regarding our past deferral of the nonattainment designation are not timely in the context of this rulemaking action because EPA took final action deferring the effective date of the nonattainment designation in 2006 (71 FR 69022 (November 29, 2006)). While WEG challenged EPA's 2006 deferral of the nonattainment designation for the DMA/NFR area, WEG agreed to settle that matter. One element of the settlement agreement, as modified, calls for EPA to act on Colorado's SIP submission by February 28, 2011, and we are meeting that obligation through this action. WEG may not challenge this action based on EPA's prior deferral of the nonattainment designation for the DMA/NFR area; this action solely concerns the adequacy of Colorado's SIP submission. We note, however, that we disagree with WEG's claim that the deferral of the effective date allowed the area to delay cleaning the air. Colorado previously submitted SIP control measures, under EPA's regulations for EAC areas, that achieved reductions of ozone precursors before such reductions were required under the CAA.

Comment No. 2— WEG indicates that it supports aspects of EPA's proposal, including EPA's proposed disapproval of certain revisions to Regulation Number 7.

EPA Response— We acknowledge WEG's support for aspects of our proposal.

Comment No. 3 —WEG asserts that EPA's proposed approval of Colorado's attainment demonstration overlooked key modeling information. Specifically, WEG alleges that neither the baseline modeling nor the control strategy modeling demonstrate attainment. WEG's assertion centers on the baseline modeling for an area west of Fort Collins that models a violation of the NAAQS and Colorado's statement that such a violation “does not seem implausible.” WEG's position is that EPA cannot approve the attainment demonstration as it overlooked key information, or at least failed to explain why the modeled violations do not matter in the context of the proposed attainment demonstration.

EPA Response —EPA disagrees with the commenter's characterization of EPA's analysis and the commenter's interpretation of the modeling information.

Colorado's attainment demonstration is consistent with EPA's modeling guidance. (See “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5, and Regional Haze,” EPA-454/B-07-002, April 2007 (“2007 modeling guidance”).) The 2007 modeling guidance describes the modeled attainment test for the 8-hour ozone standard as an exercise in which an air quality model is used to simulate current and future air quality. The guidance recommends that model estimates be used in a “relative” rather than “absolute” sense. Specifically, the analysis focuses on the ratio of the model's future to current (baseline) predictions near ambient air quality monitors. EPA refers to these ratios as “relative response factors.” Future ozone concentrations are estimated at existing monitoring sites by multiplying the relative response factor for locations “near” each monitor by the observation-based, monitor-specific, “baseline” design value. The resulting predicted future ozone concentrations are then compared to the NAAQS. (See 2007 modeling guidance, section 2.1, page 15; section 3.0, pages 20-28; section 4.2, page 40.) Colorado followed this procedure in demonstrating that the DMA/NFR area will attain the ozone NAAQS. 2

The use of observed concentrations as the base value in the attainment test reduces problems in interpreting model results. In the relative attainment test, observed data is used to define the target concentration. This has the effect of anchoring the future concentrations to a “real” ambient value. Although good model performance remains a prerequisite for use of a model in an attainment demonstration, problems posed by less than ideal model performance on individual days are reduced through the use of this procedure.

EPA guidance also recommends an unmonitored area analysis (UAA) in attainment demonstrations. (See 2007 modeling guidance, section 3.4, pages 29-30.) The UAA uses a combination of model output and ambient data to identify areas that might exceed the NAAQS if a monitor were placed in the given location. In general, the UAA review is intended to ensure that a control strategy leads to reductions in ozone at other locations which could have baseline (and future) design values exceeding the NAAQS if a monitor were deployed there. It was this analysis in Colorado's attainment demonstration that indicated potential future concentrations above the level of the NAAQS in the elevated terrain areas west of Fort Collins.

The 2007 modeling guidance indicates that NAAQS violations in the UAA should be handled on a case-by-case basis. However, the guidance stresses that due to the lack of observation-based, measured data, the examination of ozone concentrations as part of the UAA is more uncertain than the monitor-based attainment test. As a result, the guidance recommends that the UAA be treated as a separate test from the monitor-based attainment test. While it is expected that States will implement additional emission controls to eliminate predicted violations of the monitor-based test, the same requirements may not be appropriate in unmonitored areas. The guidance recommends that it may be appropriate to deploy additional monitors in an area where the UAA indicates a potential future year violation. (See 2007 modeling guidance, section 3.4.3, page 32.)

The UAA submitted by Colorado shows potential ozone concentrations above the NAAQS in the elevated terrain area west of Fort Collins. 3 Historical ambient ozone monitoring data are sparse in the foothill and mountain areas west of the Front Range. The complex terrain has a strong influence on wind and pollutant transport patterns in the area and contributes to uncertainty in the model predictions. We have carefully considered the model's predicted concentrations west of the Fort Collins West monitor (FTCW). Given the inherent uncertainty associated with UAA and the uncertainty associated with modeling in this specific location, we conclude that it is not appropriate to insist on additional control measures at this time to address the modeled ozone concentrations west of FTCW. (See 2007 modeling guidance, section 3.4.3, page 33.) Other factors also support our decision.

First, in accordance with our guidance, Colorado installed an additional ozone monitor in the area west of FTCW to determine whether the model-predicted ozone concentrations are, in fact, valid. The special purpose monitor, located in Rist Canyon, began operation on May 14, 2009. The Rist Canyon monitoring station has collected data for two ozone seasons (approximately 20 months) since it began operating. The Rist Canyon monitoring station uses a Federal Equivalent Method (FEM) and follows the quality assurance requirements of 40 CFR part 58, Appendix A.

Ozone data collected at this monitoring station is eligible for comparison to the ozone NAAQS after the monitor has operated for more than 24 months per 40 CFR 58.30(c). Design values, however, are based on the 3-year average of the annual fourth highest daily maximum 8-hour average ozone concentration (see 40 CFR part 50, Appendix D). While the monitor has not operated for these periods, the data is informative. An analysis of the data shows the fourth highest daily maximum 8-hour average ozone concentration reading is 69 ppb for May through December of 2009 and 71 ppb for January through December 2010. This data indicates that the area west of FTCW is not currently being exposed to ozone concentrations above the 1997 8-hour ozone standard. Also, these values are lower than the fourth highest daily maximums—73 ppb and 75 ppb—for FTCW for 2009 and 2010.

Second, Colorado's UAA explains that the high design value of 86 ppb at FTCW was based on only two years (2006-2007) of monitoring data, not the normal three years. (See Appendix I of Colorado's technical support document, titled “Final 2010 Ozone Attainment Demonstration Modeling for the Denver 8-Hour Ozone State Implementation Plan.”) At the time the SIP was prepared, three full years of data were not available because the monitor did not start operating until 2006. This high design value drove the high 2010 projected design values at FTCW and the unmonitored area values west of the monitor. When a third year of monitoring data is included (2008), the 2010 projected design value at FTCW is reduced from 86 ppb to 82 ppb. If Colorado's UAA had used the 82 ppb design value at FTCW instead of 86 ppb, no grid cells would have exceeded the 8-hour ozone NAAQS in the UAA.

Given that Colorado followed our 2007 modeling guidance and the supporting evidence discussed above, Colorado properly modeled attainment.

Comment No. 4— WEG asserts that there is no analysis showing that Regulation Number 7 imposes RACM/RACT as required by CAA section 172(c)(1). Regulation Number 7 does not impose RACT requirements for all sources of ozone precursors in the DMA/NFR area and does not impose controls for NO X . RACT cannot mean no air pollution controls for certain sources like refineries or sources of NO X . Regulation Number 7 is contrary to the CAA.

EPA Response —Our longstanding interpretation of CAA section 172(c)(1) is that it only requires implementation of control measures that contribute to attainment as expeditiously as practicable; measures that would not advance the attainment date need not be considered RACM/RACT. See, e.g., 57 FR 13498, 13560 (April 16, 1992); 70 FR 71612, 71617, 71653-71654 (November 29, 2005). This interpretation has been upheld by the courts. See, e.g., NRDC v. EPA, 571 F.3d 1245, 1253 (DC Cir. 2009); Sierra Club v. EPA, 294 F.3d 155, 162 (DC Cir. 2002); Sierra Club v. EPA, 314 F.3d 735, 743-745 (5th Cir. 2002). As we noted in our proposed action (75 FR 42351), Colorado's modeling demonstrates attainment in 2010 based on existing SIP-approved control measures, including the measures in Regulation Number 7. Because the submission demonstrates attainment by November 2010, and it is already 2011, these SIP-approved measures represent all measures necessary to demonstrate attainment as expeditiously as practicable. At this point in time, additional control measures, whether for VOCs or for NO X , would not advance the attainment date and are not needed to satisfy the requirements of CAA section 172(c)(1). 4 WEG has not demonstrated that the attainment demonstration is flawed. Additional controls on NO X and controls in other parts of the nonattainment area may be desirable from WEG's perspective, but WEG has not demonstrated that such controls are necessary to demonstrate attainment as expeditiously as practicable.

Comment No. 5— WEG asserts that the requirements in Regulation Number 7, Sections II.C.1.c and II.C.1.d, are unenforceable because these sections defer solely to the discretion of Division staff the establishment of RACT limits at a later date. The proposed SIP revisions do not specify what RACT emission limits will be for each VOC source. In addition, Sections II.C.1.c and II.C.1.d fail to provide for appropriate public notice and involvement in the development and adoption of RACT requirements. EPA must ensure that facility-specific RACT emission limits are adopted through the SIP to ensure the enforceability of any RACT requirements and to ensure that Regulation 7 represents RACT consistent with the CAA.

EPA Response —The State designated Sections II.C.1.c and II.C.1.d “State Only.” As we indicated in our proposed action, our interpretation is that provisions designated “State Only” have not been submitted to us for approval. Instead, we interpret these provisions to have been submitted for informational purposes. See 75 FR 42353. We are not acting on Sections II.C.1.c and II.C.1.d in this action, and, thus, we consider these comments irrelevant to our action. Because we are not acting on Sections II.C.1.c and II.C.1.d, we are not incorporating them by reference into the Code of Federal Regulations. WEG has not indicated any way in which these state-only provisions affect the federally enforceable aspects of Regulation Number 7. As noted above, we have determined that the State has fully met the applicable RACT requirement in section 172(c)(1) and thus this State-only provision is not a necessary component of the attainment demonstration on which we are acting through this rule.

Comment No. 6— WEG asserts that Section II.C.2 also imposes unenforceable RACT requirements. WEG does not agree with EPA that Colorado's revisions to Section II.C are minor clerical changes. WEG asserts that the new cross-reference to Regulation Numbers 3 and 7 in Section II.C.2 is unclear.

EPA Response —In the current EPA-approved SIP, Section II.C.2 reads, “All new sources shall utilize controls representing Reasonably Available Control Technology (RACT.)” The State's revised language reads, “All new sources shall utilize controls representing RACT, pursuant to Regulation Number 7 and Regulation Number 3, Part B, Section III.D., upon commencement of operation.”  5

We view the language change to Section II.C.2 as a minor clarifying change. The new reference to Regulation Number 7 is intended to indicate that new sources need to comply with any applicable RACT requirements specified in Regulation Number 7. As we indicated in our proposed action, Regulation Number 7 specifies emission limits for various industries and generic requirements. 6 These limits and requirements already apply to new sources (in addition to existing sources) (see Regulation Number 7, Section I.B.1.a); the added reference to Regulation Number 7 simply clarifies where ( i.e., in Regulation Number 7) RACT requirements are specified.

The reference to Regulation Number 3, part B, Section III.D, merely clarifies that new sources need to comply with the permitting requirements in Colorado's “Construction Permit Review Requirements.”  7 This revision does not alter the status quo; new sources are required to get permits under Reg. 3 irrespective of the language of Section II.C.2 of Regulation Number 7. Additionally, Colorado has historically used its permit process to establish VOC “RACT” limits for new sources covered by Section II.C.2 for those limited cases in which the other sections of Regulation Number 7 do not specify limits or requirements. 8 Thus, we continue to view the change to Section II.C.2 as a minor clerical change.

Finally, the revised rule specifies that the new source must comply with RACT from commencement of operation, as opposed to some later date. This merely reiterates the requirement that is already specified by existing Section I.B.1.a.

WEG's comments reflect a concern about Section II.C.2's alleged deferral of the establishment of RACT limits to the State's permitting process. Our view, however, is that Section II.C.2's requirements are actually surplus to necessary RACT requirements under CAA section 172(c)(1). This is because Regulation Number 7's various source-category-specific VOC limits and requirements apply to sources regardless of Section II.C.2's requirements. Thus, for sources subject to these source-category-specific limits and requirements, Section II.C.2 does not defer the establishment of controls to the State's permitting process. Additionally, as indicated above, we have determined that such limits and requirements, along with other SIP control measures, contribute to attainment as expeditiously as practicable, thus satisfying RACM/RACT under CAA section 172(c)(1). Accordingly, the imposition, pursuant to Section II.C.2, of VOC controls on new sources beyond those contained in the other sections of Regulation Number 7, while potentially beneficial, is not necessary to satisfy RACT requirements under CAA section 172(c)(1), the State's use of the term “RACT” in Section II.C.2 notwithstanding. 9

Comment No. 7 —WEG asserts that the SIP submission fails to comply with applicable Part D, Subpart 1 and 2 requirements under the CAA. In particular, section 172(c) requires states to enact RACM in their ozone nonattainment SIPs, to the extent more specific RACM requirements are not set forth under Subpart 2. Section 181 requires that marginal nonattainment SIPs meet the requirements of sections 181 and 182 as well as 172. It does not appear as if EPA made any assessment whether Colorado's submission complies with Subpart 1 and 2 requirements. WEG is particularly concerned that the SIP doesn't ensure RACT for NO X emissions or that RACT corrections are made in areas of the DMA/NFR nonattainment area that were not originally part of the Denver Metro 1-hour ozone nonattainment area. Instead of requiring RACM/RACT, the proposed SIP only focuses on the less stringent requirements for ozone nonattainment areas. The proposed SIP admits that RACM is one of the core elements for an attainment plan but goes on to say that RACT is not required to be applied.

EPA Response —EPA's regulation placing certain areas only under the planning provisions of CAA title I, part D, subpart 1 was vacated by the DC Circuit in South Coast Air Quality Management District, et al. v . EPA, 472 F.3d 882 (DC Cir. 2006) on the basis that it was unreasonable. EPA has not yet finalized a rule in which it either places all of these areas in subpart 2 or in which it provides a reasonable explanation for placing all or some of the areas only under the planning provisions of subpart 1. However, unless and until EPA takes final action classifying the DMA/NFR area under subpart 2, it remains solely subject to the nonattainment planning provisions in subpart 1. Thus, the RACT requirement in subpart 2 does not currently apply to the DMA/NFR area. As explained above, because the State has demonstrated that it has adopted all controls necessary to attain as expeditiously as practicable ( i.e., it cannot advance the attainment date from November 2010), we have determined that the area has met the RACM requirement in section 172 ( i.e., “subpart 1”). We note that for purposes of section 172(c) in subpart 1, RACT is a subset of RACM. Thus a determination that an area has met the RACM requirement of section 172(c) means that the area has also met the RACT requirement in that section. See, e.g., NRDC v. EPA, 571 F.3d 1245, 1253 (DC Cir. 2009).

We note that in response to the court's vacatur, EPA has proposed to place all areas under subpart 2. If EPA finalizes that proposal as proposed, Denver would be classified as marginal under subpart 2. See 74 FR 2936 (January 16, 2009). Even if EPA were to finalize a subpart 2 classification for the DMA/NFR area, we anticipate, as outlined in our proposal, that a SIP addressing subpart 2 requirements (including the RACT corrections applicable to marginal areas) would not be due until one year after a final rule classifying the DMA/NFR area under subpart 2. For these reasons, we did not evaluate the SIP submission against subpart 2 requirements in the proposed rule, nor are we doing so for this final rule.

Comment No. 8 —WEG asserts that Colorado must update past RACT determinations made for the 1-hour ozone standard in light of the new 8-hour ozone NAAQS nonattainment designation.

EPA Response —Per our discussion above, the only RACM/RACT requirement that is applicable at this time is the requirement under CAA section 172(c)(1). That requirement is met if the State has adopted all controls necessary to attain as expeditiously as practicable and thus, that additional controls will not advance the attainment date. As explained above, we believe Colorado has met that requirement.

Comment No. 9— WEG asserts that 172(c)(1) coupled with 182(f) requires owners and operators of sources in ozone nonattainment areas to implement RACT requirements for sources that are subject to Control Technology Guidelines issued by EPA and for major sources of VOC and NO X , which are ozone precursors. Significant sources of ozone precursors are to be controlled to a reasonable extent. The proposed SIP does not even contain the bare minimum with regard to RACT, implementing only limited controls to address emissions of VOCs from oil and gas production operations in the area and from a limited number of other stationary sources in the Front Range. RACT for emissions of VOCs from other industrial sources is woefully lacking. The SIP contains no RACT requirements for industrial sources of NO X emissions anywhere in the nonattainment area.

EPA Response —As provided above, we have concluded that the SIP submission satisfies applicable RACM/RACT requirements. We note, however, that we disagree with WEG's characterization of the scope of VOC controls as being “limited.”

Comment No. 10 —WEG refers to legislative history to support its views regarding VOC and NO X RACT requirements having to apply to all nonattainment areas. WEG quotes the following language from the Senate Environment and Public Works Committee: “[s]tate and local agencies are not authorized to ignore [RACT] controls on NO X and VOC sources for which no CTG has been issued. Sources of the size specified in the bill must be controlled to levels achievable through the use of measures that are technologically and economically feasible for a class or category of sources.”

EPA Response —The language WEG cites is from a Senate report discussing the anticipated provisions in section 182(b) of subpart 2, which was added by the 1990 Amendments to the CAA. Specifically, under section 182(b)(2)(C), which applies to areas classified under subpart 2 as moderate or higher, RACT applies to all major stationary sources of VOC that are not covered by subsections (A) and (B). Subsections (A) and (B) address RACT for sources for which a CTG has been issued. Section 182(f) extends the subpart 2 RACT requirements to major stationary sources of NO X . As indicated above, we are not evaluating the SIP submission against subpart 2 requirements because those requirements are not currently applicable. Also as indicated above, courts have upheld our interpretation of RACM/RACT under CAA section 172(c)(1).

Comment No. 11 —WEG asserts that a SIP that fails to contain RACT for major VOC and NO X commercial sources will significantly increase the likelihood of continued nonattainment and jeopardize maintenance. It does not appear that EPA has assessed the adequacy of the SIP in this light.

EPA Response —As we have stated, the SIP demonstrates attainment of the 1997 ozone NAAQS as expeditiously as practicable. The State is not under a current obligation to submit a SIP that demonstrates long-term maintenance of the ozone standard and this SIP was not submitted for that purpose. Under Union Electric v. EPA, 427 U.S. 246 (1976), EPA's job in reviewing a SIP is to determine whether it meets the minimum requirements of the CAA. The SIP submission demonstrates attainment based on enforceable measures that we previously approved into the existing SIP. While additional controls might be desirable because they would provide additional emission reductions beyond those needed for attainment, we cannot disapprove the attainment demonstration SIP on that basis.

Comment No. 12 —WEG asserts that if EPA is not assessing whether Colorado's SIP complies with subparts 1 and 2 of the CAA, EPA must make a finding of failure to submit for Colorado's failure to submit a required SIP under subparts 1 and 2.

EPA Response —Colorado submitted a SIP revision as required by 40 CFR 81.300(e)(3)(ii)(D), which requires EAC areas that failed to attain the 1997 8-hour ozone standard by December 31, 2007 to submit a revised attainment demonstration SIP. As explained above, EPA has assessed the Colorado SIP under the attainment demonstration and RACM/RACT requirements of section 172(c) in subpart 1. Also, as explained above, Denver is not currently classified under subpart 2 and thus, at this time, no SIP revision is required under subpart 2. Thus, there is no basis at this time for evaluating the SIP under the provisions of subpart 2 or for making a finding of failure to submit a SIP revision under subpart 2.

Comment No. 13 —WEG asserts that EPA's proposed approval fails to comply with section 110(l) of the CAA. The SIP submission does not demonstrate that it will not interfere with the 2008 ozone NAAQS, which are currently applicable. Thus, EPA cannot approve the revision. It is contrary to section 110(l) for EPA to assume that its duties are limited to protecting the 1997 ozone NAAQS. Section 110(a)(1) provides that a State must submit a SIP for a new NAAQS within three years of promulgation. Where a statutory duty applies within that three year period, the State and EPA are compelled to meet that requirement given that it falls within the three year window provided by section 110(a)(1). WEG also asserts that the revision would significantly interfere with nonattainment of the NAAQS in downwind states.

EPA Response —We disagree that our approval does not comply with CAA section 110(l) or that section 110(l) requires disapproval of Colorado's attainment demonstration or other aspects of the SIP submission we are approving. CAA section 110(l) provides that EPA “shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress * * *, or any other applicable requirement of” the CAA. Contrary to WEG's assertion, we do not assume our duties under section 110(l) are limited to protecting the 1997 8-hour ozone NAAQS—we simply do not agree that our approval will interfere with attainment of the 2008 ozone NAAQS or any other requirement of the CAA. Through our action, no SIP-approved control measures for ozone precursors are being relaxed; in fact, we are approving changes to Regulation Number 3 that will strengthen the SIP and disapproving revisions to Regulation Number 7 that would weaken the SIP. WEG has not explained how Colorado's attainment demonstration and the other parts of the SIP we're approving would interfere with the 2008 ozone NAAQS.

At this time, no areas are designated nonattainment for the 2008 ozone NAAQS and no attainment demonstration SIPs are due for that NAAQS. EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration for all NAAQS before any changes to a SIP may be approved. See Kentucky Resources Council, Inc. v. EPA, 467 F.3d 986 (6th Cir. 2006); see also e.g., 70 FR 53 (Jan. 3, 2005), 70 FR 28429 (May 18, 2005) (proposed and final rules, upheld in Kentucky Resources, which discuss EPA's interpretation of section 110(l)). EPA has concluded that preservation of the status quo air quality prior to the time new attainment or maintenance demonstrations are due will prevent interference with CAA requirements, including the States' obligations to develop timely demonstrations. Thus, areas do not have to produce a complete attainment demonstration to make any revisions to the SIP, provided the status quo air quality is preserved.

As noted above, as a result of today's action, the SIP will be strengthened and air quality maintained. This conclusion is sufficient to satisfy the requirements of section 110(l) with respect to the 2008 ozone standard. We have not and are not required to evaluate whether the current attainment demonstration also demonstrates attainment for the 2008 ozone standard or the SIP contains measures to attain that standard. The CAA and our regulations designate specific time frames for areas to submit SIPs and demonstrate attainment following a nonattainment designation for a new standard. See, e.g., CAA sections 110(a)(1) and 172(b). Since this action will not interfere with status quo air quality, and thus with Colorado's ability to develop a SIP to attain the 2008 ozone standard, it is appropriate under the CAA to approve this action and allow Colorado to address the 2008 ozone standard according to the statutory framework.

We do not understand WEG's comment about the deadline under CAA section 110(a)(1). It appears WEG may be asserting that the State had to submit a 110(a)(1) SIP for the 2008 standard at the same time it submitted its SIP for the 1997 standard simply because the deadline for the SIP for the 1997 standard fell within the three-year period specified by section 110(a)(1) for submission of a SIP for the 2008 standard. WEG cites no legal or policy support for this theory, and it is not supported by section 110(a)(1), section 110(l), or any other provision of the CAA. To the extent WEG is claiming that our approval action will interfere with the SIP required by CAA section 110(a)(1), we disagree. Section 110(a)(1) SIPs are merely infrastructure SIPs, not complete attainment demonstration SIPs, and, as noted by WEG, these infrastructure SIPs are not due until three years after designation. Approval of the 1997 ozone attainment demonstration will in no way interfere with the State's obligation or ability to submit an infrastructure SIP for the 2008 standard.

WEG provides no support for its assertion that the revision would significantly interfere with nonattainment of the NAAQS in downwind states. We are not required to respond to unsupported assertions. In any event, because our action will not result in an increase in emissions, we disagree with WEG that the revision will significantly interfere with attainment of the NAAQS in downwind states.

For the reasons provided in our July 21, 2010 proposal (75 FR 42351), our December 17, 2010 notice of availability of revised modeling (75 FR 78950), and herein, we are approving the following elements of the 1997 8-hour ozone SIP revisions that Colorado submitted on June 18, 2009:

(1) Colorado's 2010 attainment demonstration for the 1997 8-hour ozone NAAQS.

(2) The MVEBs contained in the OAP, which are identified in the following table:

In addition to approving the MVEBs, we are also approving the process described in the OAP for use of the Total Nonattainment Area MVEBs and the subarea MVEBs. Per the OAP, the initial conformity determination must use the Total Nonattainment Area MVEBs for NO X and VOCs. After the initial conformity determination, the Denver Regional Council of Governments and North Front Range Transportation and Air Quality Planning Council may switch from using the Total Nonattainment Area MVEBs to using the subarea MVEBs for determining conformity. To switch to use of the subarea MVEBs (or to subsequently switch back to use of the Total Nonattainment Area MVEBs), the Denver Regional Council of Governments and the North Front Range Transportation and Air Quality Planning Council must use the process described in the OAP at pages VI-4 and VI-5.

(3) All other aspects of the OAP except the last paragraph on page IV-1 and the first paragraph on page IV-2, the words “federally enforceable” in the second to last paragraph on page V-6, and the reference to Attachment A in the Table of Contents and on page IV-3.

(4) The revisions to Parts A and B of Colorado Regulation Number 3.

(5) The revisions to Sections I through XI and XIII through XVI of Colorado Regulation Number 7, except for the repeal of Section II.D.

Regarding part B of Regulation Number 3, as we noted in our July 21, 2010 proposal, there is a discrepancy between the numbering of the submitted revisions and the EPA-approved SIP. Colorado added new Sections II.D.1.k, l, m, and n to Part B to specify the four types of emissions points that will continue to be exempt from minor source construction permitting requirements. However, in the current EPA-approved SIP, Section III.D.1 of part B lists the types of emissions points that are exempt from minor source construction permitting requirements. 10 These emissions points are listed in Sections III.D.1.a through j. For purposes of this action, we are interpreting Colorado's proposed revisions to Part B, in the form of Sections II.D.1.k through n, as being an addition to Section III.D.1, and following immediately after Section III.D.1.j of part B of the EPA-approved SIP.

For the reasons provided in our July 21, 2010 proposal, we are disapproving the following elements of the 1997 8-hour ozone SIP revisions that Colorado submitted on June 18, 2009:

(1) In the OAP: the last paragraph on page IV-1 and the first paragraph on page IV-2, the words “federally enforceable” in the second to last paragraph on page V-6, and the reference to Attachment A in the Table of Contents and on page IV-3.

(2) The repeal of Section II.D of Colorado Regulation Number 7.

(3) The revisions to Section XII of Colorado Regulation Number 7.

Our disapproval of these provisions does not trigger sanctions or a FIP obligation because our disapproval does not leave a deficiency in the SIP. The effect of our disapproval is to excise proposed SIP revisions that would weaken the SIP and potentially undermine the attainment demonstration. The provisions we are approving today and provisions that will remain in the SIP as a result of our action today fully support the attainment demonstration and meet all applicable requirements of the Clean Air Act. Thus, our action does not trigger sanctions or a FIP obligation. 11

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 4, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended to read as follows:

Acronyms and Abbreviations . The following acronyms and abbreviations are used in this document.

Organization of This Document. The following outline is provided to aid in locating information in this preamble.

This rule will affect the following categories:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that could potentially be regulated by this action. Other types of entities not listed in this table could also be affected. To determine whether your facility, company, business organization, or other entity is regulated by this action, you should carefully examine these regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

EPA is undertaking this rulemaking as a result of the decision issued by the U.S. Court of Appeals for the District of Columbia Circuit (Court) in Arkema v. EPA (618 F.3d 1, DC Cir. 2010) regarding the December 15, 2009 final rule titled “Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export,” published at 74 FR 66413 (2009 Final Rule). Certain allowance holders affected by the 2009 Final Rule filed petitions for judicial review of the rule under section 307(b) of the Clean Air Act. Among other arguments, the petitioners contended that the rule was impermissibly retroactive because in setting the baselines for the new regulatory period, EPA did not take into account certain inter-pollutant baseline transfers that petitioners had performed during the prior regulatory period.

The Court issued a decision on August 27, 2010, agreeing with petitioners that “the [2009] Final Rule unacceptably alters transactions the EPA approved under the 2003 Rule” ( Arkema v. EPA, 618 F.3d at 3). The Court vacated the rule in part, “insofar as it operates retroactively,” and remanded to EPA “for prompt resolution,” (618 F.3d at 10). The Court withheld the mandate for the decision pending the disposition of any petition for rehearing. EPA's petition for rehearing was denied on January 21, 2011. The mandate issued on February 4, 2011. More detail is provided on the case and EPA's interpretation of the Court's decision in Section II.D.

The Montreal Protocol on Substances that Deplete the Ozone Layer is the international agreement aimed at reducing and eventually eliminating the production and consumption of stratospheric ozone-depleting substances (ODS). The U.S. was one of the original signatories to the 1987 Montreal Protocol and the U.S. ratified the Protocol on April 12, 1988. Congress then enacted, and President George H.W. Bush signed into law, the Clean Air Act Amendments of 1990 (CAAA), which included Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. chapter 85, Subchapter VI, to ensure that the U.S. could satisfy its obligations under the Montreal Protocol. Title VI includes restrictions on production, consumption, and use of ODS that are subject to acceleration if “the Montreal Protocol is modified to include a schedule to control or reduce production, consumption, or use * * * more rapidly than the applicable schedule” prescribed by the statute (CAA § 606). Both the Montreal Protocol and the Clean Air Act (CAA) define consumption as production plus imports minus exports.

In 1990, as part of the London Amendment to the Montreal Protocol, the Parties identified HCFCs as “transitional substances” to serve as temporary, lower ozone depletion potential (ODP) substitutes for CFCs and other ODS. EPA similarly viewed HCFCs as “important interim substitutes that will allow for the earliest possible phaseout of CFCs and other Class I substances”  1 (58 FR 65026). In 1992, through the Copenhagen Amendment to the Montreal Protocol, the Parties created a detailed phaseout schedule for HCFCs beginning with a cap on consumption for industrialized (Article 2) Parties, a schedule to which the U.S. adheres. The consumption cap for each Article 2 Party was set at 3.1 percent (later tightened to 2.8 percent) of a Party's CFC consumption in 1989, plus a Party's consumption of HCFCs in 1989 (weighted on an ODP basis). Based on this formula, the HCFC consumption cap for the U.S. was 15,240 ODP-weighted metric tons (MT), effective January 1, 1996. This became the U.S. consumption baseline for HCFCs.

The 1992 Copenhagen Amendment created a schedule with graduated reductions and the eventual phaseout of HCFC consumption (Copenhagen, 23-25 November, 1992, Decision IV/4). Prior to a later adjustment in 2007, the schedule initially called for a 35 percent reduction of the consumption cap in 2004, followed by a 65 percent reduction in 2010, a 90 percent reduction in 2015, a 99.5 percent reduction in 2020 (restricting the remaining 0.5 percent of baseline to the servicing of existing refrigeration and air-conditioning equipment), with a total phaseout in 2030.

The Copenhagen Amendment did not cap HCFC production. In 1999, the Parties created a cap on production for Article 2 Parties through an amendment to the Montreal Protocol agreed by the Eleventh Meeting of the Parties (Beijing, 29 November-3 December 1999, Decision XI/5). The cap on production was set at the average of: (a) 1989 HCFC production plus 2.8 percent of 1989 CFC production, and (b) 1989 HCFC consumption plus 2.8 percent of 1989 CFC consumption. Based on this formula, the HCFC production cap for the U.S. was 15,537 ODP-weighted MT, effective January 1, 2004. This became the U.S. production baseline for HCFCs.

To further protect human health and the environment, the Parties to the Montreal Protocol adjusted the Montreal Protocol's phaseout schedule for HCFCs at the 19th Meeting of the Parties in September 2007. In accordance with Article 2(9)(d) of the Montreal Protocol, the adjustment to the phaseout schedule was effective on May 14, 2008. 2

As a result of the 2007 Montreal Adjustment (reflected in Decision XIX/6), the U.S. and other industrialized countries are obligated to reduce HCFC production and consumption 75 percent below the established baseline by 2010, rather than 65 percent as previously required. The other milestones remain the same. The adjustment also resulted in a phaseout schedule for HCFC production that parallels the consumption phaseout schedule. All production and consumption for Article 2 Parties is phased out by 2030.

Decision XIX/6 also adjusted the provisions for Parties operating under paragraph 1 of Article 5 (developing countries): (1) To set HCFC production and consumption baselines based on the average 2009-2010 production and consumption, respectively; (2) to freeze HCFC production and consumption at those baselines in 2013; and (3) to add stepwise reductions of 10 percent below baselines by 2015, 35 percent by 2020, 67.5 percent by 2025, and 97.5 percent by 2030—allowing, between 2030 and 2040, an annual average of no more than 2.5 percent to be produced or imported solely for servicing existing air-conditioning and refrigeration equipment. All production and consumption for Article 5 Parties will be phased out by 2040.

In addition, Decision XIX/6 adjusted Article 2F to allow industrialized countries to produce “up to 10 percent of baseline levels” for export to Article 5 countries “in order to satisfy basic domestic needs” until 2020. 3 Paragraph 14 of Decision XIX/6 notes that no later than 2015, the Parties would consider “further reduction of production for basic domestic needs” in 2020 and beyond. Under paragraph 13 of Decision XIX/6, the Parties will review in 2015 and 2025, respectively, the need for the “servicing tails” for industrialized and developing countries. The term “servicing tail” refers to an amount of HCFCs used to service existing equipment, such as certain types of air-conditioning and refrigeration appliances.

The U.S. has chosen to implement the Montreal Protocol phaseout schedule on a chemical-by-chemical basis. In 1992, environmental and industry groups petitioned EPA to implement the required phaseout by eliminating the most ozone-depleting HCFCs first. Based on the available data at that time, EPA believed the U.S. could meet, and possibly exceed, the required Montreal Protocol reductions through a chemical-by-chemical phaseout that employed a “worst-first” approach focusing on certain chemicals earlier than others. In 1993, as authorized by section 606 of the CAA, the U.S. established a phaseout schedule that eliminated HCFC-141b first and would greatly restrict HCFC-142b and HCFC-22 next, followed by restrictions on all other HCFCs and ultimately a complete phaseout (58 FR 15014, March 18, 1993; 58 FR 65018, December 10, 1993).

On January 21, 2003 (68 FR 2820), EPA promulgated regulations (2003 Final Rule) to ensure compliance with the first reduction milestone in the HCFC phaseout: the requirement that by January 1, 2004, the U.S. reduce HCFC consumption by 35 percent and freeze HCFC production. In the 2003 Final Rule, EPA established chemical-specific consumption and production baselines for HCFC-141b, HCFC-22, and HCFC-142b for the initial regulatory period ending December 31, 2009. Section 601(2) states that EPA may select “a representative calendar year” to serve as the company baseline for HCFCs. In the 2003 Final Rule, EPA concluded that because the entities eligible for allowances had differing production and import histories, no single year was representative for all companies. Therefore, EPA assigned an individual consumption baseline year to each company by selecting its highest ODP-weighted consumption year from among the years 1994 through 1997. EPA assigned individual production baseline years in the same manner. EPA also provided an exception allowing new entrants provided that they began importing after the end of 1997 but before April 5, 1999, the date the advanced notice of proposed rulemaking was published. EPA believed that such small businesses might not have been aware of the impending rulemaking that would affect their ability to continue in the HCFC market.

The 2003 Final Rule apportioned production and consumption baselines to each company in amounts equal to the amounts in the company's highest “production year” or “consumption year,” as described above. It completely phased out the production and import of HCFC-141b by granting 0 percent of that substance's baseline for production and consumption in the table at 40 CFR 82.16. EPA did, however, create a petition process to allow applicants to request very small amounts of HCFC-141b beyond the phaseout. The 2003 Final Rule also granted 100 percent of the baselines for production and consumption of HCFC-22 and HCFC-142b for each of the years 2003 through 2009. EPA was able to allocate allowances for HCFC-22 and HCFC-142b at 100 percent of baseline because, in light of the concurrent complete phaseout of HCFC-141b, the allocations for HCFC-22 and HCFC-142b, combined with projections for consumption of all other HCFCs, remained below the 2004 cap of 65 percent of the U.S. baseline.

EPA allocates allowances for specific years; they are valid between January 1 and December 31 of a given control period ( i.e., calendar year). Prior to December 15, 2009, EPA had not allocated any HCFC allowances for year 2010 or beyond. The regulations at section 82.15(a) and (b) only addressed the production and import of HCFC-22 and HCFC-142b for the years 2003-2009. Through the 2009 Final Rule (74 FR 66412), EPA addressed the production and import of HCFC-22 and HCFC-142b for the 2010-2014 control periods. Absent the granting of calendar-year allowances, section 82.15 would have prohibited the production and import of HCFC-22 and HCFC-142b after December 31, 2009. The 2009 Final Rule allowed for continued production and consumption, at specified amounts, of HCFC-142b, HCFC-22, and other HCFCs not previously included in the allowance system, for the 2010-2014 control periods.

In the U.S., an allowance is the unit of measure that controls production and consumption of ODS. EPA establishes company-by-company baselines (also known as “baseline allowances”) and allocates calendar-year allowances equal to a percentage of the baseline for specified control periods. A calendar-year allowance represents the privilege granted to a company to produce or import one kilogram (not ODP-weighted) of the specific substance. EPA allocates two types of calendar-year allowances—production allowances and consumption allowances. “Production allowance” and “consumption allowance” are defined at section 82.3. To produce an HCFC for which allowances have been allocated, an allowance holder must expend both production and consumption allowances. To import an HCFC for which allowances have been allocated, an allowance holder must expend consumption allowances. An allowance holder exporting HCFCs for which it has expended consumption allowances may obtain a refund of those consumption allowances upon submittal of proper documentation to EPA.

Since EPA is implementing the phaseout on a chemical-by-chemical basis, it allocates and tracks production and consumption allowances on an absolute kilogram basis for each chemical. Upon EPA approval, an allowance holder may transfer calendar-year allowances of one type of HCFC for calendar-year allowances of another type of HCFC, with transactions weighted according to the ODP of the chemicals involved. Pursuant to section 607 of the CAA, EPA applies an offset to each HCFC transfer by deducting 0.1 percent from the transferor's allowance balance. The offset benefits the ozone layer since it “results in greater total reductions in the production in each year of * * * class II substances than would occur in that year in the absence of such transactions” (42 U.S.C. 7671f).

The U.S. remained comfortably below the aggregate HCFC cap through 2009. The 2003 Final Rule announced that EPA would allocate allowances for 2010-2014 in a subsequent action and that those allowances would be lower in aggregate than for 2003-2009, consistent with the next stepwise reduction for HCFCs under the Montreal Protocol. EPA stated its intention to determine the number of allowances that would be needed for HCFC-22 and HCFC-142b, bearing in mind that other HCFCs would also contribute to total HCFC consumption. EPA noted that it would likely achieve the 2010 reduction step by applying a percentage reduction to the HCFC-22 and HCFC-142b baselines. EPA subsequently monitored the market to estimate servicing needs and market adjustments in the use of HCFCs, including HCFCs for which EPA did not establish baselines in the 2003 Final Rule.

In the 2009 Final Rule, EPA determined both the estimated demand for HCFC-22 during the 2010-2014 regulatory period and the percentage of that estimated demand for which it was appropriate to allocate allowances. As described in Section V.B. of this action, EPA determined that the percentage of the estimated demand allocated in the form of allowances should not remain constant from year to year but rather should decline on an annual basis. For 2010, EPA allocated allowances equal to 80 percent of the estimated demand for HCFC-22, concluding that reused, recycled, and reclaimed material could meet the remaining 20 percent. Under the 2009 Final Rule, the percentage of estimated demand for which there was no allocation, and therefore would need to be met through recycling and reclamation, rose from 20 percent in 2010 to 29 percent in 2014 to ensure the U.S. market would have a viable reclamation industry and could meet the 2015 stepwise reduction under the Montreal Protocol. The determinations EPA made in the 2009 Final Rule regarding (1) The total estimated demand for HCFC-22 in 2010-2014 and (2) the percentage of that estimated demand that EPA would address through an allowance allocation were not at issue in the litigation and are unaffected by the Court's decision. EPA is not revisiting either determination with respect to 2011 in this interim final action, but rather is relying on the existing record for the 2009 Final Rule. However, EPA welcomes comment on whether it should revisit these determinations in the future. EPA is also interested in comments on whether it could and should allocate a different percentage of baseline for calendar-year production than for calendar-year consumption, while still meeting U.S. obligations under the Montreal Protocol and complying with the CAA.

Several sections of the CAA apply to this rulemaking. Section 605 of the CAA phases out production and consumption and restricts the use of HCFCs in accordance with the schedule set forth in that section. As discussed in the 2009 Final Rule (74 FR 66416), section 606 provides EPA authority to set a more stringent phaseout schedule than the schedule in section 605 based on an EPA determination regarding current scientific information or the availability of substitutes, or to conform to any acceleration under the Montreal Protocol. EPA previously set a more stringent schedule than the section 605 schedule through a rule published December 10, 1993 (58 FR 65018). Through the 2009 Final Rule, EPA made a further adjustment to the section 605 schedule based on the acceleration under the Montreal Protocol as agreed to at the Meeting of the Parties in September 2007. The more stringent schedule established in that rule is unaffected by the recent Court decision and is therefore still in effect.

Section 606 provides authority for EPA to promulgate regulations that establish a schedule for production and consumption that is more stringent than what is set forth in section 605 if: “(1) Based on an assessment of credible current scientific information (including any assessment under the Montreal Protocol) regarding harmful effects on the stratospheric ozone layer associated with a class I or class II substance, the Administrator determines that such more stringent schedule may be necessary to protect human health and the environment against such effects, (2) based on the availability of substitutes for listed substances, the Administrator determines that such more stringent schedule is practicable, taking into account technological achievability, safety, and other relevant factors, or (3) the Montreal Protocol is modified to include a schedule to control or reduce production, consumption, or use of any substance more rapidly than the applicable schedule under this title.” It is only necessary to meet one of the three criteria. In the 2009 Final Rule, EPA determined that all three criteria had been met with respect to the schedule for phasing out production and consumption of HCFC-22 and HCFC-142b.

As noted in the 2009 Final Rule, while section 606 is sufficient authority for establishing a more stringent schedule than the section 605 phaseout schedule, section 614(b) of the CAA provides that in the case of a conflict between the CAA and the Montreal Protocol, the more stringent provision shall govern. Thus, section 614(b) requires the Agency to establish phaseout schedules at least as stringent as the schedules contained in the Montreal Protocol. To meet the 2010 stepdown requirement, EPA is continuing to allocate HCFC allowances at a level that will ensure the aggregate HCFC production and consumption will not exceed 25 percent of the U.S. baselines. For more discussion of this point, see 74 FR 66416.

Finally, section 607 addresses transfers of allowances both between companies and chemicals. EPA is further clarifying its policy on inter-pollutant transfers in this action.

Certain allowance holders affected by the 2009 Final Rule filed petitions for review in the U.S. Court of Appeals for the District of Columbia Circuit. Among other arguments, the petitioners, Arkema Inc., Solvay Fluorides, LLC, and Solvay Solexis, Inc., contended that the rule was impermissibly retroactive because in setting the baselines for the new regulatory period, EPA did not take into account certain inter-pollutant baseline transfers that petitioners had performed during the prior regulatory period. The transfers at issue occurred in 2008. Solvay Solexis, Inc. submitted two Class II Controlled Substance Transfer Forms for consumption allowance transfers to Solvay Fluorides, LLC on February 15, 2008, and March 4, 2008. Arkema, Inc. submitted two Class II Controlled Substance Transfer Forms for consumption and production allowance transfers on April 18, 2008. Each company requested EPA's approval to convert HCFC-142b allowances to HCFC-22 allowances, and checked a box on the EPA transfer form indicating that “baseline” allowances would be transferred. EPA sent non-objection notices to both Solvay Solexis and Solvay Fluorides on February 21, 2008 and March 20, 2008 and to Arkema, Inc. in April 2008. The transfer requests and EPA's approvals were attached to petitioners' court filings and are available in the docket for this action.

In the Notice of Proposed Rulemaking titled “Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export,” published in the Federal Register at 73 FR 78680 on December 23, 2008 (2008 Proposed Rule), EPA requested comments on establishing baselines for the 2010-2014 regulatory period “with or without” taking into account baseline inter-pollutant transfers made during the 2003-2009 regulatory period (73 FR 78687). The proposed regulatory text accounted for the inter-pollutant transfers discussed above. The increase in HCFC-22 baseline allowances for Arkema, Inc. and Solvay Fluorides, LLC presented in the 2008 Proposed Rule resulted in a larger amount of HCFC-22 baseline allowances overall and therefore a lower percentage of HCFC-22 baselines allocated across the board in each control period. Specifically, the proposed shift resulted in a 16 percent decrease in market share for all other allowance holders, and increases for the petitioners: Arkema and Solvay. For more detail on the impact of these transfers, see Section V.C. of this preamble.

In the 2009 Final Rule, after considering comments, EPA determined that allowing inter-pollutant transfers to carry forward from one regulatory period to the next could undermine the Agency's chemical-by-chemical phaseout approach and could encourage market manipulation. For a more detailed discussion, see Section V.A.1. EPA also concluded that section 607 of the CAA was best read as limiting inter-pollutant transfers to those conducted on an annual basis. For these reasons, EPA did not take the 2008 inter-pollutant transfers into account in establishing the baselines for the 2009 Final Rule covering 2010-2014.

The Court issued a decision on August 27, 2010, agreeing with petitioners that “the [2009] Final Rule unacceptably alters transactions the EPA approved under the 2003 Rule” ( Arkema v. EPA, 618 F.3d at 3). The Court vacated the rule in part, “insofar as it operates retroactively,” and remanded to EPA “for prompt resolution,” (618 F.3d at 10). The Court withheld the mandate for the decision pending the disposition of any petition for rehearing. On November 12, 2010, EPA filed a petition for rehearing, which was denied on January 21, 2011. The mandate issued on February 4, 2011.

Because the Court vacated the rule only in part, without specifying which part or parts were vacated, EPA may adopt a reasonable interpretation of the vacatur's extent. In doing so, EPA is relying on its expertise in administering the HCFC phaseout regulations under Title VI of the CAA. First, EPA notes that the rule contains elements that were not at issue in the litigation. EPA concludes that the vacatur has no effect on allowances for any substances other than HCFC-142b and HCFC-22, since the petitioners' claims and the opinion itself discuss only those two substances. Similarly, EPA concludes that other discrete portions of the rule, such as the provisions on use and introduction into interstate commerce, are unaffected by the vacatur.

The baselines for HCFC-142b and HCFC-22 were clearly at issue in the litigation and indeed are the focus of the Court's opinion. The Court found that “the Agency's refusal to account for the Petitioners' baseline transfers of inter-pollutant allowances in the Final Rule is impermissibly retroactive,” (618 F.3d at 9). Because baseline and calendar year allowances are inextricably linked, 4 EPA has determined that the Court's vacatur voids the HCFC-22 and HCFC-142b baselines in 40 CFR 82.17 and 82.19 as well as the percentage of baseline allocated for those specific substances in 40 CFR 82.16 for all companies listed in those sections. 5 This means that until EPA establishes new baselines and allocates new calendar-year allowances, production and import of these two substances is prohibited under 40 CFR 82.15. Recognizing this scenario, on January 28, 2011, EPA sent letters to affected stakeholders informing them that the Agency would exercise enforcement discretion for a limited period provided their production and import did not exceed specified levels and provided that they adhered to additional conditions.

In determining the meaning of the Court's vacatur, EPA considered whether this interpretation was consistent with what the Court intended and a good fit for the specific circumstances, which include the goals and design of the HCFC allowance program and the basic structure of the 2009 Final Rule. While this interpretation is appropriate in this instance, it is possible that another interpretation would be more appropriate in a case involving a program with different goals, design, or structure.

In the 2009 Final Rule, EPA relied on its assessment of the amount of virgin and recovered HCFC-22 and HCFC-142b needed to service existing equipment and transition to the 2015 stepdown under the Montreal Protocol. The Court did not take issue with this assessment. At this time, EPA has not received information indicating that demand will be higher than the Agency's assessment predicted. On the contrary, EPA has heard from several anecdotal sources that the amount of actual market demand for HCFC-22 may in fact be lower than the amount identified in the Servicing Tail Report. However, since EPA does not have sufficient data to support this conclusion at this time, and recognizes the urgent need to act quickly to establish allowances for the 2011 control period, the Agency is relying on the record for the 2009 Final Rule, which includes the Agency's prior assessment of demand for HCFC-22 and HCFC-142b in 2011. Therefore, through this action, EPA is establishing new baselines for 2011 reflecting the court's decision and allocating the percentage of baseline needed to ensure that the total allocation for 2011 remains the same as in the 2009 Final Rule. If sufficient information becomes available in future, EPA may adjust the aggregate allocation level for future control periods.

EPA interprets the Court's decision as applying, at a minimum, to the HCFC-22 and HCFC-142b baseline and calendar-year allowances for 2011-2014. EPA is not addressing 2010 allowances in this action. The Agency plans to take comment in a future notice-and-comment rulemaking on whether the vacatur and remand should be interpreted as applying to the 2010 allocations, and if so, how allowances in future control periods might be adjusted to reflect this. The 2011 control period is already well underway, and as discussed in the good cause finding in Section III, it is important that EPA establish a definitive 2011 allocation now to dispel confusion and allow normal business activities to proceed. In particular, EPA believes the urgent need for certainty regarding the consumption allowance allocations in the 2011 control period precludes the Agency from considering any adjustments during 2011. However, EPA intends to address this issue in detail in a separate notice-and-comment rulemaking with respect to future control periods.

EPA is taking this action as an interim final rule without prior proposal and public comment because EPA finds that the good cause exemption from the notice-and-comment rulemaking requirement of the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., applies here. Section 307(d) of the CAA states that in the case of any rule to which section 307(d) applies, notice of proposed rulemaking must be published in the Federal Register (CAA § 307(d)(3)). The promulgation or revision of regulations under Title VI of the CAA is generally subject to section 307(d). However, section 307(d) does not apply to any rule referred to in subparagraphs (A) or (B) of section 553(b) of the APA. Section 553(b)(B) of the APA, 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that notice-and-comment public procedures are impracticable, unnecessary, or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment.

EPA has determined that there is good cause for making today's rule final without prior proposal and opportunity for comment because such notice and opportunity for comment is unnecessary, impracticable, and contrary to the public interest. In reaching this determination, EPA considered several factors: (1) Taking interim final action for 2011 avoids regulatory confusion, disruption of normal business activities, and effects on consumers pending development of a notice-and-comment rulemaking (see, e.g., Brae Corp. v. United States, 740 F.2d 1023 (DC Cir. 1984)); (2) the Agency is relying on the existing record from the 2009 Final Rule for this action (see, e.g., Chamber of Commerce v. SEC, 443 F.3d 890 (DC Cir. 2006)); and (3) the rule's duration is limited (see, e.g., Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506 (DC Cir. 1983)).

First, it is in the public interest to dispel confusion, allow normal business activities to proceed, and avoid adverse effects on consumers. EPA has received numerous questions from industry about what, if any, allowances companies currently hold in light of the Court's decision. The primary purpose of this interim final rule is to dispel confusion and provide regulatory certainty for the near term. EPA interprets the vacatur as voiding company baselines and calendar-year allowances for HCFC-22 and HCFC-142b, and because entities are prohibited from producing or importing HCFCs without allowances, quick action is necessary to ensure the continued production and import of those two HCFCs. This interim final action will provide industry with certainty for 2011, and allow normal business operations to continue. It also gives EPA time to develop notice-and-comment rules that will cover subsequent control periods.

This action will also avoid unintended consequences for consumers and businesses who own appliances containing HCFC-22 and/or HCFC-142b ( e.g., refrigerators and air conditioners), as well as the businesses that service these appliances. Absent this rulemaking, there could be a shortage of these HCFCs. Consumers and businesses unable to service their existing HCFC-22 equipment with HCFCs would instead have to retrofit their existing appliances before the end of their useful life to use a refrigerant other than that which was intended for the appliance, or purchase new equipment to replace existing appliances. Not only would this be expensive and unexpected, especially for those who bought a new unit shortly before January 1, 2010, but the shortage could lead to improper retrofits that decrease a unit's effectiveness and energy efficiency, cost the consumer more to operate, and result in further refrigerant emissions to the atmosphere. Considering the current state of the economy, shortages of HCFC-22 could lead appliance owners, who likely do not have the same level of experience as a licensed professional, to recharge their units on their own. Improper retrofits and recharging could raise the potential for mixing refrigerants, which could damage systems and increase the likelihood of mixed refrigerants being vented into the atmosphere, since mixtures may not work properly and likely could not be reclaimed.

At worst, these scenarios could lead to an unanticipated changeover of significant quantities of equipment, which would be at odds with EPA's goal of minimizing impacts to business and consumers by supporting a gradual turnover of the installed base of equipment as individual equipment reaches the end of its useful life, allowing existing equipment to continue to operate properly. In the preamble to the 2009 Final Rule, EPA stated: “Congress intended to permit the continued use of previously-manufactured appliances” (74 FR 66438). EPA discussed this issue in detail at that time, in the context of the section 605(a) ban on the “use” of HCFCs (74 FR 66437-66438). In this action, the Agency is not revisiting its analysis or conclusions with respect to this issue. Accordingly, EPA is allocating production and consumption allowances for HCFC-22 and HCFC-142b in a way that avoids shortening the useful lifetime of appliances that were manufactured prior to the effective date of the use ban (January 1, 2010).

Furthermore, a supply shortage could raise the price of affected gases, thereby increasing incentives for entities to illegally smuggle HCFC-22 into the country to meet the demand of consumers and businesses. There are numerous cases cited on the EPA Web site ( http://www.epa.gov/ozone/enforce/index.html ) documenting the smuggling of CFCs and HCFCs. Not only would this hurt entities that are abiding by the law, it could even hurt consumers and businesses that unknowingly receive inferior material. For all these reasons, it is important that EPA take action quickly. Since it is impracticable to complete a notice-and-comment rulemaking prior to the 2011 summer season, when working air conditioners are most important, and delay would be contrary to the public interest, interim final action is necessary.

The second reason for invoking the good cause exemption is that EPA is relying on the existing record for the 2009 Final Rule, which is still applicable and sufficiently current for the purposes of this action. In this interim final rule, EPA is not revisiting the determination made in the 2009 Final Rule regarding the total amount of HCFC production and import that the Agency will allow for 2011. EPA is simply addressing what share of that total amount should be allocated to particular companies. The 2008 Proposed Rule (73 FR 78680) provided all interested parties an opportunity to comment on the total HCFC production and import amount for 2011. Thus, it is unnecessary to provide a second opportunity to comment on that amount prior to issuing this interim final rule.

Third, this interim final rule only addresses 2011—the current control period—and is thus limited in duration. The specific duration is defined by the structure of the stratospheric ozone protection program, which operates in control periods that correspond to calendar years. Allowances are allocated for a specific control period. EPA intends to initiate a notice-and- comment rulemaking or rulemakings as soon as possible to address subsequent control periods.

For the reasons explained above, and given the Court's statement that it was remanding to EPA “for prompt resolution,” notice and public procedure are impracticable, unnecessary, and contrary to the public interest. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(B). Nonetheless, EPA is providing 30 days for submission of public comments following this action. EPA will consider all written comments submitted in the allotted time period to determine whether to issue additional production allowances for 2011.

Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. chapter 5, generally provides that rules may not take effect earlier than 30 days after they are published in the Federal Register . APA section 553(d) excepts from this provision any action that grants or recognizes an exemption or relieves a restriction. Since today's action relieves a restriction from the regulatory ban on the production and consumption of HCFC-22 and HCFC-142b in the U.S., EPA is making this action effective immediately upon publication to ensure the availability of these HCFCs for servicing air conditioning and refrigeration equipment in 2011.

In response to the Court's decision, EPA is (1) Establishing 2011 company-by-company consumption and production baselines for HCFC-22 and HCFC-142b in the tables at 40 CFR 82.17 and 82.19 in a manner that reflects the 2008 inter-pollutant baseline transfers and (2) allocating company-by-company production and consumption allowances for these substances for 2011 by establishing percentages of baseline in the table at section 82.16. EPA is also updating the tables at sections 82.17 and 82.19 to reflect 2010 inter-company, single-pollutant baseline transfers and revising the list of allowance holders to update company names. These actions are consistent with actions taken in the 2009 Final Rule. To reflect the court's vacatur, EPA is removing the allocation percentages from the table at section 82.16 for the years 2011-2014. In this rulemaking, EPA is adding an allocation percentage for 2011. In a separate notice-and-comment rulemaking or rulemakings, EPA will address the allocations for the control periods 2012-2014. All aspects of the 2009 Final Rule promulgated on December 15, 2009 (74 FR 66412) that are not addressed in this interim final rule are unchanged.

As a Party to the Montreal Protocol, and having ratified the Montreal Protocol and all of its amendments, the U.S. was required to decrease its amount of HCFC consumption and production to 25 percent of the U.S. baseline in 2010. The cap is the same for the years 2010-2014 before it drops down to 10 percent of baseline in 2015. Under the cap, the aggregate allowances for all U.S. HCFC consumption in 2011 cannot exceed 3,810 ODP-weighted MT (25 percent of the aggregate U.S. consumption baseline) annually, and the aggregate allowances for all U.S. HCFC production in 2011 cannot exceed 3,884.25 ODP-weighted MT (25 percent of the aggregate U.S. production baseline) annually.

To stay below the cap set by the Montreal Protocol for the 2011 control period addressed in this rulemaking, EPA is using the historical production and consumption baselines as adjusted in the 2009 Final Rule, with further adjustments to reflect the 2008 inter-pollutant baseline transfers and inter-company, single-pollutant baseline transfers that occurred after issuance of the 2009 Final Rule.

EPA determined in the 2009 Final Rule that for HCFC-22, it was necessary to allocate a percentage of baseline that would decrease on an annual basis to reflect a projected decrease in demand as well as to promote recycling and reclamation. EPA is not revisiting that determination in this rulemaking. EPA concluded in the 2009 Final Rule that this approach would help prevent shortages that might otherwise occur upon the stepdown in 2015. In this action, EPA is allocating 32.0 percent of baseline for HCFC-22 in 2011, which reflects an annual decline from the 2010 amount. EPA is allocating 4.9 percent of baseline for HCFC-142b in 2011. The HCFC-142b number relates solely to the aggregate baselines for this substance and does not reflect an annual decline. The reasons for establishing these allocation percentages for 2011 are discussed in Section V.

EPA's allocations for both HCFC-22 and HCFC-142b meet U.S. obligations under the Montreal Protocol and reflect the use restrictions under section 605(a) of the CAA while providing for servicing needs consistent with those restrictions. The allocations for HCFC-22 and HCFC-142b reflect EPA's analysis of market data for these chemicals, as prepared in advance of the 2009 Final Rule. The allocation levels for these HCFCs meet the demand for virgin material and avoid shortages during 2011.

In this action, EPA is not changing the methodology used in the 2009 Final Rule to calculate the total number of calendar-year consumption and production allowances. While the number of total calendar-year consumption allowances is unchanged, the number of production allowances is slightly lower (less than two percent lower) than in the 2009 Final Rule due to the changes in aggregate baseline allowances. This is explained in more detail in Section V.C. The only other difference is in the distribution of those allowances.

At this time, EPA is allocating a total of 2,504 ODP-weighted MT of HCFC-22 and HCFC-142b calendar-year consumption allowances and 2,302 ODP-weighted MT of HCFC-22 and HCFC-142b calendar-year production allowances for 2011. Both allocations remain below the limit established by the Montreal Protocol for the 2010-2014 phasedown step of 75 percent below baseline. The difference between the cap and the total allocation reflects EPA's estimate (developed for the 2009 Final Rule) of the demand for HCFCs during these control periods. It also will accommodate minor adjustments in the market, particularly to allow potential market growth for other allowed HCFCs. As discussed in more detail in Section V.B.3. and in the preamble to the 2009 Final Rule, it will also encourage greater reclamation of recovered refrigerant and thus facilitate preparation for the 2015 step down in the consumption cap to 10 percent of baseline.

This action also clarifies EPA's policy on inter-pollutant transfers for 2011 and all future control periods in Section V.A.1.

In the 2009 Final Rule, EPA presented the allocation structure for HCFC-22 and HCFC-142b for the control periods 2010-2014: allocating a percentage of the baseline production and consumption allowances. The rationale for this system is discussed further at 74 FR 66412. The Court found no fault with EPA's framework for allocating HCFCs in the 2009 Final Rule, except the aspects of the rule they deemed to be retroactive, i.e., not taking into account inter-pollutant baseline transfers that occurred in the prior regulatory period in establishing company-specific baseline allowances. To address this, EPA is establishing HCFC-22 and HCFC-142b baseline allowances for 2011 that reflect past inter-pollutant baseline transfers deemed permanent by the Court.

Sections 607(b) and (c) of the CAA address inter-pollutant and inter-company transfers of allowances, respectively. Inter-pollutant transfers are the transfer of an allowance of one substance to an allowance of another substance on an ODP-weighted basis. Inter-company transfers are transfers of allowances for the same ODS from one company to another company. Section 607(c) also authorizes inter-company transfers combined with inter-pollutant transfers, so long as the requirements of both are met. The corresponding regulatory provisions for HCFCs appear at 40 CFR 82.23.

The 2009 Final Rule updated the baselines for HCFC-22 and HCFC-142b to reflect name changes and inter-company baseline transfers, i.e., transfers of baseline for a specific type of HCFC from one company to another. Doing so reflected the changes in the marketplace that had occurred since EPA promulgated the 2003 Final Rule. Inter-company baseline transfers provide a mechanism for new entrants to join the HCFC market and for other companies to expand their business. EPA recognizes that in some cases, entities are no longer actively involved in HCFC production, import, and/or export activities. EPA retained the baseline for such entities, noting that this had been a mechanism by which new entrants had entered the HCFC allowance system in the past.

The 2009 Final Rule also addressed four inter-pollutant baseline transfers made during the prior regulatory period (see Section II.D. of this action for more detail). EPA had proposed to adjust the company baselines to reflect these four inter-pollutant baseline transfers in the 2008 Proposed Rule. Eight commenters opposed, and two commenters supported, these proposed adjustments. At issue was whether the inter-pollutant baseline transfers should carry forward as part of the companies' baseline allowances in the next regulatory period.

After reviewing the comments, EPA concluded that adjusting the baselines to reflect inter-pollutant baseline transfers could create incentives for future manipulation of the allocation system in anticipation of future control periods. EPA remains concerned about the potential for such future manipulation if inter-pollutant baseline transfers during the current regulatory period are carried forward as a change in a company's baseline for future regulatory periods. For example, in 2020 EPA will no longer be issuing HCFC-22 production or consumption allowances (see section 82.16(e)). EPA expects that companies with HCFC-22 allowances would no longer be in the HCFC market at that date if they did not hold allowances for other HCFCs that may still be produced after 2020. If EPA were to allow inter-pollutant baseline transfers that carried forward into the new regulatory period, companies with HCFC-22 baselines in 2019 could convert them all to baselines for HCFC-123. Perpetuating the HCFC-22 baselines in a new form would be counter to the design of the chemical-by-chemical phaseout, under which the baseline allowances for a particular chemical are intended to drop out of the system upon the phase-out of that chemical. As another example, in 2015, a producer or importer that previously had not participated in the HCFC-123 market could dominate that market by converting its HCFC-22 baseline in 2014 to HCFC-123 baseline. Given the different ODPs of HCFC-22 and HCFC-123 (0.055 and 0.02, respectively), converting one baseline allowance of HCFC-22 would result in 2.75 baseline allowances of HCFC-123. Also, since companies hold many more HCFC-22 baseline allowances than HCFC-123 baseline allowances, converting those HCFC-22 baseline allowances would have an overwhelming effect on the current HCFC-123 baseline allowance holders and the overall market. EPA agrees with commenters on the 2008 Proposed Rule that taking inter-pollutant baseline transfers into account in setting baselines could have the effect of moving the U.S. HCFC phasedown from a chemical-by-chemical phaseout, as established under the “worst-first” approach in the 1993 Final Rule, towards an ODP-weighted phasedown. Thus, there are important policy reasons going forward for not taking inter-pollutant transfers into account in establishing baselines for new regulatory periods.

Some commenters on the 2008 Proposed Rule stated that modifying the baselines by taking into account inter-pollutant transfers would be contrary to the CAA. One commenter argued that section 607 of the CAA allows EPA to approve inter-pollutant transfers of allowances only on a year-to-year basis. That commenter pointed to language in section 607(b) stating that EPA regulations are to permit “a production allowance for a substance for any year to be transferred for a production allowance for another substance for the same year on an ozone depletion weighted basis.” The commenter also discussed the legislative history of the 1990 CAA Amendments.

EPA does not agree with the commenter that the language of section 607(b) is clear on its face. However, where the statutory language is ambiguous, EPA has discretion to choose a reasonable interpretation of that language. EPA determined in the 2009 Final Rule that section 607(b) is best read as permitting only year-by-year inter-pollutant transfers. EPA continues to believe that this is the best interpretation of the statutory language. Section 607(b) states that EPA's rules are to permit “a production allowance for a substance for any year to be transferred for a production allowance for another substance for the same year.” This language emphasizes the year-by-year nature of such transactions. No parallel language appears in section 607(c). That section does, however, provide that any inter-pollutant transfers between two or more persons must meet the requirements of section 607(b).

As the Court noted, “the Agency is certainly entitled to * * * institute a program that forbids baseline inter-pollutant transfers in the future,” ( Arkema v. EPA, 618 F.3d at 9). Hence, EPA concludes that requiring all inter-pollutant transfers to be conducted on a yearly—and thus temporary—basis going forward is the approach most consistent with the wording of section 607(b). Further discussion of the reasons for limiting inter-pollutant transfers to those conducted on a calendar-year basis is available in the Response to Comments on the 2008 Proposed Rule (included in the docket for this rulemaking).

Consistent with the Court's decision regarding past inter-pollutant transfers (those conducted during the prior regulatory period), the baselines established in this action for 2011 take into account the 2008 inter-pollutant baseline transfers discussed earlier in this notice. EPA is clarifying, however, that it has not approved any inter-pollutant transfers of baseline allowances in the current regulatory period, and for the reasons given in the 2009 Final Rule and in this action, in future EPA intends to approve inter-pollutant transfers only on a year-by-year basis. Thus, in the context of the protection of stratospheric ozone allowance system, companies should not expect that any inter-pollutant transfers they conduct will affect their baselines either in the current regulatory period or any future regulatory period.

As it did in the 2009 Final Rule, EPA is adjusting baseline allowances to reflect inter-company, single-pollutant baseline transfers that occurred since the last final rule was signed.

In summary, this interim final rule reflects the changes in consumption and production baseline allowances from (1) The 2008 inter-pollutant transfers deemed permanent by the Court and (2) inter-company, single-pollutant baseline transfers that have occurred since the 2009 Final Rule was signed, and (3) clarifies the types of inter-pollutant transfers that will be permitted in the future. The consumption and production baseline amounts for HCFC-22 and HCFC-142b for 2011 are shown below in Table 3.

In the 2009 Final Rule, EPA decided to allocate HCFC-22 and HCFC-142b allowances based on the projected servicing needs for those compounds, taking into account the amount of those needs that can be met through recycling and reclamation. EPA is not changing that approach in this interim final rule. However, the specific amounts allocated per company are different due to the changed baselines and the need to apply a different allocation percentage to company baselines in order to keep the aggregate amount allocated the same. Because it is necessary to promote use of reused, recycled, and reclaimed material in anticipation of the 2015 phasedown step, EPA does not intend to allocate the difference between the consumption allocation authorized by the Parties to the Montreal Protocol and the consumption allocation authorized by this rule except under unforeseen extenuating circumstances.

HCFC-22 is the most widely-used HCFC. The demand for its use in servicing existing equipment was the primary factor affecting EPA's allocation of production and consumption allowances of HCFCs for the current regulatory period. Prior to issuing the 2009 Final Rule, EPA issued and sought comment on three versions of a draft report analyzing servicing demand for the HCFC appliances in the U.S. refrigeration and air-conditioning sector projected to be in service from 2010-2019 (all versions available at Docket EPA-HQ-OAR-2008-0496: Published November 4, 2005 at 70 FR 67172; released at a stakeholder meeting on September 29, 2006; published December 23, 2008, with 2008 Proposed Rule). The Servicing Tail Report focuses on air-conditioning and refrigeration appliances because such equipment represents the bulk of the servicing need. In addition, the servicing exception to the use ban for HCFC-22 and HCFC-142b pertains only to use as a refrigerant in such equipment. Under section 605(a) of the CAA and EPA's implementing regulations, nearly all other uses of these two HCFCs were banned effective January 1, 2010. The projected servicing need for HCFC-22 in 2011 is approximately 57,900 MT (3,185 ODP-weighted MT), or approximately 84 percent of the consumption cap for all HCFCs in 2011 under the Montreal Protocol, which is 3,810 ODP-weighted MT. HCFC-142b has primarily been used as a foam blowing agent, a use that was phased out in 2010. The projected servicing demand for existing refrigeration equipment containing HCFC-142b is extremely low: Approximately 100 MT (7 ODP-weighted MT). EPA therefore focused the analysis on HCFC-22 because that compound is the predominant HCFC in the installed base of air-conditioning and refrigerant equipment for which servicing in the U.S. will likely continue.

As discussed in the 2009 Final Rule, the majority of HCFC-22 equipment that is projected to be in use from this point onward will be air-conditioning applications, including window units, packaged terminal units, unitary air-conditioning, chillers, dehumidifiers, water and ground source heat pumps, and motor vehicle air-conditioning in buses and trains. The report projected that approximately 145.6 million units of all such types of HCFC-22 air-conditioning equipment were in use in 2010, decreasing by about 41 percent in 2015 and 86 percent in 2020. In addition, approximately 3.8 million units of HCFC-22 refrigeration equipment were in use in 2010. The installed base of HCFC-22 refrigeration equipment is projected to decrease from 2010 levels by about 44 percent in 2015 and 75 percent in 2020. For more on the Servicing Tail Report and the Vintaging Model, which was used to develop the report, see 74 FR 66424 and the Servicing Tail Report included in the docket.

EPA estimates that the servicing need for HCFC-22 will continue to decrease each year, and consistent with the 2009 Final Rule, this interim final rule accounts for this by allocating a smaller amount for 2011 than was allocated for 2010. This approach is described in Section V.B.3. In this interim final action, EPA is maintaining the overall HCFC-22 allocation levels for 2011 that the Agency determined were appropriate in the 2009 Final Rule. EPA's decision not to allocate above the need projected in the Servicing Tail Report is discussed in the preamble to the 2009 Final Rule.

In the 2009 Final Rule, the Agency recognized that servicing demand can be met with a combination of newly-manufactured or imported HCFCs (virgin HCFCs) and HCFCs that have been recovered and either reused, recycled or reclaimed. Therefore, EPA did not anticipate that virgin HCFC-22 would need to be produced or imported to meet the entire HCFC-22 servicing demand (estimated to be 3,185 ODP-weighted MT in 2011). The Servicing Tail Report analyzes various scenarios regarding reclamation. EPA continues to believe that reused, recycled, and reclaimed material can help meet HCFC-22 servicing needs and is therefore not changing course at this time. Should new data be presented, EPA reserves the option of increasing the amount of demand for servicing existing equipment that should be met by reused, recycled, and reclaimed material in future control periods.

As explained in the preamble to the 2009 Final Rule, without year-to-year reductions in the allocations for virgin HCFC-22, the HCFC-22 market could be oversaturated, and the contribution of reused, recycled, and reclaimed refrigerant would decrease, both in the total number of kilograms and as the proportion of overall need.

EPA is particularly concerned with encouraging a smooth transition to the 2015 stepdown. At that date, the U.S. must meet a 90 percent reduction below the baseline for all HCFCs, which is equivalent to 1,524 ODP-weighted MT. EPA's Servicing Tail Report shows that even a 20 percent recovery rate would be insufficient to meet the demand for HCFC-22 in 2015. As shown in Table 4-5 in the report, demand for HCFC-22 in 2015 is projected to be 38,800 MT while the cap for all HCFCs equates to 27,709 MT of HCFC-22 (assuming no allocation for any other HCFCs). A 20 percent recovery rate would allow for the additional use of 8,800 MT but would still leave a shortfall of 2,291 MT in 2015. In developing the 2009 Final Rule, EPA calculated that to meet the total demand in 2015, the recovery rate would have to increase to 26 percent (representing 29 percent of total servicing demand).

In the 2009 Final Rule, EPA determined that it was desirable to institute a year-by-year reduction for the period 2010-2014. The Agency is maintaining that policy in this interim final action for 2011. A smooth transition for stakeholders—including continued availability of needed material for approved uses—has historically been an essential aspect of U.S. success in implementing the Montreal Protocol and CAA requirements. To ease the transition to 2015 and avoid disruptions to the market and shortages in HCFC-22 at that date, it is necessary to take steps now to foster the development of a robust recovery and recycling industry in the U.S.

EPA determined in the 2009 Final Rule the level of allocation that would meet the servicing demand over 2010-2014. In this interim final action, EPA is maintaining the overall HCFC-22 allocation levels for 2011 that the Agency determined were appropriate in the 2009 Final Rule. Since EPA is not banning the use of existing HCFC-22 appliances manufactured prior to January 1, 2010, reused, recycled, and reclaimed HCFC-22 will become more valuable as the phaseout progresses. The demand for HCFC-22 to service existing equipment will provide an economic incentive to increase the quantities of recovered HCFC-22 available for reuse, recycling, and reclamation. The docket for the 2009 Final Rule (EPA-HQ-OAR-2008-0496) provides further information on EPA's assumptions regarding the availability of reused, recycled and reclaimed HCFC-22 to meet servicing demand.

Because the primary benefit of annually reducing the allocation is to ensure demand in 2015 is met through greater recovery and reclamation, EPA continues to believe that it is appropriate to base the allocation on that goal. In developing the 2009 Final Rule, EPA estimated demand in 2015 for HCFC-22 would be 38,800 MT. Were the allocations to consist entirely of HCFC-22, the cap would limit the 2015 HCFC-22 allocation to only 27,709 MT, a difference of 11,091 MT that would have to be made up with recovered material. Furthermore, it is likely that the allocation in 2015 will not consist entirely of HCFC-22, as EPA will need to reserve room under the cap for other HCFCs. In the 2009 Final Rule, EPA determined it was appropriate to establish an annual step-down such that the amount of total demand to be met from recovered HCFC-22 would equal 12,500 MT each year. This is approximately the amount EPA projected would be needed to meet the servicing demand in 2015. EPA is retaining this approach for 2011 in the interim final rule. Under this approach, the allocations equal approximately 45,400 MT in 2011. These values, shown in the table below, are derived by subtracting 12,500 MT from the estimated demand each year. EPA will not issue HCFC-22 and HCFC-142b allowances for 2012 or later until a future rulemaking. Consistent with the 2009 Final Rule, EPA plans to reduce the allocation amount annually in future rulemakings to reflect the declining servicing demand.

As the total demand decreases, maintaining the supply of recovered HCFCs at a constant level results in recovered material comprising a greater proportion of the total demand each year. Under this approach, the percentage of the total demand to be met with recovered material will rise from 20 percent of total demand in 2010 to 21.6 percent in 2011, though the total amount of recovered material needed remains at 12,500 MT for both years. EPA still believes this is appropriate as it facilitates meeting the demand in 2015, of which at least 29 percent must be met with recovered material, but takes comment on whether demand for HCFC-22 has changed since the 2009 Final Rule was published. Additionally, EPA is taking comment on whether there is surplus HCFC-22 on the U.S. market. In particular, EPA is interested in learning more about: (1) The current amount of recovered HCFC-22 that is available for reclamation or reuse in another HCFC-22 system; (2) the amount of surplus HCFC-22 (virgin and reclaimed) in inventory; and (3) the amount of recovered HCFC-22 abroad awaiting import into the U.S. for reclamation and/or reuse. If new information shows a different amount of HCFC-22 should be allocated in future control periods to encourage reclamation and ensure a smooth transition, EPA will explore options to address this in a later proposed rule.

EPA is revising the tables in 40 CFR 82 that together specify the production and consumption allowances available to allowance holders during specified control periods. The tables at sections 82.17 and 82.19 apportion baseline production allowances and baseline consumption allowances, respectively, to individual companies for individual HCFCs during a particular regulatory period. Complementing these tables, the table at section 82.16 lists the percentage of baseline allocated to allowance holders for specific control periods. In the interim final rule, EPA is retaining this framework of complementary tables, revising them to reflect the Court's vacatur, responding to the Court's remand by making adjustments to the previous baselines consistent with the Court's ruling, and granting percentages of baselines in a manner that achieves the 2010 phaseout step and lays the groundwork for the next phaseout step in 2015.

In the 2009 Final Rule, the percent allocation for HCFC-22 for 2011 was 38.0 percent of baseline. In the interim final rule, the value is 32.0 percent. The percent allocation for HCFC-142b for 2011 was 0.47 percent of baseline in the 2009 Final Rule and is 4.9 percent of baseline in this interim final rule. These changes do not reflect a change in the total consumption allocation amounts for each substance, as the total allocation for HCFC-22 in 2011 remains approximately 45,400 MT (the same as the 2009 Final Rule), and the total allocation for HCFC-142b in 2011 remains at approximately 100 MT. Using the same percentage of baseline to allocate production allowances as consumption allowances, the total HCFC-22 production allocation is smaller than in the 2009 final rule by less than two percent. The lower amount is due to the change in company baselines to reflect the Court's decision on the 2008 inter-pollutant baseline transfers, and not a change in the methodology used to determine allowances. More information is available on this subject in Section V.C.2.

The 2009 Final Rule, which did not treat the 2008 transfers of HCFC-142b to HCFC-22 baseline allowances as carrying forward into the next regulatory period, had a total HCFC-22 consumption baseline of 119,384 MT. In this interim final rule, EPA is reflecting the baseline transfers in section 82.19 in accordance with the Court's decision. As a result, the aggregate HCFC-22 consumption baseline has increased to 141,865 MT. Since the aggregate HCFC-22 baseline is now higher due to the increase in the number of HCFC-22 baseline allowances for Arkema, Inc. and Solvay Fluorides, LLC, EPA is allocating a smaller percentage of the company-specific baselines than in the 2009 Final Rule to achieve the same total number of allowances. Thus, 45,400 MT of HCFC-22 consumption (the aggregate allocation amount in 2011) is equal to 38.0 percent of 119,384 MT (baseline) of HCFC-22 in the 2009 Final Rule, and 32.0 percent of 141,865 MT (baseline) in this interim final rule. The aggregate HCFC-22 production baseline is also increasing from 110,619 MT in the 2009 Final Rule to 129,093 MT in this interim final rule to reflect Arkema, Inc.'s transfer of HCFC-142b baseline production allowances to HCFC-22 baseline production allowances.

The opposite is true for HCFC-142b, which had a larger aggregate consumption baseline in the proposed rule (21,089 MT), but now has a smaller baseline (2,047 MT) since EPA is accounting for inter-pollutant transfers from HCFC-142b to HCFC-22. Thus, 100 MT of HCFC-142b consumption allowances (the aggregate allocation amount in 2011) are equal to 0.47 percent of 21,089 MT of HCFC-142b in the 2009 Final Rule, and 4.9 percent of 2,047 MT in this interim final rule. Aggregate HCFC-142b baseline production allowances are decreasing from 25,090 MT in the 2009 Final Rule to 9,444 MT in this interim final rule to reflect Arkema, Inc.'s transfer of HCFC-142b baseline production allowances.

EPA is removing the vacated text relating to HCFC-22 and HCFC-142b from the tables in sections 82.16, 82.17, and 82.19; adding new production and consumption baselines for those substances for 2011 to the tables at sections 82.17 and 82.19; and adding new specified percentages of baseline for those substances to the table in section 82.16 for the 2011 control period.

Consistent with the 2009 Final Rule, EPA is allocating different baseline percentages for HCFC-22 and HCFC-142b because EPA projects that the needs will differ for servicing air-conditioning and refrigeration appliances during the 2011 control period. As discussed in Section V.B.1., the analysis prepared for the 2009 Final Rule showed there will be a significantly greater need for HCFC-22 than for HCFC-142b during 2011. Based on the Servicing Tail Report and reporting information already required by EPA regulations, the needs for individual HCFCs are not uniform. EPA determined in the 2009 Final Rule that allocating the same percentage of baseline for HCFC-22 and HCFC-142b would result in too few allowances for HCFC-22 and too many allowances for HCFC-142b. While annual inter-pollutant transfers in accordance with section 82.23(b) could be used to transfer allowances of one HCFC for another on a temporary basis, EPA continues to believe it is not appropriate to rely on such transfers as a mechanism for large-scale corrections. Instead, EPA anticipates that the continued availability of annual, temporary inter-pollutant transfers will permit the market to self-correct for unforeseen changes in demand and allow entities to consider a range of options for their allowances. EPA seeks to avoid unnecessary disruptions in the marketplace and to promote a smooth transition for society.

For 2011, EPA is allocating HCFC-22 consumption allowances to meet about 78 percent of the servicing need, assuming the remainder will be met by recovered HCFC-22 that is either reused, recycled, or reclaimed. This translates into approximately 45,400 MT (2,497 ODP-weighted MT), or 66 percent of the total HCFC consumption cap for the 2011 control period.

For purposes of the 2011 interim final rule, EPA is not revisiting its determination in the 2009 Final Rule to use the same percentages for production and consumption allocations—deriving the percentages based on estimated need for each individual HCFC. Therefore, this rule allocates 41,310 MT (2,272 ODP-weighted MT of the 3,884.25 ODP-weighted metric ton production cap) to HCFC-22 production in 2011. The 2011 aggregate allocation is 1.7 percent lower than the amount allocated in the 2009 Final Rule (41,310 MT in this Interim Final Rule vs. 42,035 MT in the 2009 Final Rule) because the aggregate amount of baseline production allowances in this rulemaking did not increase by the same relative amount as aggregate baseline consumption allowances. Because Solvay did not transfer its HCFC-142b production allowances to HCFC-22 production allowances, consumption allowances are 18.8 percent higher in this rule, while production allowances are only 16.7 percent higher. The memo to the docket for this rulemaking (EPA-HQ-OAR-2010-1040) titled “HCFC-22 and HCFC-142b Allocation Adjustments: 2009 Final Rule vs. 2011 Interim Final Rule,” discusses the slight differences in allocation amounts in more detail.

While some allowance holders have encouraged EPA to increase the number of production allowances allocated in 2011, EPA is not allocating additional production allowances in this interim final rule for several reasons. First, EPA is relying on the existing record for the 2009 Final Rule, in which the Agency determined it was appropriate to allocate production and consumption allowances at the same percentage of baseline. EPA believes it is important to obtain public comment on this issue before changing course. Second, in the 2009 Final Rule, EPA stated that allocating the same percentage of baseline for production and consumption was “consistent with section 605(c) of the Clean Air Act, which requires that the phaseout schedule for HCFC consumption be the same as that for HCFC production” (74 FR 66429). EPA has given further thought to this provision and is seeking public comment on its interpretation before any changes in policy. Third, EPA has not previously taken comment on whether there would be environmental implications associated with such a change. Given these three considerations, EPA believes it would not be appropriate to increase the production amount without providing notice and an opportunity to comment.

While this interim final rule contains the same allocation percentages for production and consumption, EPA welcomes comment on whether it should use different percentages to allocate HCFC-22 production and consumption allowances in 2011 and/or future control periods. From a policy perspective, EPA is interested in comments on whether an increase in the total number of HCFC-22 production allowances would result in greater total HCFC production, either in the U.S. or globally. EPA notes that production of 1 kilogram of an HCFC requires both a production allowance and a consumption allowance (82.15(a)(1),(2)). Thus, an increase in production allowances without a corresponding increase in consumption allowances does not automatically result in greater production. The most likely scenario is that an increase in production allowances would result in greater U.S. production for export. This is because as stated in § 82.20(a), “A person may obtain at any time during the control period * * * consumption allowances equivalent to the quantity of class II controlled substances that the person exported from the U.S. and its territories to a foreign state * * * when that quantity of class II controlled substance was produced in the U.S. * * * with expended consumption allowances.” In effect, current EPA regulations allow exporters to receive a refund of one consumption allowance for each kilogram they export if they show one consumption and one production allowance were expended for the material exported. Therefore, EPA would not expect an increase in production allowances to result in greater amounts of HCFCs being used in the U.S. EPA welcomes comment on whether an increase in the level of production allowances would result in more U.S. production, either for domestic use or for export, and whether any additional U.S. production for export would result in greater worldwide production of HCFCs.

From a legal perspective, EPA is interested in comments on whether section 605(c) would preclude allocating a different percentage of baseline for production than for consumption. Section 605(c) states that EPA must “promulgate regulations phasing out the production * * * of class II substances in accordance with [section 605],” subject to any acceleration under section 606. It further states that EPA must “promulgate regulations to insure that the consumption of class II substances in the United States is phased out and terminated in accordance with the same schedule * * * as is applicable to the phase-out and termination of production of class II substances under [Title VI].” EPA is considering three possible interpretations of the term “schedule” as referenced in section 605(c): (1) The schedule that appears on the face of section 605, which contains no deadlines until 2015; (2) the schedule that appears on the face of section 605, as accelerated under section 606; and (3) the specific allocation percentages or amounts established by EPA through rulemaking for each control period. EPA believes that the second interpretation is the most consistent with the statutory language and purpose.

In past actions, the Agency has accelerated the initial schedule in section 605 to reflect modifications to the Montreal Protocol phaseout schedule for HCFCs. Under the 2007 Montreal Adjustment (reflected in Decision XIX/6), the U.S. is obligated to reduce HCFC production and consumption 75 percent below its aggregate baseline by 2010. EPA is not proposing to increase production to an amount that would be inconsistent with that obligation. Instead, EPA is taking comment on whether to allow production to increase relative to consumption, without encroaching on the cap. Specifically, EPA is taking comment on whether to issue additional production allowances in the amount of 7,746 MT when compared to this interim final rule.

If EPA were to decide to increase production allowances in 2011, its preferred approach would be to decouple the percentage of baseline allocated for production from the percentage of baseline allocated for consumption. EPA would effectuate this change in its regulations by replacing the table at 40 CFR 82.16 with two tables. One would allocate 32 percent of baseline for consumption allowances in 2011. The other would allocate 38 percent of baseline for production allowances in 2011. This approach would still provide the petitioners in Arkema v. EPA the benefit of their 2008 baseline transfers while giving other companies with production baselines approximately the same number of production allowances as they received in the 2009 Final Rule. Compared to the 2009 Final Rule, the net result would be 7,020 MT (386 ODP-weighted MT) additional HCFC-22 production allowed in 2011 for a total of 49,055 MT (2,698 ODP-weighted MT). Under this scenario, the U.S. would be 1,021 ODP-weighted MT below the production cap and in compliance with its obligations under the Montreal Protocol. EPA is seeking comment on whether this increase would hinder the transition to the 2015 phaseout step, under which the U.S. is obligated to reduce HCFC production and consumption 90 percent below its aggregate baseline. EPA's preference is to continue to use the same percentages for production and consumption allocations. This is because EPA is concerned this action could increase U.S. production of HCFCs, might decrease the U.S.'s ability to transition to the 2015 stepdown under the Montreal Protocol, and potentially increase global production of HCFCs. Nevertheless, the Agency welcomes comment on this option for increasing 2011 and/or future HCFC-22 production allowances. After reviewing comments, EPA may either issue a supplemental allocation of production allowances for 2011 or leave the 2011 production allocation in this interim final rule unchanged.

Establishing HCFC-142b baseline allowances that take into account the 2008 inter-pollutant transfers discussed in Section II.D. results in 2,047 MT of aggregate baseline consumption allowances and 9,444 MT of aggregate baseline production allowances. Consistent with the 2009 Final Rule, EPA is allocating 100 percent of the projected servicing need for HCFC-142b identified in that rule: 100 MT (7 ODP-weighted MT) of consumption. To get to that level of consumption, EPA is allocating 4.9 percent of the aggregate consumption baseline, as reflected in the table at section 82.16. The aggregate allocation number for consumption is the same as in the 2009 Final Rule.

Using the same percentage (4.9 percent), EPA is allocating 463 MT (30.1 ODP-weighted MT) of HCFC-142b production allowances for 2011. The 2011 aggregate allocation for production is higher than the amount allocated in the 2009 Final Rule (463 MT in this interim final rule vs. 118 MT in the 2009 Final Rule). The allocated amount is 292 percent higher than in the 2009 Final Rule because the aggregate amount of baseline HCFC-142b consumption allowances in this rulemaking decreased by a significantly larger amount than aggregate baseline HCFC-142b production allowances. Baseline consumption allowances are 90.3 percent lower in this rule, while baseline production allowances are only 62.4 percent lower. This occurred because Solvay did not transfer its HCFC-142b production allowances to HCFC-22 production allowances. This higher amount of calendar-year production does not affect the U.S.'s ability to meet its obligations under the Montreal Protocol. The memo to the docket for this rulemaking (EPA-HQ-OAR-2010-1040) titled “HCFC-22 and HCFC-142b Allocation Adjustments: 2009 Final Rule vs. 2011 Interim Final Rule,” discusses the differences in exact allocation amounts in more detail.

EPA is allocating (1) approximately 45,400 MT of HCFC-22 consumption allowances, (2) 41,310 MT of HCFC-22 production allowances, (3) approximately 100 MT of HCFC-142b consumption allowances, and (4) 463 MT of HCFC-142b production allowances for 2011. However, EPA actually allocates allowances to individual companies ( i.e. , legal entities).

Company-specific production and consumption baselines (also referred to as “baseline allowances”) for HCFC-142b and HCFC-22 are listed at sections 82.17 and 82.19, respectively. The percentage of baseline each entity will receive in 2011 appears at section 82.16(a), as shown in Table 1 above.

Allowances allocated for individual control periods are called “calendar-year allowances” to distinguish them from the baseline production or consumption. For 2011, EPA is apportioning production and consumption baselines for HCFC-22 and HCFC-142b on the same basis as in the 2009 Final Rule, except that EPA is making adjustments to reflect (1) The 2008 inter-pollutant transfers of baseline allowances deemed permanent by the Court, (2) inter-company, single-pollutant transfers of baseline allowances that occurred in 2010, and (3) changes in company names that occurred after the 2009 Final Rule was signed. Applying the approach described above, EPA is apportioning production and consumption baselines for HCFC-22 and HCFC-142b to the following entities in the following amounts:

This is a summary of the Commission's Structure and Practices of the Video Relay Service Program, Second Report and Order ( Second Report and Order ), document FCC 11-118 adopted July 28, 2011, and released July 28, 2011, in CG Docket No. 10-51, adopting modifications to its certification process for all iTRS providers. The full text of FCC 11-118 and copies of any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. FCC 11-118 and copies of subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor, Best Copying and Printing, Inc. (BCPI), at Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC 20554. Customers may contact BCPI at its Web site, http://www.bcpiweb.com, or by calling 202-488-5300. FCC 11-118 can also be downloaded in Word or Portable Document Format (PDF) at: http://www.fcc.gov/cgb/dro/trs.html#orders.

To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Document FCC 11-118 contains modified information collection requirements subject to the PRA. It will be submitted to OMB for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, the Commission previously sought specific comment on how it might further reduce the information collection burden on small business concerns with fewer than 25 employees.

In document FCC 11-118, the Commission has assessed the effects of imposing various requirements on iTRS providers to obtain certification from the Commission in order to be eligible for compensation from the Interstate TRS Fund (Fund). The Commission has determined that any additional data filing requirements imposed by document FCC 11-118 on iTRS providers are reasonable and necessary in order to ensure compliance with the Commission's rules. The Commission has taken steps to address the concerns of commenters stating that some of the Commission's proposed rules were overly burdensome. For example, the Commission initially proposed to require that a provider file a deed or lease for every service center operated. The Commission has modified this requirement in its final rule to allow for providers with more than five centers to submit a representative sampling of deeds and leases. In addition, the Commission has declined to adopt its proposed requirement for providers to submit documentation of all financing arrangements pertaining to the provision of iTRS. The Commission has also declined to adopt the requirement that providers submit copies of all subcontracting agreements for services not directly essential for the provision of iTRS. The Commission concludes that it has taken steps to further reduce the burdens on affected entities to apply for certification to receive compensation from the Fund for the provision of iTRS, and that the remaining filing requirements are not overly burdensome.

The Commission will send a copy of document FCC 11-118 in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A).

1. In document FCC 11-118, the Commission modifies its process for certifying iTRS providers as eligible for payment from the Fund for their provision of iTRS, as proposed in the Commission's Structure and Practices of the Video Relay Service Program, Report and Order and Further Notice of Proposed Rulemaking ( VRS Practices Report and Order and Certification FNPRM ), document FCC 11-54, published at 76 FR 24393, May 2, 2011 and 76 FR 24437, May 2, 2011. In the Certification FNPRM, the Commission sought comment on ways to modify the current certification process to ensure that iTRS providers receiving certification are qualified to provide iTRS in compliance with the Commission's rules, and to eliminate waste, fraud and abuse through improved oversight of such providers.

2. Under the Commission's current rules, an iTRS provider is eligible to provide relay services and receive compensation from the Fund if it is: (1) Operated under contract with and/or by a certified state TRS program; (2) owned or operated under contract with an interstate common carrier; (3) an interstate common carrier offering TRS under the Commission's rules; or (4) certified by the Commission pursuant to § 64.606 of the Commission's rules.

3. The Commission now adopts a requirement for all iTRS providers to receive certification from the Commission to be eligible to receive compensation from the Fund. As the Commission stated in the Certification FNPRM, the current alternative eligibility methods have failed to ensure that all providers are qualified to provide service that complies with the Commission's rules, or to facilitate Commission oversight of all entities eligible under these criteria. Because the Commission bears the responsibility for managing the Fund and ensuring the integrity of its iTRS programs, it should have the exclusive authority to ensure that iTRS is provided by qualified providers and to exercise effective oversight over the operations of these providers. The Commission finds that requiring all iTRS providers to become Commission-certified is a reasonable and appropriate way to achieve these objectives and further the Commission's goals of promoting effective, efficient, and sustainable iTRS services, and reducing fraud and abuse in the VRS program. The Commission further finds that applying this requirement to all iTRS will help to ensure that the difficulties the Commission has encountered in the VRS program will less likely be repeated for other iTRS programs.

4. Accordingly, an iTRS provider will no longer be permitted to receive compensation from the Fund unless it is certified by the Commission. The requirement for Commission certification will apply to new applicants, and to existing providers who have been eligible to provide iTRS under one of the previous alternative methods for eligibility. It likewise will apply to all forms of iTRS, and to all iTRS providers seeking recertification after their certifications expire, including those providers currently eligible under an existing Commission certification.

5. The Commission will require that entities wishing to be eligible for compensation from the Fund for the provision of VRS be certified by the Commission, operate the core facilities necessary to provide VRS service and employ their own communications assistants (CAs). The requirements adopted in the VRS Practices Report and Order, including those requiring VRS providers to lease, license or acquire and operate their own facilities and employ their own CAs, emanated from the Commission's goals of establishing better oversight of the VRS program, in order to ensure compliance with the Commission's rules and reduce fraud. Requiring VRS providers to operate their own call centers and to employ their own CAs will ensure that certified providers exercise necessary oversight of their own operations and compliance with Commission rules, and enable the Commission to better oversee the core operations of these providers.

6. ACD Platforms. By the term “ACD platform,” the Commission means the hardware and/or software that comprise the essential call center function of call distribution, and that are a necessary core component of iTRS. The Commission will require that any VRS provider that is leasing an automatic call distribution (ACD) platform from an eligible provider or from a third-party non-provider must have a written lease for such ACD platform and must include a copy of such written lease with its application for certification. The terms of the lease may not include (i) Compensation of the lessor by the lessee related to minutes of use or (ii) revenue sharing agreements between the lessor and the lessee. All references to leasing, leases, lessors, and lessees in this discussion of ACD platforms shall be construed to refer correspondingly to licensing, licenses, licensors, and licensees.

7. In addition, a VRS provider leasing an ACD platform from an eligible provider must locate the ACD platform on its own premises and must use its own employees to manage the ACD platform. In other words, an eligible VRS provider may lease the ACD platform from an eligible provider on a stand-alone basis, but may not lease capacity on another provider's ACD. The Commission will deny any application for certification that does not comply with the ACD platform requirements. In addition, if the Commission later discovers that a certified VRS provider is leasing from an eligible provider an ACD platform subject to an arrangement (whether in writing or verbal) that does not comply with the ACD platform requirements, the Fund Administrator shall immediately suspend all payments to both the lessor and the lessee.

8. The Commission finds that ACD leases with eligible providers calling for revenue sharing, compensation related to minutes of use, sharing of the ACD platform, or sharing the management of the ACD platform may give providers an increased incentive and ability to generate illegitimate minutes to bill to the Fund, and thus could result in continuation of the types of unlawful activities that the Commission has already seen on the part of many white label providers, undermining the Commission's efforts to reduce waste, fraud and abuse. In order to prevent fraud and ensure that only providers certified by the Commission provide the core components of VRS and exercise oversight of, and are accountable for, their own operations, the Commission prohibits these practices.

9. For VRS providers that lease their ACD platforms from manufacturers or equipment distributors not affiliated with VRS providers, the Commission requires a written lease for such ACD platform that conforms to the same restrictions on lease terms discussed above ( i.e., no compensation related to minutes of use and no revenue sharing between lessor and lessee), and that the applicant include a copy with its application for certification. The ban on revenue sharing and compensation based upon minutes of use should remove any incentive on the part of the non-provider lessor to facilitate any scheme by a provider to generate illegitimate minutes.

10. IP Relay and IP CTS Providers. In the VRS Practices Report and Order, the Commission adopted requirements that VRS providers own and operate their own facilities and employ their own CAs as part of a package of rules designed to reduce fraud, establish better oversight of the VRS program, and address the unauthorized revenue sharing arrangements that have escalated in the VRS program. Though IP Relay and IP CTS providers frequently use subcontractors to operate call centers, to date there has been no public record of significant waste, fraud and abuse in those programs from the use of subcontractors as there is in the VRS program, where there have been dozens of indictments related to fraud. The Commission therefore finds that to apply these requirements to IP Relay and IP CTS providers at this time could force such providers to expend significant sums to restructure their businesses to own and operate their own facilities, and thereby result in disproportionate industry disruption as compared to regulatory benefit. Nevertheless, the Commission will monitor the provision of IP Relay and IP CTS services and revisit this issue should the need arise.

11. The Commission has modified some of the documentation requirements originally proposed in the Certification FNPRM to minimize the burden on applicants to the extent consistent with the Commission's responsibility to ensure that only qualified providers are certified and that the Commission is able to exercise adequate oversight of providers. All of the requirements adopted in document FCC 11-118 are adopted pursuant to one or more of the Commission's objectives to ensure that iTRS providers receiving certification are qualified to provide iTRS in compliance with the Commission's rules, and to eliminate waste, fraud and abuse through improved oversight of such providers.

12. Deeds or Leases for Call Centers. The Commission modifies its proposal that a certification applicant file a copy of “each” deed or lease for “each” of its call centers. Instead, the Commisison will require VRS providers that maintain five or fewer domestic call centers to submit the deeds or leases for all of those call centers, while requiring providers with more than five domestic call centers to submit a representative sampling of the deeds or leases for five of their centers, together with a list of all other call centers that they operate. The Commission notes that the VRS Practices Report and Order already requires that providers, twice per year, submit a list to the Commission and the TRS Fund administrator of the locations of all of their call centers that handle VRS calls. Specifically, the list must contain the street address of each call center, the number of individual CAs and CA managers employed at each call center, and the name and contact information (phone number and e-mail address) for the managers at each call center. The Commission directs that the list we require here contain the same information. In addition, all providers must submit copies of deeds or leases for all international call centers that they operate, regardless of the number of such centers; these supplement the five (or fewer, if applicable) domestic deeds or leases. Because the Commission does not require at this juncture that IP Relay or IP CTS providers actually own or operate call centers, the Commission does not apply this documentation requirement to them.

13. Entities with Financial Interest in Applicant. The Commission requires that all iTRS applicants for certification or renewal submit a list of individuals or entities that hold at least a 10 percent equity interest in the provider, have the power to vote 10 percent or more of the securities of the provider, or exercise de jure or de facto control over the provider. In addition, the Commission requires applicants to submit a description of its organizational structure, and the names of its executives, officers, general partners (if the applicant is structured as a partnership), and members of its board of directors. The Commission declines to adopt its proposal in the Certification FNPRM that certification applicants submit a list of all financing arrangements pertaining to the provision of iTRS, including documentation on loans for equipment, inventory, property, promissory notes, and liens.

14. List of Employees and Copies of Employment Agreements. The Commission adopts substantially modified versions of its proposals in the Certification FNPRM that certification applicants provide a list of names of all their employees, and that applicants furnish copies of employment agreements for all of their executives and CAs. With respect to employee lists, the Commission requires only that providers submit a list of numbers of full-time and part-time employees involved in TRS operations, that includes, divided by the following positions: the executives and officers; video phone installers; CAs; and persons involved in marketing and sponsorship activities. In response to several comments objecting to the scope of the Commission's original proposal, Commission is not requiring the submission of information on employees, such as janitorial staff, who do not have any direct involvement with relay services. Nevertheless, the Commission will require applicants to retain the more comprehensive documentation that the Commission originally asked for regarding employees, including names and copies of employment agreements—to the extent they are involved in TRS operations—and to furnish it to the Commission upon the Commission's request. Likewise, instead of submitting agreements for all of its executives and CAs, iTRS certification applicants must retain employment agreements for its executives responsible for the provision of iTRS, including senior operations and marketing personnel, and copies of CA employment contracts. Consistent with record retention requirements that the Commission adopted in the VRS Practices Report and Order, the Commission likewise adopts a five-year duration period for the employment agreements and other employee records that it requires providers to retain in this Second Report and Order.

15. Proofs of Purchase or Lease for Use of All Equipment and/or Technologies. The Commission adopts a slightly modified version of the Commission's proposal to require applicants for certification to submit proofs of purchase or license agreements for all equipment and/or technologies, including hardware and software, used for the applicant's VRS call center functions. The Commission will require applicants, in their submissions, to describe the technology and equipment used to support their call center functions—including, but not limited to, ACD, routing, call setup, mapping, call features, billing for compensation from the TRS Fund, and registration—and for each core call center function, state whether it is owned or leased (and from whom if leased or licensed), and provide proofs of purchase, license agreements, or leases. This requirement's scope is limited to equipment and/or technologies to be used by the applicant for its call center functions, i.e., to provide the core components (other than CAs) of VRS. Because the Commission does not require at this juncture that IP Relay or IP CTS providers actually own or operate their own facilities, the Commission does not apply this documentation requirement to them.

16. List of Sponsorship Arrangements. The Commission adopts a slightly modified version of its proposal to require that applicants submit a list of all sponsorship or marketing arrangements and associated agreements. Now the Commission requires only those related to iTRS.

17. Copies of Subcontracting Agreements for Non-Essential Services. The Commission now believes that the scope of such documentation would be overly broad and only marginally useful, and declines to adopt this requirement.

18. Copies of All Other Agreements Related to Provision of iTRS. In the Certification FNPRM, the Commission proposed to require applicants for certification to submit copies of “all other agreements” associated with the provision of iTRS. Although the Commission declines to adopt a requirement that applicants submit copies of all other such agreements that are not included in any of the above categories, the Commission may seek additional relevant information from individual applicants that the Commission deems to be directly relevant to the applicant's ability to comply with the Commission's rules, on an as-needed basis.

19. Common Carrier Status. The Commission will eliminate the requirement that iTRS providers demonstrate their status as common carriers in order to receive certification. The Commission notes, however, that all providers, regardless of whether they are common carriers, are required to provide service in a manner that is both compliant with the Communications Act of 1934, as amended (Communications Act) and the Commission's rules and orders, and consistent with the Commission's policies and goals to prevent fraud and abusive practices. To that end, the Commission will seek comment in a forthcoming Notice of Proposed Rulemaking on whether it is necessary to adopt a rule to make non-common carrier iTRS providers subject to the same prohibitions against unjust or unreasonable practices that common carriers are subject to under the Communications Act. See 47 U.S.C. 201(b), 202(a).

20. The Commission finds that on-site visits may uncover deficiencies in an application or noncompliance in a provider's operations, which will decrease opportunities for and may, in turn, prevent, waste, fraud and abuse. Accordingly, the Commission reserves the right to include, as part of the iTRS certification process, an on-site visit to the applicant's headquarters, offices or call centers. The Commission also reserves the right to make subsequent, unannounced on-site visits of iTRS providers once they receive certification, for the purpose of ensuring continued compliance with certification requirements.

21. In order to avoid an interruption of service by those VRS providers who are already providing service via subcontracting, but who seek to become eligible providers through Commission certification, the Commission reserves the right to conditionally grant certification, subject to a subsequent optional on-site visit of any applicant where the Commission, upon initial review of the application, determines that the application facially meets the certification requirements, but that the Commission needs to verify some of the information contained in the application. Such grant of conditional certification will be without prejudice to the Commission's final determination of the applicant's qualifications, and will be dependent on the Commission verifying the information provided in the application for certification. Ultimate conversion to a full certification will occur when the Commission finds, based on review of the application, that the conditional grantee is in compliance with the Commission's rules and is qualified to receive compensation from the Fund for the provision of iTRS services. In other words, the Commission will complete its review of the applicant's qualifications subsequent to the on-site visit, and if the Commission finds the applicant to be qualified based on the complete review, then the Commission will issue full certification. If the Commission finds the applicant not to be qualified based on the complete review, the application will be denied and the conditional certification will automatically terminate 35 days after the denial. In such a case, the provider must give at least 30 days notice to its customers that the provider will no longer provide service.

22. Due to the evolving nature of the technologies and market for iTRS services, it is essential for the Commission to be informed on an annual basis of any updates to the information provided in the certification application. Therefore, the Commission will now require certified iTRS providers to append to their annual reports any documentary evidence required for certification that has changed since the date that certification was granted, and that has not been included in annual reports filed since the date of certification, and to provide a summary of such changes. If all documents that a provider supplied to the Commission at the time of its certification application and with subsequent annual reports remain accurate and current, a provider is instead required to append to its annual report an attestation that it has no updates to its certification documentation and subsequent annual reports. The Commission also declines to eliminate the current rule requiring iTRS providers to apply for recertification every five years.

23. In order to ensure that the Commission has complete and up-to-date information about the types of technologies and equipment used by VRS and IP Relay providers, the Commission amends its rules to require that each provider notify the Commission within 60 days of its launch of any new equipment or technology, including hardware and software, that it offers to consumers to the extent that such equipment or technology changes the way in which consumers access the provider's VRS or IP Relay services or has a bearing on the provider's compliance with the Commission's mandatory minimum standards.

24. The Commission determines that providing services from a new facility not previously identified to the Commission or the Fund administrator and discontinuation of service from any facility are types of substantive changes warranting notification to the Commission. In order to ensure that all VRS and IP Relay providers comply with the Commission's rules, the Commission must have in its records the existence and location of all VRS and IP Relay facilities established by the providers. Without such information, it will be more difficult to monitor compliance with the Commission's rules and to reduce waste, fraud and abuse.

25. The Commission takes this opportunity to reiterate that if a Commission-certified provider purchases, acquires, or merges with another iTRS provider, such transaction constitutes a substantive change under § 64.606(f)(2) of the Commission's rules, and therefore requires notice to the Commission within 60 days of its consummation. The Commission further notes that a Commission certification is not transferable to an entity not already certified by the Commission as eligible for compensation from the Fund.

26. The Commission finds that this 60-day notification requirement should be limited to those changes that likely impact a provider's ability to provide service in compliance with the Commission's rules. At this time, the Commission does not find it necessary to apply this 60-day notification requirement to changes in a provider's management, name branding of its product, or marketing and outreach activities to ensure compliance with the Commission's rules, but will revisit the issue if the need arises. Moreover, the rule changes the Commission adopts, including the substance of the annual reporting requirements, will enable the Commission to better monitor compliance with its rules and help reduce waste, fraud and abuse.

27. The Commission will adopt its proposal to require Commission approval in advance of planned service outages by VRS providers and to require notification to consumers in advance of such outages. Because Commission requirements that service be provided 24 hours a day, seven days a week, currently apply to VRS but not to IP Relay and IP CTS, the Commission adopts these requirements for VRS and not for the other iTRS services. As proposed in the Certification FNPRM, applications for temporary cessation of service must be filed at least 60 days in advance of such planned outage, and the Commission will act on any such application at least 35 days in advance of the planned service interruption date to afford providers a sufficient opportunity to notify consumers.

28. The Commission adopts a de minimis exception to its initial proposal to require prior Commission consent for all planned service outages. Planned outages of less than 30 minutes will not require prior consent of the Commission or prior notification to consumers, but the Commission must be notified of such outages within two business days after the outage. The Commission clarifies that it will not construe load-shifting among call centers as an interruption in service if service is not affected by such load shifting.

29. The Commission will require that unforeseen service interruptions of any iTRS service beyond the control of the provider be reported to the Consumer and Governmental Affairs Bureau (CGB) within two business days of the start of such service interruption. The Commission also requires that notification of service outages be provided to consumers on an accessible Web site, and that the Web site also include timely updates of service status.

30. In order to ensure the seamless delivery of iTRS during the transition period following Commission establishment of the new eligibility requirements and certification procedures, any provider currently eligible to receive compensation from the TRS Fund via a means other than Commission certification is required to apply for certification within 30 days after publication in the Federal Register of notice of OMB approval of the rules in document FCC 11-118 containing information collections, if it wishes to continue receiving compensation from the Fund without interruption pending review of its certification application. The Commission hereby grants interim eligibility to any iTRS provider currently eligible to receive compensation directly from the TRS Fund to continue to be eligible to receive compensation from the Fund. Such interim eligibility shall expire (1) 35 days after this application deadline, in the event no application is timely filed; (2) 35 days after Commission dismissal or denial of the application for certification in the event of Commission dismissal or denial; or (3) upon Commission grant of the application for certification in the event of Commission grant. Where interim eligibility expires under (1) or (2), the Commission requires the provider to give its customers at least 30 days notice that the provider will no longer provide service.

31. For those providers with Commission certifications that would have expired before the new certification requirements adopted in document FCC 11-118 go into effect had they not been extended to November 4, 2011, the Commission requires that they submit applications for recertification under the new requirements adopted in document FCC 11-118 after the requirements become effective but at least 30 days prior to the expiration of their currently extended certifications—that is, no later than October 5, 2011, provided that the rules are effective by that date.

32. The current stay of the Commission's rule which prohibits revenue sharing arrangements expires on October 1, 2011. For those iTRS providers who are not currently eligible to receive compensation directly from the TRS Fund but are currently providing service under a revenue sharing arrangement, and are interested in seeking a seamless transition to certified iTRS provider, the Commission urges that they file their certification applications on, or as soon as possible after, the day the rules adopted in this Second Report and Order become effective, so that review of their applications can commence as soon as possible.

The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” See 5 U.S.C. 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). Small Business Act, 15 U.S.C. 632.

In document FCC 11-118, the Commission amends its process for certifying iTRS providers as eligible for payment from the Fund for their provision of iTRS, as proposed in the Commission's Certification FNPRM. In the Certification FNPRM, the Commission sought comment on ways to revise the current certification process to ensure that iTRS providers receiving certification are qualified to provide iTRS in compliance with the Commission's rules, and to eliminate waste, fraud and abuse through improved oversight of such providers. Specifically, in document FCC 11-118, the Commission requires all iTRS providers to obtain certification from the Commission in order to be eligible to receive compensation from the Fund; requires all VRS applicants for Commission certification to lease, license or own, as well as operate, essential facilities associated with TRS call centers and to employ interpreters to staff those centers at the date of the application; and requires each iTRS applicant for certification to submit specific types of documentary evidence of its ability to comply with all of the Commission's rules, including those adopted in the VRS Practices Report and Order. In addition, the Commission adopts rules governing on-site visits by Commission staff to the premises of applicants for certification, as well as to iTRS providers' premises after they are certified. The Commission also revises its rules governing annual compliance reports filed by certified providers, and substantive TRS program changes that must be reported to the Commission. Finally, the Commission requires prior approval for planned cessations of VRS service of 30 minutes or longer.

The Commission has assessed the effects of imposing various requirements on iTRS providers to obtain certification from the Commission in order to be eligible for compensation from the TRS Fund. The Commission has determined that any additional data filing requirements imposed by document FCC 11-118 on iTRS providers are reasonable and necessary in order to ensure compliance with the Commission's rules, particularly in light of the widespread fraud currently being investigated in the VRS industry. VRS is a form of iTRS. The Commission has taken steps to address the concerns of commenters stating that some of the Commission's proposed rules were overly burdensome. For example, the Commission initially proposed to require that a provider file a deed or lease for every service center operated. The Commission has modified this requirement in its final rule to allow for providers with more than five centers to submit a representative sampling of deeds and leases. In addition, the Commission has declined to adopt its proposed requirement for providers to submit documentation of all financing arrangements pertaining to the provision of iTRS. The Commission has also declined to adopt the proposed requirement that providers submit copies of all subcontracting agreements for services not directly essential for the provision of iTRS. The Commission concludes that it has taken steps to further reduce the burdens on affected entities to apply for certification to receive compensation from the TRS Fund for the provision of iTRS services, and that the remaining filing requirements are not overly economically burdensome.

In order to be compensated, TRS providers are already required to comply with all of the Commission's rules governing the provision of TRS. All reasonable costs of providing service in compliance with document FCC 11-118 are compensable from the Fund. Thus, because certified providers will recoup the costs of compliance within a reasonable period, the Commission asserts that such providers will not be detrimentally burdened. This applies to currently eligible iTRS providers, as well as potential future applicants to provide iTRS.

Applications to become a certified iTRS provider are voluntarily submitted. Therefore, the Commission is not imposing an expense on a potential applicant that it cannot avoid by either declining to apply for certification, or by complying with the Commission's rules. If a small entity, as defined by the SBA, makes the latter business decision and applies for certification by showing that it can comply with all of the Commission's rules, its expenses will be indirectly reimbursed from the Fund once it becomes a certified provider. Therefore, for the small business entities receiving certification there is no adverse economic impact, and the question of whether there is a negative impact on a significant number of small entities is moot.

Therefore, the Commission certifies that the requirements of document FCC 11-118 will not have a significant economic impact on a substantial number of small entities.

The Commission will send a copy of document FCC 11-118, including a copy of this Final Regulatory Flexibility Certification, in a report to Congress pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A).

Pursuant to sections 1, 4(i), (j) and (o), 225, and 303(r), of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), (j) and (o), 225, and 303(r), document FCC 11-118 is adopted.

Pursuant to § 1.427(a) of the Commission's rules, 47 CFR 1.427(a), document FCC 11-118 and the rules adopted herein shall be effective September 6, 2011, except 47 CFR 64.606(a)(2), (g), (h)(2), and (h)(3) of the Commission's rules, which require approval by OMB under the PRA and which shall become effective after the Commission publishes a notice in the Federal Register announcing such approval and the relevant effective date.

The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of document FCC 11-118 including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows:

This is a summary of the Commission's Structure and Practices of the Video Relay Service Program, Order ( Order ), document FCC 11-118 adopted July 28, 2011, and released July 28, 2011, in CG Docket No. 10-51, adopting interim rules related to the Commission certification process for iTRS providers. The full text of FCC 11-118 and copies of any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. FCC 11-118 and copies of subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor, Best Copying and Printing, Inc. (BCPI), at Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI at its Web site, http://www.bcpiweb.com, or by calling 202-488-5300. FCC 11-118 can also be downloaded in Word or Portable Document Format (PDF) at: http://www.fcc.gov/cgb/dro/trs.html#orders. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

The Commission will send a copy of document FCC 11-118 in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A).

The interim rules adopted in document FCC 11-118 contain new information collection requirements subject to the PRA. Document FCC 11-118 will be submitted to OMB for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new information collection requirements contained in this proceeding. While the interim rules in document FCC 11-118 are being adopted without notice and comment, and therefore are not subject to Regulatory Flexibility Act analysis under 5 U.S.C. 604(a), the Commission believes that the information collection burden on small businesses from the interim rules is de minimis. Specifically, to the extent they require that providers support their certification applications and annual compliance filings with a certification, under penalty of perjury, as to the truthfulness, accuracy, and completeness of the filings, this merely entails adding the language specifically provided in the interim rules and having the filing signed by a senior executive. The Commission therefore concludes that the information collection burden associated with the interim rules is de minimis.

In document FCC 11-118, the Commission adopts interim rules requiring that providers certify, under penalty of perjury, that their certification applications and annual compliance filings required under § 64.606(g) of the Commission's rules are truthful, accurate, and complete. The Commission finds good cause to adopt the interim rules to ensure that providers seeking certification and providers holding certifications may be held accountable for their submissions as they seek to secure or retain certification under the rules adopted in the Second Report and Order portion of document FCC 11-118.

The Commission previously has found that requiring a signed statement sworn to be true under penalty of perjury is a vehicle long and regularly used in a myriad of legal contexts to guarantee the veracity of the declarations, as well as to provide a means for civil enforcement and criminal prosecution to hold high level officials accountable for the actions and submissions of their companies. In addition, any applicant for, or holder of, any Commission authorization already is required to ensure that its statements to the Commission are truthful, accurate, and complete under the Commission's rules. Consistent with these existing requirements, the Commission concludes that interim rules requiring certification by a senior executive, under penalty of perjury, to the truthfulness, accuracy, and completeness of certification applications and annual compliance filings are a necessary and critical component of the Commission's efforts to curtail fraud and abuse. In particular, these interim rules will help to ensure that the Commission has true and complete information, thereby ensuring that only qualified providers are eligible for compensation from the Fund.

The Commission finds good cause to adopt the interim rules without notice and comment, pursuant to 5 U.S.C. 553(b)(3)(B), in light of the impending deadlines for initial and re-certification applications. The current stay of the Commission's rule which prohibits revenue sharing arrangements expires on October 1, 2011, and iTRS providers who are not eligible to receive compensation directly from the Fund but are currently providing service under a revenue sharing arrangement will no longer be able to provide service through such arrangements. Similarly, providers currently eligible for compensation from the Fund via a means other than Commission certification must apply for certification within 30 days after the final rules adopted in document FCC 11-118 become effective, and providers with Commission certifications expiring November 4, 2011 must apply for recertification after the rules become effective but at least 30 days prior to their expirations provided that the rules are effective by that date, or risk having to shut down their operations and being denied compensation from the Fund. The Commission therefore finds that interim rules are consistent with the public interest, given the importance of ensuring that only qualified providers are certified to become eligible for compensation from the Fund. The Commission concludes that notice and comment, in this instance, are impracticable given the impending certification application deadlines. In a forthcoming Notice of Proposed Rulemaking, the Commission will seek additional comment on whether to make these rules permanent.

The interim rules adopted in document FCC 11-118 are being adopted without notice and comment, and therefore are not subject to Regulatory Flexibility Act analysis under 5 U.S.C. 604(a). The Commission will perform the appropriate regulatory flexibility analyses for any permanent rules adopted at a later date.

Pursuant to sections 1, 4(i), (j) and (o), 225, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), (j) and (o), 225, and 303(r), and section 553(b)(3)(B) of the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), document FCC 11-118 IS ADOPTED. Pursuant to § 1.427(a) of the Commission's rules, 47 CFR 1.427(a), document FCC 11-118 shall be effective September 6, 2011, except 47 CFR 64.606 (a)(2)(v) and (g)(2), which require approval by OMB under the PRA and which shall become effective after the Commission publishes a notice in the Federal Register announcing such approval and the relevant effective date.

The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of document FCC 11-118 to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows:

In August 2006, NHTSA issued a final rule  2 to establish uniform performance requirements for the accuracy, collection, storage, survivability, and retrievability of onboard motor vehicle crash event data recorders (EDRs) voluntarily installed in passenger cars and other light vehicles. This final rule was intended to standardize the data obtained through EDRs so that such data would be put to the most effective future use.

Specifically, the regulation, 49 CFR part 563 (Part 563), applies to passenger cars, multipurpose passenger vehicles, trucks, and buses with a gross vehicle weight rating (GVWR) of 3,855 kg (8,500 pounds) or less and an unloaded vehicle weight of 2,495 kg (5,500 pounds) or less, except for walk-in van-type trucks or vehicles designed to be sold exclusively to the U.S. Postal Service, that are equipped with an event data recorder and to the manufacturers of these vehicles. The final rule is intended to be technology-neutral, so as to permit compliance with any available EDR technology that meets the specified performance requirements.

In January 2008 (73 FR 2168), the agency amended the EDR final rule in the following ways:

• We clarified the event storage definitions to alleviate any uncertainties in multiple event crashes,

• Revised certain sensor ranges and accuracies to reflect current state of the art technologies,

• Clarified the recorded data reporting format,

• Specified vehicle storage conditions during compliance testing,

• Clarified the required data elements and scope of covered sensors, and

• Revised the effective date to provide additional time for manufacturers and suppliers to comply with the rule.

The agency received three petitions for reconsideration  3 and two requests for interpretation in response to the January 2008 final rule. The petitions for reconsideration were submitted by the Alliance of Automobile Manufacturers (Alliance), the Association of International Automobile Manufacturers, Inc. Technical Affairs Committee (AIAM), and Mr. Thomas Kowalick. The requests for interpretation were submitted by the Automotive Occupant Restraints Council (AORC) and Robert Bosch, LLC (Bosch). To the extent possible, the agency will address these requests for interpretation in this notice.

The Alliance petitioned the agency to remove collection of acceleration data from part 563. It commented that acceleration could be reasonably estimated from delta-V data collected by the EDR, and that the 250 millisecond time interval required in Part 563 would increase the cost of memory for storage of acceleration data. It further commented that the revised acceleration data accuracy requirements do not sufficiently address the effects of data clipping. It recommended that the agency amend § 563.6 to be consistent with the agency's intent to exclude peripheral sensors as described in the preamble of the final rule. The Alliance recommended that the agency establish a test procedure for compliance with the delta-V accuracy requirement. Finally, the Alliance commented on several technical and editorial corrections to clarify the regulatory text for certain data elements such as suppression switch status, occupant classification, antilock braking system (ABS) status, stability control status, and seat track position.

The AIAM requested that the agency make an allowance in the final rule for the possibility of reduced accelerometer accuracy resulting from data clipping. It commented that clipping can occur at higher impact speeds even with sensors of fairly wide range capability. It requested that the agency clarify its intent with regard to the capture and lock of data collected from certain air bag deployment events. In addition, the AIAM requested that the agency clarify certain data elements and definitions such as time zero, end of event, multi-event status, and accelerometer range.

Mr. Thomas Kowalick petitioned the agency to reconsider a mechanical lock out system for the download port of EDRs that could only be accessed by the owner of the vehicle. He stated that devices are being offered to consumers to alter odometer readings, erase EDR data, or prevent EDR data from being recorded by the vehicle.

In its request for interpretation, the AORC stated its belief that manufacturers will forego recording of acceleration data and lateral delta-V data if the agency does not allow for additional inaccuracy due to data clipping. It requested that the agency clarify the accuracy requirements in Table III, specifically for accelerometers, and all parameters calculated from the accelerometer data. Additionally, the AORC requested that the agency clarify:

○ That events involving deployable restraints other than air bags could be treated as an event trigger at the option of the manufacturer,

○ That the data lock may apply to either the individual event data or the entire EDR at the option of the manufacturer,

○ Whether the acceleration/angular rate data elements in Table II are single sampled (raw) data or time averaged data, and

○ That newer steering systems with active intervention may allow cases where the steering angle and tire position may not correlate.

Bosch requested that the agency clarify that the lateral acceleration data element requirement in Table III is based on the need for data from lateral sensors with a relatively large range (high-G), having a typical range of ± 50 g and used for side crash events, rather than lateral sensors with a relatively small range (low-G) having a typical range of ± 5 g and used for rollover events. It assumed that the lateral acceleration data used for side crash events are the main scope of the final rule, and therefore that the range for the data element would be more appropriately set at ± 50 g. Bosch also requested that the agency interpret the accuracy and resolution for the steering input data element in Table III so that the range, resolution, and accuracy are consistent.

Part 563 specifies that if the EDR records acceleration data “in non-volatile memory for the purpose of subsequent downloading,” then the data must be reported under the minimum conditions and format specified in Tables II and III. Acceleration data has been introduced as a desired component of the EDR rulemaking as early as the June 14, 2004  4 Notice of Proposed Rulemaking (NPRM). Originally proposed as a required data element, we revised the requirement to an optional data element in the August 28, 2006  5 final rule in favor of the requirement to record delta-V data. However, we retained the acceleration data elements in recognition of the value of this data when reconstructing a crash. In response to the 2006 final rule, the Alliance stated that acceleration data could be derived from the delta-V data and petitioned the agency to delete the collection requirements for accelerometer data. In the January 14, 2008 final rule, we denied the Alliance petition stating that “acceleration is a common data element collected in engineering studies and crash tests to determine crash severity and the shape of the crash pulse in frontal and rear crashes.” However, for reporting acceleration data, we reduced the sampling rate from 500 samples/second to 100 samples/second, reduced the accuracy from ± 5 percent to ± 10 percent, reduced the resolution from 0.01 g to 0.5 g and removed filtering protocols to better reflect current accelerometer technologies.

In response to the January 14, 2008 final rule, the Alliance again petitioned the agency to remove the acceleration data element from part 563. It commented that there are several reasons for the agency to reconsider its decision. First, the Alliance stated that given the revisions adopted in the January 14, 2008 final rule, retaining acceleration data in the regulation provides no incremental crash assessment information since the acceleration data can be readily derived from delta-V data. It suggested that through simple arithmetic manipulation of the delta-V data, the agency could derive acceleration data. Second, the Alliance stated that a 70 millisecond acceleration data element time interval is typically used in EDRs for evaluating air bag performance, not the 250 millisecond interval required in Part 563. It commented that the increased cost of data storage to meet the regulation could potentially lead to the unintended consequence of manufacturers opting not to capture and record acceleration data. Third, the Alliance commented that it is unaware of any way to practically assess or comply with the ± 10 percent accuracy requirement for the acceleration data elements.

The AIAM commented that while the agency provided allowance for accelerometers with ranges greater than the minimums specified in Table III, it did not provide any additional allowance for resolution based on an extended range. The AIAM thus believes that manufacturers will incur additional costs to increase the resolution of accelerometers with ranges in excess of the minimums. It recommended that the agency reconsider the Alliance approach  6 proposed in its petition for reconsideration to the August 28, 2006 final rule. The Alliance proposed that the accelerometer resolution be revised to “the range of the sensor divided by the number of available states in one byte.” In this manner, a sensor capable of measuring 100 g would have a resolution of 0.39 g (100 g/255 states in a byte).

Similarly, the AORC stated their belief that vehicle manufacturers will forgo recording acceleration data due to concerns about inaccuracies from sensor saturation or data clipping. The AORC requested that the agency clarify that the accuracy requirement for the acceleration data elements applies to the full scale physical application sensor, rather than the minimum range shown in Table III.

Agency Response: We are denying the petition to remove acceleration from Part 563. The agency continues to believe, as it has twice stated (in the August 28, 2006 and January 14, 2008 final rules), that acceleration is a common data element collected in engineering studies and crash tests. Vehicle accelerations are among the first sets of data collected by the EDR, and are subsequently used for determining vehicle delta-V data. We are aware that several vehicle manufacturers, such as Ford Motor Company (Ford) and General Motors (GM), currently record acceleration data via the EDR in addition to delta-V data. The agency has also stated that the acceleration data element is important in understanding and evaluating air bag deployment algorithms and vehicle crash pulses for the purposes of better understanding occupant restraint performance and predicting injury in crash reconstructions. The Alliance has also recognized the value of accelerometer data  7 for such purposes.

In its petition for reconsideration, the Alliance first stated that “* * * it is pointless to separately record acceleration data at a rate and interval that matches the rate and interval of delta-V data, given that these acceleration data can be derived by simple arithmetic manipulation of the delta-V data.” Secondly, it suggested that the cost increase involving Part 563 acceleration data could provide strong incentive for not recording acceleration data at all.

We partially agree with the Alliance regarding the need to separately record acceleration data at a rate and interval that matches the rate and interval of delta-V data. Our interest in acceleration data extends beyond the simple arithmetic manipulation of delta-V data for the reasons cited above. However, we note that for other reasons described below, we have revised the acceleration data element in a manner that addresses the Alliance's concerns about the recording intervals and potential for increased costs.

The remaining concerns expressed by the Alliance and other petitioners dealt with persistent technical issues that affect compliance with the acceleration data element requirements. The Alliance stated that the accuracy of the acceleration data collected by the EDR would not necessarily coincide with the laboratory acceleration data at any given moment in time. Specifically, the Alliance stated that EDR acceleration data is typically filtered at a different level than laboratory accelerometers, and thus results in recorded acceleration data that is phase-shifted in time. Information shared during an ex parte meeting with GM  8 on May 8, 2008, also illustrated this issue: the data showed that at given points in time, the 10 percent accuracy requirement was not met.

Three organizations, the Alliance, the AORC, and the AIAM stated that the revised acceleration data accuracy requirements do not sufficiently address the effects of data clipping. The Alliance stated that during crash tests specified for Part 563 compliance, it is not uncommon to experience brief periods of deceleration exceeding 50 g. The AORC stated that such clipped data and resulting inaccuracies could deter manufacturers recording acceleration. The AIAM also agreed with the Alliance in that manufacturers would need to switch to sensors of very high ranges (in excess of ± 100 g) in order to meet the accuracy requirements in Part 563. Consequently, the AIAM suggested that vehicle manufacturers would need to redesign their EDR systems with higher range sensors that could result in degradation in air bag system performance. The AIAM submitted data from five crash tests to illustrate that clipping occurs at the higher impact speeds even with sensors of a fairly wide range. It requested that the agency make an allowance in the rule for the possibility of reduced accelerometer accuracy resulting from data clipping.

In the January 2008 final rule, we relaxed the required accelerometer resolution capability because we recognized that current EDR technology would not achieve acceleration data element resolutions of 0.01 g. We agreed that there would be no significant loss in acceleration data quality if the acceleration resolution was revised to 0.5 g. However, we did not adopt the Alliance proposal for data element resolution, favoring instead a set resolution of 0.5 g. Our reasoning for adopting this set resolution limit was that we intended to standardize EDR output data. We believed that adopting the Alliance proposal would encourage a proliferation of acceleration data element output resolutions rather than a standardized single reported resolution.

At that time, we believed that the revised acceleration data element accuracy and resolution requirements would provide sufficient relief to avoid any unnecessary rise in manufacturing costs. We did not fully anticipate the effects of sensor saturation or clipping on the choice of accelerometer ranges to comply with the EDR rule. However, because of this clipping, manufacturers that wished to continue capturing acceleration data would be left with no alternative but to increase the sensing range of accelerometers beyond what is practical for EDRs. This, in part, contributed to the Alliance request to either remove the acceleration data elements or revise the acceleration data element resolution requirements.

The data presented by the petitioners and during the ex parte meeting with GM indicated that clipping can occur for brief periods even during Federal Motor Vehicle Safety Standard (FMVSS) No. 208, “Occupant crash protection,” compliance testing. It is during these brief periods that the accuracy of the acceleration measurement cannot be maintained within ± 10 percent. The Alliance and the AIAM commented that the only countermeasure available to manufacturers to solve the clipping problem would be to expand the range of the accelerometers such that any clipping or saturation would be minimized. The AORC comments supported these claims. The petitioners suggested that the trade-off in expanding the accelerometer detection range is a decreased sensitivity which could negatively affect the performance of air bag systems.

One of the primary concerns the agency considered in developing this final rule was to ensure that air bags continue to deploy properly. We did not intend to require the data element accuracies listed in Table III to extend beyond the capabilities of the sensors used in EDRs, specifically in sensors that are designed to meet critical safety roles and optimized for those purposes. Likewise, we find the Alliance comments on filtering and phase-shifting persuasive. However, we wish to continue collecting accelerometer data so that the agency might better understand crash scenarios and deployment decisions made during crashes. Based on our evaluation of these comments, in lieu of removing acceleration from Part 563, we have instead decided to remove the reporting specifications for acceleration data elements in Table III, including minimum range, accuracy and resolution.

We have also added a provision for the EDR report to indicate when sensor clipping has occurred. We believe that an indicator of when inertial sensors have become saturated during a crash will aid the agency in understanding when measurements from the sensors have begun to exceed their design ranges, and potentially exceed the accuracy requirements in Part 563. The manner by which clipping is indicated is at the option of the manufacturer. 9 This appears as Footnote 1 in Table III.

We believe that through our actions, manufacturers may continue to use current EDR technologies and not incur any significant cost increases due to use of extended accelerometer ranges. We have determined that the acceleration data element is important to the agency's data collection goals. Therefore, we wish to continue receiving the “reported” acceleration data, regardless of the format with which it is captured.

As such, we have revised the acceleration data elements reported by the download tool and the accuracy of the acceleration data elements to be at the option of the manufacturer. For example, if a vehicle manufacturer elected to record 70 msec of acceleration data at 2 msec time increments with an accuracy of ± 0.5 g, we would expect the reported acceleration data to follow that format. We believe that this would alleviate concerns about certification accuracies, while preserving a means of reporting acceleration data from the EDR for crash reconstruction purposes.

We acknowledge that in making this change, the reported acceleration output would not be standardized among EDRs. The duration of the reported output and the resolution may vary depending upon the EDR design of the vehicle. However, given the aforementioned concerns, having acceleration data reported by the download tool with an indicator of when sensor clipping or saturation occurs, would assist crash reconstructionists with a means of computing a momentum balance on the crash event and provide a better understanding of vehicle crash behavior. Furthermore, the agency plans to monitor the acceleration reported by the EDR download tool through various means, including comparing the reported output with a differentiated delta-V time history, and/or by comparing the reported output to laboratory instrumentation during crash tests. This information will allow the agency to better understand the significance and variation of data clipping and filtering experienced in recorded acceleration data. If the agency finds that the acceleration information from the EDR is not useful as reported, we may revisit the need for further standardization.

Thus, for the reasons discussed above, we are denying the petition to delete the acceleration data elements from part 563. We do not believe it unreasonable to report acceleration data during download if a manufacturer voluntarily records acceleration data during a crash. It would also mitigate data storage concerns since no additional storage would be required by the EDR over what has already been established in the design of the EDR.

The Alliance agreed that data clipping is a rare occurrence in real world conditions, but that during the FMVSS No. 208 tests that will be used to determine if EDRs have met the requirements in Part 563, there may exist brief periods of deceleration that can exceed 100 g. It recommended that the agency revise the delta-V accuracy requirement to ± 10 percent for events in which no sensor saturation or data clipping occurs.

Agency Response: In the January 14, 2008 final rule, we denied petitions to allow additional inaccuracy due to sensor saturation or data clipping. Our belief at that time was that

We believed then that the revised data element accuracy and resolution requirements would provide sufficient relief to avoid any unnecessary rise in manufacturing costs, but we did not fully anticipate the effects of sensor saturation or clipping on the choice of sensor ranges to comply with the EDR rule. Since we do not wish at this time to force manufacturers to increase the range of sensors beyond what is optimal for air bag performance, we have added a footnote to the data element accuracy requirement in Table III to apply only within the range of the physical sensor utilized by the EDR. This would be a minimum output range of −100 km/h to +100 km/h. We note that previous agency research  11 has shown that the delta-V data collected from EDRs during FMVSS No. 208 crash tests are reliable and accurate when compared with the delta-V data collected from reference sensors in the laboratory. We believe that the additional requirement for a sensor saturation or data clipping indicator will aid the agency in understanding when such measurements exceed the range of the sensor.

The Alliance identified two items that were clarified in the preamble to the January 14, 2008 final rule, but not reflected in the regulatory text: exclusion of peripheral sensors from the scope of Part 563, and clarification of recording closely timed subsequent events when the EDR power source is damaged. The AIAM similarly petitioned that the agency clarify the requirements for storage and locking of data from air bag deployment events.

In support of the agency's position on exclusion of peripheral sensors, we stated the following in the January 2008 final rule:

The Alliance petitioned the agency to add the following text to the end of § 563.6, “Requirements for Vehicles,” as follows: “Peripheral sensors that do not produce `rigid body' centroid acceleration signals are excluded from the requirements of this part.”

Agency Response: We are denying the Alliance request to add this exclusion to Part 563. We believe that our definitions in the regulatory text are sufficiently clear. We understand, since this rule was first promulgated, manufacturers have adopted sophisticated sensing strategies to determine when air bag deployments are warranted. Moreover, we also understand vehicle electrical architectures have become more sophisticated and data from these peripheral sensors may be captured and “recorded in non-volatile memory” in the event of crash. It was not our intent to capture this level of data when we first began the EDR rulemaking, nor was it considered. Given the sophistication of EDRs at that time, it was our intent to capture data as collected by the restraint control module located inside the vehicle. However, we note that the Alliance concerns are partially addressed through our actions to remove the time interval, range, and accuracy requirements for accelerometer measurements. By removing the requirements for acceleration measurements, any peripheral acceleration data  13 collected by an EDR is at the option of the manufacturer. We believe that these revisions will relieve reporting requirements for any data from peripheral accelerometers on the vehicle.

In the January 2008 final rule, we stated the following with regard to damaged EDR power sources and the recording of subsequent events:

The Alliance requested that the agency amend § 563.9 to clarify the agency's intent with regard to power sources damaged in a first event by adding the following new paragraph (c) stating: “If power source(s) or sensor(s) are damaged during an initial event, it is not necessary to record data associated with subsequent event(s).” The Alliance commented that NHTSA's test procedures have historically stated that the absence of a test provision from the agency's procedures does not exempt manufacturers from their obligation to meet all requirements specified in the standard.

Agency Response: We are denying this petition. We are not compelled by the petitioner's rationale to add the requested language to the regulatory text. Part 563 does not contain multi-impact test procedures for determining what would constitute “damage” to the power source or other sensors.

The AIAM petitioned the agency to clarify the requirements for storage and locking of data from air bag deployment events. It interpreted the August 2006 final rule as meaning that once data from an air bag deployment event has been stored and locked, it is not necessary to record a subsequent event, but if no air bag is deployed in the first event, two events could be stored. It cited § 563.9(a), which states that, in a frontal or side air bag deployment crash, an EDR must capture and record the current deployment data, “up to two events,” and that the memory for each air bag deployment event must be locked to prevent any future overwriting of these data. The AIAM stated that this could be read to mean that the EDR must be capable of recording up to two air bag deployments, which would be a departure from the intent of the August 2006 final rule. The AIAM petitioned the agency to explain its rationale and include a resulting cost estimate analysis, if the agency intends to adopt such a change.

Agency Response: The AIAM correctly interpreted § 563.9(a) to mean that after the EDR has captured, recorded, and locked data from an air bag deployment event, the EDR is not required to record any subsequent events. In the preamble to the August 2006 final rule, we stated: “If the first event is the deployment of an inflatable restraint, these data are recorded to memory and the file is locked. No further analyses ( i.e., looking for subsequent triggers) or recording occurs.”  15

We noted in the preamble to the August 2006 final rule that while not required to do so, an EDR may capture multi-event data during a crash that involves an air bag deployment. To clarify the issue, we have amended § 563.9(a) by removing the phrase “up to two events,” and we have clarified the language regarding side air bag deployment crashes (as discussed in section H. below). The paragraph now states “In a frontal air bag deployment crash, capture and record the current deployment data. In a side or side curtain/tube air bag deployment crash, where lateral delta-V is recorded by the EDR, capture and record the current deployment data. The memory for the air bag deployment event must be locked to prevent any future overwriting of the data.” Thus, any frontal air bag deployment, or any side, or side curtain/tube air bag deployment where lateral delta-V is recorded by the EDR, would not require the EDR to record a second, subsequent event, although it would allow such recording. We note that the phrase “up to two events” remains in § 563.9(b) and so there continues to be an obligation to record multiple non-air bag deployment events.

The AIAM commented that the January 2008 final rule does not explicitly state how “time zero” would be determined in the case of a non-reversible restraint that is deployed despite a crash that does not meet the “trigger threshold.” It recommended that the agency clarify the definition for “time zero” to include other types of non-reversible deployable restraints ( e.g., pyrotechnic pretensioners). Additionally, it recommended that the definition for “event” include other non-reversible deployable devices. Specifically, the AIAM proposed defining “event” as “a crash or other physical occurrence that causes the trigger threshold to be met or exceeded, or an air bag or other non-reversible deployable device to be deployed, whichever occurs first.” AIAM proposed including “deployment of another type of non-reversible deployable device” in the definition of “time zero.”

Agency Response: We agree with the need to change the definition of event to include other non-reversible deployable devices. However, we have used the word “restraint” rather than “device” in order to maintain the focus on occupant protection. Such non-reversible deployable restraints would be inclusive of frontal, side and side curtain/tube air bags, but also could include devices such as knee air bags and pretentioners. We believe this change is needed to make the definition of event consistent with the data recording triggers found in § 563.9(a) and (b). In the January 2008 final rule, the agency carefully considered the definition of an event. We agreed with the industry that an air bag deployment could be considered an event trigger, but were concerned about proliferation of trigger threshold strategies that would lock the data and prevent capture of subsequent crashes in which an air bag is deployed. For purposes of § 563.9(a) as currently written, we are primarily interested in the collection of EDR data from high delta-V crashes. We ultimately decided that frontal and side air bag deployments were consistent with our intent and did not extend this to other types of deployable restraints. We continue to believe that § 563.9(a) is clear in stating that the locked recorded data should be tied to a high delta-V event by virtue of a frontal or side air bag deployment. However, to further clarify that other non-reversible deployable restraints are considered events, i.e., those covered by § 563.9(b), we have amended the definition of “event” as follows: “Event means a crash or other physical occurrence that causes the trigger threshold to be met or exceeded, or any non-reversible deployable restraint to be deployed, whichever occurs first.” Consistent with this, we address clarification of § 563.9 later in this document.

We further believe that Part 563 is clear that algorithm wake-up strategies, and thus time zero, are at the option of the manufacturer. These wake-up strategies may include such things as pretensioner activation, or other non-air bag related deployments. However, to address the AIAM concern and to clarify our strategy, we have replaced “an air bag deployment” in the definition of “time zero” with “deployment of a non-reversible deployable restraint.”

The AIAM commented that the definition for end of event does not specify which delta-V mode(s) should be used to determine the end of the event. It noted that many vehicles measure both longitudinal and lateral delta-V, and in some cases can measure both concurrently as one multi-directional event. Our definition for end of event states “ * * * the moment at which the cumulative delta-V within a 20 ms time period becomes 0.8 km/h (0.5 mph) or less * * *” but does not define the direction of the delta-V mode. Additionally, the AIAM commented that the definition is not clear as to which of the criteria to use to determine the end of the event, i.e., the cumulative delta-V or the algorithm reset. It stated that the event should end based on the later of the two end of event conditions being met. It requested that the agency revise the definition to clarify how the end of event should be determined.

The AORC also commented that the regulatory text does not specify if the end of event criteria includes both longitudinal and lateral delta-V components. It stated that both lateral and longitudinal should be used if available.

Agency Response: In development of the August 2006 final rule, the agency was mainly focused on events involving frontal impacts since those types of impacts represent most of the crashes investigated. Therefore, the agency originally intended to specify that the end of event is determined by a drop in the longitudinal delta-V component, as evidenced by our requirement for EDRs to capture the longitudinal delta-V component, but making the lateral delta-V component an optional data element.

In responding to the petitions for reconsideration to the August 2006 final rule, the agency agreed that deployment of a frontal or side air bag could be considered an event trigger. This consideration required changes in the definitions ( e.g., event, time zero, and end of event) that relate to how the event recording interval is determined. However, we inadvertently neglected to consider how measurement of lateral delta-V would impact the determination of when an event has ended.

We have carefully considered the comments of the AIAM and the AORC and agree that the definition for the end of an event must account for the directional component of the delta-V measurement. Therefore, we have revised the definition of end of event time to mean “the moment at which the resultant cumulative delta-V within a 20 ms time period becomes 0.8 km/h (0.5 mph) or less, or the moment at which the crash detection algorithm of the air bag control unit resets.” (Emphasis added). We believe adopting this change will provide the manufacturers with necessary clarity on determining when an event has ended.

The Alliance commented that the data element in Table II for the frontal air bag suppression switch status appears to only apply to vehicles equipped with manual frontal air bag suppression switches. It asked that the agency confirm this interpretation.

Agency Response: We agree that the suppression switch status data element only applies to vehicles equipped with manual frontal air bag suppression switches and is meant to indicate the position of a manual frontal air bag suppression switch at the time of the event as designated in S4.5.4 of FMVSS No. 208.

The Alliance requested that the agency develop and publish a test procedure for compliance with Part 563 as soon as possible. It suggested that a test procedure would have the potential to elaborate and clarify the regulatory requirements. It provided the example of computing the delta-V accuracy requirement as an example of how this would be helpful. It commented that it is not clear if the requirement applies to point-by-point delta-V data, or the average of delta-V data over the 250 ms interval, or to the cumulative delta-V at the end point of 250 ms. It suggested that the accuracy requirement be a root mean square average of the recorded delta-V values. The Alliance stated that the publication of a test procedure could resolve this and other issues.

The AORC suggested that the accuracy could be evaluated based on 10 percent of the full scale range of the physical application sensor and would be evaluated after applying filtering and range characteristics of the physical application sensor to the reference data.

Agency Response: In developing the agency's compliance crash test procedure for Part 563, the agency considered the various methods proposed by the petitioners in evaluating delta-V accuracy. The agency found that a delta-V accuracy requirement applied on a point-by-point basis proved to be suitably repeatable. This was based on testing that NHTSA's Office of Vehicle Safety Compliance (OVSC) conducted with a pair of triaxial accelerometers installed on, and near, the EDR during frontal crash tests. The computed delta-V from these accelerometers provided the agency with signals that could be directly compared to the delta-V measured by the EDR. The results of these tests demonstrated a sufficient correlation with the two laboratory sensors and a means for testing compliance. 16

NHTSA has published the Part 563 test procedure in response to this request.

The AIAM recommended that the agency clarify its intent with regard to the capture and lock of data collected from a side air bag versus a side curtain/tube air bag. It recommended that section 563.9(a) be clarified to include explicit reference to the separate definitions for side air bags and side curtain/tube air bags. It commented that because of the separate definitions for side and side curtain/tube air bags in § 563.5(b), a manufacturer could interpret § 563.9 to regulate crash events involving only a side air bag. It added that this appears to be at odds with the definition for “time zero” which cites that an EDR must capture any crash event that deploys any air bag (front, side, or side curtain/tube).

Agency Response: We concur with clarifying the applicability of § 563.9(a) as suggested by the AIAM. The agency intended for § 563.9(a) to capture air bag deployments in frontal crashes or side crashes that involve either side or side curtain/tube air bags. We consider the definitions for “side air bag” and “side curtain/tube air bag” in § 563.5(b) to be subsets of inflatable occupant restraint devices designed to be deployed in any side impact crash or rollover event. Therefore, a “side curtain/tube air bag” would simply be a specific type of “side air bag,” and as such would be subject to the requirements of § 563.9(a).

We have also since recognized that it may not be appropriate to require the locking of a side or side curtain/tube air bag deployment event when the lateral delta-V information is not recorded. For example, in the case of a purely lateral crash, an EDR that minimally complies with Part 563 would not record any of the lateral crash information that would be useful for reconstructing a side impact event. It would also lock the frontal data element information relative to this side impact event in memory and would require the consumer to repair (or reset) the EDR, if the consumer would like to restore the ability to record 2 events in the future.

Therefore, to clarify our intent in the final rule, we are amending § 563.9(a) to read as follows:

In response to the August 2006 final rule, Mr. Thomas Kowalick submitted a petition requesting that the agency require manufacturers to provide mechanical locks for the on-board diagnostic (OBD2) port for the sole use and control of the owner/operator of the vehicle. In response to his 2006 petition for reconsideration, the agency stated that while Mr. Kowalick presented information that devices exist that may be used to erase or tamper with EDR data, he did not provide any information that these devices were in fact being used for this purpose. We concluded that there were several other ways ( e.g., door locks, ignition keys) that protect access to the OBD2 port. Further, we required that EDR data from a crash that involves an air bag deployment be locked to prevent overwriting of these data.

In response to the January 2008 final rule, Mr. Kowalick again petitioned the agency to reconsider a mechanical lockout system for the download port of EDRs that could only be accessed by the owner of the vehicle. He again submitted information that indicates that devices are being offered to consumers to alter odometer readings, erase EDR data, or prevent EDR data from being recorded by the vehicle. Mr. Kowalick cited the agency position that if tampering were to become apparent, then the agency would reconsider its position on the tampering issue. He commented that the agency should reconsider its denial of a requirement for a mechanical lockout tool because the current rule is inadequate to protect vehicle owners and operators from tampering, and because the agency did not provide a definition for the term “lock.”

Agency Response: We are denying this petition. Despite the purported availability of such devices, we have still not seen evidence of tampering during our real world data collections, and the petitioner provided no new information that would suggest that we should reconsider our previous denial of this request. We note that the preponderance of information submitted by Messrs. Kowalick, Rosenbluth, and Thompson  17 dealt with odometer fraud issues which are outside the scope of this rule.

Further, we do not believe that the rule is inadequate to protect vehicle owners/operators from data tampering. Mr. Kowalick commented that the agency should require a mechanical lockout device to be installed on the OBD2 port. We clearly state in § 563.9(a) that “the memory for each air bag deployment event must be locked to prevent any future overwriting of these data.” We further clarified the meaning of “locked” in the preamble by stating that we consider it to be “to protect EDR data from changes or deletion.” We note that there are many strategies which may be utilized to “lock” data to prevent overwriting in addition to the mechanical lock Mr. Kowalick proposed. In fact, Mr. Rosenbluth highlights one example as the writing of data to Electrically Programmable Read Only Memory, which “is not electrically changeable,” to prevent EDR data from being erased or tampered with after a crash. We do not wish to restrict the method by which a vehicle manufacturer chooses to lock EDR data collected during a crash. Therefore, we are denying the petition to require mechanical locks for the OBD2 port.

The Alliance, the AIAM, the AORC and Bosch commented on several technical and editorial corrections to clarify the regulatory text as follows:

1. The AIAM commented that section 563.9(b) should be clarified to more clearly state that only air bag deployment event data should be locked after capture. The AIAM believes the intent of the agency was to require data from only air bag deployment events to be locked, rather than events that involve other types of deployable restraint systems. It commented that the regulatory language could be misinterpreted and recommended that § 563.9(b) be revised.

The AORC commented that § 563.9(b) appears to be inconsistent with the definition of an event. It interpreted this clause to mean that a deployment of a restraint other than an air bag may be treated as a trigger at the option of the manufacturer.

Agency Response: We concur with the AORC interpretation of § 563.9(b) that the deployment of a restraint other than an air bag may be treated as an EDR trigger at the option of the manufacturer. We agree that § 563.9(b) could be misinterpreted to mean that in an event that involves both an air bag and another type of deployable restraint, the captured data would not need to be locked. Similarly, we concur with the AIAM that § 563.9(b) could be misinterpreted to require the EDR to lock data from crashes in which an air bag was not deployed, but other deployable restraint systems were activated. We intended for EDRs to record and lock data from frontal, side, and side curtain/tube air bag deployment events, but data from events that do not deploy a frontal, side, or side curtain/tube air bag could be captured and recorded at the option of the manufacturer subject to the conditions in § 563.9(b). For this reason, we have revised § 563.9(b) as shown below. We note that the inclusion of “trigger threshold” has been removed since exceeding the trigger threshold is by definition an event. Similarly, all other “events” not captured in § 563.9(a), must be captured, subject to the conditions in § 563.9(b).

2. In the definitions set forth in § 563.5(b), the Alliance recommended that the definition for occupant size classification be clarified from a driver as not being “of small stature” to “larger than a 5th percentile female (as defined in 49 CFR part 572, subpart O),” and a “child” as that defined in 49 CFR part 572, subpart N (6 year old child). It proposed the following definition:

The Alliance also noted that the occupant classification data elements differ between Tables II and III. It recommended that the agency standardize the occupant classification data elements in Tables II and III to make Part 563 more objective.

Agency Response: We agree with adding more clarity to the Occupant size classification definition to reflect the occupant size categories used in testing the suppression of air bags in FMVSS No. 208. We amended the definition as: “ Occupant size classification means, for the right front passenger, the classification of the occupant as a child (as defined in 49 CFR part 572, subpart N or smaller) or not as an adult (as defined in 49 CFR part 572, subpart O), and for the driver, the classification of the driver as being a 5th percentile female (as defined in 49 CFR part 572, subpart O) or larger.” We also concur that the differences in occupant classification data elements in Tables II and III were typographical errors and have made these editorial corrections in the regulatory text.

3. The Alliance recommended that the word “status” be inserted after “foremost” in the right front passenger seat track position data element in Table II.

Agency Response: We concur with this change. The word “status” is used in the companion data element in Table II for the driver and was originally part of the 2006 final rule. This was inadvertently dropped in the 2008 final rule. We have made this editorial correction to Table II.

4. The Alliance recommended that the requirement in Table III for the service brake status and ABS activity be revised to read: “On or Off.”

Agency Response: We concur. These are listed presently as “On and Off.” However, “On or Off” is the correct way to list these options. We have made the editorial corrections to Table III and to the definition of “Service brake, on and off” in § 563.5.

5. The Alliance recommended that the requirement in Table III for stability control be revised to read: “On, Off, or Engaged.”

Agency Response: We concur. This is presently listed as “On, Off, Engaged.” However, we intended for these three states to be offered as options. Therefore, we have made the requested editorial correction to Table III and Table II.

6. The AIAM recommended that the agency clarify the data element in Table I for “Multi-event, number of event.” It stated it is unclear if the status is used to indicate that there were 1 or 2 events, or if the status is used to indicate which event is being stored, ( e.g., event 1 of 2 or event 2 of 2). It interpreted this to mean that two events should be stored only in the case of a multi-event crash situation.

Agency Response: We agree that the data element in Table I needs clarification. We intended for the “multi-event” data element in Table I to indicate which event is being stored. In § 563.5(b), we defined a multi-event crash as “the occurrence of 2 events, the first and last of which begin not more than 5 seconds apart.” We note that in the case of a single event, the multi-event data element would then report a “1.” In the case of a multiple event, during the first event, the EDR would not yet know that the second event is going to occur. Therefore, the data from the first event would still report a “1” for the multi-event data element. Any data captured from the subsequent event would then report a “2” for the multi-event data element and the time from event 1 to 2. To clarify this, we have amended the multi-event data element in Table I to be “Multi-event, number of event” by removing the “(1, 2).” We have also revised this nomenclature in Table III.

7. The AORC requested that the agency clarify that upon locking of data from an event, the “lock” may be applied to either the data from the individual event or the entire EDR at the option of the manufacturer.

Agency Response: The January 2008 final rule revised § 563.9(a) to require that “the memory for each air bag deployment event must be locked to prevent any future overwriting of these data.” We further clarified the meaning of “locked” in the preamble (73 FR 2172) by stating that we consider it to be “to protect EDR data from changes or deletion.” We agree that either strategy suggested by the AORC may be employed to lock the EDR data provided that the minimum conditions within § 563.9 have been met.

8. The AORC requested that the agency clarify that acceleration and angular rate data recorded in accordance with Table II represents single sample (raw) data rather than time-averaged data.

Agency Response: Our understanding of the acceleration data reported by current EDRs is that the data is time-averaged for deployment decisions. However, as previously discussed, we have amended the requirements for the acceleration data elements to be at the option of the vehicle manufacturer. We note that part 563 does not regulate “angular rate” data. Rather, it specifies limits for “vehicle roll angle” data. We believe that this data element is time-averaged data.

9. The AORC commented that in newer active steering systems the steering wheel angle and the tire position may not correlate. Additionally, Bosch commented that the Table III accuracy and resolution requirements for the steering input data element are inconsistent with other data elements. It recommended that the agency revise the range definition for this data element to ± 100 percent.

Agency Response: In response to the petitioners, we have revised the minimum range requirement for the “Steering input” data element from −250 degrees CW to 250 degrees CCW to a value of ± 100 percent in Table III. We agree with Bosch that this change would be more consistent with the accuracy and resolution requirements being expressed as percentages. We also believe this change will better address state of the art active steering systems noted by the AORC.

10. Bosch commented that current EDR designs often utilize two different types of lateral acceleration sensors: a high-g sensor (± 50 g) to detect side impact events, and a low-g sensor (± 5 g) to detect rollover events. It interpreted that the final rule is mainly concerned with side impact events, and recommend that the agency revise the lateral acceleration data element range to ± 50 g.

Agency Response: We agree that current EDR designs may utilize two different types of lateral acceleration sensors for side impact and rollover events. However, for the reasons discussed previously, we have amended the minimum range requirements to be at the option of the manufacturer.

11. Other editorial corrections: We have revised the data element descriptions (first column) in Table III to remove references to the data range since Table III already references the range for each of the data elements.

This rule makes several technical changes to the regulatory text of 49 CFR part 563, and does not increase the regulatory burden of manufacturers. The agency has discussed the relevant requirements of the Vehicle Safety Act, Executive Order 12866, the Department of Transportation's regulatory policies and procedures, the Regulatory Flexibility Act, Executive Order 13132 (Federalism), Executive Order 12988 (Civil Justice Reform), Executive Order 13045 (Protection of Children from Health and Safety Risks), the Paperwork Reduction Act, the National Technology Transfer and Advancement Act, Unfunded Mandates Reform Act, and the National Environmental Policy Act in the August 2006 final rule cited above. Those discussions are not affected by these technical changes.

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

In consideration of the foregoing, part 563 is amended as follows:

On July 10, 2008, we published a final rule amending the listing determination for the Preble's to remove protections for the mouse in Wyoming (73 FR 39790). In that rule, we determined that the Preble's was not threatened throughout all of its range, but the portion of its range located in Colorado represented a significant portion of the range where the Preble's should retain its threatened status. The 2008 Amended Listing Decision relied on a March 2007 Memorandum Opinion from the Department of the Interior's Office of the Solicitor (Opinion M-37013) and applied Opinion M-37013's interpretation of the Act's term “significant portion of the range” (SPR) to determine that a difference in status was warranted between the Wyoming and Colorado portions of the range.

On June 23, 2009, a petition for review of the 2008 amended listing decision was filed in the United States District Court for the District of Colorado. Petitioners challenged, among other things, our interpretation of SPR as applied to the Preble's decision. In the time since that lawsuit was filed, two courts vacated final listing decisions that relied on the same statutory interpretation contained in Opinion M-37013 and applied in the Preble's 2008 Amended Listing Decision. On May 4, 2011, after careful review of the statutory interpretation contained in Opinion M-37013 and those two court decisions, the Solicitor of the Department of the Interior issued a memorandum (“M-37024”) withdrawing Opinion M-37013, and the Service announced its intent to propose in the near future, for notice and comment, a joint policy with the National Marine Fisheries Service (“NMFS”) regarding the interpretation and implementation of the Act's statutory phrase “in danger of extinction throughout all or a significant portion of its range” (“SPR Language”). This announcement is available at: http://www.fws.gov/home/feature/2011/pdf/Wolf_Actions_FAQs.pdf .

The Service determined it necessary to reconsider the Preble's status in light of recent court decisions and the subsequent withdrawal of Opinion M-37013. Accordingly, the Service filed a motion for voluntary remand and vacatur of the Preble's 2008 Amended Listing Decision, and requested that the special rule promulgated pursuant to Section 4(d) of the Act and published in the Federal Register in 2001 (66 FR 28125, May 22, 2001), amended in 2002 (67 FR 61531, October 1, 2002), and extended indefinitely in 2004 (69 FR 29101, May 20, 2004), be reinstated throughout the species' range. On July 7, 2011, the United States District Court for the District of Colorado granted this motion and ordered the 2008 Amended Listing Decision vacated as of August 6, 2011 ( Center for Native Ecosystems, et al. v. Salazar, et al. , 09-cv-01463-AP-JLK, 2011 U.S. Dist. LEXIS 72664 (D. Colo. July 7, 2011).

This court ruling reinstates the 1998 Final Rule listing the Preble's as threatened throughout its range (63 FR 26517), effective August 6, 2011. Accordingly, Federal protections that were in place prior to our 2008 Amended Listing Decision are reinstated for the Preble's in Wyoming. Further, the special rule promulgated pursuant to section 4(d) of the Act and published in the Federal Register in 2001, amended in 2002, and extended indefinitely in 2004, is reinstated throughout the species' range (50 CFR 17.40(l)). The Service must complete its status review of the Preble's and publish a 12-month finding in the Federal Register for two petitions submitted by the State of Wyoming and Coloradans for Water Conservation and Development to delist the Preble's by the sooner of either 12 months after its formulation of the new joint policy with NMFS interpreting “significant portion of its range” language or June 1, 2013.

We published a statement on our Web site to notify the public of the ruling and its impact shortly after the order was released. We intend to notify the public again when this notice is published to ensure awareness of the ruling.

This rulemaking is necessary to comply with the July 7, 2011, court order. Therefore, under these circumstances, the Director has determined, pursuant to 5 U.S.C. 553(b)(3)(B), that prior notice and opportunity for public comment are impractical and unnecessary. The Director has further determined, pursuant to 5 U.S.C. 553(d)(3), that the agency has good cause to make this rule effective August 6, 2011.

As of August 6, 2011, the Preble's is again listed as threatened in Wyoming (50 CFR 17.11(h)) and the section 4(d) rule is reinstated throughout the species' range (50 CFR 17.40(l)). Please see the above-cited Federal Register publications for more detailed information regarding the Preble's listing and the special rule.

This rule will not affect the status of the Preble's under State laws or suspend any other legal protections provided by State law.

Accordingly, in order to comply with the court orders discussed above, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below.

NMFS published a final rule in the Federal Register on November 3, 2003 (68 FR 62250), implementing a process, for years in which the full Winter I commercial scup quota is not harvested, to allow unused quota from the Winter I period (January 1 through April 30) to be added to the quota for the Winter II period (November 1 through December 31), and to allow adjustment of the commercial possession limit for the Winter II period commensurate with the amount of quota rolled over from the Winter I period.

For 2011, the initial Winter II quota is 3,245,500 lb (1,472 mt), and the best available landings information indicates that 3,366,913 lb (1,527 mt) remain of the Winter I quota of 9,184,725 lb (4,166 mt). Consistent with the intent of Framework 3, the full amount of unused 2011 Winter I quota is transferred to Winter II, resulting in a revised 2011 Winter II quota of 6,612,413 lb (2,999 mt). Because the amount transferred is greater than 2,000,000 lb (907 mt), the possession limit per trip will increase to 8,000 lb (3,629 kg) during the Winter II quota period, consistent with the final rule Winter I to Winter II possession limit increase table (table 3) published in the 2011 final scup specifications (75 FR 81498, December 28, 2010).

This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.

The Assistant Administrator for Fisheries, NOAA (AA), finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment on this in-season adjustment because it is impracticable and contrary to the public interest. The landings data upon which this action is based are not available on a real-time basis and were compiled only a short time before the determination was made that this action is warranted. If implementation of this in-season action is delayed to solicit prior public comment, the objective of the fishery management plan to achieve the optimum yield from the fishery could be compromised; deteriorating weather conditions during the later part of the fishery year will reduce fishing effort and could result in the annual quota from being fully harvested. This would conflict with the agency's legal obligation under the Magnuson-Stevens Fishery Conservation and Management Act to achieve the optimum yield from a fishery on a continuing basis, resulting in a negative economic impact on vessels permitted to fish in this fishery.

Background

This temporary final rule extends the emergency measures implemented on March 15, 2011 (76 FR 13887), as authorized by section 305(c) of the Magnuson-Stevens Act, to increase the butterfish ABC from 1,500 mt to 1,811 mt. The March 15, 2011, emergency rule included detailed information on purpose and need to revise the butterfish ABC that was initially set in the final 2011 specifications for the MSB Fishery Management Plan (FMP) (76 FR 8306; February 14, 2011). There was one anonymous comment submitted on the emergency rule. NMFS will again accept public comment on both the appropriateness of the emergency action to date, and its extension.

The emergency specifications extended through this final rule maintain the 2011 butterfish ABC at 1,811 mt, with the increase applied to the butterfish mortality cap on the Loligo fishery. Other specifications for butterfish, specifically initial optimum yield (IOY), domestic annual harvest (DAH), domestic annual processing (DAP), total allowable level of foreign fishing (TALFF), and research set-aside (RSA), are unchanged from those set in the final 2011 specifications. Specifications for Atlantic mackerel, Loligo squid, and Illex squid also remain unchanged.

Amendment 10 to the MSB FMP specified that the butterfish mortality cap is to be set equal to 75 percent of the butterfish ABC, with the remaining 25 percent of the butterfish ABC allocated to account for butterfish catch in other fisheries, but noted that this apportionment may be revised as necessary to accommodate the Loligo squid fishery. The additional 311-mt ABC allotment extended through this action is entirely allocated to the mortality cap. Under the 2011 specifications, the butterfish mortality cap was 1,125 mt (75 percent of 1,500 mt); this extension maintains the increase in the 2011 butterfish mortality cap at 1,436 mt that was implemented in the emergency action.

NMFS policy guidelines for the use of emergency rules (62 FR 44421; August 21, 1997) specify the following three criteria that define what an emergency situation is, and justification for final rulemaking: (1) The emergency results from recent, unforeseen events or recently discovered circumstances; (2) the emergency presents serious conservation or management problems in the fishery; and (3) the emergency can be addressed through emergency regulations for which the immediate benefits outweigh the value of advance notice, public comment, and deliberative consideration of the impacts on participants to the same extent as would be expected under the normal rulemaking process. NMFS policy guidelines further provide that emergency action is justified for certain situations where emergency action would prevent significant direct economic loss, or to preserve a significant economic opportunity that otherwise might be foregone. As noted in the March 15, 2011, emergency rule, NMFS determined that it was necessary to modify the butterfish specifications, consistent with new scientific advice, in a timely manner in order allow the Loligo squid fleet to optimize Loligo squid harvest with reduced concern that the fishery would be closed due to the butterfish mortality cap.

Comment: One anonymous individual opposed the increase in the butterfish ABC and stated that this level of taking is not sustainable.

Response : As discussed in the background section of the March 2011 emergency rule, the increased butterfish ABC NMFS implemented in the emergency action is consistent with the best scientific information available. The analysis presented in the supplemental EA concludes that increasing the butterfish ABC to 1,811 mt is not expected to have any adverse impact on the butterfish stock when compared to the original 1,500-mt butterfish ABC.

NMFS has determined that this rule is consistent with the Magnuson-Stevens Act and other applicable law.

The Assistant Administrator for Fisheries, NOAA, finds good cause under section 553(b)(B) of the Administrative Procedure Act (APA) that it is impracticable and contrary to the public interest to provide for prior notice and opportunity for the public to comment. As more fully explained above, the reasons justifying promulgation of this rule on an emergency basis make solicitation of public comment contrary to the public interest. This action provides the benefit of allowing the Loligo fleet to optimize its harvest, with less concern that the fishery could be closed due to the butterfish mortality cap. The initial emergency action did not allow for prior public comment because the scientific review process and determination could not have been completed any earlier, due to the inherent time constraints associated with the process and the fact that the information on which this action is based became available after 2011 specifications were finalized.

For the reason above, the Assistant Administrator for Fisheries finds good cause under section 553(d) of the APA to waive the 30-day delay in effectiveness.

This emergency rule has been determined to be not significant for purposes of E.O. 12866.

This rule is exempt from the procedures of the Regulatory Flexibility Act to prepare a regulatory flexibility analysis because the rule is issued without opportunity for prior public comment.

The EA prepared for the initial emergency rule analyzed the impacts of the emergency specifications for the duration of a year (Supplemental Environmental Assessment for 2011 Atlantic Mackerel, Squid, and Butterfish Specifications; February 2011). Therefore, the impacts of this emergency action extension have been analyzed, and are within the scope of the Finding of No Significant Impact.

The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires that each regional fishery management council submit any fishery management plan or fishery management plan amendment it prepares to NMFS for review and approval, disapproval, or partial approval by the Secretary of Commerce. The Magnuson-Stevens Act also requires that NMFS, upon receiving a fishery management plan amendment, immediately publish a notice in the Federal Register announcing that the amendment is available for public review and comment.

NMFS published the notice of availability for Amendments 38 and 39 to the FMP on May 4, 2011 (76 FR 25295), with a comment period that ended on July 5, 2011. NMFS received one comment letter. NMFS summarized this letter into two separate comments, and responds to them under Response to Comments, below.

NMFS determined that Amendments 38 and 39 to the FMP are consistent with the Magnuson-Stevens Act and other applicable laws and approved Amendments 38 and 39 on August 2, 2011. The May 4, 2011, notice of availability (76 FR 25295) contains additional information on this action. No changes to Federal regulations are necessary to implement these FMP amendments.

The crab fisheries in the exclusive economic zone of the Bering Sea and Aleutian Islands are managed under the FMP. The FMP was prepared by the North Pacific Fishery Management Council (Council) under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 et seq. The FMP establishes a cooperative management regime that defers many aspects of crab fisheries management to the State of Alaska (State) with Federal oversight. State crab fishery management action must be consistent with the FMP, Magnuson-Stevens Act, and other applicable Federal laws.

In October 2010, the Council unanimously recommended Amendments 38 and 39 to the FMP. Amendment 38 establishes a mechanism in the FMP for the Council to specify annual catch limits (ACLs) and accountability measures. Amendment 39 modifies the snow crab rebuilding plan to establish that the stock will be rebuilt when the snow crab biomass is estimated to reach the level necessary to produce maximum sustainable yield.

Amendment 38 satisfies requirements of the Magnuson-Stevens Act, as amended in 2007, while maintaining the FMP's cooperative management regime that relies on State expertise in collecting and analyzing scientific data on crab and in establishing the total allowable catches (TACs). Amendment 38 establishes acceptable biological catch (ABC) control rules in the FMP and sets an ACL for each stock equal to the stock's ABC. Annually, the ABC control rule will be used to set the maximum ABC for each crab stock below the overfishing level (OFL) set for that stock. This mechanism ensures that, at the maximum ABC, the probability of overfishing is less than 50 percent.

Amendment 38 establishes accountability measures to comply with the Magnuson-Stevens Act requirement that FMPs include accountability measures to prevent catch from exceeding ACLs and to correct overages of the ACL if they do occur.

Amendment 38 also amends the FMP to establish an optimum yield (OY) range of 0 to less that the OFL catch. This OY range enables the State to determine the appropriate TAC levels below the OFL to prevent overfishing or address other biological concerns that may affect the reproductive potential of a stock but that are not reflected in the OFL itself. The State establishes TACs at levels that maximize harvests, and associated economic and social benefits, when biological and ecological conditions warrant doing so.

Amendment 39 modifies the existing snow crab rebuilding plan to redefine when the snow crab stock will be considered “rebuilt.” Under Amendment 39, snow crab will be considered rebuilt when the estimated biomass reaches the level necessary to produce maximum sustainable yield, rather than when estimated biomass reaches such a level for 2 consecutive years, as previously defined. The Scientific and Statistical Committee recommended that a 1-year threshold is appropriate for snow crab based on its confidence in the biomass estimates provided by the approved stock assessment model.

An Environmental Assessment was prepared for Amendments 38 and 39 that describes the management background, the purpose and need for action, the management alternatives, and the environmental, social, and economic impacts of the alternatives (see ADDRESSES ).

Comment 1: The commenter supports approval of Amendment 38 but expresses concern over the fact that the burden of implementing accountability measures falls primarily on the State. NMFS should accept some of the responsibility for assisting the State in implementing accountability measures.

Response: NMFS agrees that it has the responsibility to implement accountability measures. The accountability measures under Amendment 38 conform to the cooperative management structure of the FMP. Appropriate accountability measures are implemented by the Council, NMFS, and the State according to the respective roles and responsibilities under the FMP. Existing State and Federal accountability measures prevent TACs from being exceeded in crab fisheries and will continue to be used to prevent catch from exceeding ACLs. Federal accountability measures will be implemented during the ABC-setting process as the Council's Crab Plan Team and the Scientific and Statistical Committee determine the appropriate downward adjustments to the ACL in the fishing year after an ACL has been exceeded. Additionally, given that the State sets the TAC under the FMP, Amendment 38 also includes accountability measures for the State to exercise in the annual TAC-setting process. Under the FMP, the State has some discretion to determine the most appropriate method to account for any catch above the ACL in setting the TAC for the subsequent fishing season.

Comment 2: The commenter does not support Amendment 39. The commenter states that it would be premature to declare the snow crab stock as rebuilt the first year the stock biomass is above the level necessary to produce maximum sustainable yield. The commenter suggests postponing the reclassification of the snow crab stock as rebuilt until the stock has proven a 2-year trend above the estimated biomass. The commenter states that maintaining the 2-year rebuilding requirement would ensure that the biomass has reached the appropriate level before opening it up to the new challenges it will face under the new classification system.

Response: NMFS and the Council adopted the 2-year threshold previously used to define the snow crab stock as rebuilt as a precautionary measure to address the high degree of uncertainty in snow crab biomass estimates at the time the rebuilding plan was approved in 2000. Since then, a stock assessment model has been approved for use in estimating the snow crab biomass and setting the biological reference points.

The decision to modify the definition of rebuilt from 2 consecutive annual biomass estimates at or above the level necessary to support maximum sustainable yield to 1 such biomass estimate was based on the confidence of the Crab Plan Team and Scientific and Statistical Committee in the stock assessment model's ability to accurately estimate snow crab biomass. With the improved accuracy of biomass estimates provided by the approved stock assessment model, the 2-year threshold is no longer necessary.

The comment does not identify the new challenges that snow crab will face under the new classification system. Under Amendment 38, once the snow crab stock is rebuilt, the Scientific and Statistical Committee will set the OFL and ABC according to the best available scientific information and the methods established in the FMP. In addition, the State will set the TAC according to the harvest strategy. These measures will prevent overfishing and help to ensure that the snow crab stock biomass remains at or near the level necessary to produce maximum sustainable yield.