This rulemaking incorporates by reference the following standard into Part 433:

• ANSI/ASHRAE/IESNA Standard 90.1-2007, Energy Standard for Buildings Except Low-Rise Residential Buildings, 2007, American Society of Heating Refrigerating and Air-Conditioning Engineers, Inc., ISSN 1041-2336.

Copies of this standard are available from the American Society of Heating Refrigerating and Air-Conditioning Engineers, Inc., 1791 Tullie Circle, NE., Atlanta, GA 30329, (404) 636-8400, http://www.ashrae.org//.

This rulemaking also incorporates by reference the following standard into part 435:

• ICC International Energy Conservation Code (IECC), 2009 Edition, January 2009, International Code Council, ISBN 978-1-58001-742-8.

Copies of this standards are available from International Code Council, 500 New Jersey Avenue, NW., 6th Floor, Washington, DC 20001, 1-888-ICC-SAFE (422-7233) or (202) 370-1800, http://www.iccsafe.org/Pages/default.aspx.

Section 305 of the Energy Conservation and Production Act (ECPA), as amended, requires DOE to establish building energy efficiency standards for all new Federal buildings. (42 U.S.C. 6834(a)(1)) The standards established under section 305(a)(1) of ECPA must contain energy efficiency measures that are technologically feasible, economically justified, and meet the energy efficiency levels in the applicable voluntary consensus energy codes specified in section 305. (42 U.S.C. 6834(a)(1)-(3))

Under section 305 of ECPA, the referenced voluntary consensus code for commercial buildings (including multi-family high rise residential buildings) is the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1 and the referenced code for low-rise residential buildings is the International Energy Conservation Code (IECC). (42 U.S.C. 6834(a)(2)(A)) DOE codified these referenced codes into energy efficiency standards in 10 CFR parts 433, 434, and 435. Also under section 305 of ECPA, DOE must establish, by rule, revised Federal building energy efficiency performance standards for new Federal buildings that require such buildings be designed to achieve energy consumption levels that are at least 30 percent below the levels established in the referenced codes, if life-cycle cost-effective. (42 U.S.C. 6834(a)(3)(A)(i)(I))

Under section 305 of ECPA, not later than one year after the date of approval of each subsequent revision of the ASHRAE Standard or the IECC, DOE must determine whether to amend the Federal building standards with the revised voluntary standard based on the cost-effectiveness of the revised voluntary standard. (42 U.S.C. 6834(a)(3)(B)) It is this requirement that today's rulemaking addresses. ASHRAE Standard 90.1 and the IECC have been updated from the versions currently referenced in DOE's regulations at 10 CFR parts 433 and 435. DOE is now revising the baseline Federal building standards for 10 CFR parts 433 and 435.

Section 306(a) of ECPA provides that each Federal agency and the Architect of the Capitol must adopt procedures to ensure that new Federal buildings will meet or exceed the Federal building energy efficiency standards established under section 305. (42 U.S.C. 6835(a)) Section 306(b) bars the head of a Federal agency from expending Federal funds for the construction of a new Federal building unless the building meets or exceeds the applicable Federal building energy standards established under section 305. (42 U.S.C. 6835(b)) This includes both the requirement that all new Federal buildings comply with the baseline standards in ASHRAE Standard 90.1 and the IECC and the requirement that new Federal buildings achieve energy consumption levels at least 30 percent below these minimum baseline standards where life-cycle cost-effective. (42 U.S.C. 6834 (a)(3)(A))

DOE is issuing today's action as a final rule. As indicated above, DOE must determine whether the energy efficiency standards for new Federal buildings should be updated to reflect revisions to ASHRAE Standard 90.1 or the IECC based on the cost-effectiveness of the revisions. (42 U.S.C. 6834(a)(3)(B)) In today's final rule, DOE determines that the energy efficiency standards for new Federal buildings should be updated to reflect the 2007 revisions to ASHRAE Standard 90.1 and the 2009 revisions to the IECC based on the cost-effectiveness of the revisions.

DOE reviewed ASHRAE Standard 90.1 and the IECC standard for DOE's state building codes program and determined that the 2007 version of ASHRAE Standard 90.1 and the 2009 version of the IECC would achieve greater energy efficiency than their respective prior versions. These determinations were subject to notice and comment. See 75 FR 54117 (September 3, 2010) and 75 FR 54131 (September 3, 2010). In those prior determinations, and again in today's rule, DOE states that the cost-effectiveness of revisions to the voluntary codes is considered through DOE's statutorily directed involvement in the codes process. See 75 FR 54121. Section 307 of ECPA requires DOE to participate in the ASHRAE and IECC codes development process and to assist in determining the cost-effectiveness of the voluntary standards. (42 U.S.C. 6836) DOE is required to periodically review the economic basis of the voluntary building energy codes and participate in the industry process for review and modification, including seeking adoption of all technologically feasible and economically justified energy efficiency measures. (42 U.S.C. 6836(b))

ASHRAE Standard 90.1 is developed through an American National Standards Institute (ANSI) consensus process. The ANSI consensus process involves representatives of producers (industry), users (owners and designers), and general (advocates and government) segments of the building industry. Part of that process involves development of cost-effectiveness criteria to use in the development of Standard 90.1. Another part of the process is extensive public review and comment of each change to Standard 90.1. During the course of the public review and comment process, cost-effectiveness is often a topic. One of the objectives considered by the committee developing Standard 90.1 is for the requirements of Standard 90.1 to be cost-effective for use in the private sector. The 90.1 committee uses a scalar ratio for cost-effectiveness based on ASTM Standard E917-Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems.

Similarly, the IECC is developed by the International Code Council (ICC) in a government-consensus process. In the ICC process, only voting members of the ICC who are representative of state and local governments and who are responsible for code enforcement vote on any changes to the IECC. The public may participate in hearings and the hearings are widely attended by the building community. The process in the ICC is somewhat different than in Standard 90.1 in that explicit use of life-cycle costing is not required for each change proposed to the IECC. However, proponents of changes are required to state if a proposed change will increase the first cost of construction and the cost-effectiveness of proposals is widely debated during the hearings. Given the level of debate by the entire building community, DOE believes that the end result of the ICC code development process is an energy code that is cost-effective.

In today's rule, DOE is amending the energy efficiency standards applicable to new Federal buildings based on the determinations made by DOE as to the energy efficiency improvements of ASHRAE Standard 90.1-2007 and the 2009 IECC, as compared to their respective predecessor versions, and based on the considerations of cost-effectiveness incorporated into the codes processes, as well as DOE's involvement in those processes. This final rule amends 10 CFR Parts 433 and 435 to update the referenced baseline Federal energy efficiency performance standards. No other changes are proposed to 10 CFR parts 433 and 435 by this rule.

DOE notes that it is currently working on preliminary determinations for ASHRAE Standard 90.1-2010 and the 2012 IECC. If DOE finalizes these determinations, the Department intends to update 10 CFR Part 433 with ASHRAE Standard 90.1-2010 and 10 CFR part 435 with the 2012 IECC.

Today's final rule applies to new Federal buildings for which design for construction begins on or after one year from the date of this notice. Such buildings must be designed to exceed the energy efficiency level of the appropriate updated voluntary standard by 30 percent if life-cycle cost-effective. However, at a minimum, such buildings must achieve the energy efficiency equal to that of the appropriate updated voluntary standard. One year lead time is consistent with DOE's previous updates to the energy efficiency baselines and the original statutory mandate for Federal building standards. One year lead time helps minimize compliance costs to agencies, which may have planned buildings in various stages of design, and allows for design changes to more fully consider life-cycle cost-effective measures (as opposed to having to revise designs in development, which may make incorporation of energy efficiency measure more difficult or expensive.)

The Department originally prepared this list of resources to help Federal agencies achieve building energy efficiency levels of at least 30 percent below ASHRAE Standard 90.1-2004 or the 2004 IECC. The Department has reviewed these resources and believes that they are still applicable to helping agencies achieve building energy efficiency levels of at least 30% better than ASHRAE Standard 90.1-2007 or the 2009 IECC. The Department has updated this resource list as necessary. These resources come in many forms and in a variety of media. Resources are provided for three categories: For all buildings, specifically for commercial and multi-family high-rise residential buildings, and specifically for low-rise residential buildings.

http://www.eere.energy.gov/femp/procurement/ and http://www.energystar.gov/products.

Federal agencies are required by the Energy Policy Act of 2005 to specify Federal Energy Management Program (FEMP) designated or ENERGY STAR equipment, including building mechanical and lighting equipment and builder-supplied appliances, for purchase and installation in all new construction. This equipment is generally more efficient than the corresponding requirements of ASHRAE Standard 90.1-2004 and the 2004 IECC, and may be used to achieve part of the savings required of Federal building designs. (Today's rule does not specifically address the use of this equipment, but this Web site is listed for convenience because it is a very useful resource for achieving part of the energy savings required by the rule.)

http://www.access.gpo.gov/nara/cfr/waisidx_04/10cfr436_04.html.

The life-cycle cost analysis rules promulgated in 10 CFR part 436 Subpart A Life-Cycle Cost Methodology and Procedures conform to requirements in the Federal Energy Management Improvement Act of 1988 (Pub. L. 100-615) and subsequent energy conservation legislation, as well as Executive Order 13123, Greening the Government through Efficient Energy Management. The life-cycle cost guidance and required discount rates and energy price projections are determined annually by FEMP and the Energy Information Administration, and are published in the Annual Supplement to The National Institute of Standards and Technology Handbook 135: “Energy Price Indices and Discount Factors for Life-Cycle Cost Analysis” http://www1.eere.energy.gov/femp/pdfs/ashb10.pdf. FEMP also provides guidance on the life-cycle cost requirements of Executive Order 13123 at http://www1.eere.energy.gov/femp/information/download_blcc.html.

http://www.energystar.gov/index.cfm?c=new_homes.nh_features (homes) and http://www.energystar.gov/index.cfm?c=new_bldg_design.bus_target_finder (non-residential buildings).

ENERGY STAR is a Government-backed program helping businesses and individuals protect the environment through superior energy efficiency. The EPA specifications for ENERGY STAR-labeled homes, effective as of the date of this rule, provide a useful prescriptive guide for meeting the Federal energy efficiency standard for low-rise residential buildings. EPA plans to launch ENERGY STAR specifications for new construction and substantially rehabilitated multifamily high rise buildings in July 2011. The benchmarking tool and other information at the ENERGY STAR Target Finder Web site can be useful in determining an annual energy target for building design and computer simulations, evaluating cost-effectiveness of efficiency measures, and tracking a building's actual energy performance after construction.

http://www1.eere.energy.gov/buildings/commercial_initiative/.

A collection of design approaches, tools, technologies and case studies focused on high performance buildings that achieve savings of 30 percent to 50 percent better than generally accepted good practice.

http://www.eere.energy.gov/buildings/tools_directory/.

This directory provides information on building software tools for evaluation energy efficiency, renewable energy, and sustainability in buildings.

http://www.ashrae.org (search for Standard 90.1-2007) or http://www.techstreet.com/standards/ASHRAE/90_1_2007_I_P_?product_id=1536065.

The baseline energy efficiency standard for commercial and multi-family high-rise buildings is ANSI/ASHRAE/IESNA Standard 90.1-2007. This link also contains a link to a read-only version of Standard 90.1-2007.

http://www.wbdg.org.

A portal providing one-stop access to up-to-date information on a wide range of building-related guidance, criteria and technology from a “whole buildings” perspective.

http://www.ashrae.org/aedg.

A set of design guides for users who wish to go beyond Standard 90.1. The design guides are targeted at 30 percent better than ASHRAE Standard 90.1-2004 (which translates to approximately 25 percent better than Standard 90.1-2007). (DOE's final determination of energy savings for Standard 90.1-2007 (available at http://www.energycodes.gov/status/determinations_com.stm ) indicates that Standard 90.1-2007 is approximately 4.6 percent better than Standard 90.1-2004 on a site energy basis.) The design guides are available for free download.

http://www.newbuildings.org/advanced-design/advanced-buildings.

A set of guidelines for the design, construction, and operation of new and renovated nonresidential buildings targeted at 30 percent better than ASHRAE Standard 90.1-2004 (which translates to approximately 25 percent better than ASHRAE Standard 90.1-2007).

http://www.labs21century.gov/.

A Web site focused on improving the energy efficiency and environmental performance of laboratory space. This site includes training and educational resources and design tools focused on laboratories.

http://www.iccsafe.org (search for 2009 IECC) or http://www.iccsafe.org/Store/Pages/Product.aspx?category=0&cat=ICCSafe&id=3800X09.

The baseline energy efficiency standard for low-rise residential buildings is the International Code Council (ICC) 2009 IECC.

http://www.eere.energy.gov/buildings/building_america/.

Building America is a private/public partnership that develops energy solutions for new and existing homes. The Building America project combines the knowledge and resources of industry leaders with DOE's technical capabilities.

http://www.eeba.org/.

EEBA's mission is to provide education and resources to transform the residential design, development and construction industries to profitably deliver energy efficient and environmentally responsible buildings and communities.

http://www.pathnet.org/sp.asp?mc=about_path.

PATH is dedicated to accelerating the development and use of technologies that radically improve the quality, durability, energy efficiency, environmental performance, and affordability of America's housing. PATH is a voluntary partnership between leaders of the homebuilding, product manufacturing, insurance, and financial industries and representatives of Federal agencies concerned with housing.

Today's final rule is a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993). Accordingly, today's action was subject to review by the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB). OMB has completed its review.

DOE believes that although cost increases vary from project to project, the construction cost of Federal buildings will increase only slightly as a result of this rule. DOE estimates a construction cost increase of less than 1% for both commercial and multi-family high-rise residential buildings and low-rise residential buildings. The cost estimate for commercial and multi-family high-rise residential buildings is based on an interpolation of a cost study conducted on several building types that are 30% or 50% more efficient than ASHRAE Standard 90.1-2004. The cost estimate for low-rise residential buildings is based on the national average cost increase of homes under the 2009 IECC compared to the 2006 IECC. The 2004 and 2006 IECC are approximately equivalent on a national average in terms of baseline cost and efficiency, therefore it is reasonable to estimate the cost increase for the 2009 IECC by comparing it to the 2006 IECC.

DOE notes that the determinations regarding the updated voluntary consensus codes were subject to notice and comment in evaluating the voluntary consensus codes in the context of State building codes. See 75 FR 54117 (September 3, 2010) and 75 FR 54131 (September 3, 2010). The determinations made in the context of the State codes are equally applicable in the context of Federal buildings. DOE finds that providing notice and comment on the determinations again in the context of Federal buildings would be unnecessary. The fact that the voluntary consensus codes apply to Federal buildings as opposed to the general building stock does not require a different evaluation of energy efficiency and cost-effectiveness. Additionally, DOE notes that today's rule, amending standards on energy efficiency performance standards for the design and construction of new Federal buildings, is a rule relating to public property, and therefore, is not subject to the rulemaking requirements of the Administrative Procedure Act, including the requirement to publish a notice of proposed rulemaking. (See, 5 U.S.C. 553(a)(2))

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires the preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking, 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process, 68 FR 7990. The Department has made its procedures and policies available on the Office of General Counsel's Web site: http://www.gc.doe.gov.

DOE has determined that a notice of proposed rulemaking is not required by 5 U.S.C. 553 or any other law for issuance of this rule. As such the analytical requirements of the Regulatory Flexibility Act do not apply.

This rulemaking will impose no new information or recordkeeping requirements. Accordingly, Office of Management and Budget (OMB) clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq. )

The Department prepared an Environmental Assessment (EA) (DOE/EA-1871) entitled, “Environmental Assessment for Final Rule, 10 CFR part 433, `Energy Efficiency Standards for New Federal Commercial and Multi-Family High-Rise Residential Buildings,' and 10 CFR part 435, `Energy Efficiency Standards for New Federal Low-Rise Residential Buildings' Baseline Standards Update,” pursuant to the Council on Environmental Quality's (CEQ) Regulations for Implementing the Procedural Provisions of the National Environmental Policy Act (40 CFR parts 1500-1508), the National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), and DOE's NEPA Implementing Procedures (10 CFR part 1021).

The EA addresses the possible incremental environmental effects attributable to the application of the final rule. The only anticipated impact would be a decrease in outdoor air pollutants resulting from decreased fossil fuel burning for energy use in Federal buildings. Therefore, DOE has issued a Finding of No Significant Impact (FONSI), pursuant to NEPA, the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance with NEPA (10 CFR part 1021).

To identify the potential environmental impacts that may result from implementing the final rule on new Federal commercial buildings, DOE compared the final rule with the “no-action alternative” of using the current Federal standards. This comparison essentially compares the baseline standards—ANSI/ASHRAE/IESNA Standards 90.1-2004 and 90.1-2007 for Federal commercial and multi-family high-rise residential buildings, and the 2004 Supplement to the 2003 IECC to the 2009 IECC for Federal low-rise residential buildings. This comparison is identical to that undertaken by DOE in its determinations of energy savings of those standards and codes. For the purposes of this environmental assessment, DOE also investigated the impact of buildings achieving energy consumption below Standard 90.1-2007 or the 2009 IECC in increments of 10 percent, up to 50 percent. The Federal government is estimated to construct about 2000 covered, low-rise housing units annually, which, if built to realize a 30 percent savings over the 2009 IECC, will avoid 3,600 metric tons of carbon dioxide emissions, 22 metric tons of methane emissions, 1 metric ton of nitrogen oxide, and 2 metric tons of sulfur dioxide each in the first year the final rule is in effect. These savings would compound in future years as more and more Federal construction occurs.

For commercial and multi-family high-rise residential buildings, the Federal government is projected to construct 40 million square feet of Federal commercial buildings annually. Federal multi-family high-rise residential buildings are rare. Looking just at Federal commercial buildings, and assuming a 30 percent savings over Standard 90.1-2007, 6,200 metric tons of carbon dioxide will be avoided (relative to the existing 10 CFR part 433) in the first year the final rule is in effect. These savings would compound in future years as more and more Federal construction occurs. Again assuming a 30 percent savings over Standard 90.1-2007, 24 metric tons of methane emissions will be avoided, 6 metric tons of nitrogen oxide emissions will be avoided, and 14 metric tons of sulfur dioxide emissions will be avoided, all in the first year the rule is in effect.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations, 65 FR 13735. DOE examined this rule and determined that it does not preempt State law and does 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. No further action is required by Executive Order 13132.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct, rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a) and (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA (62 FR 12820) (also available at http://www.gc.doe.gov ). This final rule contains neither an intergovernmental mandate nor a mandate that may result in the expenditure of $100 million or more in any year by State, local, and Tribal governments, in the aggregate, or by the private sector, so these requirements under the Unfunded Mandates Reform Act do not apply.

Section 654 of the Treasury and General Government Appropriations Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This final rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

The Department has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this rule would not result in any takings which might require compensation under the Fifth Amendment to the United States Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. This final rule would not have a significant adverse effect on the supply, distribution, or use of energy and, therefore, is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule prior to its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons set forth in the preamble, the Department of Energy amends chapter II of title 10 of the Code of Federal Regulations as set forth below:

On June 2, 2011, the FAA published in the Federal Register a final rule amending Class D airspace at Cabaniss NOLF, Corpus Christi, TX (76 FR 31821, Docket No. FAA-2010-1171). Subsequent to publication, an error was discovered in the latitude coordinates listed in the regulatory text. This action corrects that error. Class D airspace designations are published in paragraph 5000 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 D airspace designations listed in this document will be published subsequently in the Order.

Accordingly, pursuant to the authority delegated to me, the latitude coordinates listed in the regulatory text for the Class D airspace area at Cabaniss NOLF, Corpus Christi, TX, as published in the Federal Register June 2, 2010 (76 FR 31821), (FR Doc. 2011-13559), are corrected as follows:

On page 31822, column 1, line 49 of the regulatory text, remove `lat. 27°38′15″ N.,' and insert `lat. 27°38′16″ N.'; and on line 50 remove `lat. 27°41′30″ N.,' and insert `lat. 27°41′22″ N.'

Section 14(a)(3)(B)(vi) of the CPSA, as added by section 102(a)(2) of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Public Law 110-314, directs the CPSC to publish a notice of requirements for accreditation of third party conformity assessment bodies (also known as “testing laboratories” or “laboratories”) to assess children's products for conformity with “other children's product safety rules.”  1 Section 14(f)(1) of the CPSA defines “children's product safety rule” as “a consumer product safety rule under [the CPSA] or similar rule, regulation, standard, or ban under any other Act enforced by the Commission, including a rule declaring a consumer product to be a banned hazardous product or substance.” Under section 14(a)(3)(A) of the CPSA, each manufacturer (including the importer) or private labeler of products subject to those regulations must have products that are manufactured more than 90 days after the Federal Register publication date of a notice of the requirements for accreditation, tested by a third party conformity assessment body accredited to do so, and must issue a certificate of compliance with the applicable regulations based on that testing. Section 14(a)(2) of the CPSA, as added by section 102(a)(2) of the CPSIA, requires that certification be based on testing of sufficient samples of the product, or samples that are identical in all material respects to the product. The Commission also emphasizes that, irrespective of certification, the product in question must comply with the applicable CPSC requirements (see, e.g. , section 14(h) of the CPSA, as added by section 102(b) of the CPSIA).

This notice provides the criteria and process for Commission acceptance of accreditation of third party conformity assessment bodies for testing pursuant to the following test methods:

• CPSC-CH-C1001-09.3, Standard Operating Procedure for Determination of Phthalates , issued on April 1, 2010 (“CPSC Test Method”). This is the most recent version of the test method, and it can be downloaded from the CPSC Web site at http://www.cpsc.gov/about/cpsia/CPSC-CH-C1001-09.3.pdf; and/or

• GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic , issued on June 16, 2008 (“Chinese Test Method”).

The Commission is recognizing limited circumstances in which it will accept certifications based on product testing conducted before the publication of this notice of requirements. The details regarding those limited circumstances can be found in part VI of this document below.

Although section 14(a)(3)(B)(vi) of the CPSA directs the CPSC to publish a notice of requirements for accreditation of third party conformity assessment bodies to assess conformity with “all other children's product safety rules,” this notice of requirements is limited to test methods CPSC-CH-C1001-09.3, Standard Operating Procedure for Determination of Phthalates , and GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic . The CPSC acknowledges that the test methods for determining phthalates content are not, by themselves, rules that are codified in the Code of Federal Regulations. However, section 108(d) of the CPSIA considers the phthalates content limits to be “consumer product safety standards” under the Consumer Product Safety Act. Section 14(a)(3)(B)(vi) of the CPSA directs the Commission to publish notices of requirements for the accreditation of third party conformity assessment bodies to assess conformity with “other children's product safety rules,” and section 14(f)(1) of the CPSA defines a “children's product safety rule,” in part, as “a consumer product safety rule under [the CPSA].” Section 3(a)(6) of the CPSA, in turn, defines a “consumer product safety rule” as “a consumer products safety standard described in section 7(a) [of the CPSA] * * * or a rule under this Chapter declaring a consumer product a banned hazardous product.” Accordingly, because the phthalates content limits are “consumer product safety standards” under the CPSA, it follows that they are also “consumer product safety rules” under section 3(a)(6) of the CPSA and, in turn, “children's product safety rules” under section 14(f)(1) of the CPSA. Thus, the phthalates content limits are “children's product safety rules” for which a notice of requirements for accreditation of third party conformity assessment bodies must be published. In addition, because the test methods would be used to assess conformity with the phthalates limits, it is appropriate for the notice of requirements to apply to the CPSC Test Method and the Chinese Test Method.

The CPSC also recognizes that section 14(a)(3)(B)(vi) of the CPSA is captioned: “All Other Children's Product Safety Rules,” but the body of the statutory requirement refers only to “other children's product safety rules.” Nevertheless, section 14(a)(3)(B)(vi) of the CPSA could be construed to require a notice of requirements for “all” other children's product safety rules, rather than a notice of requirements for “some” or “certain” children's product safety rules. However, whether a particular rule represents a “children's product safety rule” may be subject to interpretation. Commission staff is continuing to evaluate which rules, regulations, standards, or bans are “children's product safety rules.” The CPSC intends to issue additional notices of requirements for other rules which the Commission determines to be “children's product safety rules.”

This notice of requirements applies to all third party conformity assessment bodies, as described in section 14(f)(2) of the CPSA. Generally speaking, such third party conformity assessment bodies are: (1) Third party conformity assessment bodies that are not owned, managed, or controlled by a manufacturer or private labeler of a children's product to be tested by the third party conformity assessment body for certification purposes; (2) “firewalled” conformity assessment bodies (those that are owned, managed, or controlled by a manufacturer or private labeler of a children's product to be tested by the third party conformity assessment body for certification purposes and that seek accreditation under the additional statutory criteria for “firewalled” conformity assessment bodies); and (3) third party conformity assessment bodies owned or controlled, in whole or in part, by a government.

The Commission requires baseline accreditation of each category of third party conformity assessment body to the International Organization for Standardization (ISO)/International Electrotechnical Commission (IEC) Standard 17025:2005, “General Requirements for the Competence of Testing and Calibration Laboratories.” The accreditation must be by an accreditation body that is a signatory to the International Laboratory Accreditation Cooperation-Mutual Recognition Arrangement (ILAC-MRA), and the scope of the accreditation must include testing for any of the test methods identified earlier in this document for which the third party conformity assessment body seeks to be accredited.

(A description of the history and content of the ILAC-MRA approach and of the requirements of the ISO/IEC 17025:2005 laboratory accreditation standard is provided in the CPSC staff briefing memorandum, “Third Party Conformity Assessment Body Accreditation Requirements for Testing Compliance with 16 CFR part 1501 (Small Parts Regulations),” dated November 2008, and available on the CPSC's Web site at: http://www.cpsc.gov/library/foia/foia09/brief/smallparts.pdf ).

The Commission has established an electronic accreditation registration and listing system that can be accessed via its Web site at: http://www.cpsc.gov/about/cpsia/labaccred.html .

The Commission stayed the enforcement of certain provisions of section 14(a) of the CPSA in a notice published in the Federal Register on February 9, 2009 (74 FR 6396); the stay applied to testing and certification of various products, including the phthalates limits of section 108 of the CPSIA. On December 28, 2009, the Commission published a notice in the Federal Register (74 FR 68588), revising the terms of the stay. One section of the December 28, 2009, notice addressed: “Consumer Products or Children's Products Where the Commission Is Continuing the Stay of Enforcement Until Further Notice,” due to factors such as pending rulemaking proceedings affecting the product or the absence of a notice of requirements. The phthalates content testing and certification requirements for children's toys and child care articles were included in that section of the December 28, 2009 notice. The absence of a notice of requirements prevented the lifting of the stay in the December 28, 2009 notice with regard to testing and certifications of children's toys and child care articles for phthalates content. On February 8, 2011, the Commission published a notice in the Federal Register (76 FR 6765), continuing the stay of enforcement for testing and certification of children's products for which a notice of requirements for accreditation of laboratories had not yet been published.

The phthalates content testing and certification requirements for children's toys and child care articles were mentioned specifically as an example of a provision for which the stay would continue, pending publication of the notice of requirements. Thus, publication of this notice of requirements would have had the effect of lifting the stay on testing and certification requirements for phthalates content in children's toys and child care articles; however, on July 27, 2011, the Commission voted to stay enforcement of the testing and certification requirements of section 14 of the CPSA with respect to toys and child care articles subject to the phthalates content limits until December 31, 2011.

Accordingly, the Commission will enforce third party testing and certification requirements for products subject to the phthalates content limits if such products are manufactured on or after January 1, 2012. (Under the CPSA, the term “manufacturer” includes anyone who manufactures or imports a product.)

This notice of requirements is exempt from the notice and comment rulemaking requirements of the Administrative Procedure Act, 5 U.S.C. 553 (see section 14(a)(3)(G) of the CPSA, as added by section 102(a)(2) of the CPSIA (15 U.S.C. 2063(a)(3)(G))).

The Commission approved a “Statement of Policy: Testing of Component Parts with Respect to Section 108 of the Consumer Product Safety Improvement Act” on August 7, 2009. On August 17, 2009, a Notice of Availability regarding the Statement of Policy was published in the Federal Register (74 FR 41400). The Statement of Policy can be viewed and downloaded from the CPSC Web site at: http://www.cpsc.gov/about/cpsia/componenttestingpolicy.pdf . In brief, we believe that only those plastic parts or other product parts which could conceivably contain phthalates (“plasticized component parts”) should be tested for phthalates. We consider it to be unnecessary to test and certify materials that are known not to contain phthalates or to certify that phthalates are absent from materials that are known not to contain phthalates. 2 In addition, we believe that when testing covered products, the assessment of the concentration of phthalates is to be based on testing of the plasticized component parts, rather than testing of the entire product, to avoid dilution of the concentrations of phthalates that can occur when the entire product is considered. The Statement of Policy remains in effect until further notice (except that the CPSC Test Method referenced in the Statement of Policy, CPSC-CH-C1001-09.2, has been superseded by CPSC-CH-C1001-09.3 as outlined in part VI of this document below).

The Commission voted to publish a “Draft Guidance Regarding Which Children's Products are Subject to the Requirements of CPSIA Section 108” on February 13, 2009. On February 23, 2009, the staff guidance was published in the Federal Register (74 FR 8058). This staff guidance can be viewed and downloaded from the CPSC Web site at: http://www.cpsc.gov/businfo/frnotices/fr09/draftphthalatesguidance.pdf . The Commission may choose to update this staff guidance or initiate a formal rulemaking concerning the topics addressed by the guidance after receipt of the Chronic Hazard Advisory Panel report required by section 108(b)(2)(C) of the CPSIA. Until such time, this staff guidance remains in effect (except that the CPSC Test Method referenced in the guidance, CPSC-CH-C1001-09.1, has been superseded by CPSC-CH-C1001-09.3 as outlined in part VI of this document below).

Answers to frequently asked questions that provide guidance concerning the requirements of section 108 of the CPSIA can be viewed on the CPSC Web site at: http://www.cpsc.gov/about/cpsia/sect108.html#faqs . The Commission intends for this guidance to be useful and therefore the materials on this Web page may be modified periodically in the future. In order to receive automatic notification of any such updates, interested parties may sign up for the CPSIA email subscription list at: https://www.cpsc.gov/about/cpsia/cpsialist.aspx . The Commission notes that the phthalate content limits in section 108 of the CPSIA are statutory requirements and we may always take action with regard to products defined in this section of the statute that exceed those limits.

The Commission requested comments regarding the Statement in the Notice of Availability published in the Federal Register (74 FR 41400). We received several comments on the CPSC Test Method. We describe and respond to the comments in this section of the document. To make it easier to identify the comments and our responses, the word “Comment,” in parentheses, will appear before the comment's description, and the word “Response,” in parentheses, will appear before our response. We also have numbered each comment to help distinguish between different topics. The number assigned to each comment is for organizational purposes only and does not signify the comment's value, or importance, or the order in which it was received.

( Comment 1 )—Some commenters questioned the necessity to run the test in triplicate. Other test multiples from two to five were suggested. Some commenters asked whether the sample to be tested always needed to be ground to a powder. A commenter asked about the proper cleaning protocol of the cryogenic mill.

( Response 1 )—We have examined all suggestions and comments pertaining to the CPSC Test Method and have updated our test method to address these issues (CPSC-CH-C1001-09.3). We adjusted the method to allow the third party conformity assessment body to choose an appropriate quality assurance program; thus, the third party conformity assessment body will determine the number of replicates to be tested. The CPSC Test Method allows, but does not require, third party conformity assessment bodies to pulverize the sample. Cryogenic mill equipment should be cleaned as thoroughly as any other laboratory equipment that comes into contact with a sample.

( Comment 2 )—One commenter suggested that the official Chinese test method, GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic, should be added to the lists of acceptable extraction and analysis methods. The commenter also suggested that each plasticized component part should be cut into pieces no larger than 2 mm prior to the extraction step.

( Response 2 )—We have reviewed the test method GB/T 22048-2008 and determined that it is an acceptable test method for inclusion in this notice of requirements. With regard to the 2 mm maximum size of pieces, we agree with this comment and have incorporated the dimension into the current edition of the CPSC Test Method (CPSC-CH-C1001-09.3).

( Comment 3 )—Another commenter suggested that the CPSC Test Method include a description of the limit of detection (LOD) and limit of quantitation (LOQ). The commenter added that, on the last page of CPSC-CH-C1001-09.2, there appears to be an error in the DEHP calculation. Under column C, measured DEHP concentration by GC-MSW is 200 µg/ml. In the final calculation column, 200 µg/ml is mistakenly cited as 20 µg/ml.

( Response 3 )—Detection and quantitation limits have not been outlined specifically at this point. Third party conformity assessment bodies should follow their own internal quality assurance program. These limits may be introduced in the future, following further validation and round robin studies. The DEHP calculation included a typographical error that was corrected for the current edition of the test method (CPSC-CH-C1001-09.3).

( Comment 4 )—One commenter stated that grinding the sample into a powder is time-consuming, adds additional expense to the testing methods, and could introduce the possibility of significant interlaboratory variability.

( Response 4 )—Grinding the sample into a powder is no longer required in the CPSC Test Method; however, third party conformity assessment bodies may continue to do so, if they wish.

( Comment 5 )—One commenter asked how the CPSC Test Method prevents interferences that can lead to a false positive for the phthalates of interest. The commenter also asked if the detection method could be revised.

( Response 5 )—We have updated the CPSC Test Method (to CPSC-CH-C1001-09.3) to include a vigorous qualitative assessment by trained staff to avoid false positives. Such steps include: Retention time matching with known standards and full-scan mass spectrum analysis. We will continue to consider new methods that could simplify or improve the analysis.

( Comment 6 )—One commenter pointed out typographical inconsistencies found within the text of the method. Additionally, the commenter asked: What is the minimum signal-to-noise ratio required, and what are the reproducibility and detection limits of the method?

( Response 6 )—We have corrected the typographical errors that might have caused confusion. Signal-to-noise, detection limits, and reproducibility requirements have not been outlined specifically at this point. Third party conformity assessment bodies should follow their own internal quality assurance program. Testing requirements may be adjusted following further validation and round robin studies.

( Comment 7 )—One commenter asked if the chromatography was optimized.

( Response 7 )—The gas chromatography parameters outlined have been successful at providing adequate separation while minimizing sampling time. However, due to the nature of DINP and DIDP, they will not completely separate chromatographically. DINP and DIDP are actually a mixture of compounds; DINP and DIDP contain some of the same phthalate species, leading to an overlap. We recommend following the selection monitoring analysis scheme outlined in the CPSC Test Method to quantify these compounds for instances when they are both present.

( Comment 8 )—One commenter suggested that we create a flexible correlative policy that permits use of several methods suitable for the routine identification and measurement of total phthalate concentration, such as ASTM D7083-04, the Canada Product Safety Bureau method, the European Toy Safety Directive method, and GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic.

( Response 8 )—The current edition of the CPSC Test Method (CPSC-CH-C1001-09.3) allows alternative test methods. Additionally, any combination of the approved extraction and analysis methods listed may be used. We have included GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic, as an additional test method in this notice of requirements. We have not included ASTM D7083-04 as an alternative detection method due to the lack of selectivity from using a flame ionization detector; this method may lead to false positives. We will review other suggested methods and may include them as alternatives in future revisions of the test method.

For a third party conformity assessment body to be accredited to test children's products for conformity with the test methods identified earlier in part I of this document, it must be accredited by an ILAC-MRA signatory accrediting body, and the accreditation must be registered with, and accepted by, the Commission. A listing of ILAC-MRA signatory accrediting bodies is available on the Internet at: http://ilac.org/membersbycategory.html. The accreditation must be to ISO Standard ISO/IEC 17025:2005, “General Requirements for the Competence of Testing and Calibration Laboratories,” and the scope of the accreditation must expressly include testing to the test method CPSC-CH-C1001-09.3, Standard Operating Procedure for Determination of Phthalates, and/or to the test method GB/T 22048-2008, Toys and Children's Products—Determination of Phthalate Plasticizers in Polyvinyl Chloride Plastic. A true copy, in English, of the accreditation and scope documents demonstrating compliance with these requirements must be registered with the Commission electronically. The additional requirements for accreditation of firewalled and governmental conformity assessment bodies are described in parts IV.B and IV.C of this document below.

The Commission will maintain on its Web site an up-to-date listing of third party conformity assessment bodies whose accreditations it has accepted and the scope of each accreditation. Once the Commission adds a third party conformity assessment body to that list, the third party conformity assessment body may commence testing children's toys and child care articles for phthalates content to support certification by the manufacturer or private labeler of compliance with the test method(s) identified earlier in part I of this document.

In addition to the baseline accreditation requirements in part IV.A of this document above, firewalled conformity assessment bodies seeking accredited status must submit to the Commission copies, in English, of their training documents, showing how employees are trained to notify the Commission immediately and confidentially of any attempt by the manufacturer, private labeler, or other interested party to hide or exert undue influence over the third party conformity assessment body's test results. This additional requirement applies to any third party conformity assessment body in which a manufacturer or private labeler of a children's product to be tested by the third party conformity assessment body owns an interest of 10 percent or more. While the Commission is not addressing common parentage of a third party conformity assessment body and a children's product manufacturer at this time, it will be vigilant to see if this issue needs to be addressed in the future.

As required by section 14(f)(2)(D) of the CPSA, the Commission must formally accept, by order, the accreditation application of a third party conformity assessment body before the third party conformity assessment body can become an accredited firewalled conformity assessment body. The Commission's order must also find that accrediting the firewalled conformity assessment body would provide equal or greater consumer safety protection than the manufacturer's or private labeler's use of an independent conformity assessment body.

In addition to the baseline accreditation requirements of part IV.A of this document above, the CPSIA permits accreditation of a third party conformity assessment body owned or controlled, in whole or in part, by a government if:

• To the extent practicable, manufacturers or private labelers located in any nation are permitted to choose conformity assessment bodies that are not owned or controlled by the government of that nation;

• The third party conformity assessment body's testing results are not subject to undue influence by any other person, including another governmental entity;

• The third party conformity assessment body is not accorded more favorable treatment than other third party conformity assessment bodies in the same nation who have been accredited;

• The third party conformity assessment body's testing results are accorded no greater weight by other governmental authorities than those of other accredited third party conformity assessment bodies; and

• The third party conformity assessment body does not exercise undue influence over other governmental authorities on matters affecting its operations or on decisions by other governmental authorities controlling distribution of products based on outcomes of the third party conformity assessment body's conformity assessments.

The Commission will accept the accreditation of a governmental third party conformity assessment body if it meets the baseline accreditation requirements of part IV.A of this document above and meets the additional conditions stated here. To obtain this assurance, CPSC staff will engage the governmental entities relevant to the accreditation request.

The Commission has established an electronic accreditation acceptance and registration system accessed via the Commission's Internet site at: http://www.cpsc.gov/about/cpsia/labaccred.html. The applicant provides, in English, basic identifying information concerning its location, the type of accreditation it is seeking, and electronic copies of its ILAC-MRA accreditation certificate and scope statement, and firewalled third party conformity assessment body training document(s), if relevant.

CPSC staff will review the submission for accuracy and completeness. In the case of baseline third party conformity assessment bodies and government-owned or government-operated conformity assessment bodies, when that review and any necessary discussions with the applicant are completed satisfactorily, the third party conformity assessment body in question is added to the CPSC's list of accredited third party conformity assessment bodies at http://www.cpsc.gov/about/cpsia/labaccred.html. In the case of a firewalled conformity assessment body seeking accredited status, when staff's review is complete, staff transmits its recommendation on accreditation to the Commission for consideration. (A third party conformity assessment body that may ultimately seek acceptance as a firewalled third party conformity assessment body also can initially request acceptance as a third party conformity assessment body accredited for testing of children's products other than those of its owners.) If the Commission accepts a staff recommendation to accredit a firewalled conformity assessment body, the firewalled conformity assessment body will be added to the CPSC's list of accredited third party conformity assessment bodies. In each case, the Commission will notify the third party conformity assessment body electronically of acceptance of its accreditation. All information to support an accreditation acceptance request must be provided in the English language.

Once the Commission adds a third party conformity assessment body to the list, the third party conformity assessment body may begin testing children's products to support certification of compliance with the phthalates content limits for which it has been accredited.

For certifications of children's toy or child care articles subject to the phthalates content limits in section 108 of the CPSIA, the Commission will allow certifications to be based on prior testing under certain conditions. Firms that elect to voluntarily have the phthalates content of children's toys and child care articles tested by a third party conformity assessment body, using either the CPSC Test Method or the Chinese Test Method, before January 1, 2012, will not need to have those products retested. The Commission's acceptance of certifications based on prior testing under certain conditions should prevent testing backlogs at accredited third party conformity assessment bodies, making it less likely that the Commission will have to postpone the effective date for certification.

The Commission will accept a certificate of compliance to the phthalates limits in section 108 of the CPSIA based on testing performed by an accredited third party conformity assessment body (including a government-owned or -controlled conformity assessment body, and a firewalled conformity assessment body) if:

• At the time of product testing, the product was tested by a third party conformity assessment body that was ISO/IEC 17025 accredited by an ILAC-MRA member at the time of the test. For firewalled conformity assessment bodies, the firewalled conformity assessment body must be one that the Commission has accredited by order at or before the time the product was tested, even if the order did not include the test methods specified in this notice. If the third party conformity assessment body has not been accredited by a Commission order as a firewalled conformity assessment body, the Commission will not accept a certificate of compliance based on testing performed by the third party conformity assessment body before it is accredited, by Commission order, as a firewalled conformity assessment body;

• For tests conducted using the CPSC Test Method, the test was conducted on or after July 27, 2009. The Commission has chosen July 27, 2009, because it is the date the Commission posted a test method for testing component parts for phthalates on the Commission Web site: ( http://www.cpsc.gov/about/cpsia/CPSC-CH-C1001-09.2.pdf ). The test method was updated on April 1, 2010, to the current method ( http://www.cpsc.gov/about/cpsia/CPSC-CH-C1001-09.3.pdf .). The Commission will accept phthalates content certifications for products tested before January 1, 2012, if the product was tested using either CPSC-CH-C1001-09.2 or CPSC-CH-C1001-09.3. The Commission acknowledges that, on March 3, 2009, it released a test method that involved testing the entire product ( http://www.cpsc.gov/about/cpsia/CPSC-CH-C1001-09.1.pdf ) (“March 2009 test method”). The Commission will not accept phthalates content certifications for products tested using the March 2009 test method (CPSC-CH-C1001-09.1). The Commission considers testing the entire product to be less protective of children because mouthable component parts with high concentrations of phthalates in products with large quantities of nonplasticized parts would be able to pass the test because the total mass of the product would dilute the overall phthalate measure.

• For tests conducted using the Chinese Test Method, the test was conducted on or after June 18, 2008. The Commission has chosen June 18, 2008, because that is the date that the Chinese Test Method was issued.

• The third party conformity assessment body's application for accreditation is accepted by CPSC by the mandatory effective date, as established by the Commission;

• The accreditation scope in the application for accreditation expressly includes one or both of the acceptable test methods identified earlier in part I of this document;

• The test results show compliance with the applicable current standards; and

• The third party conformity assessment body's accreditation and inclusion of one or both of the test methods (identified earlier in part I of this document) in its scope remain in effect through the effective date for mandatory third party testing and manufacturer certification for the subject products' respective standards.

I. Introduction A. Dodd-Frank Act

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. 1 Title VII of the Dodd-Frank Act  2 amended the CEA  3 to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation was enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) Providing for the registration and comprehensive regulation of swap dealers and major swap participants; (2) imposing clearing and trade execution requirements on standardized derivative products; (3) creating robust recordkeeping and real-time reporting regimes; and (4) enhancing the Commission's rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission's oversight.

Section 723(c)(3) of the Dodd-Frank Act provides that swaps in an agricultural commodity (as defined by the Commission)  4 are prohibited unless entered into pursuant to a rule, regulation or order of the Commission adopted pursuant to CEA section 4(c). Further, section 733 of the Dodd-Frank Act, new CEA section 5h(b)(2), provides that a swap execution facility (“SEF”) may not list for trading or confirm the execution of any swap in an agricultural commodity (as defined by the Commission) except pursuant to a rule or regulation of the Commission allowing the swap under such terms and conditions as the Commission shall prescribe.

As a result of the Dodd-Frank changes, on February 3, 2011, the Commission published in the Federal Register a notice of proposed rulemaking to withdraw current part 35 of the Commission's regulations  5 and replace it with a new part 35 that would essentially permit the transaction of swaps in an agricultural commodity (or, “agricultural swaps”)  6 subject to the same rules and regulations applicable to any other swap (the “NPRM”). 7 The NPRM was preceded by an advanced notice of proposed rulemaking wherein the Commission sought general comment on the agricultural swaps provisions in the Dodd-Frank Act (the “ANPRM”). 8 The NPRM included an overview and summary of the comments received on the ANPRM, which generally favored treating agricultural swaps the same as every other swap.

Because the Dodd-Frank Act statutory definition of a swap includes commodity options (other than options on futures), 9 the NPRM also included proposed provisions that would substantially amend the Commission's regulations regarding commodity option transactions. At this time, the Commission is only finalizing the rules for agricultural swaps in amended part 35 of the Commission's regulations. The proposed rules for commodity options—including proposed amendments to parts 3, 32, and 33—will be addressed at a later date.

Accordingly, the preamble to this final rule reviews the statutory and regulatory framework governing agricultural swaps, as discussed in the NPRM, 10 provides an overview and summary of the comments received on the agricultural swaps rules proposed in the NPRM, and includes an explanation of the final rules issued herein. This preamble also includes a discussion of CEA section 4(c), the primary statutory authority for the agricultural swaps rules, 11 and a detailed discussion of the costs and benefits of the final rule, along with a review of those comments specifically addressing the costs and benefits of the proposed agricultural swaps rules.

As explained in the NPRM, beginning in 2000, bilateral swaps between certain sophisticated counterparties were generally exempted from the Commission's jurisdiction pursuant to pre Dodd-Frank CEA section 2(g), 12 which was added to the CEA by the Commodity Futures Modernization Act of 2000 (“CFMA”). 13 However, pre Dodd-Frank section 2(g) specifically excluded an “agreement, contract, or transaction” in an “agricultural commodity” from the CFMA swaps exemption. 14 While the term “agricultural commodity” is not specifically defined in the Act, the Commission recently adopted a final rule defining “agricultural commodity.”  15

The effect of the pre Dodd-Frank CEA sections explicitly excluding agricultural commodities from the CFMA statutory swaps exemptions and exclusions was that swaps involving exempt and excluded commodities were allowed to transact largely outside of the Commission's jurisdiction or oversight, while swaps in agricultural commodities had to continue to rely on authority found in pre-CFMA law. As discussed in greater detail below, that pre-CFMA authority was found in part 35 of the Commission's regulations.

Part 35 originally provided a broad exemption for certain swap agreements and applied to swaps in all commodities. 16 After the CFMA amendments to the CEA, which statutorily exempted swaps on “exempt” and “excluded” commodities from virtually all of the Commission's jurisdiction, part 35 remained relevant only for agricultural swaps. With the exception of three outstanding exemptive orders related to cleared agricultural basis and calendar swaps  17 (which orders exempt certain swaps transactions from part 35's non-fungibility and counterparty creditworthiness requirements), part 35 is the sole existing authority under which market participants may transact agricultural swaps that are not options. 18

As explained in the introduction, the Dodd-Frank Act amended the CEA to remove the CFMA swaps exemptions and exclusions and to create a new regulatory regime for swaps. Under the CEA, as amended by the Dodd-Frank Act, only eligible contract participants (“ECPs”)  19 may enter into a swap, unless such swap is entered into on a designated contract market (“DCM”), 20 in which case any person may enter into the swap. 21

New CEA section 2(h), as added by section 723(a)(3) of the Dodd-Frank Act, establishes a clearing requirement for swaps. Under that subsection, the Commission would determine, based on factors listed in the statute, whether a swap, or a group, category, type, or class of swaps, should be required to be cleared. A swap that is required to be cleared must be executed on a DCM or a SEF, 22 if a DCM or SEF makes the swap available for trading. Swaps that are not required to be cleared may be executed bilaterally.

Section 731 of the Dodd-Frank Act adds a new section 4s to the CEA that provides for the registration and regulation of swap dealers and major swap participants. 23 The new requirements for swap dealers and major swap participants include, in part, capital and margin requirements, business conduct standards, and reporting, recordkeeping, and documentation requirements.

Section 737 of the Dodd-Frank Act amends current CEA section 4a regarding position limits. Under the Dodd-Frank provisions and amended CEA section 4a, the Commission is directed to establish position limits as appropriate for futures and options traded on or subject to the rules of a designated contract market, and swaps that are economically equivalent to such futures and exchange-traded options for both exempt and agricultural commodities.

Notwithstanding the new swaps regime in the Dodd-Frank Act, section 723(c)(3) of Dodd-Frank prohibits swaps in an “agricultural commodity” (as defined by the Commission)  24 unless the swap is entered into pursuant to an exemption granted under CEA section 4(c). The requirements of section 4(c) are discussed in greater detail, below. 25

Dodd-Frank section 723(c)(3)(B) includes a “grandfather” clause providing that any rule, regulation, or order regarding agricultural swaps that was issued pursuant to the Commission's section 4(c) exemptive authority, and that was in effect on the date of enactment of the Dodd-Frank Act, would continue to be permitted under such terms and conditions as the Commission may prescribe. Such rules, regulations or orders include part 35 with respect to agricultural swaps and the agricultural basis and calendar swaps noted above.

In addition to the provisions in section 723(c)(3), section 733 of the Dodd-Frank Act, new CEA section 5h(b), provides that a SEF may not list for trading or confirm the execution of any swap in an agricultural commodity (as defined by the Commission) except pursuant to a rule or regulation of the Commission allowing the swap under such terms and conditions as the Commission shall prescribe.

The NPRM proposed repealing existing part 35 in its entirety and replacing it with the following:

In consideration of the foregoing and pursuant to the authority contained in the Act, as indicated herein, the Commission hereby amends chapter I of title 17 of the Code of Federal Regulations as follows:

Background

The final regulations (TD 9475) that are the subject of this document are under sections 358, 368 and 1502 of the Internal Revenue Code.

As published, the final regulations (TD 9475) contain an error that may prove to be misleading and is in need of clarification.

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:

The Metro North (Peck) Bridge, across the Pequonnock River, mile 0.3, at Bridgeport, Connecticut, has a vertical clearance in the closed position of 26 feet at mean high water and 32 feet at mean low water. The drawbridge operation regulations are listed at 33 CFR 117.219(b).

The operator of the bridge, Metro North Railroad, requested a temporary deviation from the regulations to facilitate scheduled bridge maintenance, miter rail repair, at the bridge.

The waterway users are recreational vessels and commercial lobster boats. The Metro North (Peck) Bridge rarely opens for vessel traffic. The bridge has received no requests to open during the past two years except for bridge testing and repairs.

Under this temporary deviation the Metro North (Peck) Bridge may remain in the closed position from August 22, 2011 through November 30, 2011. Vessels that can pass under the bridge in the closed position may do so at all times.

The waterway users were advised of the requested bridge closure and offered no objection.

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.

On May 3, 2011, we published a notice of proposed rulemaking (NPRM) entitled USCG-2011-0044 in the Federal Register (76 FR 24837). We received no comments on the proposed rule. No public meeting was requested, and none was held.

The legal basis for the rule is the Coast Guard's authority to establish regulated navigation areas (RNAs) and 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; Public Law 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.

The purpose of the rule is to ensure the safe transit of vessels in the area and to protect all persons, vessels, and the marine environment.

This rule designates an RNA encompassing all waters within one nautical mile of the center of the Intracoastal Waterway from Featherbed Bank extending 14 nautical miles north to the Rickenbacker Causeway Bridge in Miami, Florida. The RNA will be enforced daily from 12:01 p.m. until 11:59 p.m. on the Saturday and Sunday of the second week in October (Columbus Day weekend) each year. All vessels within the RNA are: (1) Required to transit the area at no more than 15 knots; (2) subject to control by the Coast Guard; and (3) required to follow the instructions of all law enforcement vessels in the area.

The RNA is necessary to ensure the safety of the public. The close proximity of numerous vessels transiting that portion of the Intracoastal Waterway encompassed within the RNA during Columbus Day weekend poses a hazardous condition. The RNA will result in the transiting of vessels at a safer speed, thereby significantly reducing the threat of vessel collisions. Requiring vessels within the RNA to transit at no more than 15 knots will also enable law enforcement officials to identify, respond to, query, and stop operators who may pose a hazard to other vessels in the area. Nothing in this regulation alleviates vessels or operators from complying with all other Federal, state, and local laws in the area, including manatee slow speed zones.

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 RNA will be in effect for only two days each year; (2) although during the enforcement period vessels will be required to transit the RNA at no more than 15 knots, be subject to control by the Coast Guard, and be required to follow the instructions of all law enforcement vessels in the area, the RNA does not prohibit vessels from transiting the area; (3) vessels may still operate in surrounding waters that are not encompassed within the RNA without the restrictions imposed by the RNA; and (4) advance notification of the RNA's enforcement will be made to the local maritime community via Local Notice to Mariners and Broadcast Notice to Mariners.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will 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 transit the RNA on the Saturday and Sunday of the second week in October (Columbus Day weekend). For the reasons discussed in the Executive Order 12866 and Executive Order 13563 section above, this rule will not have 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), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

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

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

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

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph 34(g), of the Instruction. This rule involves establishing an RNA, as described in paragraph 34(g) of the Instruction, from Featherbed Bank in Biscayne Bay north to the Rickenbacker Causeway in Miami, Florida. 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:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

Since EPA last approved rules into the Minnesota SIP in 1998, Minnesota has revised or updated many of its air rules. These revisions have not been incorporated into the Minnesota SIP. This has resulted in out-of-date rules in the Minnesota SIP, which can result in inconsistent enforceability of rules at the state and Federal levels. On May 5, 2008, the Minnesota Pollution Control Agency (MPCA) submitted a request to update the rules contained in the Minnesota SIP to be consistent with the rules changes that have occurred at the state level, as well as to remove a number of regulations that have been repealed by the state and no longer need to be included in the Minnesota SIP. The following sections of Minnesota's air rules have undergone changes: Minnesota Rules chapter 7001 Permits and Certifications; Minn. R. ch. 7002 Permit Fees; Minn. R. ch. 7005 Definitions and Abbreviations; Minn. R. ch. 7007 Air Emissions Permits; Minn. R. ch. 7008 Exempt Air Emissions; Minn. R. ch. 7009 Ambient Air Quality Standards; Minn. R. ch. 7011 Standards for Stationary Sources; Minn. R. ch. 7017 Monitoring and Testing Requirements; Minn. R. ch. 7019 Emission Inventory Requirements; Minn. R. ch. 7023 Mobile and Indirect Sources. All rule changes were made under the MPCA's rulemaking authority and went through appropriate public participation procedures as required by state law. The rule revisions do not adversely affect the air quality in the state of Minnesota and are being approved for their SIP strengthening purposes.

Minnesota performed a series of so-called “Omnibus” rulemakings to implement minor changes, correct mistakes, clarify requirements, and address comments from industry, MPCA, and EPA to previously adopted rules. Most of these changes were minor and were not significant enough to warrant individual rulemakings. The changes correct and improve rules to make them more understandable, up-to-date, and streamlined. Summaries of the more significant changes to the rules are described below.

The amendments to Minn. R. ch. 7005 add definitions that are used in Minn. R. ch. 7007, 7008, and 7011. For example, the definition of “emission factors” has changed to reflect inclusion of Hazardous Air Pollutants in EPA databases, to remove the obsolete AIRS database, and to remove the implied hierarchy of emission factor sources. Other changes to Minn. R. ch. 7005 include changes to the definitions of “construction” and “begin actual construction” (and removal of the term “commence” and its definition) for consistency with the EPA definitions and to clarify what activities may occur prior to obtaining a permit.

In Minn. R. ch. 7009, MPCA updated the rule to reflect changes to the ozone and PM2.5 National Ambient Air Quality Standards (NAAQS). The state also made changes to the rule to clarify which facilities are required to prepare emission reduction plans and clarified the requirements for submitting these plans to the MPCA.

In Minn. R. ch. 7011, MPCA clarified that the control equipment rules, Minn. R. 7011.0060 to 7011.0080, apply to facilities that elected to use default control efficiencies, monitoring and recordkeeping requirements, and updated the rules so that they reflect modern day control assumptions and can potentially be utilized by more permittees to help them determine permit applicability. In addition, changes were made to the pollution control equipment listed in the table in Minn. R. 7011.0080 to define certain terms, to add listed control equipment, and to otherwise clarify requirements for control efficiency and control equipment operation and monitoring.

In Minn. R. 7011.0900-0922, MPCA amended the asphalt concrete plant rules by adding performance standards for hot mix asphalt plants. The amendments to the asphalt plant performance standards added operation, record keeping, and monitoring requirements for hot mix asphalt plant control equipment and dryer burners, outlined performance test frequency which is dependent on control equipment type, changed the opacity standard for existing plants to remove allowance of opacity excursions, listed materials allowed to be processed by hot mix asphalt plants, and allowed small production throughput increases for all plants which test at less than 80% of their emission limit and additional increase for plants with baghouses whose tested emission rate is less than 50% of their emission limit.

The changes to Minn. R. ch. 7017 relate to the use of two types of Continuous Monitoring Systems (CMS)—Continuous Emission Monitoring Systems (CEMS) and Continuous Opacity Monitoring Systems (COMS). Prior to the revisions, CMS related requirements were scattered throughout a number of locations within Minnesota's rules. The current SIP approved CEMS rule, Minn. R. 7017.1000, was repealed and replaced with more detailed CMS rules which consolidated all CMS requirements. Minn. R. 7017.1002 to 7017.1220 identify which facilities are required to install CMS and the various testing, installation, certification, operational and design requirements for the monitoring systems. The revised CMS rules also delineate the recordkeeping and submittal requirements. All facilities which report CMS derived emissions data to MPCA will be subject to the requirements of the revised CMS rules.

Amendments that MPCA made to Minn. R. ch. 7019 include changes related to emission inventory requirements such as: added ammonia as an inventory pollutant; increased allowable capture efficiency for VOC controls with hoods from 60 to 80 percent; allow the use of stack test data up to 10 years old; and, for stack test data over 10 years old, to allow the use of the higher of either the emission factor derived from the stack test or the default emission factor.

Minnesota also made several changes to Minn. R. ch. 7007, including rules to implement Minnesota's operating permit program under Title V of the CAA. EPA expressed concerns about the approvability of certain amended provisions related to the state's Title V operating permit program. Therefore, in a letter dated December 13, 2010, MPCA withdrew its submittal of Minn. R. ch. 7007 for inclusion into the Minnesota SIP. Although MPCA indicated in their December 13, 2010, letter that Minn. R. 7007.5000, relating to Best Available Retrofit Technology, should be approved into the SIP, MPCA also stated that they made the same request to approve Minn. R. 7007.5000 in their December 30, 2009, submittal of the Minnesota Regional Haze SIP. EPA will therefore defer rulemaking on Minn. R. 7007.5000 until it takes action on the Minnesota Regional Haze SIP. In addition, because of the permitting relationship to Minn. R. ch. 7007, EPA will defer rulemaking on changes to Minn. R. ch. 7002 and Minn. R. ch. 7008 until MPCA resubmits Minn. R. ch. 7007 for approval into the SIP. (Minn. R. ch. 7002 addresses permit fees and Minn. R. ch. 7008 addresses permit exemptions and insignificant activities for purposes of Minn. R. ch. 7007.)

In their May 5, 2008, submittal MPCA also requested the removal from the SIP of several obsolete rules that were repealed by the state in 2005. This included changes to Minn. R. ch. 7001, which established permits and certifications issued by the MPCA. Language currently in the SIP governing mobile sources and indirect source permits for parking facilities is also obsolete as the rules governing indirect source permits were repealed by the Minnesota Legislature in 2001. The portions of Minn. R. ch. 7001 that were retained by MPCA do not relate to air permits or any air quality related requirements. Therefore, EPA is granting MPCA's request for removal of Minn. R. ch. 7001 from the SIP.

A second set of regulations requested for removal by MPCA are contained in Minn. R. ch. 7011. This includes a large portion of the rules in Minn. R. 7011.1200, which relate to Standards of Performance for waste combustors. The rules as currently approved into the SIP have been repealed by MPCA, and Minnesota's new rules governing these sources have been submitted to EPA as a 111(d) plan. EPA agrees with MPCA that the new rules do not need to be considered for inclusion into the SIP. MPCA also repealed the state standards of performance for portland cement plants in Minn. R. 7011.0800, as there are no existing portland cement plants in the state. All new plants would be subject to 40 CFR part 60, subpart F, “Standards of Performance for Portland Cement Plants,” that was incorporated by reference by the state in Minn. R. 7011.0830. Finally, the permitting exemption for concrete manufacturing plants was repealed from Minn. R. 7011.0860 and moved to Minn. R. ch. 7008. EPA concurs with Minnesota's request and is removing these regulations from Minn. R. ch. 7011 in the SIP.

A final set of regulations requested for removal, Minn. R. 7023.1010 through 7023.1105, concern the Minneapolis/St. Paul vehicle inspection and maintenance program. The Minneapolis/St. Paul carbon monoxide (CO) nonattainment area was redesignated to attainment on October 29, 1999, at 64 FR 58344, effective November 29, 1999. MPCA explained that the Minnesota Legislature determined Minn. R. 7023.1010 through 7023.1105 to be obsolete and deleted or repealed the rules due to the state's termination of the vehicle inspection and maintenance program as a result of the area's attainment of the CO NAAQS. Therefore, in addition to Minn. R. 7023.1010 through 7023.1105, MPCA also requested that Minnesota Statutes 116.60 through 116.65, which comprised the vehicle inspection and maintenance program, be removed from the SIP. In its submittal MPCA states that the rules and the Statutes are no longer necessary as the area has achieved the NAAQS for CO. However, in their March 23, 1998, request to redesignate the Minneapolis/St. Paul CO nonattainment area to attainment, Minnesota retained the vehicle inspection and maintenance program as a contingency measure in the maintenance plan for the area. EPA approved the Minneapolis/St. Paul CO maintenance plan into the SIP as part of the October 29, 1999, redesignation of the area. Because the CO maintenance plan is still in effect for the Minneapolis/St. Paul area, EPA finds that the vehicle inspection and maintenance program (Minn. R. 7023.1010 through 7023.1105 and Minnesota Statutes 116.60 through 116.65) needs to be retained as part of the Minnesota SIP. Therefore EPA is disapproving the state's request to remove Minn. R. 7023.1010 through 7023.1105 and Minnesota Statutes 116.60 through 116.65 from the Minnesota SIP.

EPA is approving the request made by MPCA on May 5, 2008, to revise and update Minnesota's air rules in the Minnesota SIP. In addition, this action removes obsolete permit, portland cement plant and waste combustor rules from the SIP. EPA is not taking action on revisions to Minn. R. ch. 7007, Rules Governing Air Emission Permits, as the state withdrew this portion of their submittal from EPA consideration. EPA is also deferring rulemaking on changes to Minn. R. ch. 7002 and Minn. R. ch. 7008 until MPCA resubmits Minn. R. ch. 7007 for approval into the SIP. Finally, EPA is retaining the Minneapolis/St. Paul vehicle inspection and maintenance program as part of the Minnesota SIP. The codification of this rulemaking delineates the revised SIP.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan amendment if relevant adverse written comments are filed. This rule will be effective October 11, 2011 without further notice unless we receive relevant adverse written comments by September 9, 2011. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective October 11, 2011.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 11, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Throughout this document, references to “EPA,” “we,” “us,” or “our,” are intended to mean the Environmental Protection Agency. The supplementary information is arranged as follows:

EPA is taking final action to approve revisions to the North Carolina SIP regarding the State's NSR programs. On November 30, 2005, March 16, 2007, and June 20, 2008, the State of North Carolina, through the North Carolina Department of Environment and Natural Resources (NC DENR), submitted revisions to the North Carolina SIP. The SIP revisions consist of changes to North Carolina Air Quality Rules, Subchapter 2D. Specifically, the November 30, 2005, proposed SIP revision includes changes to Regulation 15A North Carolina Administrative Code (NCAC) 2D .0531, “Sources in Nonattainment Areas.” The March 16, 2007, proposed SIP revision includes changes to Regulation 15A NCAC 2D .0530, “Prevention of Significant Deterioration.” The June 20, 2008, proposed SIP revision  1 includes additional changes to Regulations 15A NCAC 2D .0530, and .0531. NC DENR submitted these revisions in response to EPA's December 31, 2002, November 7, 2003, and November 29, 2005, revisions to the federal NSR program. Pursuant to section 110 of the Clean Air Act (CAA or Act), EPA is taking final action to approve these SIP revisions.

On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 Code of Federal Regulations (CFR) parts 51 and 52, regarding the CAA's PSD and NNSR programs. On November 7, 2003 (68 FR 63021), EPA published a notice of final action on the reconsideration of the December 31, 2002, final rule changes. The December 31, 2002, and the November 7, 2003, final actions are collectively referred to as the “2002 NSR Reform Rules.”  2 For additional information on the 2002 NSR Reform Rules, see 67 FR 80186 (December 31, 2002). For information on the subsequent revisions to these rules, see http://www.epa.gov/nsr.

Also relevant to NC DENR's SIP revisions, on November 29, 2005 (70 FR 71612), EPA promulgated implementation provisions for the 1997 8-hour NAAQS which made changes to the NSR regulations. These included, among other changes, a requirement that emissions of nitrogen oxides (NOx) be considered a precursor to ozone. These rules are commonly referred to as the Ozone Implementation NSR Update.

On November 30, 2005, March 16, 2007, and June 20, 2008, NC DENR submitted SIP revisions to EPA for the purpose of revising the State's NSR permitting provisions to adopt EPA's 2002 NSR Reform Rules and the Ozone Implementation NSR Update. These SIP revisions incorporate by reference (IBR) the federal NSR rules at 40 CFR 51.166 and 51.165, as amended on June 13, 2007, with several changes. See EPA's analysis of the State's NSR SIP revisions in the September 9, 2008, proposed rulemaking. See 73 FR 52226. Copies of North Carolina's revised NSR rules, as well as the State's Technical Support Document, can be obtained from the docket, as discussed in the ADDRESSES section above.

On September 9, 2008 (73 FR 52226), EPA proposed to approve the above-referenced SIP revisions. In response to a request for an extension of the public comment period for EPA's September 9, 2008, proposed rulemaking, EPA extended the public comment period through November 10, 2008 (73 FR 58084). EPA received adverse comments from the National Resource Defense Council (NRDC) and the Duke Energy Corporation (DEC) regarding North Carolina's NSR Reform Rule changes. No adverse comments were received for North Carolina's rule changes to adopt the provisions of the Ozone Implementation NSR Update. EPA's response to these comments is below in section III of this final rulemaking. EPA's analysis of the State's NSR SIP revisions is contained in the September 9, 2008, proposed rulemaking, and briefly summarized as follows. See 73 FR 52226.

EPA's evaluation of the North Carolina SIP submittals included a line-by-line comparison of the proposed revisions with the federal requirements. As a general matter, state agencies may meet the requirements of 40 CFR part 51, and the 2002 NSR Reform Rules, with different but equivalent regulations. As mentioned above, North Carolina chose to IBR the federal rules with several changes. The definition of “baseline actual emissions” at subchapter 2D .0530(b)(1) and .0531(a)(1) was changed to remove the provision allowing emissions units that are not electric utility steam generating units (EUSGUs) to look back 10 years to select the baseline period. North Carolina rules treat EUSGUs and non-EUSGUs the same by allowing a look back of only 5 years. However, North Carolina rules provide the option of allowing a different time period, not to exceed 10 years, if the owner or operator demonstrates that it is more representative of normal source operation. In addition, North Carolina rules require EUSGUs to adjust downward the baseline emissions to account for reductions required under the North Carolina Clean Smokestack Act (CSA) (a state law mandating emission reductions from certain EUSGUs). North Carolina's rules also include some changes from the federal rules regarding recordkeeping and reporting; plant-wide applicability limits; and clarifications regarding the use of emissions reductions from the CSA. One such clarification is that any allowances for emissions reductions achieved under the CSA are not available to the subject facilities, nor any other sources, and may not be used to offset emissions and avoid installation of best available control technology or lowest achievable emissions rate on new natural gas-fired units. A full discussion of the differences between the North Carolina rules and the federal rules is available in the proposal action. See 73 FR 52226.

EPA received two sets of adverse comments on the September 9, 2008, proposed rulemaking to approve North Carolina's November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions. Specifically, adverse comments were received from NRDC and DEC. A complete set of these comments is provided in the docket for today's rulemaking. EPA's response to these adverse comments is provided below.

NRDC commented on EPA's proposed rulemaking to approve North Carolina's NSR rule changes. Specifically, NRDC primarily commented on the requirements of the federal NSR rules, not North Carolina's application of the federal requirements in its own rules. Notably, NRDC participated in litigation challenging EPA's 2002 promulgation of the NSR Reform Rules, where similar arguments were made by NRDC and dismissed by the D.C. Circuit Court. New York v. EPA, 413 F.3d 3 (DC Cir. 2005). NRDC's comments, including exhibits, do not raise any specific concerns with North Carolina's rules, but rather, reiterate arguments made by NRDC to the D.C. Circuit regarding sections 110(l) and 193 of the CAA. 3

While NRDC's comments provide citations to eleven portions of the North Carolina rules, the comments make no attempt to specifically explain or demonstrate how those identified provisions are inconsistent with either section 110(l) or section 193 of the CAA. Furthermore, NRDC provides no evidence supporting its allegations that approval of the specific provisions would result in a violation of the CAA or otherwise be “arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.” NRDC Comments at 2.

The NRDC comments include a list of 31 exhibits which the comment letter incorporates by reference into the comments. NRDC Comments at 1. The 31 exhibits appear to all be related to the DC Circuit Court case New York v. EPA, and were either submitted to that Court for review, or are relevant to that adjudication. To the extent that these exhibits were provided to the DC Circuit, those issues were previously resolved by the Court and/or already responded to by EPA in its responsive court papers. Any other documents included in the 31 exhibits that were not provided to the DC Circuit Court do not provide EPA with any comments specific to the North Carolina rules at issue.

Despite the lack of North Carolina-specific discussion in NRDC's letter, EPA has responded to the few comments that appear related to the September 9, 2008, proposed rulemaking to approve North Carolina's SIP revision pertaining to EPA's 2002 NSR Reform Rules. 4

Comment 1: In summary, NRDC stated that finalizing the EPA September 9, 2008, proposed rulemaking to approve North Carolina's November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions would violate section 110(l) of the Act. NRDC comments at 1-6. As support for its conclusion, NRDC asserted that “[t]he 2002 NSR Reform Rule provisions that were not vacated by the DC Circuit in New York v. EPA [citation omitted] allow previously-prohibited emissions-increases to occur.” NRDC comments at 4. Further, that “North Carolina nevertheless has made no `demonstration that the emissions that are allowed by its revised rule but are prohibited by the current SIP would not interfere with attainment or other applicable requirements.' ” As a result, NRDC stated that, “it cannot be said of North Carolina's plan that it `will cause no degradation of air quality.' ” NRDC comments at 5. NRDC also stated that EPA has not made any findings that North Carolina's rule will not cause degradation of air quality or interfere with any applicable requirements concerning attainment and reasonable further progress, or any other applicable requirements of the CAA. NRDC comments at 5.

Response 1: EPA's 2002 NSR Reform Rules were upheld by the DC Circuit Court which reviewed them, with the exception of the pollution control project and clean unit provisions (and the remanded matters). The three significant changes in NSR Reform that were upheld by the DC Circuit were: (1) Plant-wide applicability limits (PALs), (2) the 2-in-10 baseline, and (3) the actual-to-projected actual emission test. The Supplemental Environmental Analysis of the Impact of the 2002 Final NSR Improvement Rules (November 21, 2002) (Supplemental Analysis) discussed each of these three changes individually, and addresses some of the issues raised by NRDC.

With regard to PALs, the Supplemental Analysis explained, “[t]he EPA expects that the adoption of PAL provisions will result in a net environmental benefit. Our experience to date is that the emissions caps found in PAL-type permits result in real emissions reductions, as well as other benefits.” Supplemental Analysis at 6. EPA further explained that,

With regard to the 2-in-10 baseline, EPA concluded that, “[t]he EPA believes that the environmental impact from the change in baseline EPA is now finalizing will not result in any significant change in benefits derived from the NSR program.” Supplemental Analysis at 13. This is mainly because “the number of sources receiving different baselines likely represents a very small fraction of the overall NSR permit universe, excludes new sources and coal fired power plants, and because the baseline may shift in either direction, we conclude that any overall consequences would be negligible.” Supplemental Analysis at 14. Additional information regarding the 2-in-10 baseline changes is available in the Supplemental Analysis, Appendix F.

With regard to the actual-to-projected actual test, EPA concluded, “we believe that the environmental impacts of the switch to the actual-to-projected actual test are likely to be environmentally beneficial. However, as with the change to the baseline, we believe the vast majority of sources, including new sources, new units, electric utility steam generating units, and units that actually increase emissions as a result of a change, will be unaffected by this change. Thus, the overall impacts of the NSR changes are likely to be environmentally beneficial, but only to a small extent.” Supplemental Analysis at 14 (see also Supplemental Analysis Appendix G).

Section 110(l) of the CAA states, in relevant part, that “[t]he Administrator 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 this chapter.” CAA, 42 U.S.C. 7410(l). In “Approval and Promulgation of Implementation Plans; New Source Review; State of Nevada, Clark County Department of Air Quality and Environmental Management,” 69 FR 54006 (September 7, 2004), EPA stated that section 110(l) does not preclude SIP relaxations. Rather, EPA stated that section 110(l) only requires that the “relaxations not interfere with specified requirements of the Act including requirements for attainment and reasonable further progress,” and that, therefore, a state can relax its SIP provisions if it is able to show that it can attain or maintain the NAAQS and meet any applicable reasonable further progress goals or other specific requirements. See 69 FR at 54011-12.

North Carolina's November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions track the federal NSR Reform Rules, with changes, as described in North Carolina's SIP revisions. EPA evaluated North Carolina's rules consistent with its evaluation of the federal rules, and determined that North Carolina's rules were equivalent to or more stringent than the 2002 NSR Reform Rules. Overall, as summarized above, EPA expects that changes in air quality as a result of implementing North Carolina's rules as updated by the aforementioned SIP revisions is consistent with EPA's position on the federal NSR Reform Rules—that there will be somewhere between neutral and providing modest contribution to reasonable further progress between the NSR Reform and pre-Reform provisions. EPA's analysis for the environmental impacts of the three components of the NSR Reform rules (discussed earlier) is informative of how North Carolina's adoption of NSR Reform (based on the federal rules) will affect emissions. EPA has no reason to believe that the environmental impacts will be different from those discussed in the Supplemental Analysis for the NSR Reform Rules, and thus, approval of the November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions related to NSR Reform would not be contrary to section 110(l) of the CAA. 5

Comment 2: NRDC cites to eleven general portions of North Carolina's rules as provisions that would violate section 110(l). These provisions are: Regulation 15A North Carolina Administrative Code (NCAC), Subchapter 2D .0530, subsections (a), (b), (g), (i), (u), and (v) (from North Carolina's PSD rules); and Subchapter 2D .0531, subsections (a), (c), (n), (o), and (p) (from North Carolina's NNSR rules).

Response 2: With regard to the comments, NRDC provides no evidence supporting its contention that these specific provisions violate section 110(l). The first provision noted by NRDC, 15A NCAC 02D .0530(a) states the general purpose of the rule to implement North Carolina's PSD program, which does include some changes per the SIP revisions at issue. Nonetheless, without further specificity, it is not clear why or how NRDC believes this provision is a violation of section 110(l). In addition, NRDC has provided no North Carolina-specific documentation that indicates that EPA's analysis and conclusions regarding the impact of NSR Reform, in the Supplemental Analysis, is not applicable to North Carolina's rules, which are equivalent to or more stringent than the federal rules.

In evaluating North Carolina's November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions, EPA compared North Carolina's rules with the existing federal rules and determined that North Carolina's rules were equivalent to or more stringent than the NSR Reform (federal) rules. EPA also considered North Carolina's changes to the federal NSR Reform provisions. These changes were discussed in EPA's September 9, 2008, proposed rulemaking to approve North Carolina's three SIP revisions related to NSR Reform, and are discussed in North Carolina's final submittal (including North Carolina's response to comments received during the State public process), which are included in the docket for today's final action. As was explained in EPA's September 9, 2008, proposed rulemaking, EPA agrees with North Carolina's conclusion that the changes are at least equivalent to the Federal rules. See 73 FR 52228-52229. EPA also considered the Supplemental Analysis in reviewing North Carolinas's three SIP revisions related to NSR Reform, and NRDC's comments. EPA concluded that approval of North Carolina's SIP revisions would not be contrary to section 110(l) of the CAA.

Absent more explicit information demonstrating that North Carolina's plan for implementation of a specific provision of its rules would interfere with any applicable requirement of the CAA and thus should be disapproved under section 110(l), EPA is concluding that North Carolina's Technical Support Document and the Supplemental Analysis supports approval. As a result, there is no basis on which to determine that approval of North Carolina's rules would violate section 110(l).

Comment 3: NRDC states that NSR is a “control requirement” and thus the requirements of section 193 apply to the NSR rules at issue in North Carolina's November 30, 2005, March 16, 2007, and June 20, 2008, SIP revisions. NRDC comments at 7. NRDC further alleges that North Carolina's revisions “ensure that emissions will not be reduced as much as under the pre-existing rules. In fact, the modifications allow emissions to increase in North Carolina's nonattainment areas.” NRDC comments at 9. Finally, NRDC states that “because section 193 lies within part D,” “if EPA approves North Carolina's revised plan, that action will additionally exceed the agency's authority under section 110(k)(3) and violate section 100(l).” (Note, the last citation to 100(l) appears to be a typographical error and should read 110(l).) NRDC comments at 10.

Response 3: EPA's response to the section 193 issues raised by NRDC involves many of the same elements of the response above to the section 110(l) comments, which is also incorporated by reference here. Section 193 states (in relevant part), that “[n]o control requirement in effect, or required to be adopted by an order, settlement agreement, or plan in effect before November 15, 1990, in any area which is a nonattainment area for any air pollutant may be modified after November 15, 1990, in any manner unless the modification insures equivalent or greater emission reductions of such air pollutant.”

Assuming for purposes of this discussion that section 193 does apply to the instant action, as was discussed earlier in this notice, EPA has previously determined and explained in the Supplemental Analysis, that implementation of the 2002 NSR Reform Rule provisions still in effect (that is, those not vacated by the DC Circuit) are expected to have at least a neutral environmental benefit. While North Carolina's rules do include some changes from the Federal rules, in the September 9, 2008, proposed rulemaking, EPA explained the basis for its evaluation that the differences do not make North Carolina's NSR program less stringent than the federal program. EPA has no information indicating that findings associated with EPA's Supplemental Analysis would not apply in North Carolina—that is, that North Carolina's SIP revisions would have at least a neutral environmental benefit. See e.g., NRDC v. Jackson, Nos. 09-1405 & 10-2123 (7th Cir., Jun. 16, 2011), 2011 US App LEXIS 12116 (upholding EPA's reliance on the Supplemental Analysis where there was no information indicating an alternative outcome or analysis). Therefore, even if section 193 did apply to this action, EPA does not agree with commenter's assertions that the SIP revisions approved in this action raise a section 193 concern.

In addition, the core of NRDC's argument seems to revolve around the DC Circuit Court decision in South Coast Air Quality Management District v. EPA, 472 F.3d 882 (DC Cir. 2006) (finding that NSR associated with the 1-hour ozone NAAQS included control requirements). At issue in South Coast v. EPA was EPA's determination regarding the revocation of the entire 1-hour ozone program (and corresponding SIP elements), including all the 1-hour nonattainment NSR elements, and whether such elements would continue to be required as part of SIPs implementing the new (at that time) 8-hour ozone NAAQS. The facts in the South Coast v. EPA case are distinguishable from the instant matter where the North Carolina SIP is merely being updated to include changes to the Federal NSR program. EPA is not removing the entirety of North Carolina's NNSR program from the SIP as it pertains to a particular NAAQS. Rather, EPA is simply approving North Carolina's SIP revisions that adopt rules equivalent to or more stringent than the federal rules; and as discussed earlier in this notice, EPA developed a Supplemental Analysis to support adoption of the federal rules. The North Carolina SIP will continue to operate with the full suite of NSR related elements, including a comprehensive minor source program.

DEC also commented on EPA's September 9, 2008, proposed rulemaking to approve North Carolina's NSR rule. DEC primarily commented on the requirements that electric utilities adjust downward the baseline emissions to account for reductions achieved and paid for as a result of the North Carolina CSA. Below summarizes DEC's comment and EPA's response.

Comment 4: DEC indicated that EPA should not approve these provisions into North Carolina's SIP because: (1) They are not required by the CAA and the federal NSR regulations; (2) they have nothing to do with air quality concerns; and (3) the General Assembly of North Carolina adopted legislation which provides specific exceptions from the requirement to adjust baseline emissions downward based on the CSA.

Response 4: As a point of background, on August 21, 2009, North Carolina provided a SIP revision to EPA requesting that EPA incorporate the provisions of the CSA into the SIP. The submittal was necessary to ensure attainment and maintenance of the NAAQS within North Carolina (North Carolina has relied, and continues to rely, on the CSA reductions to demonstrate attainment with more than one NAAQS). As part of redesignation submittals for at least two areas in North Carolina, for the 1997 annual PM 2.5 NAAQS, North Carolina is relying on the CSA as containing “permanent and enforceable” measures that ensure maintenance for that NAAQS. That reliance necessitated that North Carolina submit to EPA the CSA for approval into the SIP. On June 22, 2011, EPA proposed to approve the CSA into the North Carolina SIP. See 76 FR 36468.

As was explained in the proposal action, North Carolina's rules include a requirement that EUSGUs adjust downward the baseline emissions to account for reductions required under the North Carolina Clean Smokestack Act. DEC's comments appear to suggest that because the CSA reductions are not required, this provision should not be approved into the SIP. Further, that the North Carolina legislature took action to eliminate this provision for at least a certain period of time. Consistent with the background information provided above, because North Carolina is in fact relying on the CSA reductions for attainment and maintenance of NAAQS for various areas around North Carolina, the provision is actually necessary to ensure that the reductions remain permanent and enforceable. While there remains some flexibility in how those reductions are achieved per the CSA, once achieved, they must be permanent.

With regard to the action taken by the legislature on July 17, 2006 (the text of which DEC included as part of its comments), the language itself in Senate Bill 1587 only applies between April 21, 2005, and August 1, 2006. Because that time period has lapsed, there is nothing apparent in Senate Bill 1587 that could impact approval of the SIP revisions currently being approved today. The comment letter does not explain why a provision that lapsed on August 1, 2006, would apply to today's rulemaking and PSD applicability going forward from the effective date of today's rule. As a general matter, EPA does not necessarily agree with DEC's legal arguments; however, given that Senate Bill 1587 does not apply currently, these differences need not be resolved at this time. The NSR reform rules being approved today would apply to the facilities at issue under the CSA once today's action is final and effective, per the provisions of the State rules now being incorporated into the SIP.

EPA is taking final action to approve revisions to the North Carolina SIP for Regulations 15A NCAC 2D .0530 and .0531, as submitted by the NC DENR on November 30, 2005, March 16, 2007, and June 20, 2008. These SIP revisions address changes to North Carolina's PSD and NNSR programs. EPA is approving these revisions into the North Carolina SIP because they are consistent with section 110 of the CAA and its implementing regulations.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 11, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

40 CFR part 52 is amended as follows:

In this document EPA denies a petition by the American Bird Conservancy (ABC) to revoke pesticide tolerances. This action may also be of interest to agricultural producers, food manufacturers, or pesticide manufacturers. Potentially affected entities may include, but are not limited to those engaged in the following activities:

• Crop production (North American Industrial Classification System (NAICS) code 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers.

• Animal production (NAICS code 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers.

• Food manufacturing (NAICS code 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators.

• Pesticide manufacturing (NAICS code 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users.

• Farm Product Warehousing and Storage (NAICS code 493130), e.g., grain elevators, private and public food warehousing and storage.

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

In addition to accessing an electronic copy of this Federal Register document through the electronic docket at http://www.regulations.gov, you may access this Federal Register document electronically through the EPA Internet under the “Federal Register” listings at http://www.epa.gov/fedrgstr. You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under section 408(g) of FFDCA, any person may file an objection to any aspect of this order and may also request a hearing on those objections. You must file your objection or request a hearing on this order in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2009-0692 in the subject line on the first page of your submission. All requests must be in writing, and must be received by the Hearing Clerk as required by 40 CFR part 178 on or before October 11, 2011.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit this copy, identified by docket ID number EPA-HQ-OPP-2009-0692, by one of the following methods:

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

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

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

On July 23, 2009, the American Bird Conservancy (ABC) filed a petition with EPA which requested that EPA revoke the “import” tolerances established under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, for the following pesticides: cadusafos (banana); cyproconazole (green coffee beans); diazinon (kiwi fruit); dichlorvos (tomato); dithianon (fruit, pome, group 11; hop, dried cones); diquat (banana; green coffee beans); dimethoate (blueberry); fenamiphos (banana; fruit, citrus; garlic; grape; pineapple); mevinphos (broccoli; cabbage; cauliflower; celery; cucumber; grape; lettuce; melon; pea; pepper; spinach; squash, summer; strawberry; tomato; watermelon); methomyl (hop, dried cone); naled (cucumber; lettuce; tomato; pumpkin; squash, winter; turnip, tops); phorate (green coffee beans); and terbufos (green coffee beans). (Ref. 1). These tolerances are described as “import” tolerances because the pesticide uses associated with the tolerances are not registered for use in the United States under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq., and thus, in practical effect, their only purpose is to govern the amount of pesticide residues in imported food.

ABC argues that the challenged tolerances allow use of pesticides hazardous to birds in Central and South American countries and thus EPA is obliged to revoke the challenged tolerances under Executive Order 13186, “Responsibilities of Federal Agencies to Protect Migratory Birds,” Executive Order 13186, 66 FR. 3853 (Jan. 17, 2001), and the Endangered Species Act (ESA), 16 U.S.C. 1531 et seq. For the reasons stated below, EPA is denying the petition to revoke tolerances.

Under section 408(d)(4) of the FFDCA, EPA is authorized to respond to a section 408(d) petition to revoke tolerances either by issuing a final rule revoking the tolerances, issuing a proposed rule, or issuing an order denying the petition. 21 U.S.C. 346a(d)(4).

1. In general. EPA establishes maximum residue limits, or “tolerances,” for pesticide residues in food under section 408 of the FFDCA. 21 U.S.C. 346a. Without such a tolerance or an exemption from the requirement of a tolerance, a food containing a pesticide residue is “adulterated” under section 402 of the FFDCA and may not be legally moved in interstate commerce. 21 U.S.C. 331, 342. Monitoring and enforcement of pesticide tolerances are carried out by the U.S. Food and Drug Administration and the U.S. Department of Agriculture. Section 408 was substantially rewritten by the Food Quality Protection Act of 1996 (FQPA), which added provisions establishing a detailed safety standard for pesticides for protecting humans from pesticide residues in foods, including additional protections for infants and children.

EPA also regulates pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq. While the FFDCA authorizes the establishment of legal limits for pesticide residues in food, FIFRA requires the approval of pesticides prior to their sale and distribution in the United States, 7 U.S.C. 136a(a), and establishes a registration regime for regulating the use of pesticides. FIFRA regulates pesticide use in conjunction with its registration scheme by requiring EPA review and approval of pesticide labels and specifying that use of a pesticide in a manner inconsistent with its label is a violation of Federal law. 7 U.S.C. 136j(a)(2)(G). As discussed below, the scope of FIFRA extends beyond the human safety concerns of FFDCA section 408 to encompass environmental factors as well.

2. Safety standard for pesticide tolerances. A tolerance permitting pesticide residues in food may only be promulgated by EPA if the tolerance is “safe.” 21 U.S.C. 346a(b)(2)(A)(i). Correspondingly, a tolerance must be revoked if it no longer meets this safety standard. ( Id. ). “Safe” is defined by the statute to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” 21 U.S.C. 346a(b)(2)(A)(ii). Thus, safety determinations under FFDCA section 408 turn on the safety to the “consumer” of the pesticide residue in food. 21 U.S.C. 346a(b)(2)(D)(vi). Although residues in food are to be aggregated with other pesticide exposures, the aggregation requirement is bounded by the limitation that these other exposures of the consumer to the pesticide residue be “non-occupational” in nature. Id. Additionally, FFDCA section 408 specifically requires that these aggregate safety standard determinations expressly focus on protection of “infants and children.” 21 U.S.C. 346a(b)(2)(C). In contrast, the focus of FIFRA is much broader. Among other things, a pesticide may not be registered under FIFRA if it poses “any unreasonable risk to man or the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide * * *.” 7 U.S.C. 136(bb).

3. Procedures for establishing, amending, or revoking tolerances. Tolerances are established, amended, or revoked by rulemaking under the unique procedural framework set forth in the FFDCA. Generally, the rulemaking is initiated by the party seeking to establish, amend, or revoke a tolerance by means of filing a petition with EPA. See 21 U.S.C. 346a(d)(1). EPA publishes in the Federal Register a notice of the petition filing and requests public comment. 21 U.S.C. 346a(d)(3). After reviewing the petition, and any comments received on it, EPA may issue a final rule establishing, amending, or revoking the tolerance, issue a proposed rule to do the same, or deny the petition. 21 U.S.C. 346a(d)(4). Once EPA takes final action on the petition by either establishing, amending, or revoking the tolerance or denying the petition, any affected party has 60 days to file objections with EPA and seek an evidentiary hearing on those objections. 21 U.S.C. 346a(g)(2). EPA's final order on the objections is subject to judicial review. 21 U.S.C. 346a(h)(1).

4. Tolerance reassessment and FIFRA reregistration. The FQPA requires, among other things, that EPA reassess the safety of all pesticide tolerances existing at the time of its enactment. 21 U.S.C. 346a(q). In this reassessment, EPA is required to review existing pesticide tolerances under the new “reasonable certainty that no harm will result” standard set forth in FFDCA section 408(b)(2)(A)(i). 21 U.S.C. 346a(b)(2)(A)(i). This reassessment was substantially completed by the August 3, 2006 deadline. Tolerance reassessment is generally handled in conjunction with a similar program involving reregistration of pesticides under FIFRA. 7 U.S.C. 136a-1. Reassessment and reregistration decisions are generally combined in a document labeled a Reregistration Eligibility Decision (“RED”).

The ABC Petition seeks the revocation of “import” tolerances for 13 pesticides. According to ABC, “[t]hese pesticides are highly toxic to birds, and are used in crops that many species of U.S. migratory birds use as habitat during the winter months when they migrate to Latin America.” ABC contends that maintenance of the specified import tolerances “is tantamount to giving U.S. approval to foreign countries for the use of the pesticides.” ABC objects to such “approval” claiming that, on the crops covered by the tolerances, EPA “has already determined [that these pesticides pose] unacceptable risks for protected U.S. migratory birds.” In support of these claims, ABC cites to various statements in REDs, for information on some of the pesticides' toxicity, and to information on use by migratory birds of agricultural lands as habitat.

Based on these allegations, ABC argues that EPA should revoke the tolerances under Executive Order 13186, addressing federal agency responsibilities for protecting migratory birds, or the Endangered Species Act (ESA). According to ABC, Executive Order 13186 obligates EPA “to avoid or rescind regulatory actions that adversely affect migratory birds.” The ESA, ABC argues, requires EPA to identify pesticide uses that may cause adverse impacts on endangered or threatened species and to implement mitigation measures to address those impacts, and to consult with the Fish and Wildlife Service before allowing the identified import tolerances to continue. Because EPA cannot implement mitigation measures in foreign countries, ABC contends that EPA must revoke the tolerances to meet its obligations under the ESA. Alternatively, ABC argues that if EPA determines the tolerances are “necessary,” EPA must consult with the Fish and Wildlife Service before allowing the tolerances to continue.

EPA published notice of the petition for comment on September 1, 2009. 74 FR 45200, September 1, 2009. EPA received 25 comments: 18 from individuals or wildlife protection organizations expressing general support for the petition; detailed comments in support of the petition from the Student Animal Legal Defense Fund (SALDF) at Lewis and Clark Law School; detailed comments in opposition to the petition from two organizations representing pesticide manufacturers and others and from 4 pesticide manufacturers; and supplemental information on the petition from ABC. (All comments are included in the docket for this action, EPA-HQ-OPP-2009-0629.)

The SALDF premises its arguments in support of the petition on its assertion that EPA, based on the assessments of risk from these pesticides to birds by EPA's Office of Pesticide Programs, “has cancelled the use of the pesticides at issue in the United States.” Given these cancellations, SALDF claims that EPA is not complying with its duty to promote conservation of endangered species under ESA section 7(a)(1) or its duty under ESA section 7(a)(2) to ensure that no action authorized by EPA is deleterious to the conservation of endangered species; with its obligations under Executive Order 13186 regarding the conservation of migratory birds; and with the bar in the Migratory Bird Treaty Act (MBTA) on the taking of migratory birds.

Crop Life America, an association of pesticide manufacturers, makes a series of arguments in opposition to the petition: Executive Order 13186 does not provide a private right of action and cannot be enforced against EPA; Executive Order 13186, the ESA, and the MBTA do not provide a basis for revoking pesticide tolerances because ecological issues cannot be considered under FFDCA section 408; and the Petition fails to establish a nexus between the pesticide tolerances at issue and the claimed effects of the pesticides when used in other countries.

The Pesticide Policy Coalition, an organization representing a wide array of food- and pesticide-related industries, claims that the ABC petition has not met the regulatory requirements for a petition because ABC does not have a “substantial interest” in the tolerances challenged and because the petition is premised on a factor, ecological impacts, that is irrelevant to FFDCA section 408.

Syngenta Crop Protection, Inc., which is the manufacturer of cyproconazole and diquat, commented that both of these pesticides are registered in the United States and have been cleared by EPA after consideration of potential effects on birds. BASF Corporation, the manufacturer of dithianon, commented that, although dithianon is not registered in the United States, the lack of a FIFRA registration is not due to cancellation of such a registration by EPA but based on business decisions made by the company. BASF also noted that it was unaware of any EPA assessments that found dithianon to pose a hazard to birds. Bayer Crop Science provided comments regarding the pesticide fenamiphos. Bayer argued that “[e]cological risk assessments have strong spatial and temporal components associated with them” and that country-specific risk assessments would need to be conducted to determine the risks posed to birds. Bayer noted several of the risk mitigation requirements that appear on fenamiphos labels in Central and South American countries expressly for the purpose of reducing exposure to birds.

During the comment period, ABC filed additional information with EPA pertaining to use of agricultural fields in Latin America by migratory birds. According to ABC, these data showed 206 migratory bird species used agricultural fields as habitat and those 206 species included 12 ESA listed species and 54 bird species of conservation concern.

As noted above, ABC contends that EPA has already determined in Reregistration Eligibility Documents that the pesticides challenged in this petition present “unacceptable risks for protected U.S. migratory birds” when used on the crops covered by the challenged import tolerances. This claim, however, is not supported by ABC's petition and records cited therein.

ABC admits that EPA has made no finding as to the risk to birds for four of the pesticides (cadusafos, cyproconazole, dithianon, and mevinphos). (Refs. 1, 2, and 3). As to another four of the pesticides (diquat, methomyl, naled, terbufos), ABC does not identify any EPA findings on the risks those pesticides pose to birds, and instead merely cites EPA's conclusions regarding human risk. (Refs. 1, 4, 5, 6, and 7). For the remaining five pesticides (diazinon, dichlorvos, dimethoate, fenamiphos, phorate), ABC cites to statements in the relevant REDs in which the pesticides are characterized as “highly toxic” to birds. (Ref. 1.) However, as to each of these pesticides, the RED concluded that the pesticide met the standard for reregistration for outdoor uses in the United States so long as various steps were taken to mitigate exposure to birds. (Refs. 8, 9, 10, 11, and 12). Moreover, in none of those REDs did EPA conclude that the pesticides posed unacceptable risks to birds with regard to the specific crops covered by the challenged import tolerances.

ABC's petition requests that EPA revoke “import” tolerances for 13 pesticides due to the risks these pesticides pose to birds in countries outside of the United States. In filing its request, ABC does not cite to anything in FFDCA section 408, the statutory provision authorizing EPA to establish such tolerances, which compels revocation of the challenged tolerances. Rather, ABC argues that EPA must revoke the challenged FFDCA tolerances due to provisions in EO 13186 and the Endangered Species Act. For the reasons explained below, EPA has concluded that these authorities do not support ABC's contentions.

ABC's primary focus in its petition to revoke tolerances is EPA's obligations under Executive Order 13186. While ABC believes that EPA has an obligation under Executive Order 13186 “to avoid or rescind regulatory actions that adversely affect migratory birds”, it provides no rationale for why it believes that the Executive Order compels that action. EPA concludes, however, that EO 13186 does not compel EPA to take action to revoke the challenged tolerances, and it does not even provide EPA authority to do so.

Executive Order 13186 was issued by President Clinton in 2001, pursuant to the authority provided in the Constitution and the laws of the United States, and in furtherance of the purposes of the MBTA, the Bald and Golden Eagle Protection Acts, the Fish and Wildlife Coordination Act, the Endangered Species Act, NEPA, and “other pertinent statutes.” Executive Order No. 13186, 66 FR. 3853 (Jan. 17, 2001). The purpose of the Executive Order is to “direct executive departments and agencies to take actions to further implement the Migratory Bird Treaty Act.” Id. at section 1. The Executive Order fulfills this purpose by directing each federal agency that is “taking actions that have, or are likely to have, a measurable negative effect on migratory bird populations * * * to develop and implement, within 2 years, a Memorandum of Understanding (MOU) with the Fish and Wildlife Service (Service) that shall promote the conservation of migratory bird populations.” Id. at section 3(a). The Executive Order directs that certain procedural provisions be included in the MOU. See id. at section 3(c) and (d). The Executive Order also directs agencies to adopt certain substantive provisions in their MOUs, “to the extent permitted by law and subject to the availability of appropriations and within Administration budgetary limits, and in harmony with agency missions.” Id. at section 3(e). Thereafter, Executive Order 13186 and the MOU “are intended to be implemented when new actions * * * are initiated * * *.” Id. at section 3(c). Actions are defined as including rules, although the Executive Order allows each agency to further define what action means and what programs should be included in the MOU. Id. at section 2(h).

As an initial matter, ABC cannot compel the Agency to take any action under EO 13186 because there is no private right of action under this Executive Order. On its face, EO 13186 expressly precludes such a right. Section 5(b) of Executive Order 13186 states:

Nonetheless, even once an MOU is finalized, that MOU would not provide a basis for EPA to revoke the challenged tolerances. The MOU could not compel EPA to take action that it does not otherwise have the statutory authority to take. As discussed in Unit VII.B., EPA does not have discretion under the FFDCA in assessing the safety of a pesticide tolerance to consider whether tolerances would be “likely to have a measurable negative effect” on U.S. migratory birds that winter in foreign countries.

ABC also argues that EPA has a statutory obligation under the Endangered Species Act, 16 U.S.C 1531 et seq., to “identify all pesticides whose use may cause adverse impacts on endangered and threatened species and to implement mitigation measures to address the adverse impacts.” Presumably, ABC is referring here to EPA's obligations under ESA section 7. According to ABC, because EPA cannot require “pesticide use mitigation measures” in foreign countries, EPA should fulfill its ESA obligations by revoking tolerances allowing commodities containing such pesticides to be distributed in the United States or, at a minimum consult with the FWS prior to allowing the tolerances to remain in effect. However, ABC's claim that the ESA provides authority for revoking FFDCA tolerances is incorrect.

ESA obligations only apply where EPA has “existing discretionary authority;” the ESA does not “override express statutory mandates.” Home Builders' Ass'n v. EPA, 551 U.S. 644, 487 (2007); 50 CFR 402.03. EPA establishes pesticide residue tolerances under section 408 of the FFDCA. Section 408 authorizes EPA to set “safe” exposure levels for pesticide residue levels in foods distributed in the United States. Thus, under FFDCA section 408, EPA does not regulate use of pesticides; rather, EPA regulates levels of pesticide residues in food distributed in interstate commerce. ABC's petition would override these statutory mandates in FFDCA section 408, and, in effect, rewrite section 408 as a provision addressing environmental effects of pesticide use in foreign countries.

As noted, the FFDCA scheme is explicitly directed at the pesticide residue in food when the food is in interstate commerce. FFDCA section 408 establishes that if a food contains a pesticide residue for which there is no tolerance, or a pesticide residue at a level exceeding the applicable tolerance, then the food is deemed “unsafe” as a matter of law. 21 U.S.C. 346a(a). Foods deemed “unsafe” on these grounds are considered “adulterated.” 21 U.S.C. 342(a)(2)(B). It is unlawful under the FFDCA to “introduc[e] or deliver[] for introduction into interstate commerce any food * * * that is adulterated * * * .” 21 U.S.C. 331(a). Additionally, adulterated food is subject to seizure “when introduced into or while in interstate commerce or while held for sale (whether or not the first sale) after shipment in interstate commerce * * * .” 21 U.S.C. 334(a)(1).

Consistent with this narrow focus on pesticide residues in food in interstate commerce, the standard for establishing and revoking tolerances is directed solely at the safety of the pesticide residues in food to the food consumer, taking into account other sources of pesticide exposure to the consumer as well. Specifically, the statute provides that “[t]he Administrator may establish or leave in effect a tolerance for a pesticide chemical residue in or on a food only if the Administrator determines that the tolerance is safe.” 21 U.S.C. 346a(b)(2)(A)(i). Invariably, FFDCA section 408 directs EPA to consider factors relevant to the safety of the pesticide residue in food (aggregated with other sources of exposure to the pesticide residue), placing particular emphasis on human dietary risk. See, e.g., 21 U.S.C. 346a(b)(2)(B) (addressing an exception to the safety standard for pesticide residues as to which EPA “is not able to identify a level of exposure to the residue at which the residue will not cause or contribute to a known or anticipated harm to human health”); 21 U.S.C. 346a(b)(2)(C) (requiring special safety findings as to “infants and children” regarding their “disproportionately high consumption of foods” and their “special susceptibility * * * to pesticide chemical residues”); 21 U.S.C. 346a(b)(2)(D)(iii) (requiring consideration of the relationship between toxic effects found in pesticide studies and human risk); 21 U.S.C. 346a(b)(2)(D)(iv), (vi), and (vii) (requiring consideration of available information on “dietary consumption patterns of consumers,” “aggregate exposure levels of consumers,” and the “variability of the sensitivities of major identifiable subgroups of consumers”); 21 U.S.C. 346a(b)(2)(D)(vi) (requiring consideration of “non-occupational” sources of exposure); 21 U.S.C. 346a(b)(2)(D)(viii) (requiring consideration of information bearing on whether a pesticide “may have an effect in humans that is similar to an effect produced by a naturally occurring estrogen or other endocrine effects”); 21 U.S.C. 346a(l)(2) and (3) (requiring revocation or suspension of tolerances where associated FIFRA registration is canceled or suspended “due in whole or in part to dietary risks to humans posed by residues of that pesticide chemical on that food”). In no place, does section 408 explicitly or implicitly authorize EPA to consider environmental factors in addition to factors bearing on the safety of pesticide residues in food in interstate commerce. Thus, under section 408, EPA has no authority to revoke a pesticide residue food tolerance found to contain safe levels of pesticide residues in food based upon a conclusion that the use of the pesticide has negative impacts on endangered or threatened species of birds. Because EPA has no discretion to insert environmental considerations into decisions on FFDCA section 408 tolerances, the ESA, under the Supreme Court's holding in Homebuilders and the applicable regulations, is inapplicable to decisions made under FFDCA section 408.

Even if the ESA did apply to FFDCA section 408 decisions, ABC's petition fails because ABC has not offered evidence on an element critical to demonstrating that the existence of the tolerances in question have either a direct or indirect effect on endangered species of birds within the jurisdiction of the ESA. See 50 CFR 402.02. Clearly, pesticide tolerances in food do not have a direct impact on wildlife. Tolerances establish the legality of pesticide residues in food moved through interstate commerce in the United States and have no applicability to wildlife. ABC has not claimed otherwise.

Nor has ABC shown that the challenged tolerances have an indirect effect on endangered birds. Applicable regulations define an “indirect effect” as those that are caused by the action and that are later in time, but still are “reasonably certain to occur.” 50 CFR 402.02 (defining “Effects of the action”). ABC argues that the challenged tolerances are reasonably certain to cause an effect on migratory birds, some of which are endangered, because “[m]aintaining a U.S. import tolerance allows Central and South American countries to continue using these pesticides on crops for which the U.S. has already determined there are unacceptable risks for protected U.S. migratory birds.” To support this argument, ABC has proffered evidence that the pesticides can be toxic to birds and that birds may use agricultural lands in these foreign countries. However, even assuming this evidence is unassailable, ABC still has failed to support a critical aspect of its claim because it offered no evidence to show the pesticides are used in these countries on crops intended for export to the United States, the conditions under which the pesticides are used ( e.g., application methods, application rates, environmental conditions), and why those conditions of use are a threat to endangered birds. In the absence of such evidence, there is no basis to conclude that the tolerances are “reasonably certain to cause” an effect on endangered birds. Essentially, ABC's petition asks EPA to assume that the tolerances cause the pesticide to be used on crops for export to the United States, and, more importantly, cause the pesticide to be used in a manner that is reasonably certain to affect endangered bird species. On the latter point, ABC's argument fails to take into consideration the fact that use of challenged pesticides in the foreign country would be governed by that country. As a policy matter, EPA would not presume that the mere existence of a U.S. tolerance carries such overriding weight that it is reasonably certain to cause independent sovereign governments to abandon regulatory oversight of the pesticide and uncritically permit its use under conditions that are reasonably certain to have an effect on endangered migratory birds. Yet, this is the very premise of ABC's petition. Finally, ABC's claim that these pesticides will have an impact on endangered birds in Central and South America is not rescued by its assertion that these pesticides have been found by EPA to pose unacceptable risks to birds on the crops covered by the tolerances. As noted above in Unit VI., this is a significant overstatement.

SALDF makes many of the same arguments made by ABC in its petition, and EPA disagrees with these claims for the reasons provided in Unit VII. Also like ABC, SALDF premises its comments on the incorrect assertion that the challenged pesticides are “banned in the U.S.” due to the risk they pose to birds. Apparently going beyond ABC's petition, SALDF alleges that EPA has an obligation to comply with provisions of EO 13186, which relate to international activities. EPA disagrees with this allegation because, as discussed in Unit VII.A., the Executive Order does not provide a basis for revoking the challenged tolerances under the FFDCA. Finally, SALDF argues that the MBTA compels EPA to revoke the tolerances. This argument, however, is without legal basis. There is no violation of the MBTA when the Federal government action is not directly causing or will not directly cause the take of any migratory birds. Courts have found that Federal government actions that only impact migratory bird habitat without directly taking migratory birds ( e.g., timber sales occurring in the United States approved by the U.S. government) do not violate the MBTA. See Newton County Wildlife Ass'n v. U.S. Forest Serv., 113 F.3d 110 (8th Cir. 1997) (finding that government approval of timber sales only “indirectly results in the death of migratory birds”; MBTA is concerned more with “physical conduct of the sort engaged in by hunters and poachers”); Seattle Audubon Soc'y v. Evans, 781 F. Supp. 1502 (9th Cir. 1991) (finding no government liability in approving timber sales that affected migratory bird habitat). EPA's retention of the challenged tolerances does not involve any physical conduct directed at killing migratory birds nor does it directly result in the take or killing of any migratory birds. EPA's action is even further removed from any possible bird deaths than the timber sales directly resulting in destruction of migratory bird habitat that were found not to be covered by the MBTA in Newtown County Wildlife and Seattle Audubon Society. In fact, SALDF, by admitting that EPA “is unable to directly regulate pesticide use in sovereign nations,” has essentially conceded that there is no direct action by EPA that causes the take of migratory birds in Central and South American countries. After all, it is regulatory action by EPA ( i.e., retention of tolerances) that SALDF cites as the basis for its MBTA argument. Rather than allege direct action by EPA against migratory birds, SALDF states only that revoking the tolerances would “contribute to the protection of migratory birds.” The possibility that removing a tolerance might contribute to the protection of migratory birds falls far short of demonstrating that the continuance of a tolerance is a “take” under the MBTA and, as discussed in Unit VII.B., is not a basis for revoking tolerances under the FFDCA.

EPA generally agrees with the comments from CropLife America, the Pesticide Policy Council, and the various pesticide manufacturers. That agreement is reflected in Units VI., VII., and VIII. EPA would note, however, that the Pesticide Policy Council is mistaken in its claim that only pesticide registrants may petition to revoke tolerances under EPA regulations. According to the Pesticide Policy Council, EPA regulations specify that a petitioner must show a “substantial interest” in the challenged tolerance and the regulations also define FIFRA registrants or applicants for registration of a pesticide as the only party with a substantial interest in a tolerance for that pesticide. The Council errs by concluding that the regulation's provision that evidence of registration or application for registration “will be regarded as evidence that a person has a substantial interest” defines the universe of persons with a substantial interest. 40 CFR 180.32(b). In fact, the regulation merely defines one person who does have a substantial interest in a tolerance without in any way limiting persons with a substantial interest only to registrants or applicants.

As indicated previously, this action announces the Agency's order denying a petition filed under section 408(d) of FFDCA. As such, this action is an adjudication and not a rule. The regulatory assessment requirements imposed on rulemaking do not, therefore, apply to this action.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, does not apply because this action is not a rule for purposes of 5 U.S.C. 804(3).

Table of Contents I. Introduction II. NPL Deletion Criteria III. Deletion Procedures IV. Basis for Site Deletion V. Deletion Action I. Introduction

EPA Region 8 is publishing this direct final Notice of Deletion of the International Smelting and Refining Superfund Site, (Site), from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 300.425(e) (3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.

Because EPA considers this action to be noncontroversial and routine, this action will be effective October 11, 2011 unless EPA receives adverse comments by September 9, 2011. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent to Delete in the “Proposed Rules” section of the Federal Register . If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion, and the deletion will not take effect. EPA will, as appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the International Smelting and Refining (IS&R) Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to deletion of the Site:

(1) EPA consulted with the state of Utah prior to developing this direct final Notice of Deletion and the Notice of Intent to Delete co-published today in the “Proposed Rules” section of the Federal Register.

(2) EPA has provided the State 30 working days for review of this notice and the parallel Notice of Intent to Delete prior to their publication today, and the State, through the Utah Department of Environmental Quality, has concurred on the deletion of the Site from the NPL.

(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent to Delete is being published in a major local newspaper, Tooele Transcript Bulletin. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the IS&R Site from the NPL.

(4) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the Site from the NPL:

The International Smelting & Refining (IS&R) Superfund Site (Site ID UTD093120921) is located approximately two miles northeast of Tooele, in Tooele County, Utah. The Site occupies the lower portion of Pine Canyon on the west flank of the Oquirrh Mountains. The IS&R Site is comprised of three areas:

1. The former smelter property and surrounding land known as the Pine Canyon Conservation Area, which is owned by Atlantic Richfield Company, Inc. (ARCO), and comprises the majority of the Site;

2. Portions of the former Tooele Valley Railroad (TVRR) grade that extend from the Conservation Area to the city of Tooele, Utah; and

3. Pine Canyon, a residential area adjacent to the Conservation Area which is locally referred to as Lincoln Township.

The 3,000 acre Conservation Area includes the 1,200 acre area once occupied by the smelter and tailing impoundments and all the adjacent property owned by ARCO. ARCO, in conjunction with the Utah Division of Wildlife Resources (UDWR), created a conservation easement in 1994 to protect the reclaimed features. The Conservation Area and the area included within the conservation easement are one and the same. The current boundary for this Conservation Area coincides with the ARCO property boundary.

The TVRR grade portion of the Site is the former railroad right-of-way running from Vine Street in the City of Tooele east to where the right-of-way intersects the Conservation Area boundary. The length of the former rail line is approximately 10,000 feet, and because the land use changes along the former rail line from Tooele to the Conservation Area, the TVRR grade was sectioned into three study areas termed the “town,” “school'” and “extension” sections to reflect different land uses.

Pine Canyon occupies two square miles and is located on the western edge of the former IS&R smelter property. There are approximately 135 properties within the township with a population of about 470 people. The Pine Canyon community includes the properties that were impacted by smelter operations.

The IS&R Site was proposed for addition to the NPL in the Federal Register dated April 23, 1999 (FR Volume 64, No. 78, pages 19968-19974). The Site was made final on the NPL in the Federal Register dated July 27, 2000 (FR Volume 65, No. 145, pages 46096-46104). The existence of tailing impoundments, smelter wastes and contaminated surface soils and groundwater were the principal reasons for listing the IS&R Site. The contaminants of concern are lead and arsenic.

IS&R began operations in Tooele in 1910 on approximately 1,200 acres. At various times, from 1910 through 1972, IS&R operated copper and lead smelters and a lead-zinc flotation mill. In the early years of IS&R operation, tailings and slag were produced at an estimated annual rate of 650,000 tons per year with declining output in later years. Approximately 326 acres of tailing of an unknown volume are located within the tailing impoundment. The copper smelter was closed in 1946, followed by the closure of the lead-zinc flotation mill in 1968 and the lead smelter in 1972. With the exception of a few incidental buildings, the smelter facility was demolished or scrapped in the mid-1970s.

From 1974 through 1981, the Anaconda Company constructed and operated a mine and mill known as the Carr Fork Operation. The main mill of the operation was one mile east of the IS&R smelter property in Pine Canyon on approximately 12.5 acres. The operation began processing ore in 1979 and ran for less than two years. Tailings from the operation were transported down Pine Canyon to the original IS&R tailing impoundment where a new 100-foot high tailing dam was constructed. Because of the short duration of operations of the Carr Fork Mill, the tailings encompass only about 64 acres behind the constructed dam.

Lincoln was settled in the late 1800s as a farming and ranching area. When the smelter was constructed in 1908, much of the original farm land was purchased by the International Smelting and Refining Company for operation of the smelter. During the operational period of the smelter, Lincoln continued to be used for farming and also became the residence for some smelter employees. Since the smelter discontinued operations in 1972, the area has experienced a slow, steady growth to its current population of about 470 people.

Lincoln Township was established in 1996 and operates as a separate planning district within Tooele County. Current land uses include residential, recreational visitor and open agricultural.

The TVRR was constructed in 1909 to connect the Union Pacific and Western Pacific lines at Warner, Utah, (west of Tooele) to the IS&R smelter—a distance of approximately seven miles. The primary reason for TVRR's existence was for the support of the IS&R smelter. The railroad was used for transporting smelter ores, concentrates, equipment, and personnel to and from the Site.

In 2003, maintenance activities were performed by ARCO at the Carr Fork Landfill Area which is near the east side of the Site and is approximately six acres in size. The landfill contains mostly debris from the demolition phase of the reclamation project which occurred in 1986. Also, the Site Entrance Stained Soils Area is near the west side of the Site, near the point of entry for Site visitors. The soils were of a dark brownish tint, and the area was approximately four acres in size.

Diversion berms were installed to divert water flow away from the landfill and steep canyon slopes. The landfill area was grubbed and scarified in the area where the diversion berms were to be placed. Riprap was installed in areas of high erosion potential. The Site Entrance Area was grubbed and scarified. The area was then covered with 12 to 15 inches of compacted fill material and revegetated. The project was completed on June 20, 2003. Additional detail can be found in the Initial and Final Pollution Report dated September 10, 2003.

In 2004 & 2005 a residential soil Removal Action was conducted in Lincoln Township/Pine Canyon. Studies conducted as part of the Remedial Investigation found that some of the properties located in the Pine Canyon community, west of the Conservation Area, had been impacted by smelter-related contaminants. Due to high lead levels in a blood test taken by the Tooele County Health Department (TCHD) on a child in Pine Canyon and the risks identified by the Baseline Human Health Risk Assessment, EPA and the UDEQ determined that immediate implementation of a removal action was necessary to reduce local residents' exposure to lead and arsenic in the environment. In July 2004, EPA issued a Unilateral Administrative Order for a Time-Critical Removal Action, to address all remaining potential risks in the residential area. The cleanup levels used were 580 mg/kg lead and 100 mg/kg arsenic.

Excavation was completed on 19 residential properties and included 9,100 cubic yards of material removed and transported to the tailing repository on the smelter property. After excavation, each property was backfilled and landscaped or restored similar to the pre-construction condition. A Removal Action at the railroad grade of the TVRR was completed in the summer of 2005. The railroad grade extends from Vine Street in Tooele, east to where it divides into two tracks and then intersects the Conservation Area. For Removal Action planning and remedial action, the former grade was divided into three corresponding sections that include the town, school and extension sections.

A Unilateral Administrative Order was issued by EPA to Atlantic Richfield Company, Inc. (ARCO) on November 21, 2003. Under this order, ARCO conducted field sampling to investigate the degree and extent of the metals impact on the grade. The sampling results of relevant zones and areas that exceeded cleanup levels were included in the TVRR grade Removal Action. The administrative order required removal of up to 18 inches of soil in the town and school sections where lead and arsenic concentrations exceeded the cleanup levels and removal or capping of up to 18 inches of soil in the extension sections. The human health cleanup levels for these areas are 580 mg/kg lead and 100 mg/kg arsenic for the town and school section soils and 2,231 mg/kg lead and 900 mg/kg arsenic for the extension section soils.

In 2006, a Removal Action was performed in the Conservation Area. During the Remedial Investigation (RI) for the Site, 18 locations of varying sizes were identified in the Conservation Area that exceeded the cleanup levels of 8,000 mg/kg lead and 900 mg/kg arsenic.

The Conservation Area Removal Action began in the fall of 2006 and was completed during the spring of 2007. Locations that exceeded cleanup levels were addressed by placing a 12-inch thick cap of clean soil over the contaminated area and then reseeding the surface. Two of the 18 locations identified during the Remedial Investigation were within the tailings pile and could not be safely addressed as a result of physical hazards. Therefore, fencing and other physical barriers were constructed to limit access to these two locations. The Removal Action also addressed areas where vegetation was limited or absent and contaminant concentrations were below cleanup levels. These areas were addressed by removing 24 inches of soil, back-filling the excavation with clean soil and reseeding. A thorough discussion of the 2006 Conservation Area Removal Action is included in the 2006 Conservation Area Removal Action Final Construction Report dated June 1, 2007. Figure 2-4 of that report shows the areas addressed by the 2006 Removal Actions.

The Conservation Area (ARCO property) is designated as a wildlife conservation area in accordance with an easement agreement between ARCO and the Utah Division of Wildlife Resources (UDWR). The agreement precludes the property from being used for purposes other than the maintenance and enhancement of wildlife indigenous to the Oquirrh Range foothills. Activities that would impact remedial features are prohibited, such as drilling and exploration, filling, excavating, mining, dredging, and removal of top soil and other materials, and commercial, industrial, and agricultural use as set forth in the conservation easement. Before and since the easement was originally issued in 1994, efforts have been made to develop and protect this area for wildlife purposes. The management plan prepared by UDWR and endorsed by ARCO defines uses and periods of use allowable on the property. In general, current use of the area includes light recreational uses such as walking, wildlife observation and hunting. Motorized vehicles are not permitted on Site except for maintenance purposes, which is enforced by the UDWR. The property is fenced to prevent unauthorized use of the area. Use of the area is not expected to change in the future.

Current land uses within Pine Canyon include residential, agricultural and recreational designations. Though the actual township boundaries are large in area, the bulk of the population is located along Ericson Road and near the intersection of Blue Peak Drive and Pine Canyon Road. Behind the houses are large open fields used for farming and pasture. The Boys Ranch parcel, a large tract of open land to the northwest of the Pine Canyon/Blue Peak Road intersection, is planned for development. Institutional controls have been established to ensure that the completed remedy and future development of open land remains protected.

ARCO conducted the Remedial Investigation (RI) between 2001 and 2006 with EPA oversight. The chief objective of the RI was to determine the potential risk to human health and the environment of the IS&R Site and adjacent land by evaluating the Site in its current condition, taking into account reclamation actions completed in 1986, verifying previous investigation sample results of the Site prior to reclamation, and assessing conditions in areas not previously addressed by reclamation efforts including near-by residential areas.

The Conservation Area was divided into work areas during the RI to facilitate the inspection. During the RI, soils, slag, sediment, surface water and groundwater were sampled, and Site inspections were conducted to identify areas where future remedial action may be required. In addition to samples collected on the former smelter site and surrounding fields, residential yard samples and household dust samples were collected from selected residential dwellings in the community of Pine Canyon, located west of the smelter site. The investigation monitored groundwater wells in the area of the smelter, Pine Canyon and nearby areas.

Soil and sediment samples were analyzed for 23 metals and pH. The metals included aluminum, antimony, arsenic, barium, beryllium, cadmium, calcium, chromium, cobalt, copper, iron, lead, magnesium, manganese, mercury, nickel, potassium, selenium, silver, sodium, thallium, vanadium and zinc. Water samples were analyzed for the same 23 metals, 4 anions and 4 physical properties, including all drinking water standards. Analytical results of the samples collected show that when lead and arsenic are high, other metals may then be present in concentrations high enough to pose a concern. Therefore, throughout the investigation, lead and arsenic were used as indicator metals to gauge the impact on areas from smelter operations.

Groundwater samples were collected on and near the Site from 2001 through February 2006 to determine what impact, if any, to area aquifers are a result of past operations at the IS&R Site, and in an attempt to locate a source of elevated arsenic in the groundwater.

The Feasibility Study concluded that past Removal Actions had addressed areas with soil containing concentrations of contaminants of concern above cleanup levels. Institutional controls will be required to ensure that the protectiveness of the remedy is maintained. Monitoring of groundwater will be required to determine if arsenic concentrations change, over time, relative to baseline concentrations.

A Record of Decision (ROD) for the Site was issued by EPA on September 27, 2007. The remedy established in the ROD takes into account all removal work and capped areas in the Carr Fork Landfill Area, TVRR, and the Conservation Area; selects the implementation of institutional controls and monitoring as needed to protect the integrity of the previously completed removal and reclamation actions; and concludes that no further remedial construction is necessary.

Remedial Action Objectives (RAO) for the Conservation Area, the TVRR grade area, and Pine Canyon were achieved as a result of the 2006 Conservation Area Removal Action, the 2004 and 2005 Pine Canyon/Lincoln residential Removal Action and the TVRR Removal Action completed in the summer of 2005.

The RAOs identified for the Site consisted of the following:

1. For human and ecological receptors, prevent direct contact/ingestion with soil having lead and/or arsenic concentrations in excess of cleanup levels identified for the Site, and

2. For human and ecological receptors, protect water quality in stream by minimizing migration of soil with lead and/or arsenic concentrations above cleanup levels into streams.

RAOs were not necessary for surface and ground water and sediments since these media did not pose a risk to human health and the environment. RAOs for groundwater were not necessary.

The findings of the Record of Decision indicate that the Removal Actions performed at the Site have addressed all contamination that exceeds clean up goals set for the Site.

• Residential area soils do not exceed 580 mg/kg lead and 100 mg/kg arsenic

• Conservation area soils do not exceed 8,000 mg/kg lead and 900 mg/kg arsenic.

• TVRR Town and School Section soils do not exceed 580 mg/kg lead and 100 mg/kg arsenic.

• TVRR Extension Section soils do not exceed 2,300 mg/kg lead and 900 mg/kg arsenic.

Operation and maintenance of the Site is conducted by UDWR and ARCO in accordance with the Long Term Operation and Maintenance Plan (O&M Plan 2010). ARCO is responsible for O&M at the Site. Fence posts and wire will be repaired and replaced as necessary to maintain security of the Site. This is especially important to prevent motorized vehicles from accessing the Site and damaging the cover.

Monitoring will be required for all three areas of the Site. Monitoring by ARCO will consist of inspecting the integrity of the caps, covers and storm water controls on an annual basis. The UDWR will conduct day to day surveillance as dictated in the Long Term Operations and Maintenance Plan and Conservation Easement. Groundwater monitoring will be conducted at the Conservation Area to ensure that the former smelter area does not become a source of groundwater contamination in the future.

ARCO will assist the TCHD in administering the institutional controls, which regulate the development of land within an overlay zone in Pine Canyon where soils could potentially have elevated concentrations of lead and/or arsenic. This includes providing information and review if necessary, of sampling and analysis plans prepared by land developers. Institutional controls will be monitored to ensure that they remain in place and serve their intended purposes.

In accordance with CERCLA § 121 (c), the Site is subject to statutory five-year reviews since hazardous substances, pollutants, or contaminants remain on Site above levels that allow for unlimited use and unrestricted exposure. The first statutory five-year review will be conducted in September 2012.

Shortly after the Site was listed on the NPL, an information repository containing the Administrative Record and other information about the Site was established in 2000 at the Tooele Public Library, 128 West Vine Street, Tooele, Utah, and at the Superfund Records Center at EPA Region 8 in Denver. The UDEQ has numerous files and information related to this Site, which are available to the public upon request; however, the UDEQ is not considered an information repository for the Site.

EPA and UDEQ completed a community involvement plan for the Site in November 2001. This plan outlined methods to enhance understanding and communication so that those impacted can become more informed about the Site activities and be part of the decision making process. The plan was based primarily on discussions with residents, local officials and business leaders, and it enlisted the support of local groups, individuals and elected officials to collect and distribute information.

An informal community advisory group was formed shortly after the Site was placed on the NPL. Meetings have been a joint effort between the EPA, UDEQ, TCHD and citizens, and include a citizen co-chair. Notices about the meetings and the proposed agenda are mailed and e-mailed to citizens in advance of all meetings. Information is also placed in the Tooele Transcript's event section known as the Bulletin Board.

EPA and UDEQ have maintained regular contact with members of the community and implemented a variety of community relations activities as new information about the Site has become available. This has included holding public meetings; distributing fact sheets, brochures and flyers; meeting with community members and local officials; developing and maintaining an EPA Web fact sheet; and sharing information with the local media. The EPA and UDEQ supported the TCHD in conducting a survey with residents about the Site in 2001. EPA also worked with the County to develop a brochure that was distributed to residents in 2002.

EPA developed and distributed a fact sheet in June 2004 to alert residents of soil sampling activities. The fact sheet included questions about health effects of lead and arsenic in soil and included tips to reduce exposure. It also informed the community of the County's services for free blood testing.

The remedial investigation, feasibility study reports and the proposed plan, were released to the public for comment on June 16, 2007. These documents were made available to the public in both the Administrative Record and the informational repository described above. In addition, approximately 100 copies of the proposed plan were mailed to citizens in the neighborhoods adjacent to the Site. The notice of availability for the proposed plan was published in the Tooele Transcript on June 14, 2007. A public comment period on the proposed plan was held from June 16, 2007 to July 16, 2007.

A public meeting was held on June 26, 2007, at the TCHD regarding the proposed plan for the Site. At this meeting, representatives from EPA and UDEQ answered questions about the current condition of the Site, the remedial alternatives under consideration and the preferred alternative. Several community members, including the co-chair of the community advisory group, expressed support for the preferred alternative and there were no objections to the preferred alternative. EPA did not receive any written comments during the comment period.

Four Removal Actions have been completed at the Site. The Record of Decision concluded that the removals satisfied all remedial requirements at the Site.

The Region has followed the procedures required by 40 CFR 300.425(e) as follows:

1. Responsible parties or other persons have implemented all appropriate response actions required.

2. The state of Utah, through the Utah Department of Environmental Quality has concurred in the deletion of the Site on August 25, 2010.

3. A Notice of Intent to Delete has been published in the local newspaper.

4. Information supporting the proposed deletion has been made available in the information repository for the Site.

The EPA, with concurrence of the state of Utah through the Utah Department of Environmental Quality (UDEQ), has determined that all appropriate response actions under CERCLA, other than operation, maintenance, monitoring and five-year reviews have been completed. Therefore, EPA is deleting the Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective 45 days from the date of this publication in the Federal Register unless EPA receives adverse comments within 30 days from this publication in the Federal Register . If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion, and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

The NFIP enables property owners to purchase flood insurance which is generally not otherwise available. In return, communities agree to adopt and administer local floodplain management aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits flood insurance coverage as authorized under the NFIP, 42 U.S.C. 4001 et seq.; unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR part 59. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. However, some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue their eligibility for the sale of insurance. A notice withdrawing the suspension of the communities will be published in the Federal Register .

In addition, FEMA has identified the Special Flood Hazard Areas (SFHAs) in these communities by publishing a Flood Insurance Rate Map (FIRM). The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may legally be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year, on FEMA's initial flood insurance map of the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment under 5 U.S.C. 553(b) are impracticable and unnecessary because communities listed in this final rule have been adequately notified.

Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days.

National Environmental Policy Act. This rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Considerations. No environmental impact assessment has been prepared.

Regulatory Flexibility Act. The Administrator has determined that this rule is exempt from the requirements of the Regulatory Flexibility Act because the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits flood insurance coverage unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed no longer comply with the statutory requirements, and after the effective date, flood insurance will no longer be available in the communities unless remedial action takes place.

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

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

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

Paperwork Reduction Act. This rule does not involve any collection of information for purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

Accordingly, 44 CFR part 64 is amended as follows:

This is a summary of the Commission's Report and Order (R&O), FCC 11-114, MD Docket No. 11-76, adopted on July 21, 2011 and released on July 22, 2011.

1. This Report and Order does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

2. The Commission will send a copy of this Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act. 1

3. As required by the Regulatory Flexibility Act of 1980 (“RFA”), 2 the Commission has prepared a Final Regulatory Flexibility Analysis (“FRFA”) relating to this Report and Order. The FRFA is set forth in the section entitled Final Regulatory Flexibility Analysis.

4. In this Report and Order, we conclude the Assessment and Collection of Regulatory Fees for Fiscal Year (“FY”) 2011 proceeding to collect $335,794,000 in regulatory fees for Fiscal Year (“FY”) 2011, pursuant to section 9 of the Communications Act of 1934, as amended (the “Act”). Section 9 regulatory fees are mandated by Congress and are collected to recover the regulatory costs associated with the Commission's enforcement, policy and rulemaking, user information, and international activities. 3 The annual regulatory fee amount to be collected is established each year in the Commission's Annual Appropriations Act which is adopted by Congress and signed by the President and which funds the Commission. 4 In this annual regulatory fee proceeding, we retain many of the established methods, policies, and procedures for collecting section 9 regulatory fees adopted by the Commission in prior years. Consistent with our established practice, we intend to collect these regulatory fees during a September 2011 filing window in order to collect the required amount by the end of our fiscal year. Finally, we will initiate a further rulemaking that will update the record on regulatory fee rebalancing, as well as expand this inquiry to include new issues and services, by the end of this calendar year.

5. On May 3, 2011, we released a Notice of Proposed Rulemaking (“ FY 2011 NPRM ”) seeking comment on regulatory fee issues for FY 2011. 5 The section 9 regulatory fee proceeding is an annual rulemaking process for the Commission to collect the required fee amount each year. In the FY 2011 NPRM , we proposed to retain the section 9 regulatory fee methodology used in prior fiscal years, except as discussed below. We received six comments and one reply comment. 6 We address the issues raised in our FY 2011 NPRM and these comments below.

6. In our FY 2011 regulatory fee assessment, we will use the same section 9 regulatory fee assessment methodology adopted in FY 2010 and in prior years. Each fiscal year, the Commission proportionally allocates the total amount that must be collected via section 9 regulatory fees. The results of our FY 2011 regulatory fee assessment methodology (including a comparison to the prior year's results) are contained in the table below (Table—Calculation of FY 2011 Revenue Requirements and Pro-Rata Fees). To collect the $335,794,000 required by Congress, we allocated this amount across the various fee categories. Consistent with past practice, we then divided the various fee categories by their respective number of estimated payment units to determine the unit fee. 7 As in prior years, for cases involving small fees, e.g. , licenses that are renewed over a multiyear term, we divided the resulting unit fee by the term of the license and then rounded these unit fees consistent with the requirements of section 9(b)(2) of the Act.

7. In calculating the FY 2011 regulatory fees listed in Table—FY 2011 Schedule of Regulatory Fees (see table below), we adjusted the FY 2011 list of payment units (see Table—Sources of Payment Unit Estimates for FY 2011 below) based upon licensee databases, industry and trade group projections, as well as prior year payment information. In some instances, Commission licensee databases are used; in other instances, actual prior year payment records and/or industry and trade association projections are used in determining the payment units. 8 Where appropriate, we adjusted and rounded our final estimates to take into consideration events that may impact the number of units for which regulatees submit payment, such as waivers and exemptions that may be filed in FY 2011, and fluctuations in the number of licenses or station operators due to economic, technical, or other reasons. Our estimated FY 2011 payment units, therefore, are based on several variable factors that are relevant to each fee category. The fee rate may also be rounded or adjusted slightly to account for these variables.

In order to calculate individual service fees for FY 2011, we adjusted FY 2010 payment units for each service to more accurately reflect expected FY 2011 payment liabilities. We obtained our updated estimates through a variety of means. For example, we used Commission licensee data bases, actual prior year payment records and industry and trade association projections when available. The databases we consulted include our Universal Licensing System (“ULS”), International Bureau Filing System (“IBFS”), Consolidated Database System (“CDBS”) and Cable Operations and Licensing System (“COALS”), as well as reports generated within the Commission such as the Wireline Competition Bureau's Trends in Telephone Service and the Wireless Telecommunications Bureau's Numbering Resource Utilization Forecast.

We sought verification for these estimates from multiple sources and, in all cases; we compared FY 2011 estimates with actual FY 2010 payment units to ensure that our revised estimates were reasonable. Where appropriate, we adjusted and/or rounded our final estimates to take into consideration the fact that certain variables that impact on the number of payment units cannot yet be estimated with sufficient accuracy. These include an unknown number of waivers and/or exemptions that may occur in FY 2011 and the fact that, in many services, the number of actual licensees or station operators fluctuates from time to time due to economic, technical, or other reasons. When we note, for example, that our estimated FY 2011 payment units are based on FY 2010 actual payment units, it does not necessarily mean that our FY 2011 projection is exactly the same number as in FY 2010. We have either rounded the FY 2011 number or adjusted it slightly to account for these variables.

8. When calculating the fee methodology for AM and FM radio stations, we consider many factors, such as facility attributes and the population served by each station. The calculation of the population served is determined by coupling current United States Census Bureau data with technical and engineering data, as detailed in the table below (Table—Factors, Measurements, and Calculations That Go into Determining Station Signal Contours and Associated Population Coverages). These population counts, along with the station's class and type of service, are the basis for determining regulatory fees. Although the 2010 Census data has been completed, the data is still subject to revisions. Also, because FY 2011 regulatory fees are determined on the basis of the station's attributes as of October 1, 2010, it would be inappropriate to apply incomplete 2010 Census data in determining FY 2011 regulatory fees for radio stations. Therefore, we will apply 2010 Census data in determining the population counts of radio stations as of October 1, 2011, as part of our calculations of FY 2012 regulatory fees.

For stations with nondirectional daytime antennas, the theoretical radiation was used at all azimuths. For stations with directional daytime antennas, specific information on each day tower, including field ratio, phasing, spacing and orientation was retrieved, as well as the theoretical pattern root-mean-square of the radiation in all directions in the horizontal plane (“RMS”) figure milliVolt per meter (mV/m) @ 1 km) for the antenna system. The standard, or modified standard if pertinent, horizontal plane radiation pattern was calculated using techniques and methods specified in §§ 73.150 and 73.152 of the Commission's rules. Radiation values were calculated for each of 360 radials around the transmitter site. Next, estimated soil conductivity data was retrieved from a database representing the information in FCC Figure R3. Using the calculated horizontal radiation values, and the retrieved soil conductivity data, the distance to the principal community (5 mV/m) contour was predicted for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2000 block centroids were contained in the polygon. (A block centroid is the center point of a small area containing population as computed by the U.S. Census Bureau.) The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.

The greater of the horizontal or vertical effective radiated power (“ERP”) (kW) and respective height above average terrain (“HAAT”) (m) combination was used. Where the antenna height above mean sea level (“HAMSL”) was available, it was used in lieu of the average HAAT figure to calculate specific HAAT figures for each of 360 radials under study. Any available directional pattern information was applied as well, to produce a radial-specific ERP figure. The HAAT and ERP figures were used in conjunction with the Field Strength (50-50) propagation curves specified in 47 CFR 73.313 of the Commission's rules to predict the distance to the principal community (70 dBu (decibel above 1 microVolt per meter) or 3.17 mV/m) contour for each of the 360 radials. The resulting distance to principal community contours were used to form a geographical polygon. Population counting was accomplished by determining which 2000 block centroids were contained in the polygon. The sum of the population figures for all enclosed blocks represents the total population for the predicted principal community coverage area.

9. The digital transition to full-service television stations was completed on June 12, 2009, but the digital transition for Low Power, Class A, and TV Translators/Boosters remains voluntary, and there is presently no set date for the completion of this transition. Historically, the discussion of digital transition conversion with respect to regulatory fees has applied only to full-service television stations. Hence, the “digital only” exemption does not impact this class of regulatees. Because the digital transition in the Low Power, Class A, and TV Translators/Booster facilities is still voluntary and the transition will occur over a period time, some facilities may still be in the process of converting from an analog to a digital service. During this transition period, licensees of Low Power, Class A, and TV Translator/Booster facilities may be operating in analog mode, in digital mode, or in an analog and digital simulcast mode. Therefore, for regulatory fee purposes, we conclude that a fee will be assessed for each facility operating either in an analog or digital mode. In instances in which a licensee is operating in both an analog and digital mode as a simulcast, a single regulatory fee will be assessed for this analog facility that has a digital companion channel. As greater numbers of facilities convert to digital mode, the Commission will provide revised instructions on how regulatory fees will be assessed.

10. Commercial Mobile Radio Service (“CMRS”) Messaging Service, which replaced the CMRS One-Way Paging fee category in 1997, includes all narrowband services. 9 Since 1997, the number of subscribers has declined from 40.8 million to 4.9 million, and there does not appear to be any sign of recovery to the subscriber levels of 1997-1999. 10 We sought comment on whether to continue to maintain the fee at the existing level of $.08 per subscriber. We received one comment from the American Association of Paging Carriers (“AAPC”). AAPC contends that retaining the $0.08 per unit for CMRS Messaging is the minimum appropriate action for the Commission to undertake. 11 Moreover, AAPC believes that after the Commission reviews its regulatory fee methodology, the Commission will find, as the paging industry believes it will, that the fee rate for the paging industry should be reduced. 12 We agree with AAPC that the prevailing circumstances in FY 2003 still exist today, 13 and conclude that the FY 2011 CMRS Messaging regulatory fee should remain at a rate of $0.08 per subscriber.

11. PLMRS systems are used by licensees, generally companies, local governments, and other organizations, for their own communications needs. The services included in PLMRS are Public Safety, Industrial/Business, Private Land Mobile Paging, and Radiolocation. In their comments, PCIA—The Wireless Infrastructure Association, contends that because the number of Private Land Mobile Radio Service licenses has declined over 30 percent between 2006 and 2010, 14 it is inequitable to raise the ten-year license fee from $20 per year to $25 per year. Furthermore, PCIA asserts that PLMRS is a declining industry, and the Commission should “exercise its discretion in assessing how to regulate fees on industries with declining unit bases,” particularly in those instances where it is hard to pass on these regulatory fee costs to its customers. 15

12. We agree with PCIA that those industries that are declining and also lack the ability to effectively pass the regulatory fees onto its customers should be given special consideration for fee relief. 16 We note that the paging industry is in a similar situation with a declining subscriber base, and we have maintained their per unit regulatory fee at FY 2002 levels. Although PCIA projects the number of PLMRS licenses to increase slightly in 2011, 17 the number of PLMRS licenses issued in FY 2011 is significantly lower than in FY 2004 and FY 2005 where the estimated number of PLMRS licenses issued was over four times greater. 18 As a result, we believe the Commission should exercise its discretion to maintain the FY 2011 regulatory fee at $20 per year. Based on an anticipated increase of 14 percent in the number of licenses, 19 we will increase our unit estimate from 9,300 to 10,600, which will reduce the per year fee to $22. However, we note that if it were not for our rules regarding rounding to the nearest $5, the actual fee for PLMRS (Shared) would be $22 per year, and not $20 per year. But because of our rounding rules, we conclude that the FY 2011 regulatory fee rate for the PLMRS (Shared) fee category is $20 per year for a ten-year license.

13. In our FY 2011 Regulatory Fee Notice of Proposed Rulemaking, we sought comment on our proposal to provide relief to the ITSP industry by assessing ITSP regulatory fees on all ITSP revenues that are reported on FCC Form 499-A, Lines 412(e), 420(d), and 420(e), the lines upon which the Commission has traditionally assessed ITSP regulatory fees. We received three comments and one reply comment. 20 In its comments, the United States Telecom Association (“USTelecom”) urges the Commission to take a comprehensive approach to reforming the regulatory fee structure, including an updated full-time employee (FTE) analysis, reallocation of the costs of the support bureaus, reexamination of the underlying assumptions of the current regulatory fee structure, and incorporation of changes that have occurred in the communications industry over time. 21 While USTelecom supports limitations in the ITSP fee increase, it provides no support for action to effectuate such relief short of a complete overhaul of our regulatory fee methodology and the assumptions underlying it. 22 CTIA—The Wireless Association (“CTIA”) opposes the proposal to assess all ITSP revenues, arguing that the Commission lacks both legal authority and valid policy justification for its proposal. 23 CTIA also interprets the Commission's proposal as imposing a duplicative fee assessment on the CMRS industry, arguing that the move would result in an increase in regulatory fees of $108 million on CMRS providers in addition to over $52 million in fees that CMRS providers will pay on their subscriber fees. 24 CTIA urges use of the same methodology as the Commission used last year—spreading the regulatory fees across other fee categories—while the Commission engages in a comprehensive review of its FTEs by core bureau. 25 In separate comments, Verizon Wireless also opposes the Commission's proposal to apply the ITSP fee to the ITSP revenues of CMRS licensees. 26 Finally, in its reply comments, AT&T supports the comments of USTelecom and CTIA. 27

14. First, it is necessary to address any misconception about the impact, in terms of increased regulatory fees, our proposal would have on CMRS licensees. Contrary to CTIA's assertions, the Notice of Proposed Rulemaking did not propose assessing $108 million from wireless providers in addition to $52 million in regulatory fees that CMRS licensees currently pay. 28 As the “Table—Calculations of FY 2011 Revenue Requirements and Pro-Rata Fees” illustrates, the Commission proposed to collect $52 million from CMRS providers and $148 million from ALL ITSP providers; from within the $148 million assessed to all ITSP revenues, the Commission estimated that only $7.2 million would be derived from the ITSP revenues of predominantly non-ITSP providers ( e.g. wireless, satellite, etc.)—this $7.2 million is the resulting additional amount in regulatory fees that is proposed in our NPRM 's proposed ITSP rate of $.00361, which is based on approximately $2 billion in ITSP revenues reported by these entities on Form 499-A Lines 412(e), 420(d), and 420(e)—ITSP revenue on which they currently do not pay regulatory fees. Assessing this estimated $2 billion in ITSP revenues would, in conjunction with the additional relief measure proposed in the NPRM, help reduce the impact of the fee burden on all ITSP payers by reducing the applicable ITSP fee rate from $0.00402 to $0.00361.

15. We are unpersuaded that assessing all ITSP revenues reported on Lines 412(e), 420(d), and 420(e) on FCC Form 499-A exceeds our statutory authority under section 159(b)(2)(A). However, we acknowledge that the comments filed by USTelecom, CTIA, Verizon Wireless, and AT&T raise important concerns about the need for a more comprehensive approach to regulatory fee reform. 29 As stated in the NPRM , we fully intend to engage in that process as expeditiously as possible. 30 To that end, it is important that today we take only those measured steps necessary to complete the FY 2011 regulatory fee assessment, so that we can complete the regulatory fee assessment and collection in a timely manner. Our proposal in the NPRM to provide some measure of regulatory fee relief for ITSP providers has two components: (1) A 5.6 percent assessment across all other fee categories, and (2) an assessment of an estimated $2 billion in ITSP revenues reported by non-ITSP providers. Of these two components, we will effectuate only one: A 5.6 percent assessment across all other fee categories. We will not, at this time, assess an estimated $2 billion in ITSP revenues reported by non-ITSP providers.

16. Since we have already assessed a 5.6 percent assessment across all other fee categories to provide some measure of relief to the applicable ITSP rate, we will reduce the proposed ITSP revenue base by $2.0 billion (from $41 billion to $39.0 billion), and re-calculate the ITSP fee rate on a revenue base of $39 billion, as it would be untenable to pass on any further increases across all other fee categories. This approach provides some level of relief for the ever-increasing ITSP rate, yet leaves the issue of whether all providers who report ITSP revenues should pay on those revenues to be addressed in a broader context of regulatory fee reform.

17. This limited, temporary adjustment for FY 2011 produces an equitable result. If we provided no relief to limit the FY 2011 ITSP fee rate, the fee rate applicable to ITSP revenues would have been $.00402 per revenue dollar, an increase of 15.2 percent from FY 2010 rates. Had we provided the full measure of relief proposed in the NPRM, the ITSP fee rate would have reduced to $.00361 per revenue dollar, an increase of 3.4 percent from FY 2010 rates. However, since, for the reasons stated above, we take only limited action to reduce the increase to the ITSP rate, the action we take today will result in an ITSP fee rate of $.00375 per revenue dollar, a 7.5 percent increase from FY 2010 rates. 31 This result is equitable not only for the ITSP industry, but also for the other fee categories that are bearing the fee burden associated with providing such relief. We conclude, therefore, that the FY 2011 ITSP regulatory fee rate is $.00375 per revenue dollar.

18. We received a general comment from Raymond Awe regarding the regulatory fees paid on Amateur Radio Vanity Call Signs. Mr. Awe urges the Commission to keep the fee amount minimal, and to consider assessing a Vanity fee only on the first issue of the Vanity call sign or change in call sign. 32

19. The Commission tries to keep the regulatory fee for Vanity call signs as minimal as possible. Between FY 2007 and FY 2010, the regulatory fee for Vanity call signs increased from $1.17 (per year) to $1.33 (per year), an increase of $0.16 per year or $1.60 over a ten-year license period. 33 We do not believe this increase is inequitable, and the Commission will continue its efforts to keep this fee as minimal as possible. Regarding Mr. Awe's recommendation to assess regulatory fees only at first issue or at the time of a change in call sign, the fees that are collected from Vanity call signs are used to offset the cost of monitoring and researching new call sign requests to prevent the issuance of duplicate call signs. More than likely, fees that are collected only on new issues and at the time of changes in call signs will not generate sufficient revenues to offset the cost of managing and monitoring this work at the Commission. Therefore, we conclude that the basis upon which the Commission collects fees on Amateur Radio Vanity call signs will not change.

20. In our FY 2011 Notice of Proposed Rulemaking, we stated that as our rules expressly provide, petitions for waiver of a regulatory fee must be accompanied by the required fee “unless accompanied by a petition to defer payment due to financial hardship, supported by documentation of the financial hardship.”  34 Similarly, petitions for reduction of fees filed with less than the full fee due must be accompanied by a request for deferral “supported by documentation of financial hardship.”  35 However, citing § 1.1166 (b) of the rules, which states that “Deferrals of fees will be granted for a period of six months following the date that the fee is initially due,” it can be argued that, even where supporting documentation of financial hardship is not provided, a regulatee can delay its payment of the fees owed for up to six months simply by requesting the deferral. 36 That argument is inconsistent with §§ 1.1166 (c) and (d) of our rules, which provide that petitions for waivers or reductions will be dismissed if they are not accompanied by the full fee owed, unless the regulatee requests a deferral of payment supported by documentation of financial hardship. 37 A regulatee's mere allegation of financial hardship thus does not automatically entitle it to a deferral of its obligation to pay regulatory fees; only a properly supported claim of financial hardship will entitle the regulatee to a deferral. Accordingly, if a request for deferral is not supported by documentation of financial hardship, it will be denied, and an associated petition for waiver or reduction will be dismissed. A regulatee cannot delay payment on the theory that its deferral request triggered an automatic six-month extension of its obligation to pay. We sought comment on the proposal to amend § 1.1166 (b) of the rules  38 to read, “Deferrals of fees, if granted, will be for a designated period of time not to exceed six months.” We received no comments or reply comments. Therefore, § 1.1166(b) of the rules  39 is amended to read, “Deferrals of fees, if granted, will be for a designated period of time not to exceed six months.”

21. In FY 2009, the Commission implemented several changes in procedures which simplified the payment and reconciliation processes of FY 2009 regulatory fees. These changes proved to be very helpful to both licensees and to the Commission. In FY 2011, the Commission will promote greater use of technology (and less use of paper) to improve the regulatory fee notification and collection process. We sought general comment on the specific initiatives discussed in the paragraphs below. We received no specific comments or reply comments on any steps to take to promote greater use of technology in collecting regulatory fees. The Commission will continue to promote greater efficiency in its regulatory fee notification and collection process.

22. In FY 2009, we instituted a mandatory filing requirement using the Commission's electronic filing and payment system (also known as “Fee Filer”). 40 Licensees filing their annual regulatory fee payments were required to begin the process by entering the Commission's Fee Filer system with a valid FRN and password. 41 This change was beneficial to both licensees and to the Commission. For licensees, the mandatory use of Fee Filer eliminates the need to manually complete and submit a hardcopy Form 159, and for the Commission, the data in electronic format made it much easier to process payments more efficiently and effectively. We sought comment on how to improve the mandatory use of Fee Filer for filing annual regulatory fees. We received no specific comments or reply comments on this issue. The mandatory use of Fee Filer does not mean that licensees are expected to pay only through Fee Filer—it is only mandatory for licensees to begin the process of filing their annual regulatory fees using Fee Filer.

23. In prior years, the Commission mailed pre-bills via surface mail to licensees in select regulatory fee categories: Interstate telecommunications service providers (“ITSPs”), Geostationary (“GSO”) and Non-Geostationary (“NGSO”) satellite space station licensees, 42 holders of Cable Television Relay Service (“CARS”) licenses, and Earth Station licensees. 43 The remaining regulatees did not receive pre-bills. In our FY 2009 Report and Order, the Commission decided to make the information contained in these pre-bills viewable in Fee Filer, rather than mailing pre-bills out to licensees via surface mail. 44 In FY 2011, the Commission proposed to continue its practice of not mailing out hardcopy annual regulatory fee pre-bills, and instead place the pre-bill information on the Commission's Web site for licensees to access through the Commission's electronic filing and payment system (“Fee Filer”). Regulatees can also look to the Commission's Web site for information on upcoming events and deadlines relating to regulatory fees. We sought comment on other changes to our system of electronic notification that would more efficiently and effectively inform regulatees of information and procedures pertaining to regulatory fees. We received no specific comments or reply comments on this issue. The Commission will continue its efforts to improve its information and procedures relating to regulatory fees.

24. Included below are procedural items as well as our current payment and collection methods which we have revised over the past several years to expedite the processing of regulatory fee payments. We do not propose changes to these procedures. Rather, we include them here as a useful way of reminding regulatory fee payers and the public about these aspects of the annual regulatory fee collection process.

25. Each year we post public notices and fact sheets pertaining to regulatory fees on our Web site. These documents contain information about the payment due date and relevant regulatory fee payment procedures. We will continue to post this information on http://www.fcc.gov/fees/regfees.html, but as in previous years, we will not send out public notices and fact sheets to regulatees en masse.

26. Beginning in FY 2003, we sent fee assessment notifications via surface mail to media services entities on a per-facility basis. 45 These notifications provided the assessed fee amount for the facility in question, as well as the data attributes that determined the fee amount. We have since refined this initiative to be more electronic and paperless. 46 In our FY 2010 Notice of Proposed Rulemaking , we proposed to discontinue mailing the media notifications beginning in FY 2011, relying instead on information on the Commission's Web site and the use of the Commission-authorized Web site at http://www.fccfees.com . 47 We kept the comment and reply comment period open until September 30, 2010 to be receptive to the needs of media licensees. We received no comments or reply comments on this particular issue. Therefore, we conclude that beginning in FY 2011 the Commission will discontinue mailing hardcopy notification assessment letters to media licensees.

27. As we have done in prior years, our procedures for conveying CMRS subscriber counts to providers are as follows. We will mail an initial assessment letter to Commercial Mobile Radio Service (CMRS) providers using data from the Numbering Resource Utilization Forecast (“NRUF”) report that is based on “assigned” number counts that have been adjusted for porting to net Type 0 ports (“in” and “out”). 48 The letter will include a listing of the carrier's Operating Company Numbers (“OCNs”) upon which the assessment is based. 49 The letters will not include OCNs with their respective assigned number counts, but rather, an aggregate total of assigned numbers for each carrier.

28. A carrier wishing to revise their subscriber count can access Fee Filer after they receive their initial CMRS assessment letter and revise their count. Providers should follow the prompts in Fee Filer to record their subscriber revisions, along with any supporting documentation. 50 The Commission will then review the revised count and supporting documentation and either approve or disapprove the submission in Fee Filer. If the submission is disapproved, the Commission will attempt to contact the provider so that the provider will have an opportunity to discuss its revised subscriber count and/or provide additional supporting documentation. If we receive no response or correction to the initial assessment letter, or we do not reverse the disapproval of the provider's revised count submission, we will expect the fee payment to be based on the number of subscribers listed on the initial assessment letter. Once the timeframe for revision has passed, the subscriber counts will be finalized. These subscriber counts will then be the basis upon which CMRS regulatory fees will be expected. Providers will be able to view their final subscriber counts online in Fee Filer. A final CMRS assessment letter will not be mailed out.

29. Because some carriers do not file the NRUF report, they may not receive an initial letter of assessment. In these instances, the carriers should compute their fee payment using the standard methodology  51 that is currently in place for CMRS Wireless services ( e.g. , compute their subscriber counts as of December 31, 2010), and submit their fee payment accordingly. Whether a carrier receives an assessment letter or not, the Commission reserves the right to audit the number of subscribers for which regulatory fees are paid. In the event that the Commission determines that the number of subscribers paid is inaccurate, the Commission will bill the carrier for the difference between what was paid and what should have been paid.

30. The Commission collects a revenue amount each year based on a Congressional mandate. Because the dollar amount differs each year, a revenue apportionment is necessary each year to determine the projected regulatory fee revenue that is to be collected from submarine cable providers and from terrestrial/satellite facilities. 52 Since FY 2009, the Commission has used the 87.4/12.6 percent allocation proposed in the Consensus Proposal as the percentage upon which to determine the regulatory fee revenue amounts for submarine cable providers and terrestrial/satellite facilities, respectively. 53 Each year, the Commission reserves the right to revise this 87.4/12.6 allocation. Although we will continue to review this allocation as part of our annual regulatory fee proceeding, we do not at this time find any basis to alter the 87.4/12.6 percent revenue allocation for 2011 regulatory fees.

31. Since 1994 when the first regulatory fees were collected, the communications industry has undergone a rapid transformation. The current basis of how regulatory fees are assessed, however, has changed only slightly since its inception in 1994. 54 In FY 2008, the Commission released a Further Notice of Proposed Rulemaking which identified some of the issues raised by commenters with regard to the need for fundamental reform of our regulatory fee assessment methodology. 55 From this rulemaking, the Commission has already acted on three of the issues: (1) A change in the bearer circuit methodology for calculating regulatory fees, (2) the elimination of two regulatory fee categories, the International Public Fixed Radio and International High Frequency Broadcast Stations , and (3) the conversion of UHF and VHF Television stations from analog to digital television. 56 In our FY 2010 Regulatory Fees Report & Order , we stated that in a future proceeding, we will “further examine the nature and extent of all changes that need to be made to our regulatory fee schedule and calculations. In a separate and forthcoming action, we will call for comment on issues including, but not limited to, how changes in the telecommunications marketplace may warrant rebalancing of regulatory fees among existing service providers * * *”  57 In response to our FY 2011 Notice of Proposed Rulemaking , we have heard the call again from commenters and reply commenters to re-examine our regulatory fee structure. As our commitment to this “forthcoming action”, the Commission will by the end of calendar year 2011, initiate a further rulemaking that will update the record on regulatory fee rebalancing, as well as expand this inquiry to include new issues and services not covered by the 2008 Further Notice of Proposed Rulemaking , such as whether and how to re-assess the regulatory fee burden of all fee categories, whether to incorporate 499-A wireless revenue in the calculation of ITSP regulatory fees, and whether to eliminate the regulatory fee portion (but not the application fee portion) of General Mobile Radio Service (GMRS).

32. We will continue to permit cable television operators to base their regulatory fee payment on their company's aggregate year-end subscriber count, rather than requiring them to report cable subscriber counts on a per community unit identifier (“CUID”) basis.

33. In FY 2006, we streamlined the CMRS payment process by eliminating the requirement for CMRS providers to identify their individual call signs when making their regulatory fee payment, instead allowing CMRS providers to pay their regulatory fees only at the aggregate subscriber level without having to identify their various call signs. 58 We will continue this practice in FY 2011. In FY 2007, we consolidated the CMRS cellular and CMRS mobile fee categories into one fee category with a single fee code, thereby eliminating the requirement for CMRS providers to separate their subscriber counts into CMRS cellular and CMRS mobile fee categories during the regulatory fee payment process. This consolidation of fee categories enabled the Commission to process payments more quickly and accurately. For FY 2011, we will continue this practice of combining the CMRS cellular and CMRS mobile fee categories into one regulatory fee category.

34. In FY 2007, we adopted a proposal to round lines 14 (total subject revenues) and 16 (total regulatory fee owed) on FCC Form 159-W to the nearest dollar. This revision enabled the Commission to process the ITSP regulatory fee payments more quickly because rounding was performed in a consistent manner and eliminated processing issues that occurred in prior years. In FY 2011, we will continue rounding lines 14 and 16 when calculating the FY 2011 ITSP fee obligation. In addition, we will continue the practice of not mailing out Form 159-W via surface mail.

35. All lock box payments to the Commission for FY 2011 will be processed by U.S. Bank, St. Louis, Missouri, and payable to the FCC. During the regulatory fee season, for those licensees paying by check, money order, or by credit card using Form 159-E remittance advice, the fee payment and Form 159-E remittance advice should be mailed to the following address: Federal Communications Commission, Regulatory Fees, P.O. Box 979084, St. Louis, MO 63197-9000. Additional payment options and instructions are posted at http://www.fcc.gov/fees/regfees.html .

36. The receiving bank for all wire payments is the Federal Reserve Bank, New York, New York (TREAS NYC). When making a wire transfer, regulatees must fax a copy of their Fee Filer generated Form 159-E to U.S. Bank, St. Louis, Missouri at (314) 418-4232 at least one hour before initiating the wire transfer (but on the same business day), so as not to delay crediting their account. Regulatees should discuss arrangements (including bank closing schedules) with their bankers several days before they plan to make the wire transfer to allow sufficient time for the transfer to be initiated and completed before the deadline. Complete instructions for making wire payments are posted at http://www.fcc.gov/fees/wiretran.html .

37. Regulatees whose total FY 2011 regulatory fee liability, including all categories of fees for which payment is due, is less than $10 are exempted from payment of FY 2011 regulatory fees.

38. The Commission will accept fee payments made in advance of the window for the payment of regulatory fees. The responsibility for payment of fees by service category is as follows:

• Media Services: Regulatory fees must be paid for initial construction permits that were granted on or before October 1, 2010 for AM/FM radio stations, VHF/UHF full service television stations, and satellite television stations. Regulatory fees must be paid for all broadcast facility licenses granted on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• Wireline (Common Carrier) Services: Regulatory fees must be paid for authorizations that were granted on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date. We note that audio bridging service providers are included in this category. 59

• Wireless Services: CMRS cellular, mobile, and messaging services (fees based on number of subscribers or telephone number count): Regulatory fees must be paid for authorizations that were granted on or before October 1, 2010. The number of subscribers, units, or telephone numbers on December 31, 2010 will be used as the basis from which to calculate the fee payment. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• The first eleven regulatory fee categories in our Schedule of Regulatory Fees ( see Table—FY 2011 Schedule of Regulatory Fees) pay “small multi-year wireless regulatory fees.” Entities pay these regulatory fees in advance for the entire amount of their five-year or ten-year term of initial license, and only pay regulatory fees again when the license is renewed or a new license is obtained. We include these fee categories in our Schedule of Regulatory Fees to publicize our estimates of the number of “small multi-year wireless” licenses that will be renewed or newly obtained in FY 2011.

• Multichannel Video Programming Distributor Services (cable television operators and CARS licensees): Regulatory fees must be paid for the number of basic cable television subscribers as of December 31, 2010. 60 Regulatory fees also must be paid for CARS licenses that were granted on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• International Services: Regulatory fees must be paid for earth stations, geostationary orbit space stations and non-geostationary orbit satellite systems that were licensed and operational on or before October 1, 2010. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date.

• International Services: Submarine Cable Systems: Regulatory fees for submarine cable systems are to be paid on a per cable landing license basis based on circuit capacity as of December 31, 2010. In instances where a license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the license as of the fee due date. For regulatory fee purposes, the allocation in FY 2011 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

• International Services: Terrestrial and Satellite Services: Finally, regulatory fees for International Bearer Circuits are to be paid by facilities-based common carriers that have active (used or leased) international bearer circuits as of December 31, 2010 in any terrestrial or satellite transmission facility for the provision of service to an end user or resale carrier, which includes active circuits to themselves or to their affiliates. In addition, non-common carrier satellite operators must pay a fee for each circuit sold or leased to any customer, including themselves or their affiliates, other than an international common carrier authorized by the Commission to provide U.S. international common carrier services. “Active circuits” for these purposes include backup and redundant circuits as of December 31, 2010. Whether circuits are used specifically for voice or data is not relevant for these purposes in determining that they are active circuits. In instances where a permit or license is transferred or assigned after October 1, 2010, responsibility for payment rests with the holder of the permit or license as of the fee due date. For regulatory fee purposes, the allocation in FY 2011 will remain at 87.6 percent for submarine cable and 12.4 percent for satellite/terrestrial facilities.

39. To be considered timely, regulatory fee payments must be received and stamped at the lockbox bank by the last day of the regulatory fee filing window. Section 9(c) of the Act requires us to impose a late payment penalty of 25 percent of the unpaid amount to be assessed on the first day following the deadline date for filing of these fees. 61 Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including those set forth in § 1.1910 of the Commission's rules  62 and in the Debt Collection Improvement Act of 1996 (“DCIA”). 63 We also assess administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and § 1.1940(d) of the Commission's rules. 64 These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. In case of partial payments (underpayments) of regulatory fees, the licensee will be given credit for the amount paid, but if it is later determined that the fee paid is incorrect or not timely paid, then the 25 percent late charge penalty (and other charges and/or sanctions, as appropriate) will be assessed on the portion that is not paid in a timely manner.

40. We will withhold action on any applications or other requests for benefits filed by anyone who is delinquent in any non-tax debts owed to the Commission (including regulatory fees) and will ultimately dismiss those applications or other requests if payment of the delinquent debt or other satisfactory arrangement for payment is not made. 65 Failure to pay regulatory fees can also result in the initiation of a proceeding to revoke any and all authorizations held by the entity responsible for paying the delinquent fee(s).