The Office of Personnel Management published a final rule in the Federal Register on August 23, 2011, (76 FR 52539) that changed the factor at 5 CFR 843.309(b)(2) used to convert a lump sum basic employee death benefit under 5 U.S.C. 8442(b) to 36 installment payments. The rule inadvertently stated that the revised factor at 5 CFR 843.309(b)(2) applies to deaths occurring on or after October 1, 2004. Section 843.309(b)(2) is being corrected to state that the revised factor applies when an employee's death occurs on or after October 1, 2011. Additionally, the misspelling of the word, “deceased” is being corrected in the heading to Appendix A to subpart C of part 843.

Accordingly, 5 CFR part 843 is corrected by making the following correcting amendments:

Background

The regulations in 9 CFR part 88 (referred to below as the regulations) contain minimum standards to ensure the humane movement of equines for slaughter via commercial transportation. The regulations cover, among other things, the food, water, and rest provided to such equines prior to their transportation to slaughter, standards for conveyances used to transport equines to slaughter, and certain paperwork required to accompany equines during such transportation. The regulations also require the owner/shipper of the equines to take certain actions to ensure the safety and humane treatment of equines during loading and transportation for slaughter, including seeking immediate assistance from an equine veterinarian for any equine in obvious physical distress. In addition, the regulations prohibit the commercial transportation to slaughtering facilities of equines considered to be unfit for travel, the use of electric prods on equines in commercial transportation to slaughter, and, after December 7, 2006, the use of double-deck trailers for commercial transportation of equines to slaughtering facilities. The regulations were issued pursuant to the provisions of the Federal Agriculture Improvement and Reform Act of 1996 (the Act), in which Congress, recognizing that equines being transported to slaughter have unique and special needs, authorized the Secretary of Agriculture to issue guidelines for the regulation of the commercial transportation of equines for slaughter by persons regularly engaged in that activity in the United States (see 7 U.S.C. 1901 note).

On November 7, 2007, we published in the Federal Register (72 FR 62798-62802, Docket No. APHIS-2006-0168) a proposed rule  1 to amend the regulations by adding a definition of equine for slaughter and make other changes that would extend the protections afforded by the regulations to slaughter equines delivered first to an assembly point, feedlot, or stockyard. We proposed this action to further ensure the humane treatment of such equines by helping to ensure that the unique and special needs of equines in commercial transportation to slaughter are met.

We solicited comments concerning our proposal for 60 days ending January 7, 2008. We received 93 comments by that date. They were from private citizens, a State animal industry board, livestock industry associations, horse rescue organizations, animal welfare groups, and a foreign government. Thirty-five commenters supported the rule as proposed. Four commenters opposed the rule but did not address its specific provisions. The remaining commenters raised several issues relating to the proposed rule. These issues are discussed below.

Several commenters opposed the rule because of the potential for negative economic impacts on those engaged in horse transport but did not discuss specific issues. One of these commenters expressed concern that these potential negative economic impacts could result in horse abandonment.

We have prepared an analysis of the potential economic effects of the rule, as required by the Regulatory Flexibility Act. Based on that analysis, a summary of which is set forth below, 2 we do not expect that this rule will have a significant economic impact on small entities. Similar concerns about horse abandonment were expressed when the regulations were first adopted in 2001, but horse abandonment did not increase significantly then, and therefore we do not anticipate that horse abandonment will increase as a result of this final rule.

Seven commenters asked how the regulations would be enforced and expressed concern that enforcement will not be sufficiently aggressive.

Enforcement is and will continue to be a cooperative effort between the Animal and Plant Health Inspection Service (APHIS) and State officials. APHIS will take strong measures to ensure that the requirements of the regulations are met and violations prosecuted.

Two commenters asked why, if the number of entities transporting equines to slaughter is under 100, APHIS did not work with them to gain voluntary compliance.

APHIS has worked, and continues to work, with owner/shippers to gain compliance with the regulations. However, as a result of the closure of slaughter facilities that handle equines in the United States, there is an increased need to transport the equines to intermediate points before transporting them to slaughter facilities. Therefore the risk for those equines being treated inhumanely has increased as well. For reasons that are elaborated in the final regulatory flexibility analysis, we believe that most transporters to and from intermediate points are already in compliance with most or all of the rule's requirements on a voluntary basis. However, we also need regulatory options to address the owner/shippers who have chosen not to transport them humanely.

One commenter requested that the terms “assembly point,” “feedlot,” and “stockyard” be defined in the regulations to improve clarity.

We agree with the commenter and will add definitions for these terms to the regulations. Those terms are set forth in the regulatory text at the end of this document and are intended to be consistent with common industry and dictionary definitions of those terms as well as with the definitions established by the Grain Inspection, Packers, and Stockyards Administration in 9 CFR part 201.

One commenter stated that the definition of “shipper” is too narrow and will exempt commercial shipments of equines to slaughter when those shipments are incidental to the primary activity of production agriculture.

APHIS disagrees that the definition is too narrow. The definition specifies that for purposes of these regulations, “production agriculture” means food or fiber production. Therefore, any entity that moves more than 20 equines to slaughter annually is subject to the regulations, regardless of that entity's primary line of business. We did not propose to amend the definition of “owner/shipper” already established in the regulations and are making no changes in response to this comment.

Several commenters asked for changes to the definition for equine for slaughter. Some of these commenters stated that the term should exclude equines moving from premises of origin to a market or assembly point. Others asked that the definition be expanded to include equines moving to auctions specifically.

These suggested modifications are not consistent with the definition in the Act. We are making no changes in response to these comments.

One commenter stated that because there are no equine slaughter facilities in the United States at this time, the rule will not accomplish anything.

The commenter is correct that there are currently no equine slaughter facilities in the United States, but equines are still being sent to slaughter in Mexico and Canada. These animals need protection on their way to the border. Furthermore, while some States have banned horse slaughter, not all have done so, and the possibility exists that slaughter facilities that handle equines may open in the future.

Three commenters stated a certificate of veterinary inspection and a negative equine infectious anemia (EIA) test chart may not be reliable evidence that an equine is not for slaughter.

We agree with the commenters, but note that there are other ways to tell if an equine is for slaughter; for example, horses come away from sales designated as slaughter animals on the bill of sale. We have never used the presence or absence of certificates of veterinary inspection or EIA test charts as the sole means of identifying slaughter equines.

One commenter stated that the same penalties that apply to owner/shippers who falsify documents such as certificates of veterinary inspection and EIA test charts should also apply to veterinarians who provide falsified documents.

APHIS notes that the same penalties already do apply to both owner/shippers and veterinarians who provide falsified documents.

One commenter stated that the regulations should be extended to prohibit the transport of heavily pregnant mares, and that owner/shippers should be automatically considered in violation of the regulations if a mare gives birth in transit.

APHIS notes that the regulations already provide these protections to heavily pregnant mares. The owner/shipper certificate must include a statement of fitness to travel at the time of loading, which will indicate that the equine is able to bear weight on all four limbs, is able to walk unassisted, is not blind in both eyes, is older than 6 months of age, and is not likely to give birth during the trip. These certificates are subject to review by a United States Department of Agriculture (USDA) representative and the USDA representative may direct the owner/shipper to take appropriate actions to alleviate the suffering of any equine.

One commenter stated that if an equine arrives at a slaughter facility or United States border crossing with an injury that should have prevented the equine from being transported, the owner/shipper should be found in violation of the regulations and subject to civil penalties.

APHIS notes that this is already the case. As we described above in reference to heavily pregnant mares, the owner/shipper certificate must include a statement of fitness to travel, and these certificates are subject to review by USDA representatives, who may direct the owner/shipper to take appropriate action to alleviate the suffering of any equine.

One commenter asked how APHIS defines inhumane treatment, and whether it was different for equines than for other livestock. Another commenter asked for elaboration as to why double-deck trailers specifically are considered a source of injury or discomfort to equines.

For purposes of this regulation, APHIS considers inhumane treatment to mean actions that result in the infliction of pain, discomfort, or distress on equines for slaughter. There is a sizeable body of evidence, including studies in peer-reviewed journals, showing that significantly more equines are injured during transport in double-deck trailers than in single-deck trailers. 3 Double-deck trailers do not provide adequate headroom for adult equines, which may acquire cuts and abrasions on the tops of their heads. Because equines cannot stand in a normal position with their heads raised, they cannot maintain balance as easily and may suffer injuries from falling. In addition, ramps used to load animals onto double-deck trailers are at a relatively steep angle. While other species of animal, such as sheep, can maneuver the ramps without incident, equines frequently sustain injuries from being forced up and down the steep inclines. Because of their long legs and relatively high center of gravity, equines injure their withers and heads when they jump for the small opening at the top of a ramp leading out of a double-deck trailer.

One commenter asked if APHIS had considered issuing more specific guidelines for trailer design specifications rather than banning double-deck trailers outright.

As we explained above, there is a significant body of evidence indicating that many more equines are injured during transport in double-deck trailers than in single-deck trailers. The overpasses on most U.S. interstate highways are between 14- to 16-feet high. A tall equine can be 8 feet tall to the top of its head when standing on all four legs and close to 12 feet tall when rearing. Therefore, we believe that no conveyance is capable, under normal circumstances, of traversing most U.S. highways while carrying equines standing in a normal postural position on two or more stacked levels. Moreover, even if a route was chosen that did not involve passage under overpasses, a conveyance tall enough to transport equines standing in a normal postural position on two or more stacked levels would be extremely top-heavy and prone to tipping. For these reasons we do not believe that equines can be safely and humanely transported on a conveyance that has an animal cargo space divided into two or more stacked levels.

One commenter stated that the proposed ban on electric prods is inappropriate without solid scientific evidence to support it.

We did not propose to ban the use of electric prods on equines for slaughter. The regulations already provide that electric prods may not be used on equines for slaughter except when human safety is threatened.

A number of commenters requested changes outside the scope of the current rulemaking. These changes included adding certification requirements for owner/shippers, adding inspection requirements, and increasing recordkeeping requirements. These changes, if undertaken, would have to be part of a separate rulemaking and made available for public comment before being adopted.

Many commenters suggested banning the use of double-deck trailers for transport of all equines, restricting shipments of equines to Mexico and Canada, establishing a complete ban on the use of electric prods, and outlawing slaughter of equines in the United States. These suggested actions are outside APHIS' statutory authority.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document.

This final rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget.

We have prepared an economic analysis for this rule. The economic analysis provides a cost-benefit analysis, as required by Executive Orders 12866 and 13563, which direct agencies to assess the costs and benefits of available regulatory alternatives and to select regulatory approaches that maximize benefits, reduce costs, harmonize rules across agencies, and promote flexibility. The economic analysis also analyzes the potential economic effects of this action on small entities, as required by the Regulatory Flexibility Act. The analysis is summarized below. Copies of the full analysis are available by contacting the person listed under FOR FURTHER INFORMATION CONTACT or on the Regulations.gov Web site (see footnote 1 above for instructions for accessing Regulations.gov ).

This final rule amends the regulations regarding the commercial transportation of equines to slaughter by making equines delivered to intermediate points en route to slaughter subject to the same regulations as those moved directly to slaughtering establishments. The purpose of the rule is to ensure the humane treatment of equines bound for slaughter that are moved first to an assembly point, feedlot, or stockyard.

The regulations require that the equines have access to food, water and the opportunity to rest for at least 6 hours prior to transit and following 28 consecutive hours or more of transit; adequate space during transit to prevent injury or discomfort; segregation of stallions or other aggressive equines; use of electric prods only in life-threatening situations; and certification of each equine's fitness to travel, including notation of any special handling needs.

Since 2007, no commercial equine slaughter facilities have operated in the United States. However, the amended regulations will apply to entities that transport equines within the United States for slaughter in Canada or Mexico. Shippers who transport equines from farms or feedlots to intermediate points en route to slaughter are likely to be largely in regulatory compliance voluntarily. They have an incentive to provide the animals with food, water, and care as required by the regulations because healthy equines have increased slaughter value.

The rule will ban the use of double-deck trailers, as is currently the case when equines are transported directly to slaughter. Double-deck trailers have a greater carrying capacity (45 equines) than single-deck trailers (38 equines). Fewer equines per conveyance will mean increased transportation costs on a per animal basis. Commercial transporters typically charge a flat rate per shipment, and should be little affected by the ban on double-deck trailers. However, businesses that rely on their own or hired double-deck trailers to transport equines will be negatively affected by the reduced number of animals that can be transported per trip. Notwithstanding the prevalence of small entities among businesses that may be affected, the effects of the rule are expected to be relatively minor.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are in conflict with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with Executive Order 13175, APHIS has consulted with Tribal Government officials. A tribal summary impact statement has been prepared that includes a summary of Tribal officials' concerns and of how APHIS has attempted to address them. The tribal summary impact statement may be viewed on the Regulations.gov Web site (see http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0168 ). In addition, copies may be obtained by calling or writing to the individual listed under FOR FURTHER INFORMATION CONTACT.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0332.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

Accordingly, we are amending 9 CFR part 88 as follows:

Authority for This Rulemaking and Background

In 1995 Congress, through the Department of Transportation Appropriations Act, 1 directed the FAA “to develop and implement, not later than April 1, 1996, an acquisition management system that addressed the unique needs of the agency and, at a minimum, provided for more timely and cost effective acquisitions of equipment and materials.” The Act instructed the FAA to design the system, notwithstanding provisions of Federal acquisition law, and to not use certain provisions of Federal acquisition law. In response, the FAA developed the Acquisition Management System (AMS) for the management of FAA procurement. The AMS included a system of policy guidance that maximized the use of agency discretion in the interest of best business practices. As a part of the AMS, the FAA created the Office of Dispute Resolution for Acquisition (ODRA) to facilitate the Administrator's review of procurement protests and contract disputes. In a 1996 notice  2 published in the Federal Register , the FAA announced the creation of the ODRA and stated the agency would promulgate rules of procedure governing the dispute resolution process.

In August 1998, the FAA issued a Notice of Proposed Rulemaking (NPRM)  3 that proposed regulations under 14 CFR part 17 for the conduct of protests and contract disputes under the FAA AMS. The comment period for the NPRM closed on October 26, 1998. On June 18, 1999, 4 the FAA published the final rule entitled, Procedures for Protests and Contract Disputes; Amendment of Equal Access to Justice Act Regulations, which codified (effective June 28, 1999) the procedures governing the dispute resolution process. On August 31, 1999, the FAA published a document  5 that made certain corrections to the June 1999 final rule.

In addition to the rules of procedures, ODRA operates pursuant to delegations of authority from the Administrator. In a memorandum signed by the Administrator on July 29, 1998 (1998 Delegation), 6 the Administrator generally authorized the ODRA through its Director to provide dispute resolution services including administrative adjudication of all bid protests and contract disputes under the AMS. The 1998 Delegation further provided that all final decisions must be executed by the Administrator. The 1998 Delegation was expanded by a Delegation dated March 27, 2000 (2000 Delegation), which provided additional authority to the ODRA Director “to execute and issue, on behalf of the Administrator, Orders and Final Decisions for the Administrator in all matters within the ODRA's jurisdiction valued at not more than $1 Million.”  7 The 2000 Delegation was superseded by a Delegation of Authority from the Administrator, dated March 10, 2004 (2004 Delegation), which increased the dollar limit of the final decisional authority of the ODRA Director from $1 Million to $5 Million. 8 The 2004 Delegation was superseded by another Delegation of Authority dated March 31, 2010 (2010 Delegation), which increased the dollar limit of the final decisional authority of the ODRA Director from $5 Million to $10 Million. 9

Congress provided further confirmation about the FAA's dispute resolution authority in the Vision 100-Century of Aviation Reauthorization Act of 2003 (2003 Reauthorization Act), see Public Law 108-176, § 224(b), 117 Stat. 2490, 2528 (codified as amended at 49 U.S.C. 40110(d)(4)), which confirmed the ODRA's exclusive jurisdiction. Specifically, the 2003 Reauthorization Act expressly provided at Subsection (b)(2)(4) under the title “Adjudication of Certain Bid Protests and Contract Disputes,” that “[a] bid protest or contract dispute that is not addressed or resolved through alternative dispute resolution shall be adjudicated by the Administrator, through Dispute Resolution Officers or Special Masters of the Federal Aviation Administration Office of Dispute Resolution for Acquisition, acting pursuant to Sections 46102, 46104, 46105, 46106 and 46107 and shall be subject to judicial review under Section 46110 and Section 504 of Title 5.”

The ODRA dispute resolution procedures encourage the parties to protests and contract disputes to use Alternative Dispute Resolution (ADR) as the primary means to resolve protests and contract disputes, pursuant to the Administrative Dispute Resolution Act of 1996 (“ADRA”), Public Law 104-320, 5 U.S.C. 570-579, and in consonance with Department of Transportation and FAA policies to maximize the use of ADR to the extent possible. Under these procedures, the ODRA actively encourages the parties to consider ADR techniques such as case evaluation, mediation, arbitration, or other types of ADR. In this regard, on October 15, 2001, the FAA published in the Federal Register Final Guidance (66 FR 52475) for the use of binding arbitration for purposes of resolving bid protests and contract disputes relating to procurements and contracts under the FAA AMS after receiving the concurrence of the Attorney General in accordance with Section 575 of the ADRA. Additionally, the ODRA developed an informal pre-dispute process, which provides voluntary dispute avoidance services that are available to parties upon request.

On January 12, 2011, the FAA published the Procedures for Protests and Contracts Dispute NPRM, 10 which proposed to update, simplify and streamline the procedures for bid protests against the FAA and contract disputes brought against or by the FAA. The NPRM had a 60-day comment period, which ended March 14, 2011.

Since the issuance of the FAA's rules of procedure more than 10 years ago, the ODRA's statutory and regulatory authorities for conducting a dispute resolution process evolved, along with the body of case law interpreting those rules. The ODRA's implementation of these rules of procedure also resulted in the identification of procedural issues in need of clarification to provide uniform guidance. The ODRA further identified certain aspects of the rules that need revision to reflect evolving practices at the ODRA, as well as evolving dispute resolution practices in general. An example of such practices is the increased emphasis on early intervention and dispute avoidance efforts.

In order to address the changing environment with respect to the FAA's dispute resolution process, the agency adopts the rules proposed in the Procedures for Protests and Contracts Dispute NPRM it published on January 12, 2011. Today's final rule revises part 17 to incorporate the ODRA's evolving practices; reflect the availability of a pre-dispute process; reorganize and streamline the rules for ease of use; and harmonize the existing part 17 rules with current statutory and other authority.

The final rule reorganizes and consolidates for ease of use the current part 17 procedures for adjudicating protests and contract disputes. The procedures related to the adjudicative process for protests and for contract disputes that are currently in subpart E are now included in subpart B and subpart C, respectively. The finality and review provisions have been moved from subpart F to subpart E.

Also, today's final rule includes streamlined procedures, as well as expanded coverage in areas where guidance was lacking or a process has evolved over time. Examples of expanded coverage include the addition of a section on the confidentiality of ADR (§ 17.39) and a section for filing requests for reconsideration (§ 17.47). In addition, new sections have been added to subpart F to address “other matters” like sanctions and professional conduct. Further, new subpart G has been added to address procedures for filing pre-disputes.

The NPRM proposed to update, simplify, and streamline the FAA's regulations governing the procedures for bid protests brought against the FAA and contract disputes brought against or by the FAA. It also proposed to add a voluntary dispute avoidance and early resolution process. The FAA published the NPRM in the Federal Register on January 12, 2011 with a 60-day comment period. The comment period ended on March 14, 2011. No comments were received to the rulemaking docket. You may refer to the NPRM for further details.

A discussion, organized by subpart, and excluding minor editorial revisions and clarifications, of the adopted changes to 14 CFR part 17, follows. Additionally, even though we received no comments, the FAA has made non-substantive editorial and clarifying changes to the NPRM which are explicitly identified below.

Subpart A is revised as noted below.

The following new definitions are added to this section: Adjudicative Process, Default Adjudicative Process, Counsel, Contractor, Legal Representative, and Pre-disputes. An additional editorial change was made to correct the sentence structure of paragraph (s) by relocating the phrase “of the parties.”

Paragraph (c) is revised to clarify that “other days on which Federal Government offices in Washington, DC are not open” is an excluded timeframe in calculating time limits for filings. In addition, paragraph (d) is added to allow the use of electronic filing where permitted by the ODRA.

Paragraph (d) is revised to explain the type of sanctions that could be imposed if a protective order is violated.

In subpart B, current § 17.21 (Protest remedies) is renumbered as § 17.23, and the Adjudicative process for protests section that is currently in subpart E is moved to § 17.21.

Paragraph (d)(2) is revised to make clear the standard of review for a request for a suspension or delay of the procurement. Also, paragraph (d)(3) is added to explain the possible consequences of protesters” failure to provide appropriate supporting documentation in their requests to suspend a procurement or contract performance. An additional editorial change was made to correct the sentence structure of paragraph (a)(1) by relocating the phrase “SIR or solicitation,” and to paragraph (d)(4) by substituting the word “That” for “Whether.”

In § 17.17(a), the timeframes for responding to a request for a suspension or delay of the procurement are revised according to the established ODRA practice of granting an extension until the date of the initial status conference. In § 17.17(b), the purpose of the initial status conference is clarified. In § 17.17(c), the requirement that parties file a joint statement about whether they are pursuing ADR, and the adjudication timeframes that automatically begin when no ADR is contemplated are removed. An additional editorial change was made to correct the sentence structure by substituting the word “If” for “Should” in paragraphs (d) and (e).

Paragraph (a) is revised to clarify the use of appropriate motions for dismissal or summary decision of protests and the ODRA's standard of review for such motions. Paragraph (d) is revised to clarify when such a decision is construed as a final agency order. An additional editorial change was made to provide consistency with § 17.31(a) which states the same standard in a more concise manner.

In addition to moving the procedures for the Adjudicative Process for protests from current § 17.37 of subpart E to proposed § 17.21 of subpart B, this section is revised to more fully address the management of the discovery process and the type of discovery that is authorized. This section further is revised to delineate the ODRA's standard of review for protests, the development of the administrative record, and under what circumstances ex parte communications are permitted in protests. In addition, the revisions to this section address the procedures for preparing and issuing the ODRA's findings and recommendations and final FAA order. An additional editorial change was made for clarification by replacing the words “to pursue” with “for.”

Paragraph (b) of this section is revised to identify the factors the ODRA considers in determining an appropriate remedy.

In subpart C, current §§ 17.23, 17.25, 17.27, and 17.29 are renumbered as §§ 17.25, 17.27, 17.29 and 17.31, respectively. Section 17.33 (Adjudicative process for contract disputes), which has been moved from current § 17.39 of subpart E, is added to proposed subpart C. Also, the requirement in current § 17.27 (Submission of joint or separate statements) is deleted. An additional editorial change was made to correct the sentence structure in § 17.21 (p) by substituting the words “if” for “should” and “be” for “was.” An additional editorial change was made to delete the redundant phrase “or more.”

Paragraph (a) is revised to provide additional guidance on the information to be included in the contract dispute. Paragraph (e) is added to state the ODRA retains the discretion to modify any timeframe established by the regulations in connection to contract disputes.

This section is revised to conform to current practice regarding the informal resolution process. This includes clarifications related to scheduling and assigning a potential neutral for ADR.

Section 17.31 is revised to clarify the standard for requesting a dismissal or summary decision, and the process for responding to and issuing a decision on a request for dismissal or summary decision. This section also is revised to clarify when such a decision is to be construed as a final agency order.

In addition to moving this section from current § 17.39 of subpart E, § 17.33 is revised to clarify that the process for submitting the Dispute File applies to cases initiated by the contractor or alternatively by the FAA. Also, it is revised to more fully explain what documents will be admitted into the administrative record and the timeframes for responding to written discovery. Further, the section is revised to streamline the requirements for final submissions. Additionally, the revisions state that the ODRA must conduct a de novo review using the preponderance of the evidence standard, unless a different standard is required. The revisions also identify the circumstances under which ex parte communications are permitted in contract disputes. An additional editorial change was made to § 17.33 (g)(1) to delete the unnecessary phrase “to resolve the dispute.”

The current sections under subpart D are renumbered from §§ 17.31 and 17.33 to §§ 17.35 and 17.37, respectively. Also, a new § 17.39 (Confidentiality of ADR) is added to provide for the applicability of the Administrative Dispute Resolution Act of 1996, 5 U.S.C. 571 et seq., and to clarify how ADR communications are treated. Further, current § 17.35 (Selection of neutrals for the alternative dispute resolution process) is deleted. An additional editorial correction was made to § 17.37 (e) to delete the word “informal.” An additional revision was made to § 17.39 (c) to reflect current practice permitting the parties to agree to include ADR communications in the administrative record.

As noted previously, §§ 17.37 and 17.39 of current subpart E (Default Adjudicative Process) is moved to subparts B (§ 17.21) and C (§ 17.33), respectively. In today's final rule, the requirements in current subpart F (Finality and Review—§§ 17.41, 17.43, and 17.45) are moved to subpart E. Also, § 17.47 (Reconsideration) is added to subpart E to provide the timeframe for filing requests for reconsideration and to state the standard for reconsideration according to ODRA precedent.

Subpart F is revised to add sections covering sanctions, decorum and professional conduct, the use of orders and subpoenas for testimony and document production, and Standing Orders of the ODRA Director.

A new subpart (subpart G) is added. This subpart makes clear that the pre-dispute process applies to all potential disputes arising under contracts or solicitations with the FAA. Also, it sets forth the process for filing a pre-dispute. Further, it clarifies the non-binding voluntary nature of the pre-dispute process and that it is subject to the confidentiality requirements of § 17.39.

Appendix A is revised to eliminate the description of “Minitrial” and to add a provision that addresses and clarifies the use of binding arbitration.

Changes to Federal regulations must undergo several economic analyses. First, Executive Orders 12866 and 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impact of the final rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the costs and benefits is not prepared. Such a determination has been made for this final rule.

The reasoning for this determination follows: Under the FAA's Acquisition Management System, the Office of Dispute Resolution for Acquisition (ODRA) manages the dispute resolution process, including administrative adjudication of all procurement protests and contract disputes. This final rule simplifies and clarifies the current part 17 regulations under which ODRA operates, including clarifying language and definitions, reorganization and consolidation of certain sections, and simplification and clarification of certain procedures such as filing requirements. These changes will make it easier (less costly) to use the dispute resolution process.

In addition, the final rule is updated to incorporate changes in statutory authority and additional authority delegated by the Administrator to ODRA (these changes will have no effect on expected costs). The rulemaking also will codify a voluntary dispute avoidance and early resolution process that ODRA is already using. The voluntary process is inherently less costly than the more formal dispute resolution process. The FAA expects that codification of the voluntary process will increase its use, thereby lowering the overall cost of dispute resolutions.

Since no comments were received regarding our determination in the NPRM that the benefits exceed the costs, the FAA expects the final rule to have benefits that exceed the costs. The FAA therefore has determined that this final rule does not warrant a full regulatory evaluation.

The FAA has also determined that this final rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

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

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

As noted above, the changes to part 17 are either cost beneficial or have no effect on costs. We received no comments regarding the initial regulatory flexibility analysis determination of no significant economic impact. Accordingly, the final rule will not have a significant impact on a substantial number of small entities. Therefore, as the FAA Administrator, I certify that this final rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this final rule and determined it will have little or no effect on international trade as it applies to both foreign and domestic contractors with the FAA.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $140.8 million.

This final rule does not contain such a mandate. The requirements of Title II do not apply.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We have determined that this action will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, will not have federalism implications.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this final rule qualifies for the categorical exclusion identified in paragraph 312d and involves no extraordinary circumstances.

The FAA has analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). We have determined that it is not a “significant energy action” under the executive order, it is not a “significant regulatory action” under Executive Order 12866 and DOT's Regulatory Policies and Procedures, and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this final rule.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined that there are no ICAO Standards and Recommended Practices that correspond to these regulations.

See the “Regulatory Evaluation” discussion in the “Regulatory Notices and Analyses” section elsewhere in this preamble.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. The agency determined that this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have Federalism implications.

The FAA analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

An electronic copy of a rulemaking document my be obtained by using the Internet—

1. Search the Federal eRulemaking Portal ( http://www.regulations.gov/ );

2. Visit the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies ; or

3. Access the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.

Copies may also be obtained by sending a request (identified by notice, amendment, or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW., Washington, DC 0591, or by calling (202) 267-9680.

The rulemaking docket includes a copy of the rulemaking and related documents, as well as any public comments. You may access the docket for this rulemaking at http://www.regulations.gov. Follow the online instructions to search the docket number for this action.

While no comments were filed to this rulemaking docket, anyone is able to search the electronic form of comments received into any of the FAA's dockets by using the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc. ).

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document, may contact its local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. To find out more about SBREFA on the Internet, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/ .

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations by revising part 17 to read as follows:

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instance with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. You can inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want us to let you know we received your comments on these special conditions, send us a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On October 14, 2010, Embraer S.A. applied for a design change to Type Certificate No. A60CE for installation of a side-facing belted lavatory in the EMB-505 airplane. The belted lavatory will be used as a passenger seat during takeoff and landing; therefore, comply with the provisions of §§ 23.562 and 23.785 (in addition to the certification basis as established in type certificate A60CE) and any additional requirements the FAA determines are applicable. In this case, the approval of a side-facing seat to these provisions is considered new and novel and as such will require special conditions and specific methods of compliance to certificate.

14 CFR part 23 was amended August 8, 1988, by Amendment 23-36, to revise the emergency landing conditions that must be considered in the design of the airplane. Amendment 23-36 revised the static load conditions in § 23.561, and added a new § 23.562 that required dynamic testing for all seats approved for occupancy during takeoff and landing. The intent of Amendment 23-36 is to provide an improved level of safety for occupants on part 23 airplanes. Because most seating is forward-facing in part 23 airplanes, the pass/fail criteria developed in Amendment 23-36 focused primarily on these seats. Since the regulations do not address side-facing seats, these criteria should be documented in special conditions.

The FAA decision to review compliance with these regulations stems from the fact that the current regulations do not provide adequate and appropriate standards for the type certification of this type of seat.

These requirements are substantially similar to other single-place side-facing seat installations approved for use on several different part 25 aircraft.

Under the provisions of § 21.101, Embraer S.A. must show that the model EMB 505 meets the applicable provisions of the regulations incorporated by reference in Type Certificate No. A60CE or the applicable regulations in effect on the date of application for the change to the Embraer model 505 type certificate. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.”

The following model is covered by this special condition:

Embraer S.A. EMB 505:

For the model listed above, the certification basis also includes all exemptions, if any; equivalent level of safety findings, if any; and special conditions not relevant to the special conditions adopted by this rulemaking action.

If the Administrator determines that the applicable airworthiness regulations ( i.e., part 23 as amended) do not contain adequate or appropriate safety standards for the Embraer S.A. model EMB 505 with a side-facing seat as installed on this Embraer S.A. Aircraft model because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

The FAA issues special conditions, as appropriate, as defined in § 11.19, in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.101.

The Embraer S.A., model EMB 505, will incorporate the following novel or unusual design feature:

A side-facing lavatory seat intended for taxi/takeoff and landing.

The seat is to incorporate design features that reduce the potential for injury in the event of an accident. In a severe impact, the occupant will be restrained by a 2-point seatbelt and bear on an adjacent padded wall. In addition to the design features intended to minimize occupant injury during an accident sequence, the installation will also require operational procedures that will facilitate egress after an accident, including leaving the lavatory door locked open during taxi, takeoff and landing. The adjacent forward wall/bulkhead interior structure will have padding, which will provide some protection to the head of the occupant.

The Code of Federal Regulations states performance criteria for forward- and aft-facing seats and restraints in an objective manner. However, none of these criteria are adequate to address the specific issues raised concerning side-facing seats. Therefore, the FAA has determined that, in addition to the requirements of parts and 23, special conditions are needed to address the installation of this seat installation/restraint.

Accordingly, these special conditions are for the Embraer S.A., model EMB 505, side-facing seat location. Other conditions may be developed, as needed, based on further FAA review and discussions with the manufacturer and civil aviation authorities.

As discussed above, these special conditions are applicable to the EMB 505. Should Embraer S.A. apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

The minimum acceptable standards for dynamic seat certification of the belted lavatory seat are as follows:

(a) Existing Criteria. As referenced by § 23.785(b), all injury protection criteria of §§ 23.562(c)(1) through (c)(7) apply to the occupants of the side-facing seats. Head injury criteria (HIC) assessments are only required for head contact with the seat and/or adjacent structures.

(b) Body-to-wall/furnishing contact. The seat must be installed aft of a structure such as an interior wall or furnishing that will contact the pelvis, upper arm, chest, or head of an occupant seated next to the structure. A conservative representation of the structure and its stiffness must be included in the tests. It is required that the contact surface of this structure must be covered with at least two inches of energy absorbing protective padding (foam or equivalent), such as Ensolite.

(c) Thoracic Trauma. Testing with a Side Impact Dummy (SID), as defined by 49 CFR part 572, Subpart F, or its equivalent, must be performed in order to establish Thoracic Trauma Index (TTI) injury criteria. TTI acquired with the SID must be less than 85, as defined in 49 CFR part 572, Subpart F. SID TTI data must be processed as defined in Federal Motor Vehicle Safety Standard (FMVSS) Part 571.214, section S6.13.5. Rational analysis, comparing an installation with another installation where TTI data were acquired and found acceptable, may also be viable.

(d) Pelvis. Pelvic lateral acceleration must not exceed 130g. Pelvic acceleration data must be processed as defined in FMVSS Part 571.214, section S6.13.5.

(e) Shoulder Strap Loads. Where upper torso straps (shoulder straps) are used for occupants, tension loads in individual straps must not exceed 1,750 pounds. If dual straps are used for restraining the upper torso, the total strap tension loads must not exceed 2,000 pounds.

(f) Compression Loads. The compression load measured between the pelvis and the lumbar spine of the ATD may not exceed 1,500 pounds.

(g) Emergency Evacuation. When occupied, the lavatory door must be latched open for takeoff and landing and must remain latched under the § 23.561(b) loads. The airplane configuration must meet the emergency evaluation requirements of its certification basis with the seat occupied.

(h) Lavatory Door Placard. A placard specifying the lavatory door must be latched open for takeoff and landing when occupied must be displayed on the outside of the door.

(i) Test Requirements in § 23.562 dynamic loads. The tests in § 23.562(a), (b) and (c) must be conducted on the lavatory seat. Floor deformation is required except for a seat that is cantilevered to the bulkhead.

The following are the agreed to methods of compliance and testing requirements:

(a) One longitudinal test with the SID ATD or its equivalent, undeformed floor, no yaw, and with all lateral structural supports (armrests/walls) will be accomplished.

(b) One longitudinal test with the Hybrid II ATD, deformed floor, with 10 degrees yaw, and with all lateral structural supports (armrests/walls) will be accomplished.

(c) Vertical (15 G's) test is to be conducted with modified Hybrid II ATDs with existing pass/fail criteria.

(d) The ATD can be tethered for the floor deformation test.

(e) The seatbelt is not required to have a TSO Authorization but will need to comply with the TSO-C22g Minimum Performance Standards (MPS).

On June 17, 2011, the FAA published in the Federal Register a notice of proposed rulemaking to establish Class E airspace at Copperhill, TN (76 FR 35370) Docket No. FAA-2011-0402. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes the Class E airspace extending upward from 700 feet above the surface at Copperhill, TN to provide the controlled airspace required to accommodate the new Area Navigation (RNAV) Global Positioning System (GPS) Standard Instrument Approach Procedures developed for Martin Campbell Field Airport. This action is necessary for the safety and management of IFR operations at the airport.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore, (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Martin Campbell Field Airport, Copperhill, TN.

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

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the Federal Register expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the, associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows:

This rule amends Title 14, Code of Federal Regulations, part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAP and the corresponding effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs.

The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows:

The activities of funds, including their use of derivatives, are regulated extensively under the Investment Company Act, 1 Commission rules, and Commission guidance. 2 Derivatives may be broadly described as instruments or contracts whose value is based upon, or derived from, some other asset or metric (referred to as the “underlier,” “underlying,” or “reference asset”). 3 As detailed below, 4 funds employ derivatives for a variety of purposes, including to increase leverage to boost returns, gain access to certain markets, achieve greater transaction efficiency, and hedge interest rate, credit, and other risks. 5 At the same time, derivatives can raise risk management issues for a fund relating, for example, to leverage, illiquidity (particularly with respect to complex OTC derivatives), and counterparty risk, among others. 6

The dramatic growth in the volume and complexity of derivatives investments over the past two decades, and funds' increased use of derivatives, 7 have led the Commission and its staff to initiate a review of funds' use of derivatives under the Investment Company Act. 8 The staff generally has been exploring the benefits, risks, and costs associated with funds' use of derivatives. The staff also has been exploring issues relating to the use of derivatives by funds such as: whether current market practices involving derivatives are consistent with the leverage, concentration, and diversification provisions of the Investment Company Act; whether funds that rely substantially upon derivatives, particularly those that seek to provide leveraged returns, maintain and implement adequate risk management and other procedures in light of the nature and volume of their derivatives investments; whether funds' boards of directors are providing appropriate oversight of the use of derivatives by the funds; whether existing rules sufficiently address matters such as the proper procedures for a fund's pricing and liquidity determinations regarding its derivatives holdings; whether existing prospectus disclosures adequately address the particular risks created by derivatives; and whether funds' derivative activities should be subject to any special reporting requirements.

The goal of the Commission's and staff's review is to evaluate whether the regulatory framework, as it applies to funds' use of derivatives, continues to fulfill the purposes and policies underlying the Act and is consistent with investor protection. The purpose of this concept release is to assist with this review and solicit public comment on the current regulatory regime under the Act as it applies to funds' use of derivatives. We intend to use the comments to help determine whether regulatory initiatives or guidance are needed to improve the current regulatory regime and the specific nature of any such initiatives. 9

A fund that invests in derivatives must take into consideration various provisions of the Investment Company Act and Commission rules under the Act. The fund must consider the leverage limitations of section 18 of the Investment Company Act, which governs the extent to which a fund may issue “senior securities.”  10 A fund's use of derivatives also may raise issues under Investment Company Act provisions governing diversification, 11 concentration, 12 investing in certain types of securities-related issuers, 13 valuation, 14 and accounting and financial statement reporting, 15 among others, 16 as well as under applicable disclosure provisions. 17

Derivatives generally entail the potential for leveraged future gains and/or losses that may significantly impact the overall risk/reward profile of a fund. Applying the Act's provisions relating to diversification, concentration, and investments in securities-related issuers, among others, may require determining what value to assign to the derivative and which of the derivative's multiple exposures should be measured for purposes of the relevant provision. This determination may be complex because there are at least two potential measures of the “value”  18 of a derivative for purposes of applying various provisions of the Act: the current market value or fair value reflecting the price at which the derivative could be expected to be liquidated; and the notional amount reflecting the contract size (number of units per contract) multiplied by the current unit price of the reference asset on which payment obligations are calculated. 19 In addition, derivatives often create exposures to multiple variables, such as the credit of a counterparty as well as to a reference asset on which the derivative is based.

The Commission or its staff, over the years, has addressed a number of issues relating to derivatives on a case-by-case basis. The Commission now seeks to take a more comprehensive and systematic approach to derivatives-related issues under the Investment Company Act. In particular, in this release the Commission discusses and seeks comment on the following issues, among others, relating to funds' use of derivatives:  20

• The attendant costs, benefits and risks;

• The application of the Act's prohibitions and restrictions on senior securities and leverage;

• The application of the Act's prohibition on investments in securities-related issuers;

• The application of the Act's provisions concerning portfolio diversification and concentration; and

• The application of the Act's provisions governing valuation of funds' assets.

In addition to the specific issues highlighted for comment, the Commission invites members of the public to address any other matters that they believe are relevant to the use of derivatives by funds.

As noted above, derivatives may be broadly defined to include instruments or contracts whose value is based upon, or derived from, some reference asset. Reference assets can include, for example, stocks, bonds, commodities, currencies, interest rates, market indices, currency exchange rates, or other assets or interests, in virtually endless variety. 21

Background

The final regulations that are the subject of this document are under section 142 of the Internal Revenue Code.

As published August 19, 2011 (76 FR 51879), the final regulations (TD 9546) contain errors that may prove to be misleading and are in need of clarification.

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

Background

The final regulations (TD 9546) that are the subject of this correction are under section 142 of the Internal Revenue Code.

As published August 19, 2001 (76 FR 51879), the final regulations (TD 9546) contain errors that may prove to be misleading and are in need of clarification.

Accordingly, the final regulations (TD 9546), that are the subject of FR Doc. 2011-21154, are corrected as follows:

1. On page 51879, column 3, in the preamble, under the paragraph heading “Explanation of Provisions”, line 11 from the bottom of the second paragraph, the language ““that has no market or other value at the place where the property is located”” is corrected to read “that has no market or other value at the place where the property is located”.

2. On page 51880, column 2, in the preamble, under the paragraph heading “Explanation of Provisions”, line 8 of the column, the language “Regulations but recommended removing” is corrected to read “Regulations, but recommended removing”.

Background

This document contains amendments to 26 CFR part 301 under section 6707A of the Code. On September 11, 2008, temporary regulations (TD 9425) relating to the penalty under section 6707A for the failure to include on any return or statement any information required to be disclosed under section 6011 with respect to a reportable transaction were published in the Federal Register (73 FR 52784). A notice of proposed rulemaking (REG-160868-04) cross-referencing the temporary regulations was published in the Federal Register on the same day (73 FR 52805). No public hearing was requested or held. One written comment responding to the notice of proposed rulemaking was received from the public. This comment was considered and is available for public inspection at http://www.regulations.gov or upon request. Upon due consideration, the proposed regulations are adopted as amended by this Treasury decision, and the corresponding temporary regulations are removed. The revisions are discussed in this preamble.

On September 27, 2010, the President signed into law the Small Business Jobs Act of 2010, Public Law 111-240 (124 Stat. 2504), section 2041 of which amended section 6707A of the Code. The amendments revise the amount of the penalty to make the penalty proportionate to the decrease in tax shown on the return as a result of the reportable transaction (or which would have resulted from the reportable transaction if it were respected for Federal tax purposes). The amendments also establish maximum and minimum penalty amounts. The amended penalty calculation was made retroactive to penalties assessed after December 31, 2006. To account for the change in the law, these final regulations conform to the statutory language of section 6707A, as amended. These changes are reflected in §§ 301.6707A-1(a) and 301.6707A-1(e). These final regulations follow the amended statutory language regarding the amount of the penalty enacted in the Small Business Jobs Act of 2010, but do not give further guidance on how the amount of the penalty is computed. The Treasury Department and the IRS are aware that questions have been raised regarding the 2010 amendments to section 6707A and expect to issue regulations that will provide guidance on the computation of the amount of the penalty, as amended, at a later time. Interested persons may submit comments regarding the 2010 amendments to section 6707A relating to the computation of the penalty, including how to determine the decrease in tax shown on the return and application of the maximum penalty. For information on how to submit comments, see the section on “Comments on Future Notice of Proposed Rulemaking” in this preamble.

The proposed regulations included factors the Commissioner would consider and weigh in determining whether to grant a request for rescission of the section 6707A penalty associated with a nonlisted reportable transaction. Under the law in effect at the time the proposed regulations were issued, the section 6707A penalty amount was a fixed dollar amount that did not account for the tax benefit associated with the reportable transaction. The proposed regulations included consideration of whether the penalty assessed was disproportionately larger than the tax benefit received among the factors in the Commissioner's determination. Because the 2010 amendments to section 6707A provide that the penalty is a percentage of the tax benefit associated with the reportable transaction subject to maximum and minimum limitations on the penalty amounts, consideration of whether the penalty assessed is disproportionately larger than the tax benefit received for purposes of rescission was eliminated.

Also, at the time the proposed regulations were issued, the section 6707A(e) penalty for failing to disclose the requirement to pay certain penalties in certain Securities and Exchange Commission (SEC) filings was treated in the same way as the penalty for failure to disclose a listed transaction as required under section 6011. Because a penalty for failing to disclose a listed transaction is not subject to rescission, the proposed regulations stated that the section 6707A(e) penalty for failing to make a disclosure in an SEC filing also was not subject to rescission. As a result of the 2010 amendments to section 6707A, the penalty for failure to make a disclosure in an SEC filing is no longer treated exclusively like a section 6707A penalty for failure to disclose a listed transaction as required by section 6011. These final regulations adopt the rule that the section 6707A(e) penalty for failing to disclose certain penalties in SEC filings will be rescinded if the IRS rescinds in full the section 6707A penalty for failing to disclose under section 6011 the reportable transaction that underlies the section 6707A(e) penalty.

The final regulations clarify where a late Form 8886 should be filed in order for the late submission to weigh in favor of rescinding the penalty for not filing the form as required by § 1.6011-4. These final regulations generally state that, if a taxpayer inadvertently fails to file a Form 8886 as required by § 1.6011-4 and, upon becoming aware of the failure, files an untimely but otherwise complete and proper Form 8886, the filing of the untimely disclosure statement will weigh in favor of rescission. Under § 1.6011-4, a taxpayer who has participated in a reportable transaction must file a disclosure statement, Form 8886, “Reportable Transaction Disclosure Statement,” providing detailed information about the transaction and its expected tax treatment and all potential tax benefits. The taxpayer must attach a Form 8886 to any tax return (including any amended return or application for tentative refund) that reflects participation in a reportable transaction. At the same time that the Form 8886 is first filed by the taxpayer pertaining to a particular reportable transaction, the taxpayer also must send a copy of the Form 8886 to the Office of Tax Shelter Analysis (OTSA). These final regulations generally provide that, in order to weigh in favor of rescission, an untimely disclosure statement should be filed with the office or offices where the disclosure statement should have been filed in the first instance. If the taxpayer failed to file a disclosure statement with a return (including an amended return or application for tentative refund), the taxpayer must file an amended return with the disclosure statement so that the service center can associate the untimely disclosure statement with the proper return. The amended return accompanying the untimely disclosure statement must make no amendments to the original return other than the inclusion of the untimely disclosure statement. Additionally, the taxpayer must state in the space provided for an explanation of changes on the amended return that it is filing the amended return solely because it failed to disclose a reportable transaction on its original return. An example was added to the final regulation to illustrate these rules.

A clarifying change was also made with respect to § 1.6707A-1(d)(5) relating to rescission. Reasonable cause and good faith is a factor that may weigh in favor of rescission. Part of a determination whether reasonable cause and good faith exist may depend upon whether a taxpayer reasonably believed that the Code did not require disclosure or disclosure was adequately made. To acknowledge that these are appropriate considerations, a statement was added to the regulation that the Commissioner may consider doubt as to liability to the extent it is a factor in the determination of reasonable cause and good faith. Otherwise, the Commissioner (or the Commissioner's delegate) will not consider doubt as to liability for the penalties in determining whether to grant rescission.

In addition to the changes described in this preamble, these final regulations clarify the language of the proposed regulations in a few other ways not intended to be substantive.

A commenter suggested that references to section 6011 be revised to reference either § 1.6011-4 or the other Code provisions that deal specifically with reportable transactions. In response to this comment pinpoint citations to the regulations under section 6011 were added in some examples. The language used in section 6707A refers to the general provision of section 6011 rather than to a specific regulatory section under section 6011. These regulations include language that mirrors the language used in section 6707A, but also include appropriate citations to regulations under section 6011 to add clarity to the scope of these regulations.

As discussed in this preamble, interested persons may submit comments on the future Notice of Proposed Rulemaking regarding the 2010 amendments to section 6707A relating to the computation of the penalty under section 6707A. Comments should be submitted in writing and can be mailed to Office of Associate Chief Counsel (Procedure and Administration), Re: REG-103033-11, CC:PA:B02, Room 5135, 1111 Constitution Avenue, NW., Washington, DC 20224.

It has been determined that this final rule is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are Spence Hanemann of the Office of the Associate Chief Counsel (Procedure and Administration) and Adrienne Mikolashek, formerly of the Office of the Associate Chief Counsel (Procedure and Administration).

Accordingly, 26 CFR part 301 is amended as follows:

(a) In general. Any person who fails to include on any return or statement any information required to be disclosed under section 6011 with respect to a reportable transaction may be subject to a monetary penalty. Subject to maximum and minimum limits, the penalty for failure to include information with respect to any reportable transaction is 75 percent of the decrease in tax shown on the return as a result of the transaction or the decrease that would have resulted from the transaction if it were respected for Federal tax purposes. The penalty for failure to include information with respect to a listed transaction shall not exceed $100,000 for a natural person and $200,000 for all other persons. The penalty for failure to include information with respect to any other reportable transaction shall not exceed $10,000 for a natural person and $50,000 for all other persons. The penalty with respect to any reportable transaction shall not be less than $5,000 for a natural person and $10,000 for all other persons. The section 6707A penalty is in addition to any other penalty that may be imposed.

(b) Definitions —(1) Reportable transaction. The term “reportable transaction” is defined in section 6707A(c)(1) of the Code and § 1.6011-4(b)(1) of this chapter.

(2) Listed transaction. The term “listed transaction” is defined in section 6707A(c)(2) of the Code and § 1.6011-4(b)(2) of this chapter.

(c) Assessment of the penalty —(1) In general. The Internal Revenue Service may assess a penalty under section 6707A with respect to each failure to disclose a reportable transaction within the time and in the form and manner provided by §§ 1.6011-4(d) and 1.6011-4(e) of this chapter or pursuant to the time, form, and manner stated in other published guidance. Section 1.6011-4(e) provides, in part, that a taxpayer must attach a disclosure statement to the taxpayer's return for each taxable year for which the taxpayer participates in a reportable transaction. A taxpayer also must attach a disclosure statement to each amended return that reflects the taxpayer's participation in a reportable transaction and, if a reportable transaction results in a loss that is carried back to a prior year, a taxpayer must attach a disclosure statement to the taxpayer's application for tentative refund or amended return for that prior year. In addition, a copy of the disclosure statement must be sent to the IRS Office of Tax Shelter Analysis (OTSA) at the same time that any disclosure statement is first filed by the taxpayer pertaining to a particular reportable transaction. Nonetheless, a taxpayer who is required to disclose a transaction by filing Form 8886, “Reportable Transaction Disclosure Statement,” (or successor form) with a return (including an amended return or application for tentative refund) and who is also required to disclose the transaction by filing that form with OTSA, is subject to only a single section 6707A penalty for failure to make either one or both of those disclosures. If section 6011 and the regulations thereunder require a disclosure statement to be filed at the time that a return is filed, the disclosure statement is considered to be timely filed if it is filed at the same time as the return, even if the return is filed untimely after its due date (including extensions).

(2) Examples. The rules of paragraph (c)(1) of this section are illustrated by the following examples:

(d) Rescission authority —(1) In general. The Commissioner (or the Commissioner's delegate) may rescind the section 6707A penalty if—

(i) The violation relates to a reportable transaction that is not a listed transaction; and

(ii) Rescinding the penalty would promote compliance with the requirements of the Code and effective tax administration.

(2) Requesting rescission. The Secretary may prescribe the procedures for a taxpayer to request rescission of a section 6707A penalty with respect to a reportable transaction other than a listed transaction by publishing a revenue procedure or other guidance in the Internal Revenue Bulletin.

(3) Factors that weigh in favor of granting rescission. In determining whether rescission would promote compliance with the requirements of the Internal Revenue Code and effective tax administration, the Commissioner (or the Commissioner's delegate) will take into account the following list of factors that weigh in favor of granting rescission. This is not an exclusive list and no single factor will be determinative of whether to grant rescission in any particular case. Rather, the Commissioner (or the Commissioner's delegate) will consider and weigh all relevant factors, regardless of whether the factor is included in this list.

(i) The taxpayer, upon becoming aware that it failed, in whole or in part, to disclose a reportable transaction in accordance with the requirements of § 1.6011-4 of this chapter, filed a complete and proper, albeit untimely, Form 8886 (or successor form), as required by § 1.6011-4. If the penalty is due to the taxpayer's failure to file Form 8886 (or successor form) with a return (including an amended return or application for tentative refund), in order for an untimely disclosure to weigh in favor of rescission, the taxpayer must file an amended return with the appropriate Service Center and attach a complete and proper Form 8886 (or successor form) to that amended return. The amended return filed with the untimely Form 8886 (or successor form) must not reflect any other changes to the return (including an amended return or application for tentative refund) that it amends, and the taxpayer must, in the space provided for an explanation of changes on the amended return, state the reason for filing the amended return. If the penalty is due to the taxpayer's failure to file Form 8886 (or successor form) with OTSA, in order for an untimely disclosure to weigh in favor of rescission, the taxpayer must file a complete and proper Form 8886 (or successor form) with OTSA. If the taxpayer fails to file a complete and proper Form 8886 (or successor form) with the return (including an amended return or application for tentative refund) and also fails to file a copy of the complete and proper Form 8886 (or successor form) with OTSA, incurring one penalty for both failures, then the taxpayer must, in the manner prescribed in this paragraph (d)(3)(i), file complete and proper Forms 8886 with both the Service Center and OTSA in order for the untimely disclosures to weigh in favor of rescission. This factor will weigh heavily in favor of rescission provided that—

(A) The taxpayer files the Form 8886 prior to the date the IRS first contacts the taxpayer (including contacts by the IRS with any partnership in which the taxpayer is a partner, any S corporation in which the taxpayer is a shareholder, or any trust in which the taxpayer is a beneficiary) concerning a tax examination for the tax period in which the taxpayer participated in the reportable transaction; and

(B) Other circumstances suggest that the taxpayer did not delay filing an untimely but properly completed Form 8886 until after the IRS had taken steps to identify the taxpayer's participation in the reportable transaction in question.

(ii) The failure, in whole or in part, to disclose in accordance with the requirements of § 1.6011-4 of this chapter was due to an unintentional mistake of fact that existed despite the taxpayer's reasonable attempts to ascertain the correct facts with respect to the transaction.

(iii) The taxpayer has an established history of properly disclosing other reportable transactions and complying with other tax laws.

(iv) The taxpayer demonstrates that the failure to include on any return or statement any information required to be disclosed under section 6011 arose from events beyond the taxpayer's control.

(v) The taxpayer cooperates with the IRS by providing timely information with respect to the transaction at issue that the Commissioner (or the Commissioner's delegate) may request in consideration of the rescission request. In considering whether a taxpayer cooperates with the IRS, the Commissioner (or the Commissioner's delegate) will take into account whether the taxpayer meets the deadlines described in Rev. Proc. 2007-21 (2007-1 CB 613) (or successor document) (see § 601.601(d)(2)(ii)( b ) of this chapter) for complying with requests for additional information.

(vi) Assessment of the penalty weighs against equity and good conscience, including whether the taxpayer demonstrates that there was reasonable cause for, and the taxpayer acted in good faith with respect to, the failure to timely file or to include on any return any information required to be disclosed under section 6011. An important factor in determining reasonable cause and good faith is the extent of the taxpayer's efforts to ensure that persons who prepared the taxpayer's return were informed of the taxpayer's participation in the reportable transactions; this factor will be disregarded, however, if the persons who prepared the taxpayer's return were material advisors with respect to the reportable transaction. The presence of reasonable cause, however, will not necessarily be determinative of whether to grant rescission.

(4) Absence of favorable factors weighs against rescission. The absence of facts establishing the factors described in paragraph (d)(3) of this section weighs against granting rescission. The absence of any one of these factors, however, will not necessarily be determinative of whether to grant rescission.

(5) Factors not considered. In determining whether to grant rescission, the Commissioner (or the Commissioner's delegate) will not consider collectability of, or doubt as to liability for, the penalties (except that the Commissioner may consider doubt as to liability to the extent it is a factor in the determination of reasonable cause and good faith).

(6) Example. The following example illustrates the rules of paragraph (d)(3) of this section:

Example.

In 2008, Taxpayer Z participated in a nonlisted reportable transaction for the first time. Under § 1.6011-4(e)(1) of this chapter, he was required to attach a complete and proper Form 8886 to his 2008 return, due on April 15, 2009, and to file a copy of the Form 8886 with OTSA. Taxpayer Z timely filed his 2008 return but failed to attach a Form 8886 to his return or file a Form 8886 with OTSA. On June 1, 2009, Taxpayer Z discovered his error. On June 8, 2009, Taxpayer Z filed an amended return for tax year 2008 and attached a complete and proper Form 8886 that disclosed his participation in the reportable transaction. The amended return reflected no changes from the original return and explained that the sole purpose of the amended return was to correct Taxpayer Z's failure to file a Form 8886 with his original return. On June 8, 2009, Taxpayer Z also filed a copy of the complete and proper Form 8886 with OTSA. The IRS later notified Taxpayer Z that he was subject to a penalty under section 6707A because he failed to comply with the disclosure requirements of section 6011 by not attaching Form 8886 to his return for the 2008 taxable year. The IRS properly assessed the penalty under section 6707A and, on October 15, 2010, issued notice and demand. On November 1, 2010, in accordance with Rev. Proc. 2007-21, Taxpayer Z submitted a written request for rescission of the assessed penalty. The fact that Taxpayer Z filed an untimely Form 8886 shortly after discovery of his error but before the IRS first contacted him concerning his return for the 2008 taxable year will weigh heavily in favor of rescission.

(e) Reports to the Securities and Exchange Commission (SEC) —(1) In general. Under section 6707A(e), a taxpayer who is required to file periodic reports under section 13 or section 15(d) of the Securities Exchange Act of 1934 (or is required to be consolidated with another person for purposes of these reports) must disclose in certain reports, as provided in revenue procedures or other guidance published pursuant to paragraph (e)(2) of this section, the requirement to pay each of the following penalties:

(i) The penalty imposed by section 6707A(a) for failure to disclose a listed transaction.

(ii) The accuracy-related penalty imposed by section 6662A(a) at the 30- percent rate determined under section 6662A(c) for a reportable transaction understatement with respect to which the relevant facts affecting the tax treatment of the reportable transaction were not adequately disclosed in accordance with regulations prescribed under section 6011.

(iii) The accuracy-related penalty imposed by section 6662(a) at the 40-percent rate determined under section 6662(h) for a gross valuation misstatement, if the taxpayer (but for the exclusionary rule of section 6662A(e)(2)(C)(ii)) would have been subject to the accuracy-related penalty under section 6662A(a) at the 30-percent rate determined under section 6662A(c).

(iv) The penalty described in paragraph (e)(3) of this section for failure to disclose in periodic reports filed with the SEC the requirement to pay any of the penalties described in paragraphs (e)(1)(i) through (e)(1)(iii) or paragraph (e)(3) of this section.

(2) Manner and content of disclosure. The Secretary may, by publishing a revenue procedure or other guidance in the Internal Revenue Bulletin, prescribe the manner in which the disclosure under paragraph (e)(1) of this section must be made, including identification of the specific SEC form and section thereof in which the taxpayer must make the disclosure as well as specification of the timing and contents of the disclosure.

(3) Penalty for failure to disclose in SEC filings. Any taxpayer who is required to file periodic reports under section 13 or section 15(d) of the Securities Exchange Act of 1934 (or is required to file consolidated reports with another person) may be subject to a penalty under section 6707A(b) for each failure to disclose the requirement to pay a penalty identified in paragraphs (e)(1)(i) through (e)(1)(iii) of this section in the manner specified by revenue procedure or other guidance published in the Internal Revenue Bulletin. The taxpayer also may be subject to an additional penalty under section 6707A(b) for each failure to disclose a penalty arising under this section in the manner specified by revenue procedure or other guidance published in the Internal Revenue Bulletin. The penalty provided by this paragraph (e)(3) will be rescinded if the IRS rescinds in full the penalty for failing to disclose under section 6011 the reportable transaction underlying the penalty provided by this section. Otherwise, the penalty provided by this paragraph (e)(3) is not subject to rescission.

(f) Effective/applicability date. (1) The rules of this section apply to disclosure statements that are due after September 11, 2008.

(2) The penalty calculations set forth in paragraph (a) of this section apply to penalties assessed after December 31, 2006.

The Coast Guard will enforce the safety zones established for Annual Fireworks Displays within the Captain of the Port, Puget Sound Area of Responsibility in 33 CFR 165.1332 during the dates and times noted below.

The following safety zone will be enforced from 5 p.m. on September 10, 2011 through 1 a.m. on September 11, 2011:

The following safety zone will be enforced from 5 p.m. on December 3, 2011 through 1 a.m. on December 4, 2011:

All vessel operators who desire to enter the safety zone must obtain permission from the Captain of the Port or Designated Representative by contacting the Coast Guard Sector Puget Sound Joint Harbor Operations Center (JHOC) via telephone at (206) 217-6002.

The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

This notice is issued under authority of 33 CFR 165.1332 and 5 U.S.C. 552(a). In addition to this notice, the Coast Guard will provide the maritime community with extensive advanced notification of the safety zones via the Local Notice to Mariners and marine information broadcasts on the day of the events.

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it would be impracticable to delay this rule because the event would occur before the rulemaking process would be completed. Because of the dangers posed by the pyrotechnics used in this fireworks display, the safety zone is necessary to provide for the safety of event participants, spectators, spectator craft, and other vessels transiting the event area. For the safety concerns noted, it is in the public interest to have these regulations in effect during the event.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Any delay in the effective date of this rule would expose mariners to the dangers posed by the pyrotechnics used in the fireworks display.

Hornblower Cruises and Events will sponsor the Corporate Party on Hornblower Yacht on September 17, 2011, in the navigable waters near pier 48 of the San Francisco Bay, off of San Francisco, CA. This safety zone establishes a temporary restricted area on the waters 100 feet around the fireworks barge during the loading of the barge and transit of the barge to the launch site. During the fireworks display the safety zone will extend to 1,000 feet around the launch site. The fireworks display is meant for entertainment purposes. This safety zone is issued to establish a temporary restricted area on the waters surrounding the fireworks barge during the loading, transit, and during the fireworks display. This restricted area around the launch site is necessary to protect spectators, vessels, and other property from the hazards associated with the pyrotechnics. The Coast Guard has granted the event sponsor a marine event permit for the fireworks display.

From 11 a.m. until 4 p.m. on September 17, 2011, pyrotechnics will be loaded onto a barge at Pier 50 near position 37°46′28″ N, 122°23′06″ W (NAD 83). From 7:45 until 7:55 p.m. the loaded barge will transit from Pier 50 to the launch site located at position 37°46′38.46″ N, 122°23′01.67″ W (NAD 83). The temporary safety zone will extend 100 feet from the nearest point of the barge during the loading, transit, and arrival of the pyrotechnics from Pier 50 to position 37°46′38.46″ N, 122°23′01.67″ W (NAD 83). The fireworks display will occur from 8:45 until 8:55 p.m. on September 17, 2011, during which the safety zone will extend 1,000 feet from the nearest point of the barge at position 37°46′38.46″ N, 122°23′01.67″ W (NAD 83). At 9 p.m. on September 17, 2011 the safety zone shall terminate.

The effect of the temporary safety zone will be to restrict navigation in the vicinity of the fireworks site until the conclusion of the scheduled display. Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the restricted area. These regulations are needed to keep spectators and vessels a safe distance from the fireworks display to ensure the safety of participants, spectators, and transiting vessels.

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 and 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, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

Although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Broadcast Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are pleasure craft engaged in recreational activities.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule may affect owners and operators of pleasure craft engaged in recreational activities and sightseeing. This rule will not have a significant economic impact on a substantial number of small entities for several reasons: (i) Vessel traffic can pass safely around the area, (ii) vessels engaged in recreational activities and sightseeing have ample space outside of the effected portion of the areas off San Francisco, CA to engage in these activities, (iii) this rule will encompass only a small portion of the waterway for a limited period of time, and (iv) the maritime public will be advised in advance of this safety zone via Broadcast Notice to Mariners.

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

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

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such 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 a temporary safety zone. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES.

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-0271 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before November 7, 2011. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-0271, by one of the following methods:

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

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

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

In the Federal Register of February 25, 2011 (76 FR 1058) (FRL-8863-4), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP 0E7697) by Novozymes North America, Inc., P.O. Box 576, 77 Perry Chapel Church Road, Franklinton, NC 27525. The petition requested that 40 CFR 180.950 be amended by establishing an exemption from the requirement of a tolerance for residues of lipase, triacylglycerol (CAS Reg. No. 9001-62-(1), Hereafter referred to as triacylglycerol lipase, when used as an inert ingredient as an aid in the removal of lipids in antimicrobial pesticide formulations applied to food contact surfaces. That notice referenced a summary of the petition prepared by Novozymes North America, Inc., the petitioner, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the exemption requested by establishing an exemption from the requirement under 40 CFR 180.940(a) with a limitation of triacylglycerol lipase of 500 ppm in final pesticide formulations. This limitation is based on the Agency's risk assessment which can be found at http://www.regulations.gov in document “PC Code 908800: Lipase, triacylglycerol lipase (CAS Reg. No. 9001-62-1); Human Health Risk Assessment and Ecological Effects Assessment to the Support Proposed Exemption from the Requirement of a Tolerance When Used as an Inert Ingredient in Pesticide Formulations” in docket ID number EPA-HQ-OPP-2010-0271.

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

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. * * *”

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

Consistent with section 408(c)(2)(A) of FFDCA, and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for triacylglycerol lipase including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with triacylglycerol lipase follows.

EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

The toxicology database is adequate to support the use of triacylglycerol lipase as a component of food contact sanitizing solutions. Triacylglycerol lipases are a class of lipase enzymes that catalyze the hydrolysis of fatty acid ester bonds in the triacylglycerol molecule in aqueous solutions. Like other enzymes, triacylglycerol lipase is a protein that acts as a catalyst to increase the rate of chemical reactions and is produced by all living cells.

The acute toxicity studies of triacylglycerol lipase show low toxicity. The test material is not acutely toxic by the oral or inhalation routes. It is also not a dermal irritant, eye irritant or dermal sensitizer.

Triacylglycerol lipase was also not toxic in short-term studies. In a 2 week study, Sprague-Dawley rats were dosed once daily by gavage at dose levels of 0, 0.2, 2 or 10 grams kilogram day (g/kg/day) and in a second 13 week study, Sprague-Dawley rats were administered the same test material at dose levels of 0, 0.2, 1 and 5 g/kg/day. There were no treatment related clinical signs, nor any toxicity seen in either study.

In a 2-generation reproductive toxicity study in Sprague-Dawley rats, triacylglycerol lipase was administered orally to 5 treatment groups of rats. Each group contained 24 males and 24 females and received diets containing 0, 0.5, 1.5 or 5.0% of the test material by weight in the diet (equivalent to 0, 500, 1,500 or 5,000 milligrams kilogram body weight day (mg/kg/bw/day). There were no effects of treatment with the test material on either F 0 or F 1 fertility, general reproductive performance and systemic toxicity at exposure levels of up to 5,000 mg/kg/bw/day. No treatment related effects were observed on the developmental parameters evaluated in this study at doses up to and including 5,000 mg/kg/day.

As with other proteins, inhalation exposure to lipases may lead to potential respiratory (Type 1) allergy.

Specific information on the studies received and the nature of the adverse effects caused by triacylglycerol lipase as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document “PC Code 908800: Lipase, triacylglycerol (CAS Reg. No. 9001-62-1); Human Health Risk Assessment and Ecological Effects Assessment to the Support Proposed Exemption from the Requirement of a Tolerance When Used as an Inert Ingredient in Pesticide Formulations,” p. 7 in docket ID number EPA-HQ-OPP-2010-0271.

Triacylglycerol lipase is not toxic by the oral or dermal routes. No toxicity endpoint of concern was identified in the available toxicity studies. There were also no adverse effects observed in acute toxicity studies and short-term toxicity studies at doses up to 10 kg/day. No toxicity was observed in a 2-generation reproductive toxicity study in rats at doses up to 5% (equivalent to 5,000 mg/kg/bw/day). A quantitative risk assessment for the dietary and residential exposure from the oral and dermal routes is not necessary since no endpoint of concern was identified in the available database. Inhalation exposure to enzymes, including triacylglycerol lipase, may lead to potential respiratory (Type 1) allergy.

Lipases are necessary for lipid metabolism and are found in almost all living organisms, as well as being regularly consumed in foods. As with other enzymes, lipases are common in fresh and processed foods and are consumed by humans every day.

No hazard endpoint of concern was identified for the acute and chronic dietary assessment (food and drinking water), or for the short, intermediate, and long term dermal residential assessments, therefore, acute and chronic dietary and short-, intermed-iate-, and long-term dermal residential exposure assessments were not performed.

Residential (dermal and inhalation) exposures to triacylglycerol lipase from home uses, such as components of laundry detergents and food contact surface sanitizing solutions, are also possible. The limitation of 500 ppm for tricylglycerol lipase in final pesticide formulations will result in exposures several orders of magnitude at or below 1 nanogram per cubic meter (ng/m 3 ), the common level at which allergic symptoms have not been observed.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found triacylglycerol lipase to share a common mechanism of toxicity with any other substances, and triacylglycerol lipase does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that triacylglycerol lipase does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

No developmental toxicity studies are available in the database. However, there were no adverse effects in a 2-generation reproductive toxicity study in rats at doses up to 5% (equivalent to 5,000 mg/kg/bw/day). Also no systemic toxicity was observed at doses up to 10 g/kg/day in a 2-week, sub-acute oral toxicity study in rats and no systemic toxicity observed at 5 g/kg/day in a 13-week oral toxicity study in rats. No systemic toxicity was observed in laboratory animals at high doses, indicating relatively low hazard potential. There was no evidence of clinical signs of neurotoxicity; therefore, developmental neurotoxicity study is not required. In addition, no evidence of immunotoxicity was seen in the database; therefore, an immunotoxicity study is not required. In terms of hazard, there are low concerns and no residual uncertainties regarding prenatal and/or postnatal toxicity. Based on this information, there is no concern at this time for increased sensitivity to infants and children to triacylglycerol lipase when used as an inert ingredient in pesticide formulations and a safety factor analysis has not been used to assess risk. For the same reason, EPA has determined that an additional safety factor is not needed to protect the safety of infants and children.

Given the lack of concern for hazard posed by triacylglycerol lipase, EPA concludes that there are no dietary or aggregate dietary/non-dietary risks of concern as a result of exposure to triacylglycerol lipase in food and water or from residential exposure. Residues of concern are not anticipated for dietary exposure (food and drinking water) or for residential exposure (dermal) from the use of triacylglycerol lipase as an inert ingredient in pesticide products. As discussed in this unit, EPA expects aggregate exposure to triacylglycerol lipase to pose no appreciable dietary risk given that the data show a lack of systemic toxicity at doses up to 5,000 mg/kg/day and a lack of any apparent developmental effects. Inhalation exposure to enzymes, including triacylglycerol lipase, may lead to potential respiratory (Type 1) allergy. Although there is no well-defined threshold for the induction of sensitization to the potential allergic effects from exposure to enzymes such as triacylglycerol lipase, allergic symptoms have not been observed when inhalation exposure levels are at or below 1 ng/m 3 . A limitation of 500 ppm of triacylglycerol lipase in final pesticide formulations will result in exposures several orders of magnitude below 1 ng/m 3 . This limitation will ensure that inhalation exposures to triacylglycerol lipase will be below the threshold for adverse respiratory effects and is protective of any potential respiratory allergy concerns.

Taking into consideration all available information on triacylglycerol lipase at a maximum of 500 ppm in final pesticide formulations, EPA has determined that there is a reasonable certainty that no harm to any population subgroup will result from aggregate exposure to triacylglycerol lipase under reasonably foreseeable circumstances. Therefore, the establishment of an exemption from tolerance under 40 CFR 180.940(a) for residues of triacylglycerol lipase when used as a component of food contact sanitizing solutions applied to all food contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at a maximum level in the end-use concentration of 500 ppm is safe under FFDCA section 408.

An analytical method is not required for enforcement purposes since the Agency is not establishing a numerical tolerance for residues of triacylglycerol lipase in or on any food commodities. EPA is establishing a limitation on the amount of triacylglycerol lipase that may be used in pesticide formulations. That limitation will be enforced through the pesticide registration process under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq. EPA will not register any pesticide for sale or distribution for which the final end use concentration of triacylglcyerol lipase in antimicrobial, food contact surface sanitizing solutions would exceed 500 ppm.

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

The Codex has not established a MRL for triacylglycerol lipase.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.940(a) for residues of lipase, triacylglycerol (CAS Reg. No 9001-62-1) when used as a component of food contact sanitizing solutions applied to all food contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at a maximum level in the end-use concentration of 500 ppm.

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

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

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note).

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

Therefore, 40 CFR chapter I is amended as follows:

I. General Information A. Does this action apply to me?

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

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

Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-0054 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before November 7, 2011. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-0054, by one of the following methods:

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

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

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

In the Federal Register of March 10, 2010 (75 FR 11171) (FRL-8810-8), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 9F7674) by Marrone Bio Innovations, Inc., 2121 Second Street, Suite B-107, Davis, CA 95618. The petition requested that 40 CFR part 180 be amended by establishing an exemption from the requirement of a tolerance for residues of Chromobacterium subtsugae strain PRAA4-1 T . This notice referenced a summary of the petition prepared by the petitioner, Marrone Bio Innovations, Inc., which is available in the docket via http://www.regulations.gov. There were no comments received in response to the notice of filing.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to section 408(c)(2)(B) of FFDCA, in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in section 408(b)(2)(C) of FFDCA, which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance exemption and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue * * *” Additionally, section 408(b)(2)(D) of FFDCA requires that the EPA consider “available information concerning the cumulative effects of [a particular pesticide's] * * * residues and other substances that have a common mechanism of toxicity.”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, EPA determines the toxicity of pesticides. Second, EPA examines exposure to the pesticide through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings.

Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness, and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Chromobacterium subtsugae strain PRAA4-1 T is a naturally occurring, gram-negative, violet-pigmented bacterium that was isolated from soil under an eastern hemlock ( Tsuga canadensis ) in the Catoctin Mountain region of central Maryland. The United States Department of Agriculture found this isolate of Chromobacterium subtsugae to be orally toxic to Colorado potato beetle ( Leptinotarsa decemlineata ) larvae, small hive beetle ( Aethina tumida ) larvae, southern corn rootworm ( Diabrotica undecimpunctata ) larvae and adults, and southern green stink bug ( Nezara viridula ) adults. Additional testing has shown that Chromobacterium subtsugae strain PRAA4-1 T -treated diet resulted in reduced feeding in beet armyworm ( Spodoptera exigua ), cabbage looper ( Trichoplusia ni ), tobacco budworm ( Heliothis virescens ), diamondback moth ( Plutella xylostella ), and southern corn rootworm, suggesting this microbe's insecticidal activity is due to reduction in weight or inhibition of feeding. In light of the demonstrated insecticidal and miticidal capabilities of Chromobacterium subtsugae strain PRAA4-1 T , Marrone Bio Innovations, Inc. has proposed to register pesticide products that could be applied to agricultural and greenhouse crops, including vegetables, fruit, flowers, bedding plants, ornamentals, and turf, to control certain insect and mite pests.

All mammalian toxicology data requirements supporting the request for an exemption from the requirement of a tolerance for residues of Chromobacterium subtsugae strain PRAA4-1 T in or on all food commodities have been fulfilled with data submitted by the petitioner or data waiver requests that have been granted by EPA. The toxicity tests (acute oral, dermal, and inhalation toxicity) and irritation tests (acute eye and primary dermal irritation), which addressed potential routes of exposure to the active ingredient, were all classified in Toxicity Category IV (see 40 CFR 156.62). Moreover, an acute injection toxicity/pathogenicity test indicated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic, infective, and/or pathogenic via the intravenous route of exposure, a worst-case scenario whereby the skin is bypassed as a barrier. Finally, Chromobacterium subtsugae strain PRAA4-1 T is not recognized as a dermal sensitizer, and the petitioner has reported that no hypersensitivity incidents occurred during development and testing of this bacterium. The overall conclusions from all toxicological information submitted by the petitioner are described below, while more in-depth synopses of the study results can be found in the associated Biopesticides Registration Action Document provided as a reference in Unit IX. (Ref. 1).

1. Acute oral toxicity—rat (Harmonized Guideline 870.1100; Master Record Identification Number (MRID No.) 479450-03 ). An acceptable acute oral toxicity study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic to female rats when dosed at 5,000 milligrams per kilogram (mg/kg). The median lethal dose (LD 50 ) ( i.e., a statistically derived single dose that can be expected to cause death in 50% of test animals) was greater than 5,000 mg/kg (Toxicity Category IV).

2. Acute oral toxicity/pathogenicity (Harmonized Guideline 885.3050; MRID No. 479450-23 ). Upon consideration of results of other definitive toxicological data submitted by the petitioner, EPA waived acute oral toxicity/pathogenicity testing for Chromobacterium subtsugae strain PRAA4-1 T . An acute oral toxicity study conducted on rats (MRID No. 479450-03) demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic (LD 50 greater than 5,000 mg/kg; Toxicity Category IV), while an acute injection toxicity/pathogenicity study conducted on rats (MRID No. 479450-11) showed that Chromobacterium subtsugae strain PRAA4-1 T was not toxic, infective, and/or pathogenic when the skin was bypassed as a barrier. EPA believes these data, when taken together, clearly indicate that this bacterium would not be toxic, infective, and/or pathogenic through the oral route of exposure and that further testing is not necessary.

3. Acute inhalation toxicity—rat (Harmonized Guideline 870.1300; MRID No. 479450-05 ). An acceptable acute inhalation toxicity study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic to male and female rats when exposed to 2.12 milligrams per liter (mg/L). The median lethal concentration (LC 50 ) ( i.e., a statistically derived concentration of a substance that can be expected to cause death in 50% of test animals) was greater than 2.12 mg/L (Toxicity Category IV).

4. Acute pulmonary toxicity/pathogenicity (Harmonized Guideline 885.3150; MRID No. 479450-23). Upon consideration of results of other definitive toxicological data submitted by the petitioner, EPA waived acute pulmonary toxicity/pathogenicity testing for Chromobacterium subtsugae strain PRAA4-1 T . An acute inhalation toxicity study conducted on rats (MRID No. 479450-05) demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic (LC 50 greater than 2.12 mg/L; Toxicity Category IV), while an acute injection toxicity/pathogenicity study conducted on rats (MRID No. 479450-11) showed that Chromobacterium subtsugae strain PRAA4-1 T was not toxic, infective, and/or pathogenic when the skin was bypassed as a barrier. EPA believes these data, when taken together, clearly indicate that this bacterium would not be toxic, infective, and/or pathogenic through the inhalation route of exposure and that further testing is not necessary.

5. Acute injection toxicity/pathogenicity (intravenous)—rat (Harmonized Guideline 885.3200; MRID No. 479450-11). An acceptable acute injection toxicity and pathogenicity (intravenous) demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic, infective, and/or pathogenic to rats when dosed intravenously at 3.1 × 10  6 colony-forming units per animal.

6. Acute dermal toxicity—rat (Harmonized Guideline 870.1200; MRID No. 479450-04). An acceptable acute dermal toxicity study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not toxic to rats when dosed at 5,050 mg/kg. The LD 50 was greater than 5,050 mg/kg (Toxicity Category IV).

7. Acute eye irritation—rabbit (Harmonized Guideline 870.2400; MRID No. 479450-06). An acceptable acute eye irritation study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was minimally irritating to the eyes of rabbits (irritation symptoms cleared by 24 hours; Toxicity Category IV).

8. Primary dermal irritation—rabbit (Harmonized Guideline 870.2500; MRID No. 479450-07). An acceptable primary dermal irritation study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was slightly irritating to the skin of rabbits (irritation symptoms cleared by 24 hours; Toxicity Category IV).

9. Dermal sensitization—guinea pig (Harmonized Guideline 870.2600; MRID No. 479450-08). An acceptable dermal sensitization study demonstrated that Chromobacterium subtsugae strain PRAA4-1 T was not a dermal sensitizer to guinea pigs.

In examining aggregate exposure, section 408 of FFDCA directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses).

Dietary exposure to this microbial pesticide may occur (more likely through food than drinking water); however, the lack of acute oral toxicity, as exhibited in a toxicology test on rats, and the rationales justifying the waiver of acute oral toxicity/pathogenicity testing (see Unit III.B.), support the establishment of a tolerance exemption for residues of Chromobacterium subtsugae strain PRAA4-1 T .

1. Food exposure. Any exposure to this naturally occurring soil bacterium is anticipated to be negligible. Although Chromobacterium subtsugae strain PRAA4-1 T may be applied directly to food, it is not expected to persist or accumulate in any reservoirs on plants or food commodities (the phyllosphere) because, as a soil microorganism, it is best adapted to more favorable conditions underground. Rather, after application, it likely will degrade due to predation by other biological organisms ( e.g., protists) and exposure to particular environmental factors ( e.g., sunlight and varying temperatures) (Refs. 2 and 3). Should this microbial pesticide be present on food, the acute oral toxicity and pathogenicity data/information demonstrated no toxicity, infectivity and/or pathogenicity is likely to occur with any exposure level of Chromobacterium subtsugae strain PRAA4-1 T (see additional discussion in Unit III.B.).

2. Drinking water exposure. Exposure of humans to residues of Chromobacterium subtsugae strain PRAA4-1 T in consumed drinking water is unlikely. The proposed use patterns for Chromobacterium subtsugae strain PRAA4-1 T do not include direct application to aquatic environments, thereby limiting contact with surface water. Furthermore, ground water is not expected to have significant exposure to Chromobacterium subtsugae strain PRAA4-1 T since, like other microorganisms, this bacterium would likely be filtered out by the particulate nature of many soil types (Refs. 4, 5, and 6) and is not known to survive in water or deep soil. If Chromobacterium subtsugae strain PRAA4-1 T were to be transferred to surface or ground waters that are intended for eventual human consumption ( e.g., through spray drift or runoff) and directed to wastewater treatment systems or drinking water facilities, it likely would not survive the conditions water is subjected to in such systems or facilities, including high temperatures, chlorination, pH adjustments, and/or filtration (Refs. 7 and 8). In the remote likelihood that this microbial pesticide is present in drinking water ( e.g., in water not subject to treatment systems or facilities), the acute oral toxicity and pathogenicity data/information demonstrated no toxicity, infectivity and/or pathogenicity is likely to occur with any exposure level of Chromobacterium subtsugae strain PRAA4-1 T (see additional discussion in Unit III.B.).

Dermal and inhalation non-occupational exposure to Chromobacterium subtsugae strain PRAA4-1 T is not expected as all proposed pesticide applications will take place in distinct agricultural settings. Even if dermal and inhalation non-occupational exposures were to occur, such exposures would not exceed EPA's level of concern given testing that indicated that Chromobacterium subtsugae strain PRAA4-1 T is not toxic (acute inhalation and dermal toxicity), is only slightly irritating (primary dermal irritation), is not a sensitizer (dermal sensitization), and is not pathogenic or infective (acute injection toxicity/pathogenicity) (see additional discussion in Unit III.B.).

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance exemption, EPA consider “available information concerning the cumulative effects of [a particular pesticide's] * * * residues and other substances that have a common mechanism of toxicity.”

EPA has not found Chromobacterium subtsugae strain PRAA4-1 T to share a common mechanism of toxicity with any other substances, and Chromobacterium subtsugae strain PRAA4-1 T does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that Chromobacterium subtsugae strain PRAA4-1 T does not have a common mechanism of toxicity with other substances. Following from this, therefore, EPA concludes that there are no cumulative effects associated with Chromobacterium subtsugae strain PRAA4-1 T that need to be considered. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

FFDCA section 408(b)(2)(C) provides that EPA shall assess the available information about consumption patterns among infants and children, special susceptibility of infants and children to pesticide chemical residues, and the cumulative effects on infants and children of the residues and other substances with a common mechanism of toxicity. In addition, FFDCA section 408(b)(2)(C) provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor. In applying this provision, EPA either retains the default value of 10X or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

Based on the acute toxicity and pathogenicity data/information discussed in Unit III.B., EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to the residues of Chromobacterium subtsugae strain PRAA4-1 T . Such exposure includes all anticipated dietary exposures and all other exposures for which there is reliable information. EPA has arrived at this conclusion because, considered collectively, the data ( e.g., lack of toxicity noted for oral, dermal, and inhalation routes of exposure) available on Chromobacterium subtsugae strain PRAA4-1 T do not demonstrate toxic, pathogenic, and/or infective potential to sensitive populations from exposure to this microbial pest control agent. Thus, there are no threshold effects of concern and, as a result, an additional margin of safety is not necessary.

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

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

The Codex has not established a MRL for Chromobacterium subtsugae strain PRAA4-1 T .

EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of Chromobacterium subtsugae strain PRAA4-1 T . Therefore, an exemption from the requirement of a tolerance is established for residues of Chromobacterium subtsugae strain PRAA4-1 T in or on all food commodities when applied as an insecticide or miticide and used in accordance with good agricultural practices.

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

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

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes. As a result, this action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, EPA has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, EPA has determined that Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000), do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4).

This action does not involve any technical standards that would require EPA consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note).

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

Therefore, 40 CFR chapter I is amended as follows:

I. Does this action apply to me?

The Agency included in the final rule a list of those who may be potentially affected by this action. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

In the Federal Register of March 23, 2011 (75 FR 16301) (FRL-8863-8), EPA issued a final rule establishing new tolerances and revising existing tolerances for residues of flubendiamide (40 CFR 180.639) on certain food and livestock commodities. Inadvertently, a few of the tolerance levels were transcribed incorrectly, and consequently, 40 CFR 180.639(a)(2) provides an incorrect tolerance value for the established tolerances for cattle, meat (0.60 ppm); cattle, meat byproducts (0.08 ppm); goat, meat (0.60 ppm); goat, meat byproducts (0.08 ppm); hog, meat (0.15 ppm); hog, meat byproducts (0.03 ppm); horse, meat (0.60 ppm); horse, meat byproducts (0.08 ppm); sheep, meat (0.60 ppm); and sheep, meat byproducts (0.08 ppm). As supported by recalculated beef and dairy cattle, swine, and poultry dietary burdens, and re-evaluation of previously submitted animal feeding studies, these tolerance values should be revised to 0.08 ppm; 0.60 ppm; 0.08 ppm; 0.60 ppm; 0.03 ppm; 0.15 ppm; 0.08 ppm; 0.60 ppm; 0.08 ppm; and 0.60 ppm, respectively. This document is being issued to correct the tolerance values tolerances levels that were entered incorrectly.

Section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B), provides that, when an Agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the Agency may issue a final rule without providing notice and an opportunity for public comment. EPA has determined that there is good cause for making this technical amendment final without prior proposal and opportunity for comment, because this technical amendment revises a few incorrectly transcribed tolerance levels and does not otherwise change the original requirements of the final rule. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(3)(B).

This technical amendment revises a number of incorrect tolerance levels and does not otherwise change the original requirements of the final rule. As a technical amendment, this action is not subject to the statutory and Executive Order review requirements. For information about the statutory and Executive Order review requirements as they related to the final rule, see Unit VI. in the Federal Register of March 23, 2011 (76 FR 16301) (FRL-8863-8).

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

Therefore, 40 CFR part 180 is corrected as follows:

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

The fourth seasonal apportionment of the Pacific halibut bycatch allowance specified for the shallow-water species fishery in the GOA is 150 metric tons as established by the final 2011 and 2012 harvest specifications for groundfish of the GOA (76 FR 11111, March 11, 2011), for the period 1200 hrs, A.l.t., September 1, 2011, through 1200 hrs, A.l.t., October 1, 2011.

In accordance with § 679.21(d)(7)(i), the Administrator, Alaska Region, NMFS, has determined that the fourth seasonal apportionment of the Pacific halibut bycatch allowance specified for the trawl shallow-water species fishery in the GOA has been reached. Consequently, NMFS is prohibiting directed fishing for the shallow-water species fishery by vessels using trawl gear in the GOA. The species and species groups that comprise the shallow-water species fishery are pollock, Pacific cod, shallow-water flatfish, flathead sole, Atka mackerel, skates, and “other species.” This prohibition does not apply to fishing for pollock by vessels using pelagic trawl gear in those portions of the GOA open to directed fishing for pollock. This inseason action does not apply to vessels fishing under a cooperative quota permit in the cooperative fishery in the Rockfish Program for the Central GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of the shallow-water species fishery by vessels using trawl gear in the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 30, 2011.

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

This action is required by § 679.21 and is exempt from review under Executive Order 12866.

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

The 2011 total allowable catch (TAC) of octopus in the BSAI is 150 metric tons as established by the final 2011 and 2012 harvest specifications for groundfish of the BSAI (76 FR 11139, March 1, 2011) and an apportionment from the non-specified reserve of groundfish (76 FR 17360, March 29, 2011).

In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2011 TAC of octopus in the BSAI has been reached. Therefore, NMFS is requiring that octopus caught in the BSAI be treated as prohibited species in accordance with § 679.21(b).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay prohibiting the retention of octopus in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 31, 2011.

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

This action is required by § 679.20 and § 679.21 and is exempt from review under Executive Order 12866.