I. Background A. Existing OGE Gift Prohibitions

The Standards of Conduct for Employees of the Executive Branch were initially promulgated by the Office of Government Ethics in 1992 and are codified at 5 CFR part 2635. See 57 FR 35005-35067 (August 7, 1992). Subpart B of part 2635 sets out the restrictions on the solicitation and acceptance of gifts from outside sources by employees of the Executive Branch.

Under subpart B, all executive branch employees are subject to two general prohibitions: employees shall not, directly or indirectly, solicit or accept a gift either (1) from a prohibited source, or (2) given because of the employee's official position. 5 CFR 2635.202(a). A prohibited source is broadly defined to include any person seeking official action from the employee's agency, doing or seeking to do business with the employee's agency, conducting activities regulated by the employee's agency, or having interests that may be substantially affected by the employee's official duties; additionally, prohibited source includes any organization a majority of whose members are prohibited sources. 5 CFR 2635.203(d). Beyond gifts from prohibited sources, the rule also proscribes gifts given because of the employee's official position, which means any gift that would not have been solicited, offered, or given had the employee not held the status, authority or duties of his or her Federal position. 5 CFR 2635.203(e). While the prohibition on gifts from prohibited sources largely derives from statute, 5 U.S.C. 7353(a), OGE, itself, imposed the regulatory prohibition on gifts given because of official position as a further check against appearances that an employee might use his or her official position for private gain. See 56 FR 33777, 33780 (July 23, 1991)(preamble to proposed part 2635).

Subpart B also contains several exceptions, which are found in 5 CFR 2635.204. These exceptions cover a range of situations—such as gifts from family members and friends, de minimis gifts, and gifts of free attendance at widely attended gatherings—and each exception has its own criteria and limitations. Additionally, there are several general limitations on the use of the gift exceptions, which are found at 5 CFR 2635.202(c). These limitations, for example, preclude employees from relying on the gift exceptions to solicit or coerce the offering of a gift or to accept a gift in violation of any statute.

Against this backdrop of existing regulations, President Obama imposed an additional gift prohibition on full-time, non-career (i.e., political) appointees appointed on or after January 20, 2009. Executive Order 13490 requires these full-time political appointees to sign an “Ethics Pledge.” Exec. Order 13490, section 1, 74 FR 4673, 3 CFR, 2009 Comp., p. 193, January 21, 2009. The first paragraph of the Pledge is the “Lobbyist Gift Ban,” which states: “I will not accept gifts from registered lobbyists or lobbying organizations for the duration of my service as an appointee.” Id., 13490, section 1, par. 1. The Pledge ban applies to gifts from lobbyists and organizations that are currently registered under the Lobbying Disclosure Act (LDA), 2 U.S.C. 1603, as well as any person currently identified as a lobbyist for an organization in a registration statement or quarterly disclosure report filed under the LDA. Exec. Order 13490, section 2(e). The Secretary of the Senate and the Clerk of the House of Representatives maintain searchable, online databases of registrants and lobbyists under the LDA, from which appointees and ethics counselors may determine whether a particular person is a permissible source for a gift under the Pledge ban. 1

The Office of Government Ethics issued initial interpretive guidance to implement the lobbyist gift ban in a Memorandum to Designated Agency Ethics Officials on February 11, 2009. OGE, DO-09-007, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2009/do09007.html. OGE's guidance makes clear that the lobbyist gift ban for political appointees “is in addition to the OGE prohibitions on gifts from ‘prohibited sources’ and gifts ‘given because of the employee's official position.’ ” Id. (emphasis added). Thus, for example, the ban applies to gifts from registered lobbyists and lobbying organizations even if they do not lobby the appointee's own agency or they confine their lobbying solely to the Legislative Branch. Id. Moreover, the lobbyist gift ban in the Pledge is subject to a more limited set of exceptions than those otherwise applicable under the OGE gift regulations. Id. The Pledge intentionally broadened existing gift restrictions, in connection with registered lobbyists and organizations, because of concerns that gifts sometimes may appear to be given in connection with efforts by professional lobbyists to obtain access to the political leadership in the Executive Branch. The stricter requirements were in large part a response to various scandals involving the use of gifts by lobbyists such as Jack Abramoff, and in this regard the Pledge followed similar efforts by Congress to respond to some of the same concerns. E.g., 153 Cong. Rec. H 6 (January 4, 2007)(adoption of lobbyist gift ban for House of Representatives); Honest Leadership and Open Government Act of 2007 (HLOGA), Public Law 110-81, sections 203, 305, 541, 542, 544 (various provisions pertaining to lobbyist gifts and contributions).

The OGE guidance also emphasized that the Pledge ban is not limited to gifts from lobbyists and lobbying firms that provide lobbying services to others. DO-07-007, at p. 2. Under the plain meaning of the Executive Order, the phrase “registered lobbyist or lobbying organization” includes any “organization filing a registration” under the LDA, not just lobbying firms. Exec. Order 13490, section 2(e). The ban also includes, therefore, organizations that register because they employ “at least one in-house lobbyist” to lobby on their own behalf, such as a corporation that employs its own governmental affairs officer who meets the LDA definition of lobbyist (2 U.S.C. 1602(10)). Id. Nevertheless, the OGE guidance carved out two categories of organizations from this definition, even though they may employ their own lobbyists: nonprofit organizations exempt from taxation under 26 U.S.C. 501(c)(3), and media organizations. Id. at 5-6. In consultation with the White House Counsel's Office, OGE determined that these categories of organizations did not implicate the purposes of the Pledge ban, although the guidance did provide that an appointee “still may not accept a gift if the organization employee who extends the offer is a registered lobbyist him- or herself.” Id. at 5.

In addition to the Pledge requirements for full-time political appointees, the Executive Order directed OGE “to adopt such rules or procedures as are necessary or appropriate * * * to apply the lobbyist gift ban set forth in paragraph 1 of the pledge to all executive branch employees.” Exec. Order 13490, sec. 4(c)(3)(ii). OGE is to undertake this task “in consultation with the Attorney General and the Counsel to the President or their designees.” Id. It was intended that OGE would take the opportunity to learn from its initial experience in implementing the lobbyist gift ban for political appointees and then evaluate how best to extend the limitations to the ranks of career employees, for whom different considerations may be relevant. This proposed rule is the result of that evaluation, and OGE's conclusions about the most appropriate way to extend the lobbyist gift limitation beyond just the political leadership are summarized below, under “General Approach.”

Finally, the Executive Order charged OGE with adopting rules and procedures “to authorize limited exceptions to the lobbyist gift ban for circumstances that do not implicate the purposes of the ban.” Id. at, section 4(c)(3)(iii). As discussed below, this proposed rule specifies a limited set of exceptions applicable to full-time political appointees, as well as an expanded but still limited set of exceptions applicable to all other employees. Like the initial OGE guidance Memorandum, the proposed rule also excludes certain types of organizations from the category of lobbying organizations from which gifts are banned, with some modifications and additions to the exclusions as originally described in the Memorandum. OGE intends that these exclusions from the proposed definition of “registered lobbyist or lobbying organization” would be applicable to all employees, including full-time political appointees subject to the Pledge.

After considering the myriad issues that have arisen under the lobbyist gift ban for full-time political appointees, as well as the varied circumstances of the millions of employees to whom Subpart B applies, the Office of Government Ethics has decided that the best approach for extending the lobbyist gift ban beyond the core political personnel is to add a lobbyist limitation to the existing limitations in section 2635.202(c) on the use of the gift exceptions in the OGE regulations. In this way, the lobbyist limitation would build on concepts, prohibitions and exceptions with which employees and agency ethics officials already are familiar, rather than adding a new stand-alone prohibition. This approach would extend the real benefits that OGE already has perceived as a result of the gift ban for political appointees, without introducing unnecessary complexity or restrictions that have little relation to the real ethics concerns affecting the great mass of career and other employees outside the full-time political leadership of the executive branch.

With the implementation of the current Pledge restriction for political appointees, OGE believes that the most important salutary effect has been the elimination of sometimes questionable “widely-attended gatherings,” “social invitations,” and other gifts that might have been permissible under applicable gift exceptions in section 2635.204 had the gifts not been extended by registered lobbyists or lobbying organizations. While all of the exceptions in section 2635.204 have their appropriate uses, OGE has indeed become concerned that some of the exceptions may have been used on occasion to permit gifts, such as attendance at certain events, where the nexus to the purpose of the exception is attenuated at best. See, e.g., OGE DAEOgram DO-07-047, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2007/do07047.html. (widely attended gatherings under section 2635.204(g)(2)). When such gifts are offered by persons who are paid to influence government action, the concerns obviously are magnified. However, in the period since the Pledge ban was imposed on political appointees, OGE has noted a decrease in pressure to extend some of these exceptions, because the Pledge simply makes the exceptions unavailable for gifts from lobbyists and lobbying organizations.

The proposed rule, therefore, targets this issue directly. Proposed section 2635.202(c)(6) would operate as a straightforward limitation on the use of certain gift exceptions. Unlike the Pledge ban, the proposed rule does not add a third general prohibition applicable to all employees (i.e., in addition to the general prohibitions on gifts from prohibited sources and gifts because of official position). Rather, the proposed rule would limit the ability of employees to rely on certain gift exceptions when a prohibited source—or a person giving a gift because of the employee's official position—also happens to be a registered lobbyist or lobbying organization. With respect to the large and diverse class of career and other employees who are not required to sign the Pledge, OGE has determined that there is no demonstrated need for a new general prohibition against accepting gifts from lobbyists, as long as those lobbyists are not prohibited sources for an employee and do not even extend gifts because of the employee's official position. As described above, the terms “prohibited source” and “because of the employee's official position” are already defined quite broadly. Those restrictions cover so much of the real potential for ethical harm that it would be difficult to explain to career employees why they also should be subject to discipline for failing to determine whether a gift that does not fall within those broad prohibitions is extended by a registered lobbyist. By contrast, where a gift is extended by a prohibited source or because of the employee's official position, OGE believes that it is reasonable to ask employees (and their ethics counselors) to determine whether a particular donor is a registered lobbyist or lobbying organization before the employee may rely on certain exceptions to the OGE gift prohibitions.

At the same time, under proposed section 2635.202(d), full-time political appointees who must sign the Pledge would remain subject to the lobbyist gift ban as a separate prohibition. This result is compelled by Executive Order 13490, and it means that these appointees will remain barred from accepting gifts from registered lobbyists and lobbying organizations even when the lobbyist or organization is not a prohibited source and has not offered the gift because of an appointee's official position. Apart from the plain meaning of the Executive Order, the stricter treatment of the political leadership in the executive branch is justified by experience. Most, if not all, of the executive branch officials who were implicated in the scandals involving Jack Abramoff and his associates were political appointees. Indeed, in the case of career employees, it seems unlikely that lobbyists would expend significant time and resources to cultivate access through the use of gifts if the lobbyists (and the clients they represent) were not prohibited sources. However, one could envision strategic efforts to cultivate access to the political leadership generally, even if the lobbyists do not currently qualify as a prohibited source for a particular political appointee. OGE does not discount the symbolic value of the Pledge prohibition for the political class within the Executive Branch, and this broader prophylactic restriction remains an appropriate response to public concerns about the use of gifts as a means of access by professional lobbyists.

Proposed section 2635.202(c)(6) would preclude employees from using several of the gift exceptions in section 2635.204 to accept a gift from a registered lobbyist or lobbying organization. Like the Pledge ban for full-time political appointees, the proposed rule would not permit any employee to use the following exceptions in connection with gifts from registered lobbyists or lobbying organizations: Section 2635.204(a), the $20 de minimis exception; section 2635.204(g)(2), the widely attended gathering exception (WAG); section 2635.204(h), the social invitation exception; and section 2635.204(i), the exception for meals, refreshments and entertainment from private entities in a foreign area. The de minimis and WAG provisions, in particular, are among the most widely used exceptions in the OGE gift regulations, so the change effected by the proposed new limitation is not inconsiderable. Nevertheless, as explained below, OGE believes that the proposed lobbyist limitation is appropriate for those popular exceptions, as well as the social invitation and foreign areas exceptions.

Section 2635.204(a) permits employees to accept gifts, other than cash or investments, having a market value of $20 per source on a single occasion. This de minimis exception also allows employees to accept gifts in the aggregate valued up to $50 per source in any calendar year.

OGE has determined that it is appropriate to follow the House and the Senate, as well as the President's Ethics Pledge, in sending a consistent message that there is no de minimis for lobbyist gifts. Both the House and Senate amended their de minimis gift rules, in response to the Abramoff scandals and related concerns, to preclude gifts from registered lobbyists. See House Ethics Manual at 29-30 (2008); Rule XXXV of the Standing Rules of the Senate, par. 1(a)(2)(B); HLOGA, sec. 541. While the OGE de minimis exception is set at only $20, as compared to $50 for the House and Senate, it is nonetheless clear that both Houses of Congress intended to preclude lunches and other items from lobbyists even if the gifts were valued well below the de minimis threshold. See, e.g., Senate Select Committee on Ethics, “New Ethics Rules: Gifts and Events” (September 25, 2007) (“Senators and staff can no longer accept gifts of any value from registered lobbyists”). Moreover, although OGE believes that the rules and circumstances of the Executive Branch ethics program often are unavoidably different from those of Congress, OGE also is respectful of the “Sense of the Congress,” expressed in section 701 of HLOGA, that similar restrictions should apply. OGE's experience in implementing the Pledge ban for political appointees in the Executive Branch has not indicated any significant problems with eliminating the de minimis exception for lobbyist gifts, and OGE believes it is time to follow suit for the rest of the Executive Branch.

Of course, OGE cannot deny the convenience of the $20 de minimis rule as currently applied. It provides a bright line test, and employees generally can accept a gift within this limit without even having to determine whether the donor is a prohibited source or is extending the offer because of the employee's official position—let alone without having to determine whether the source is registered under the Lobbying Disclosure Act. Nevertheless, where the donor is a prohibited source or is offering a gift because of the employee's position, OGE believes it is not too much to ask of employees and their ethics counselors to determine whether the source also is a registered lobbyist or lobbying organization. In fact, one could say that heightened sensitivity in the use of any of the gift exceptions, including the de minimis provision, would be a positive result. As OGE states in the introduction to the gift exceptions: “Even though acceptance of a gift may be permitted by one of the exceptions contained in paragraphs (a) through (l) of this section, it is never inappropriate and frequently prudent for an employee to decline a gift offered by a prohibited source or because of his official position.” 5 CFR 2635.204. Requiring employees to stop and consider whether a potential donor is engaged in professional lobbying activities will further encourage this kind of prudential attitude.

The exception at section 2635.204(g)(2) permits employees to accept offers of free attendance at certain widely attended gatherings (WAG), where an agency designee has determined that attendance is in the interest of the agency. This exception has been used to permit attendance of a very wide range of events, from substantive activities (such as conferences and seminars) that provide a significant training opportunity, to purely social functions (such as fundraisers and gala celebrations) that provide an opportunity for government employees and others to interact in a more relaxed social setting.

As already noted above, OGE has perceived some instances over the years in which the WAG exception was used to permit attendance at events, particularly social events, where the nexus to the government's interest was attenuated. In fact, OGE issued a memorandum to agency ethics officials in December 2007 that was partly a call for agencies to focus on the real purposes of the exception. DO-07-047. The WAG exception raises particular concerns when free attendance is provided by a lobbyist. That is for the simple reason that the “gift” involved is something that the employee will enjoy in the very company of the lobbyist. If one views the problem of lobbyist gifts as the mere potential for some quid pro quo, then probably an invitation to a gala ball will not directly influence an official to take action benefiting the giver. But it is increasingly recognized that the more realistic problem is not the brazen quid pro quo, but rather the cultivation of familiarity and access that a lobbyist may use in the future to obtain a more sympathetic hearing for clients. As one scholar has observed, “the public's concern is not just that * * * officials will engage in blatant [selling of their services] to lobbyists but, more subtly, that they will become partial to the causes of lobbyists' clients because they spend a lot of time in lobbyists' company.” Anita S. Krishnakumar, Towards a Madisonian, Interest-Group-Based, Approach to Lobbying Regulation, 58 Ala. L. Rev. 513, 524-25 (2007). The WAG exception, at least when used in connection with social events, can provide the opportunity for a lobbyist not only to discuss any pending issues with the employee but also to foster a social bond that may be of greater use in the long run. Therefore, proposed section 2635.202(c)(6) would preclude the use of the WAG exception where the gift is offered by a registered lobbyist or lobbying organization.

Having said this, OGE also knows that widely attended gatherings still can serve important government purposes. For example, OGE does not believe that employees, including political appointees subject to the Pledge, should be precluded categorically from accepting offers of free attendance at substantive events that would provide a legitimate educational or professional development benefit that furthers the interests of an agency. Therefore, under the definition of registered lobbyist or lobbying organization at proposed section 2635.203(h)(4), discussed below, OGE is proposing to exclude nonprofit professional associations, scientific organizations and learned societies, at least with respect to the educational and professional development activities of those entities. This will preserve a “substantive core” of the WAG exception, regardless of whether the donor is registered under the LDA.

A final word is in order concerning the first paragraph of section 2635.204(g), which permits free attendance at events where an employee is speaking or presenting information on behalf of the government. As explained in OGE's initial Memorandum concerning the Pledge ban, the restriction on the use of section 2635.204(g)(2) does not extend to section 2635.204(g)(1):

DO-09-007, at 4 n.3. Likewise, proposed section 2635.202(c)(6) would not affect the ability of employees to accept offers of free attendance in connection with official speaking engagements, as provided in section 2635.204(g)(1). The same would be true with respect to agency support personnel “whose presence at the event is deemed essential under agency procedures to the speaker's participation at the event.” OGE DAEOgram DO-10-003, http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2010/do10003.html.

Section 2635.204(h) permits employees to accept offers of free attendance at social events attended by several persons, provided that the invitation is not from a prohibited source and no attendance fee is charged to anyone. This exception has been used, for instance, to permit employees to attend such events as movie screenings and Washington cocktail parties, as illustrated by the official examples following the regulatory text. See 5 CFR 2635.204(h)(Examples 1 & 2).

For reasons similar to those discussed above in connection with the WAG exception, OGE has determined that the social invitation exception should be unavailable to employees for lobbyist gifts. It is no secret that social events of this type sometimes are used as “lobbying tools.” Jim Puzzanghera, “Courtship starts with free film screenings,” Los Angeles Times, December 31, 2007, http://articles.latimes.com/2007/dec/31/business/fi-mpaa31 (lobbyist describes cultivation of relationships through social events as “soft lobbying”). It is true that section 2635.204(h) already has an important limitation in that it may not be used to accept gifts from a prohibited source. Nevertheless, even though a lobbyist might not have any matters currently pending before a particular employee's agency, the lobbyist could use social events as a way to build general good will with a class of employees in case access is needed for a future issue or client. It is important to remember that the lobbyist limitation in proposed section 2635.202(c)(6) will not even come into play unless the gift is otherwise prohibited under the OGE Standards. So the only time the limitation would preclude an employee from using the social invitation exception would be when a lobbyist has at least extended the invitation because of the employee's official position, even if the lobbyist is not technically a prohibited source at that time. The potential for harm, while perhaps latent, is nonetheless real.

Section 2635.204(i) permits employees to accept food, refreshments or entertainment in the course of official attendance at certain meetings or events in foreign areas. The meeting or event must involve non-U.S. citizens, or representatives of foreign governments or other foreign entities, but the source of the gift itself may not be a foreign government as defined in 5 U.S.C. 7342(a)(2). The market value of the gift also may not exceed the per diem rate specified for the foreign area by the Department of State. This exception was included in the OGE Standards at the request of several agencies with overseas operations who were concerned that, without such an exception, “employees will be required to decline the customary invitations of hospitality that frequently accompany the transaction of business in many foreign countries and that the foreign nationals and entities involved may be offended.” 57 FR 35021.

Proposed section 2635.202(c)(6) would bar employees from relying on this foreign areas exception if the gift is offered by a registered lobbyist or lobbying organization. OGE does not doubt the utility or reasonableness of this exception. However, OGE believes that the exception should not be a vehicle for registered lobbyists and lobbying organizations to entertain government employees with hospitality, which could raise some of the same concerns as those discussed above in connection with WAGs and social invitations. It is not clear how many registered lobbyists or lobbying organizations even would be geographically positioned to extend such offers in foreign areas. However, OGE notes that some foreign private entities do register under the LDA and may do so in order to avoid the more onerous registration requirements of the Foreign Agents Registration Act. See 22 U.S.C. 613(h); S. Rep. 105-147, at 4 (1997). Where the private entity engages in lobbying activity for which it is registered under the LDA, OGE has determined that there is sufficient reason to preclude an employee from accepting food and entertainment in the company of that entity.

Even for full-time political appointees, the Pledge gift ban recognizes that certain gift exceptions are reasonable even though the donor is a registered lobbyist or lobbying organization. See Executive Order 13490, sec. 2(c)(3) (exceptions to Pledge gift ban). The Pledge permits full-time political appointees to accept the following: Gifts based on a personal relationship, under section 2635.204(b); discounts and similar benefits, under section 2635.204(c); gifts resulting from a spouse's business or employment, under section 2635.204(e)(1); customary gifts provided by prospective employers, under section 2635.204(e)(3); gifts to President or Vice President, under section 2635.204(j); gifts authorized by an OGE-approved supplemental regulation, under section 2635.204(k); and gifts accepted under specific statutory authority, under section 2635.204(l). As explained in OGE's February 11, 2009 memorandum: “Because the lobbyist gift ban is very broad, these common sense exceptions are necessary to avoid potentially absurd results. Thus, an appointee may accept a birthday present from his or her spouse who is a registered lobbyist or sign up for a training course sponsored by a registered lobbying organization that provides a discount for Federal Government employees.” DO-09-007, at 3. The proposed rule extends these exceptions likewise to career employees and others not subject to the Pledge.

Additionally, OGE has determined that there is good reason to permit employees—other than the full-time political appointees subject to the Pledge—to use three other exceptions that are not applicable to the Pledge restriction. The additional exceptions are: Section 2635.204(d), for awards and honorary degrees; section 2635.204(e)(2), for gifts resulting from an employee's outside business or employment; and section 2635.204(f), for certain benefits in connection with permissible political activities.

Section 2635.204(d) sets forth specific criteria under which employees may accept “bona fide awards” for meritorious public service or achievement. The award must not be extended by a person with interests that may be substantially affected by the employee's duties or by an association of such persons. Furthermore, awards of cash or awards valued in excess of $200 require a written determination by an agency ethics official that the award is “made as part of an established program of recognition” under which (1) awards have been made on a regular basis in the past or are funded to ensure their continuation in the future and (2) the selection of recipients is made pursuant to written standards. 5 CFR 2635.204(d)(1). Although probably used less frequently, section 2635.204(d) also sets forth criteria under which an employee may accept an honorary degree from an institution of higher education, based on a written determination by an agency ethics official that the timing of the degree will raise not raise questions concerning the employee's impartiality in any matter affecting the institution. 5 CFR 2635.204(d)(2).

OGE has determined that the limitation of proposed section 2635.202(c)(6) should not preclude employees from relying on section 2635.204(d). For one thing, section 2635.204(d) follows a longstanding interpretation that bona fide awards for meritorious public service and achievement fall outside the prohibition of salary supplementation in 18 U.S.C. 209, “primarily because the grantors are typically detached from and disinterested in the performance of the public official's duties.” 8 Op. O.L.C. 143, 144 (1984); see 57 FR 35018. Consequently, the exception itself already includes both substantive and procedural safeguards that OGE believes are adequate to prevent real or perceived abuses when employees outside the political leadership are granted awards, even where the granting organization is registered under the LDA. Permitting employees to rely on this exception also would further one of the specific goals recently articulated by the Office of Science and Technology Policy concerning the promotion of professional development of government scientists and engineers. See John P. Holdren, Director of the Office of Science and Technology Policy, Memorandum for the Heads of Executive Departments and Agencies, December 17, 2010 (OSTP Memorandum). Among other things, the OSTP Memorandum states that agencies should establish policies that “[a]llow Government scientists and engineers to receive honors and awards for their research and discoveries with the goal of minimizing, to the extent practicable, disparities in the potential for private-sector and public-sector scientists and engineers to accrue the professional benefits of such honors and awards.” Id. at 4.

With respect to honorary degrees, under section 2635.204(d)(2), even the Pledge currently permits acceptance in most cases. That is because OGE, in consultation with the White House Counsel's Office, has excluded 501(c)(3) organizations from the category of registered lobbying organizations from which appointees may not accept gifts under the Pledge. DO-09-007, at 5. A large percentage of institutions of higher education, as defined in 20 U.S.C. 1001, are such 501(c)(3) organizations. Moreover, those institutions of higher education that OGE has encountered that are not 501(c)(3) organizations have been state and local universities and colleges. As to the latter, OGE already has advised informally that such public institutions are so similar to the educational institutions that have 501(c)(3) status that the Pledge ban likewise should be inapplicable to them. For the same reasons, OGE also is proposing to define “registered lobbyist or lobbying organization” to exclude all institutions of higher education (see discussion of proposed section 2635.203(h)(2) below). In view of this proposed definition, arguably it is redundant to exclude honorary degrees from the limitation in proposed section 2635.202(c)(6). Nevertheless, for purposes of simplicity, OGE proposes to include a general reference to section 2635.204(d) in its entirety in section 2635.202(c)(6), thus clarifying that employees may accept both awards and honorary degrees notwithstanding the lobbyist gift limitation.

Section 2635.204(e)(2) is one of three separate, but related exceptions in paragraph (e) of 2635.204, all of which pertain to gifts offered because of some non-federal business or employment. Paragraphs (e)(1) and (e)(3), which respectively cover gifts resulting from a spouse's business or employment and customary gifts given in connection with an employee's discussions with a prospective employer, are already applicable to the Pledge gift ban. Paragraph (e)(2), however, is not applicable to the Pledge ban, in large part because this exception covers benefits resulting from an employee's own current outside employment or business, and there was a general assumption that the political leadership in the Executive Branch would have little need of such an exception while they focused their time and effort on the business of the Administration. Indeed, for many Pledge signers, there are significant ethical limitations and restrictions on their ability to engage in outside employment and business activities. See 5 U.S.C. app. 501-505; 5 CFR part 2636; Exec. Order 12674, section 102, 54 FR 15159, 3 CFR, 1989 Comp., p. 215.

However, OGE has determined that section 2635.204(e)(2) does serve a significant purpose for career employees and others who are not subject to the Pledge. Many employees have non-Federal employment and business activities that are consistent with the ethics rules and in fact may have been approved by agency ethics officials. The vast majority of Executive Branch employees are not subject to the limitations on outside business and employment activity cited above, and their outside activities fulfill many personal and professional goals that are perfectly legitimate. For example, most part-time members of Federal commissions and boards have their regular employment with non-Federal entities; even though it is generally expected that such employees will not be registered lobbyists themselves, no doubt many of them work for entities that are registered under the LDA. See 75 FR 67397-67399 (November 2, 2010) (proposed Office of Management and Budget guidance does not “restrict the appointment of individuals who are themselves not Federal registered lobbyists but are employed by organizations that engage in lobbying activities”). Another example would be full-time career employees who have approved outside activities with entities that are registered under the LDA, such as physicians who have been authorized to engage in the outside practice of medicine with hospital organizations that also happen to employ lobbyists. See 5 CFR 5501.106(c)(3)(A) (employees of Food and Drug Administration may engage in outside medical practice with regulated entities under certain circumstances). The exception for benefits resulting from outside business or employment is useful and appropriate for these employees, particularly given the important proviso in section 2635.204(e)(2) that such benefits may not be offered or even “enhanced” because of employees' official status. See 5 CFR 2635.204(e)(2) (Example 1).

Section 2635.204(f) applies to employees who are permitted by the Hatch Act Reform Amendments of 1993, 5 U.S.C. 7323, to take an active part in political management or political campaigns. The exception allows such employees to accept meals, travel and other benefits when provided in connection with their outside political activities, if the gift is from a political organization as described in 26 U.S.C. 527(e). Section 2635.204(f) was promulgated by OGE so that the gift restrictions would not “hamper the political activities” of employees, where those activities are themselves authorized by Congress (originally by the Hatch Act and later more extensively by the Hatch Act Reform Amendments). 56 FR at 33782; see also 61 FR 50689, 50690 (September 27, 1996).

OGE believes that this exception should remain available to employees—other than those appointees subject to the Pledge—out of consideration for the rights of employees to participate in political activities. It is not clear to OGE how likely it is that a political organization, under 26 U.S.C. 527(e), would also be a registered lobbying organization, but OGE thinks it best to send a clear message to employees that nothing in the lobbyist gift limitation is intended to interfere with their existing rights to participate in political activities.

As discussed above, the proposed rule leaves the lobbyist gift ban of Executive Order 13490 in place as a separate restriction for appointees required to sign the Pledge, in addition to the general restrictions in the OGE regulations on gifts from prohibited sources and gifts given because of official position. Proposed section 2635.202(d) would accomplish this by reiterating the Pledge ban and emphasizing that it is in addition to the prohibitions set forth in section 2635.202(a). The proposed provision allows only those exceptions permitted expressly by section 2(c)(3) of the Executive Order: Gifts based on a personal relationship, under section 2635.204(b); discounts and similar benefits, under section 2635.204(c); gifts resulting from a spouse's business or employment, under section 2635.204(e)(1); customary gifts provided by prospective employers, under section 2635.204(e)(3); gifts to the President or Vice President, under section 2635.204(j); gifts authorized by an OGE-approved supplemental regulation, under section 2635.204(k); and gifts accepted under specific statutory authority, under section 2635.204(l). Note, however, that the definition of “registered lobbyist or lobbying organization,” in proposed section 2635.203(h), would apply to the Pledge restriction at proposed section 2635.202(d); that proposed definition, as discussed below, would exclude certain organizations from the Pledge ban.

Proposed section 2635.203(h) defines the phrase “registered lobbyist or lobbying organization.” This definition would apply both to the limitation on the use of the gift exceptions, in proposed section 2635.202(c)(6), and the additional prohibition for full-time political appointees (the Pledge ban), in proposed section 2635.202(d).

The proposed definition mainly follows the definition in section 2(e) of Executive Order 13490. The definition includes any lobbyist or organization that is currently registered under the Lobbying Disclosure Act (LDA) or identified as a lobbyist in a registration. As discussed above, the definition in the Executive Order covers not only lobbying firms that provide services to others but also organizations that employ in-house lobbyists to lobby on behalf of the organization itself. The proposed rule would retain this scope of coverage. Also following the Executive Order, the proposed definition does not extend to persons or organizations that simply retain “outside” lobbyists or lobbying firms: Organizations that are merely “clients” but not actually employers of lobbyists do not have to file registrations under the LDA, even though they may be listed as clients in registrations filed by the lobbyists or firms they retain. See DO-09-007, at 2-3.

Like the current OGE guidance applicable to the Pledge ban, the proposed definition emphasizes, in the Note following section 2635.203(h), that employees may determine whether the source of a gift is a lobbyist or a lobbying organization by relying on the searchable, online databases of lobbyists and registrants maintained by the Secretary of the Senate and the Clerk of the House, pursuant to the Lobbying Disclosure Act (LDA), 2 U.S.C. 1605(a). 2 The proposed Note also includes guidance about how to determine whether a given registrant or lobbyist currently is registered or listed; the guidance with respect to the de-listing or cessation of the lobbying activity of a particular lobbyist is derived from the proposed guidance issued by the Office of Management and Budget concerning “Appointment of Lobbyists to Federal Boards and Commissions.” OMB, Proposed Guidance, A1, 75 FR 67397-67399 (November 2, 2010). Additionally, the Note provides that, “[w]ith respect to organizations that have subsidiaries, parents or affiliates that are separate legal entities, employees need only determine the registration status of the entity that offered the gift.” Since the Pledge ban went into effect, OGE has fielded numerous questions about how to treat gifts from an organization that is not registered but that has a parent, subsidiary or affiliate that is registered. In answering these questions, OGE generally has relied on the guidance provided by the Secretary of the Senate and the Clerk of the House with respect to the registration requirements for such entities:

Secretary of the Senate & Clerk of the House of Representatives, Lobbying Disclosure Act Guidance (June 15, 2010), section 5 http://lobbyingdisclosure.house.gov/amended_lda_guide.html. With the understanding that parents, subsidiaries and affiliates file their own registrations without regard to each other's activities (albeit with certain accommodations for a single filing in limited circumstances, id. ), OGE believes that the clearest and most practical approach is to search the LDA database only for the legal entity that offered the gift.

The proposed definition of registered lobbyist or lobbying organization provides four exclusions. These exclusions pertain to organizations that may be registered under the LDA, but which do not pose the concerns at which the Executive Order was directed. Two of these exclusions—for 501(c)(3) organizations and media organizations—are already found in the current OGE guidance concerning the Pledge ban. See DO-09-007, at 5-6. A third exclusion—for institutions of higher education—largely follows from OGE's existing guidance on 501(c)(3) organizations and in fact has been the subject of informal advice from OGE to agency ethics officials. The fourth exclusion—for nonprofit professional associations, scientific organizations and learned societies engaging in educational or professional development activities—would be new, although the purposes of this exclusion are related to those for 501(c)(3) organizations and institutions of higher education. These four exclusions are discussed in more detail below.

It is important to remember that the mere fact that an entity is excluded from the definition of registered lobbyist or lobbying organization does not necessarily mean that a gift from such an organization may be accepted. Rather, it means only that a gift from such an organization would not trigger the lobbyist limitation at proposed section 2635.202(c)(6) or the separate gift prohibition for Pledge signers at proposed section 2635.202(d). Where the gift happens to be given by a prohibited source, or given because of the employee's official position, the employee still must rely on an applicable exception in section 2635.204 to accept the gift. However, in some cases, this will mean that an employee could rely on an exception that otherwise would be unavailable, either under section 2635.202(c)(6) or section 2635.202(d), if the source were not excluded from the definition of registered lobbyist or lobbying organization. For example, any employee (including Pledge signers) could use the $20 de minimis exception to accept a $10 lunch from a prohibited source that is a 501(c)(3) organization, even though that organization may be registered under the LDA. However, if that same organization offered to pay for a $45 dinner, and no other gift exception in section 2635.204 applied, the gift would violate the bar on gifts from a prohibited source.

OGE's original guidance concerning the Pledge gift ban excluded “charitable and other not-for-profit organizations that are exempt from taxation under 26 U.S.C. 501(c)(3)” for several reasons: They are limited by law as to the lobbying in which they may engage; their exempt purposes often involve activities of particular interest and value to agencies (e.g., educational, charitable, scientific); and similar considerations are reflected in the Government Employees Training Act (5 U.S.C. 4111). DO-09-007, at 5. In OGE's experience, the exclusion for 501(c)(3) organizations generally has worked well for the full-time political appointees subject to the Pledge, and it makes sense to extend it now to the provisions covering all employees, at proposed section 2635.203(h)(1).

The proposed rule would make one adjustment to the current OGE guidance concerning gifts from registered 501(c)(3) organizations. OGE's guidance Memorandum states that, notwithstanding the exclusion of 501(c)(3) organizations, “appointees still may not accept a gift if the organization employee who extends the offer is a registered lobbyist him- or herself.” Id. Based on experience in implementing the Pledge ban for political appointees, OGE has decided not to carry this limitation forward into proposed section 2635.203(h)(1). For one thing, this limitation has proven difficult to apply in practice. For example, in determining whether an invitation to an event has actually been “extended” by an individual who is the organization's lobbyist, should one focus on who officially signed the invitation letter, who e-mailed a PDF copy of the signed letter, or who called the employee to say that a written invitation is coming? Moreover, the proviso has not proved to be a meaningful limitation anyway, because the same invitation can be re-sent through a different messenger who is not listed as a lobbyist for the organization. OGE believes that the clearest and most straightforward approach is to exclude 501(c)(3) organizations entirely from the definition, without regard to which organization official conveys the offer.

One of the primary reasons that OGE, in consultation with the White House Counsel's Office, originally excluded 501(c)(3) organizations from the Pledge gift ban was a desire to avoid creating barriers to interaction between employees and educational institutions. However, after issuing the initial guidance Memorandum on the Pledge gift ban, it came to OGE's attention that some state and local universities and colleges have not obtained separate 501(c)(3) status, usually for reasons pertaining to state law. Because it made little sense to discriminate between those state institutions that have obtained 501(c)(3) status and those that have not, OGE has advised agencies informally that the latter are not covered by the Pledge ban. Proposed section 2635.203(h)(2) would codify this guidance. For this purpose, the proposed rule incorporates the definition of “institution of higher education” in 20 U.S.C. 1001, which includes both “public and nonprofit” institutions. Therefore, under proposed section 2635.203(h)(2), private for-profit institutions of higher education are not included as part of the exclusion from the definition of “registered lobbyist or lobbying organization” and are covered by the Pledge ban.

OGE's initial guidance Memorandum concerning the Pledge gift ban indicated that it was not the intent of the Executive Order to bar gifts from media organizations. Relying on some of the concerns underlying the LDA, as well as past Executive Branch concerns about facilitating interactions between government officials and members of the press, OGE explained the exclusion as follows: “The LDA itself reflects solicitude for the unique constitutional role of the press in gathering and disseminating information. See 2 U.S.C. 1602(8)(B)(ii). Likewise, the lobbyist gift ban is not intended to erect unnecessary barriers to interaction between appointees and journalists. This is consistent with concerns about the application of the OGE gift prohibitions to certain press dinners shortly after the Standards of Conduct became effective. See Memorandum from the Counsel to the President to All Agency Heads, December 21, 1993 (suspending enforcement of gift rule with respect to press dinners, pending revision of rule). “Therefore, an appointee may accept a gift from an employee of a media organization, as long as the gift is permissible under the OGE gift rules, including any applicable exceptions.” DO-09-007, at 5-6.

For the same reasons, OGE now proposes to carry forward the media organization exclusion in the definition at proposed section 2635.203(h)(3). The proposed rule defines media organization by reference to the definition in the LDA, 2 U.S.C. 1602(11). OGE sees this as a broad definition, covering print, broadcast, electronic and other kinds of mass communications organizations.

OGE has added one limitation, however, that was not included in the original guidance Memorandum. The proposed rule excludes a media organization only with respect to gifts that are made in connection with the organization's information gathering or dissemination activities. This limitation brings the exclusion closer to the purposes of the Pledge and the LDA, as the latter expressly excludes media contacts from the definition of “lobbying contact” only when those contacts are made for the purpose of “gathering and disseminating news and information to the public,” 2 U.S.C. 1602(8)(B)(ii). This limitation will address one question that has arisen under the current OGE guidance, which is whether gifts from media organizations are always permitted even if wholly unrelated to the news activities of the organization. OGE believes there is no reason to exclude media organization gifts that are extended under other circumstances, such as a lunch invitation from an executive of a media conglomerate to an official of the Department of Justice for the purpose of discussing a proposed corporate acquisition. By contrast, for example, OGE does intend that the exclusion would permit employees to accept invitations from media organizations to attend the typical “press dinners” at which journalists and government officials interact with each other, as such interactions foster relationships that further the news gathering functions of the organizations.

Proposed section 2635.203(h)(3) would make one additional modification to the current OGE guidance on the Pledge ban. As with the exclusion for 501(c)(3) organizations, the initial OGE guidance Memorandum imposed a limit on gifts from media organizations: “appointees may not accept a gift if the organization employee who extends the offer is actually a registered lobbyist.” DO-09-007, at 6. For the same reasons discussed above with respect to the exclusion for 501(c)(3) organizations, OGE has not carried this limitation forward in the proposed rule.

As explained above, under “Exceptions Unavailable for Lobbyist Gifts,” proposed section 2635.202(c)(6) would preclude employees from relying on the widely attended gathering (WAG) exception, 5 CFR 2635.204(g)(2), to accept a gift from a registered lobbyist or lobbying organization. However, as also described above, OGE has determined that certain widely attended events provide legitimate educational and professional development opportunities that may further agency interests, even if the offer of free attendance is extended by an organization that is registered under the LDA. Therefore, proposed section 2635.203(h)(4) would exclude nonprofit professional associations, scientific organizations and learned societies from the definition of registered lobbyist or lobbying organization, with respect to gifts made in connection with the entity's educational or professional development activities. Effectively, this would mean that an employee still could rely on the WAG exception (or other applicable exceptions) to accept free attendance at a training or professional development event hosted by one of these entities, without regard to the LDA registration status of the organization. Nevertheless, because of the concerns expressed above about gifts of free attendance from lobbyists, the exclusion will not apply to these organizations in connection with invitations to purely social events (gala balls, fundraisers, parties, etc.). 3

Title III, part B  1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) sets forth a variety of provisions designed to improve energy efficiency and established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, including residential furnaces and boilers (referenced below as one of the “covered products”).  2 (42 U.S.C. 6292(a)(5) and 6295(f))

Under the Act, this program consists essentially of three parts: (1) Testing; (2) labeling; and (3) establishing Federal energy conservation standards. The testing requirements consist of test procedures that manufacturers of covered products must use as the basis for certifying to DOE that their products comply with applicable energy conservation standards adopted pursuant to EPCA and for representing the efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures in any enforcement action to determine whether covered products comply with these energy conservation standards. (42 U.S.C. 6295(s)) Under 42 U.S.C. 6293, EPCA sets forth criteria and procedures for DOE's adoption and amendment of such test procedures. Specifically, EPCA provides that “[a]ny test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use * * * or estimated annual operating cost of a covered product during a representative average use cycle or period of use, as determined by the Secretary [of Energy], and shall not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3)) In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine “to what extent, if any, the proposed test procedure would alter the measured energy efficiency * * * of any covered product as determined under the existing test procedure.” (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

On December 19, 2007, the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, was enacted. The EISA 2007 amendments to EPCA, in relevant part, require DOE to amend the test procedures for all covered products to include measures of standby mode and off mode energy consumption. Specifically, section 310 of EISA 2007 provides definitions of “standby mode” and “off mode” (42 U.S.C. 6295(gg)(1)(A)) and permits DOE to amend these definitions in the context of a given product (42 U.S.C. 6295(gg)(1)(B)). The statute requires integration of such energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product, unless the Secretary determines that: (1) The current test procedures for a covered product already fully account for and incorporate the standby mode and off mode energy consumption of the covered product; or (2) such an integrated test procedure is technically infeasible for a particular covered product, in which case the Secretary shall prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A))

Under the statutory provisions adopted by EISA 2007, any such amendment must consider the most current versions of IEC Standard 62301, Household electrical appliances—Measurement of standby power, and IEC Standard 62087, Methods of measurement for the power consumption of audio, video, and related equipment. 3 Id. At the time of enactment of EISA 2007, the most current versions of these standards were IEC Standard 62301 (First Edition 2005-06) and IEC Standard 62087 (Second Edition 2008-09).

DOE's current test procedure for residential furnaces and boilers is found at 10 CFR part 430, subpart B, appendix N, Uniform Test Method for Measuring the Energy Consumption of Furnaces and Boilers. This procedure establishes a means for determining annual energy efficiency and annual energy consumption of these products. On October 20, 2010, DOE prescribed its final rule (hereafter called the October 2010 final rule) amending the test procedures for residential furnaces and boilers to account for the standby mode and off mode energy consumption of these products, as required by EISA 2007. 75 FR 64621 (Oct. 20, 2010). For a more detailed procedural history of the test procedure rulemaking to address standby mode and off mode energy consumption of residential furnaces and boilers, please consult the October 2010 final rule. Id. at 64622.

As discussed above, EISA 2007 amended EPCA to require that DOE test procedures for covered products include provisions for measuring standby mode and off mode energy consumption. (42 U.S.C. 6295(gg)(2)(A)) In establishing test procedures to address standby mode and off mode energy consumption, EISA 2007 requires consideration of the most current version of IEC Standard 62301 to support the added measurement provisions. Id. In the October 2010 final rule, DOE amended its test procedures to prescribe the use of IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” Publication 62301 First Edition 2005-06, which was the most current version of this standard at the time of its incorporation into the DOE regulations. This final rule fulfilled DOE's obligation under EISA 2007.

However, since that time, DOE has continued to address the requirements of EISA 2007 as it relates to standby mode and off mode for other products. For example, DOE is considering similar test procedure amendments for other heating products (water heaters, direct heating equipment, and pool heaters), and during that rulemaking, commenters identified improvements to IEC Standard 62301 that were under development and nearly finalized. These commenters, which are largely the same as those that would comment on the proposals for furnaces and boilers, supported the draft revisions to IEC Standard 62301. The second edition of the standard has now been finalized. In the abstract of its January 27, 2011 publication, the IEC reports that the second edition would provide practical improvement and possible reduction in testing burden. DOE has reviewed IEC Standard (Second Edition) and agrees that the second edition does provide for improvement in terms of measurement accuracy and, in addition, provides for possible reduced testing burden by allowing for direct meter reading techniques where appropriate. DOE believes these improvements would be applicable to a variety of heating products, including furnaces and boilers, as well as the other heating products discussed above. Accordingly, after careful review, DOE has decided to exercise its discretion to consider adoption of the revised version of the industry standard into the DOE test procedure for residential furnaces and boilers. (42 U.S.C. 6293(b)(2)) Thus, in today's NOPR, DOE is proposing to incorporate into DOE's test procedure regulations the second edition of the IEC 62301 standard in its entirety, and call out the appropriate provisions of that standard in DOE's test procedure regulations for residential furnaces and boilers.

As noted above, EPCA, as amended by EISA 2007, requires that DOE test procedures be amended to include standby mode and off mode energy consumption, taking into consideration the most current versions of Standards 62301 and 62087 of the International Electrotechnical Commission. (42 U.S.C. 6295(gg)(2)(A)) The October 2010 final rule referenced the IEC Standard 62301 (First Edition) to obtain the standby mode and off mode measured wattage for residential furnaces and boilers. The amended test procedure uses this measured wattage in calculations to accomplish the incorporation of standby mode and off mode energy consumption into the test procedures. Testimony at the public hearing and subsequent written comments suggested that IEC Standard 62301 (First Edition) may be unnecessarily burdensome to conduct for furnaces and boilers. Specifically, the Air-Conditioning, Heating and Refrigeration Institute (AHRI) recommended that to avoid unnecessary burden, the existing test procedure provisions should be used whenever there is a possible conflict with the IEC Standard 62301. A comment from the Government of China pointed out the same possible conflicts but only asked for clarification. (AHRI, No. 3 at p. 1, and, China, No. 09 at p. 1)

DOE considered the comments received in response to the NOPR and provided clarification in the October 2010 final rule so as to avoid unnecessary burden. Specifically, because there was a possible conflict with the voltage and ambient temperature provisions of the existing procedures, the October 2010 final rule clarified where the IEC provisions apply and where the existing test procedure provisions apply. With this clarification in place, DOE concluded that IEC Standard 62301 (First Edition) is appropriate for obtaining standby mode and off mode wattage measurements for residential furnaces and boilers.

As noted above, since the time of the October 2010 final rule, the IEC Standard 62301 technical committee has revised its standard. Specifically, a second edition of IEC Standard 62301 has been issued by IEC with a final publication date of January 27, 2011. This standard can be purchased at: http://www.iec.ch/index.htm. The IEC reports that the second edition provides technical improvement from the previous edition as follows:

• Greater detail in set-up procedures and introduction of stability requirements for all measurement methods to ensure that results are as representative as possible;

• Refinement of measurement uncertainty requirements for power measuring instruments, especially for more difficult loads with high crest factor and/or low power factor; and

• Updated guidance on product configuration, instrumentation, and calculation of measurement uncertainty.

DOE has conducted a review of IEC Standard 62301 (Second Edition), which is the most current version of this IEC standard. In its investigation, DOE determined that some improvement to the current DOE test procedure is possible with the incorporation of the second edition of the IEC standard as it applies to residential furnaces and boilers. Specifically, IEC Standard 62301 (Second Edition) revises the standard's power measurement accuracy provisions, based on technical submissions that showed the inability to achieve the accuracy levels required by the first edition for certain operating regimes through the use of typical instrumentation. A more comprehensive specification of required accuracy is provided in IEC Standard 62301 (Second Edition) that depends upon the characteristics of the power being measured. DOE believes that this most recent revision to the IEC standard provides improved and realistic accuracy provisions for a range of electricity consumption patterns, thereby making the updated test method appropriate for the variety of electricity-consuming devices that form part of residential furnaces and boilers. The new specification can be met by typical, commercially-available test equipment, whereas requirements in the first version may have necessitated specialized instrumentation that is not readily available. The uncertainty depends upon a value termed the Maximum Current Ratio (MCR), which is the ratio of the Crest Factor to the Power Factor of the signal. For signals with MCR's less than 10, the allowed instrument uncertainty would be 2 percent at the 95th-percentile confidence interval for measured power values greater than 1.0 watt (W). For measured power values less than 1.0 W, the maximum permitted absolute uncertainty should be less than or equal to 0.02 W at the 95th-percentile confidence interval. Both of these limitations on the level of uncertainty are sufficient to assess the standby energy consumption of residential furnaces and boilers.

The other important change in IEC Standard 62301 (Second Edition) that relates to the measurement of standby mode and off mode power consumption in residential furnaces and boilers involves the specification of the stability criteria required to measure that power. IEC Standard 62301 (Second Edition) contains more detailed techniques to evaluate the stability of the power consumption and to measure the power consumption for loads with different stability characteristics. In IEC Standard 62301 (First Edition), the stability of the system is determined by measuring the power consumption over a 5-minute period. If the variation over that period is less than 5 percent, the signal is considered to be stable. There are potential operational modes, however, that could show variation over longer time frames. For example, an electronic component could go into a sleep mode after a 10-minute period. This change in power consumption would not be captured in the 5-minute stability test. IEC Standard 62301 (Second Edition) acknowledges the existence of these different types of modes by creating stability tests for these variable power modes. For constant power modes, the test method specified in the second edition of IEC Standard 62301 matches that specified in the first edition. For cyclical power consumption, the second edition of IEC Standard 62301 adds measurement provisions for situations in which the variation in the signal might not be constant over a 5-minute period. The power measurements would take at least 60 minutes; a test period of this duration is required to accurately capture standby mode and off mode energy consumption for equipment with varying power consumption and is an improvement introduced by IEC Standard 62301 (Second Edition) compared to IEC Standard 62301 (First Edition). These techniques will result in more complete and accurate measures of standby mode and off mode energy consumption over a variety of operational modes. The manufacturer is given a choice of measurement procedures, including less burdensome methods such as direct meter reading methods if certain clearly-described stability conditions are met. DOE believes that, if adopted, the changes incorporated in IEC Standard 62301 (Second Edition) would allow for use of less burdensome methods when appropriate and would ensure accurate measures of standby energy consumption over a range of operating conditions that may be present in residential furnaces and boilers.

Accordingly, for the reasons discussed above, DOE is proposing to incorporate IEC Standard 62301 (Second Edition) in its entirety into the overall list of incorporated references in 10 CFR 430.3 and to call out the appropriate provisions of that standard in DOE's test procedure regulations for residential furnaces and boilers. To this end, this notice proposes to add a new reference in 10 CFR 430.3 to IEC Standard 62301(Second Edition) along side the existing reference to IEC Standard 62301 (First Edition). (Although DOE has tentatively determined that the provisions of IEC Standard 62301 (Second Edition) should be made applicable to residential furnaces and boilers, the Department is currently maintaining the existing reference to IEC Standard 62301 (First Edition), because other products continue to reference that standard.)

In addition, DOE is proposing a number of editorial changes in appendix N which are necessary to allow for the correct referencing for residential furnaces and boilers. For example, the definition section of the appendix needs to define the IEC Standard 62301 as the second edition instead of the first edition. Also, there are some section numbering differences in the second edition which impact the text of the measurement provisions of DOE's residential furnace and boiler test procedures. Finally, as an editorial improvement, DOE is unifying the standby mode and off mode nomenclature used in its various test procedures. Specifically, DOE's uniform nomenclature would use the expressions P W,SB and P W,OFF in all test procedures. All of these proposed changes are reflected in the regulatory text which can be found at the end of this NOPR.

IEC Standard 62301 (Second Edition) includes specific guidance on the allowed rounding for the various wattage measurements. For clarification purposes, DOE is proposing the IEC rounding guidance in this proposal. Specifically, it is proposed that the following sentence be added to the measurement sections 8.6.1 and 8.6.2: “The recorded standby power (P W,SB ) (or P W,OFF where appropriate) shall be rounded to the second decimal place, and for loads greater than or equal to 10W, at least three significant figures shall be reported.” DOE requests comment as to the adequacy and appropriateness of this additional clarification.

Currently, sampling plans for residential furnaces and boilers are located in 10 CFR 429.18. These provisions of the test procedure specify the number of units of each basic model that a manufacturer must test to calculate the certified ratings for compliance and representation purposes. The sampling procedures provide that “ * * * a sample of sufficient size shall be randomly selected and tested to ensure [compliance].” Id. For residential furnaces, a minimum of two units must be tested to certify a basic model as compliant. This minimum is implicit in the requirement to calculate a mean—an average—which requires at least two values, and is consistent with the general rule articulated under 10 CFR 429.11(b). Under no circumstances is a sample size of one (1) Authorized. Manufacturers may need to test more than two samples depending on the variability of their sample. Consequently, DOE is proposing to apply the existing DOE sampling plans used by residential furnace and boiler manufacturers to determine the certified ratings for annual fuel utilization efficiency to the standby mode and off mode ratings. DOE seeks comment on the application of the existing DOE sampling plans to the new metrics P W,SB and P W,OFF.

The effective date for these amendments would be 30 days after publication of the test procedure final rule in the Federal Register . At that time, representations may be made using the new metrics P W,SB and P W,OFF and any other measure of energy consumption which depends on P W,SB and P W,OFF , which were adopted pursuant to these amendments. The compliance date for any representations relating to standby mode and off mode is 180 days from date of publication of the test procedure final rule in the Federal Register ; on or after that date, any such representations must be based upon results generated under these test procedures and sampling plans.

However, DOE is clarifying here that use of these proposed test procedure amendments related to standby mode and off mode energy consumption of residential furnaces and boilers would not be required for purposes of energy conservation standards compliance, until the compliance date in the recently issued residential furnaces direct final rule (DFR), which adopted energy conservation standards for standby mode and off mode of residential furnaces. 76 FR 37408 (June 27, 2011). However, DOE makes this statement with two caveats: (1) The DFR only addresses standards for furnaces and not boilers, so standby mode and off mode standards for boilers would only be addressed and apply on the compliance date for the next energy conservation standards rulemaking; and (2) the above-referenced compliance date presumes that the DFR will be finalized at the end of the statutorily-required 110-day comment period.

EPCA requires that any test procedures prescribed or amended must be reasonably designed to produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use, and it must not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))

Today's proposed amendments to the DOE test procedure for residential furnaces and boilers would incorporate the most current version of IEC Standard 62301 in lieu of the previous version. DOE believes these new provisions would continue to produce valid test results, while reducing testing burden. Accordingly, this proposal would meet the requirements of 42 U.S.C. 6293(b)(3).

In addition, DOE has determined that these amendments would not alter the measured efficiency used for determining compliance with the current energy conservation standards and with future standards for standby mode and off mode for furnaces. (42 U.S.C. 6293(e)(1)) Accordingly, no modifications to the currently applicable energy conservation standards are required. (42 U.S.C. 6293(e)(2)) This is because the currently applicable energy conservation standard is based on the Annual Fuel Utilization Efficiency metric which does not include or depend on the proposed measures of energy consumption regarding standby mode and off mode. In addition, consistent with its mandate pursuant to EISA 2007, DOE is further clarifying here that use of these proposed test procedure amendments related to standby mode and off mode energy consumption, if adopted, would not be required for purposes of energy conservation standards compliance, until the compliance date of the next standards final rule that addresses standby mode and off mode. Relating to this emphasized phrase, DOE recently published a Direct Final Rule (DFR) which covered furnaces (but not boilers), and it establishes amended energy efficiency standards for furnaces, as well as standby mode and off mode energy conservation standards. 76 FR 37408 (June 27, 2011). Lastly, DOE does not believe the proposed amendments, which propose to adopt a revised version of the IEC test procedure, would significantly alter the energy consumption as measured by the existing DOE test procedure provisions related to standby mode and off mode for residential furnaces and boilers, because the test procedure provisions of IEC Standard 62301 (Second Edition) are limited to providing additional accuracy for the measurements and clarification on the test method. Consequently, DOE does not believe that potential adoption of amendments pertaining to these clarifications and additions would alter any estimates of energy consumption under either DOE's current standards or the recently promulgated standards in the June 27, 2011 direct final rule.

Today's regulatory action is not a “significant regulatory action” under section 3(f) of Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (Oct. 4, 1993). Accordingly, this regulatory action was not subject to review under that Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996) requires preparation of an initial regulatory flexibility analysis for any rule that, by law, must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis examines the impact of the rule on small entities and considers alternative ways of reducing negative effects. Also, as required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site at http://www.gc.doe.gov.

Today's proposed rule would adopt test procedure provisions to measure standby mode and off mode energy consumption of residential furnaces and boilers, generally through the incorporation by reference of IEC Standard 62301 (Second Edition). DOE reviewed today's proposed rule under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. For the reasons explained below, DOE certifies that the proposed rule would not have a significant impact on a substantial number of small entities.

As noted above, the test procedure incorporates by reference provisions from IEC Standard 62301 for the measurement of standby mode and off mode energy consumption. IEC Standard 62301 is widely accepted and used internationally to measure electric power in standby mode and off mode.

Based on its analysis of IEC Standard 62301 (Second Edition), DOE has tentatively determined that the only possible additional burden represented by the adoption of IEC Standard 62301 (Second Edition) is associated with the testing time. For measurements of power consumption that are determined to be stable, test time would not change. Test time would increase under IEC Standard 62301 (Second Edition), as compared to IEC Standard 62301 (First Edition), should the stability test indicate that the power is being used in a variable manner. For these cases, the revised procedure would increase the time of measurement from the current 15 minutes to up to 60 minutes. No additional setup time would be required for these tests. This possible increase in test time does not necessarily require active labor, because no additional set up is required, and the additional time essentially amounts to a waiting period to determine stability. Nonetheless, assuming the 45 minutes additional test time does incur additional labor cost, the worst-case estimate of an additional $30 per test unit is a small incremental change compared to the overall financial investment needed to undertake the business enterprise of testing consumer products. For these reasons, DOE does not believe that the proposed standby mode and off mode test procedure provisions would add significant costs and that it would not require any significant investment in test facilities or new equipment.

The Small Business Administration (SBA) considers an entity to be a small business if, together with its affiliates, it employs fewer than a threshold number of workers specified in 13 CFR part 121, which relies on size standards and codes established by the North American Industry Classification System (NAICS). The threshold number for NAICS classification 333415, which applies to Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing (including residential furnaces and boilers), is 750 employees. 4 DOE reviewed the Air-Conditioning, Heating, and Refrigeration Institute's Directory of Certified Product Performance for Residential Furnaces and Boilers (June 7, 2010), 5 the ENERGY STAR Product Databases for Gas and Oil Furnaces (Jan. 4, 2010), 6 the California Energy Commission's Appliance Database for Residential Furnaces and Boilers, 7 and the Consortium for Energy Efficiency's Qualifying Furnace and Boiler List (2010). 8 From this review, DOE found that there are approximately 14 small businesses in the furnace and boiler industry. Even though there are a significant number of small businesses within the furnace and boiler industry, DOE has concluded that the test procedure amendments contained in this proposed rule would not represent a substantial burden to any manufacturer, including small manufacturers, as explained above.

Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE's certification and supporting statement of factual basis will be provided to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b). DOE tentatively certifies that this rule would have no significant economic impact on a substantial number of small entities. DOE seeks comments regarding whether the proposed amendments in today's rule would have a significant economic impact on any small entities.

Today's proposed rule would impose no new information or recordkeeping requirements. Accordingly, OMB clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq. )

In this rule, DOE is proposing to further amend the test procedure for residential furnaces and boilers to address measurement of the standby mode and off mode energy consumption of these products. DOE has determined that this proposed rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (Pub. L. 91-190, codified at 42 U.S.C. 4321 et seq. ), and DOE's implementing regulations at 10 CFR part 1021. Specifically, this proposed rule, which would adopt an industry standard for measurement of standby mode and off mode energy consumption, amends an existing rule without changing its environmental effect, and, therefore, is covered by Categorical Exclusion A5 found in 10 CFR part 1021, subpart D, appendix A. Today's proposed rule, if adopted, would not affect the amount, quality, or distribution of energy usage, and, therefore, would not result in any environmental impacts. 9 Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. 64 FR 43255 (August 10, 1999). The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States, and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process that it will follow in developing such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today's proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) Therefore, Executive Order 13132 requires no further action.

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

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4, codified at 2 U.S.C. 1501 et seq. ) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. For regulatory actions likely to result in a rule that may cause expenditures by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a) and (b)) Section 204 of UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate.” UMRA also requires an agency plan for giving notice and opportunity for timely input to small governments that may be potentially affected before establishing any requirement that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. (This policy is also available at http://www.gc.doe.gov. ) Today's proposed rule, which would modify the current test procedures for residential furnaces and boilers, contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure by State, local, and Tribal governments, or by the private sector, of $100 million or more in any year. Accordingly, no further assessment or analysis is required under the Unfunded Mandates Reform Act of 1995.

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

Pursuant to Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 15, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the United States Constitution.

The Treasury and General Government Appropriations Act, 2001 (Pub. L. 106-554, codified at 44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

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

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101 et seq. ), DOE must comply with all laws applicable to the former Federal Energy Administration, including section 32 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275), as amended by the Federal Energy Administration Authorization Act of 1977 (Pub. L. 95-70). (15 U.S.C. 788) Section 32 provides that where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Federal Trade Commission (FTC) concerning the impact of commercial or industry standards on competition.

Certain of the amendments and revisions in this proposed rule would incorporate testing methods contained in the following commercial standard, the International Electrotechnical Commission (IEC) Standard 62301, “Household electrical appliances—Measurement of standby power” (Second Edition 2011). DOE has evaluated this standard and is unable to conclude whether it fully complies with the requirements of section 32(b) of the Federal Energy Administration Act ( i.e., that it was developed in a manner that fully provides for public participation, comment, and review). DOE will consult with the Attorney General and the Chairman of the FTC concerning the impact on competition of requiring manufacturers to use the test methods contained in this standard before prescribing a final rule.

The time, date, and location of the public meeting are listed in the DATES and ADDRESSES sections at the beginning of this NOPR. To attend the public meeting, please notify Ms. Brenda Edwards at (202) 586-2945. As explained in the ADDRESSES section, foreign nationals visiting DOE Headquarters are subject to advance security screening procedures.

Any person who has an interest in the topics addressed in this notice, or who is a representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation at the public meeting. Such persons may hand-deliver requests to speak to the address shown in the ADDRESSES section at the beginning of this notice between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Requests may also be sent by mail or email to Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121, or Brenda.Edwards@ee.doe.gov. Persons who wish to speak should include with their request a computer diskette or CD-ROM in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that briefly describes the nature of their interest in this rulemaking and the topics they wish to discuss. Such persons should also provide a daytime telephone number where they can be reached.

DOE requests persons selected to make an oral presentation to submit an advance copy of their statements at least one week before the public meeting. DOE may permit persons who cannot supply an advance copy of their statement to participate, if those persons have made advance alternative arrangements with the Building Technologies Program. As necessary, requests to give an oral presentation should ask for such alternative arrangements.

DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. A court reporter will be present to record the proceedings and prepare a transcript.

The public meeting will be conducted in an informal, conference style. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. DOE will present summaries of comments received before the public meeting, allow time for presentations by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a prepared general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit other participants to comment briefly on any general statements. At the end of all prepared statements on each specific topic, DOE will permit participants to clarify their statements briefly and comment on statements made by others.

Participants should be prepared to answer DOE's and other participants' questions. DOE representatives may also ask participants about other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of these procedures that may be needed for the proper conduct of the public meeting. After the public meeting, interested parties may submit further comments on the proceedings as well as on any aspect of the rulemaking until the end of the comment period.

DOE will make the entire record of this proposed rulemaking, including the transcript from the public meeting, available for inspection at the U.S. Department of Energy, 6th Floor, 950 L'Enfant Plaza SW., Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Copies of the transcript will be posted on the DOE Web site and will also be available for purchase from the transcribing reporter.

DOE will accept comments, data, and information regarding the proposed rule before or after the public meeting, but no later than the date provided at the beginning of this notice. Comments, data, and information submitted to DOE's e-mail address for this rulemaking should be provided in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format. Stakeholders should avoid the use of special characters or any form of encryption, and wherever possible, comments should include the electronic signature of the author. Comments, data, and information submitted to DOE via mail or hand delivery/courier should include one signed paper original. No telefacsimiles (faxes) will be accepted.

Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit two copies: one copy of the document that includes all of the information believed to be confidential, and one copy of the document with that information deleted. DOE will make its own determination as to the confidential status of the information and treat it accordingly.

Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information was previously made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person that would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.

Although comments are welcome on all aspects of this rulemaking, DOE is particularly interested in receiving comments and views of interested parties on the following issues:

1. Appropriateness of measurement instrument uncertainty requirements of IEC Standard 62301 (Second Edition). DOE invites comment on the appropriateness of the measurement instrument uncertainty requirements specified in Section 4.4 of IEC Standard 62301 (Second Edition) to measure standby mode and off mode power consumption for residential furnaces and boilers.

2. Adequacy of the measurement approach described in IEC Standard 62301 (Second Edition). DOE invites comments on the adequacy of the measurement provisions described in Section 5 of IEC Standard 62301 (Second Edition) to measure standby mode and off mode power consumption for residential furnaces and boilers.

3. Adequacy of clarification statements. DOE invites comments on the adequacy of incorporating into DOE regulations the following specific provisions from IEC Standard 62301 (Second Edition): Section 4.4 and section 5 of IEC 62301 with the clarification statements in Section 8 of the DOE test procedures.

4. Adequacy of rounding guidance. DOE invites comment on the incorporation of the IEC Standard 62301 (Second Edition) rounding guidance into the DOE test procedures' proposed measurements of P W,SB and P W,OFF.

5. Adequacy of existing sampling plans. DOE invites comment on the application of the existing DOE sampling plans to standby mode and off mode measures of energy consumption, in particular by the newly proposed metrics P W,SB and P W,OFF .

The Secretary of Energy has approved publication of this notice of proposed rulemaking.

For the reasons stated in the preamble, DOE proposes to amend part 430 of Chapter II, Subchapter D of Title 10 of the Code of Federal Regulations, to read as set forth below:

Table of Contents I. Background and Authority II. Summary of the Supplemental Proposed Rule III. Discussion A. Use of IEC Standard 62301 (Second Edition), “Household electrical appliances-Measurement of standby power” B. Rounding Guidance C. Sampling Plans for Standby Mode and Off Mode D. Effective Date and Compliance Date E. Compliance with Other EPCA Requirements IV. Procedural Issues and Regulatory Review V. Public Participation VI. Issues on Which DOE Seeks Comment VII. Approval of the Office of the Secretary I. Background and Authority

Title III, Part B  1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) sets forth a variety of provisions designed to improve energy efficiency and established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, including residential water heaters, direct heating equipment, and pool heaters (all of which are referenced below as “covered products”). 2 (42 U.S.C. 6292(a)(4), (9), and (11); 42 U.S.C. 6295(e))

Under the Act, this program consists essentially of three parts: (1) Testing; (2) labeling; and (3) establishing Federal energy conservation standards. The testing requirements consist of test procedures that manufacturers of covered products must use as the basis for certifying to DOE that their products comply with applicable energy conservation standards adopted pursuant to EPCA and for representing the efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures in any enforcement action to determine whether covered products comply with these energy conservation standards. (42 U.S.C. 6295(s)) Under 42 U.S.C. 6293, EPCA sets forth criteria and procedures for DOE's adoption and amendment of such test procedures. Specifically, EPCA provides that “[a]ny test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use * * * or estimated annual operating cost of a covered product during a representative average use cycle or period of use, as determined by the Secretary [of Energy], and shall not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3)) In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine “to what extent, if any, the proposed test procedure would alter the measured energy efficiency * * * of any covered product as determined under the existing test procedure.” (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

On December 19, 2007, the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, was enacted. The EISA 2007 amendments to EPCA, in relevant part, require DOE to amend the test procedures for all covered products to include measures of standby mode and off mode energy consumption. Specifically, section 310 of EISA 2007 provides definitions of “standby mode” and “off mode” (42 U.S.C. 6295(gg)(1)(A)) and permits DOE to amend these definitions in the context of a given product (42 U.S.C. 6295(gg)(1)(B)). The statute requires integration of such energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product, unless the Secretary determines that: (1) The current test procedures for a covered product already fully account for and incorporate the standby mode and off mode energy consumption of the covered product; or (2) such an integrated test procedure is technically infeasible for a particular covered product, in which case the Secretary shall prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A))

Under the statutory provisions adopted by EISA 2007, any such amendment must consider the most current versions of IEC Standard 62301, Household electrical appliances—Measurement of standby power, and IEC Standard 62087, Methods of measurement for the power consumption of audio, video, and related equipment. 3 Id. At the time of the enactment of EISA 2007, the most current versions of these standards were IEC Standard 62301 (First Edition 2005-06) and IEC Standard 62087 (Second Edition 2008-09).

DOE's current test procedures for residential water heaters, direct heating equipment, and pool heaters are found at 10 CFR part 430, subpart B in Appendix E (water heaters), Appendices G and O (direct heating equipment), and Appendix P (pool heaters). These procedures establish a means for determining measures of energy consumption, including, where appropriate, energy efficiency. On August 30, 2010, DOE published its NOPR (hereafter referred to as the August 2010 NOPR) to consider amendments to the test procedures for residential water heaters, direct heating equipment, and pool heaters to account for the standby mode and off mode energy consumption of these products, as required by EISA 2007. 75 FR 52892 (Aug. 30, 2010). For a more detailed procedural history of the test procedure rulemaking to address standby mode and off mode energy consumption of residential water heaters, direct heating equipment, and pool heaters, please consult the August 2010 NOPR. Id. at 52893-95. This SNOPR builds upon and further modifies DOE's proposal, as presented in the August 2010 NOPR.

As discussed above, EISA 2007 amended EPCA to require that DOE test procedures for covered products include provisions for measuring standby mode and off mode energy consumption. (42 U.S.C. 6295(gg)(2)(A)) EISA 2007 requires consideration of the most current version of IEC Standard 62301 to support the added measurement provisions. Id. In the August 2010 NOPR, DOE proposed to amend its test procedures to prescribe the use of IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” Publication 62301 First Edition 2005-06,” which was the most current version of this standard at the time DOE proposed its incorporation into the DOE regulations. Since that time, a second edition of the standard has been developed and finalized. In the abstract of the January 27, 2011 final publication, the IEC reports that the second edition would provide practical improvement and possible reduction in testing burden, and, as discussed in further detail below, commenters on the August 2010 NOPR expressed similar views. DOE has reviewed IEC Standard 62301 (Second Edition) and agrees that the second edition does provide for improvement in terms of measurement accuracy and possible reduced testing burden. Accordingly, in today's NOPR, DOE is proposing to incorporate into DOE's test procedure regulations the second edition of the IEC 62301 standard in its entirety, and to call out the appropriate provisions of that standard in DOE's test procedure regulations for residential direct heating equipment and pool heaters. (Because DOE continues to believe that the current test procedure for residential water heaters fully addresses standby mode and off mode energy consumption, this SNOPR proposes no amendments to the test procedure for these products.)

As noted above, EPCA, as amended by EISA 2007, requires that DOE test procedures be amended to include standby mode and off mode energy consumption, taking into consideration the most current versions of Standards 62301 and 62087 of the International Electrotechnical Commission. (42 U.S.C. 6295(gg)(2)(A)) The August 2010 NOPR would reference IEC Standard 62301 (First Edition) to obtain the standby mode and off mode measured wattage for residential direct heating equipment and pool heaters. The amended test procedures would use these measured wattages in calculations to accomplish the incorporation of standby mode and off mode energy consumption into the test procedures. DOE reviewed IEC Standard 62301 (First Edition) and tentatively concluded in its August 2010 NOPR (75 FR 52892 (August 30, 2010)) that it was generally applicable to residential direct heating equipment and pool heaters, although some clarification was needed. Specifically, because there is a possible conflict with voltage and ambient temperature provisions of the existing procedures, the August 2010 NOPR clarified where the IEC provisions apply and where the existing test procedure provisions apply. With this clarification in place, the August 2010 NOPR proposed to reference IEC Standard 62301 (First Edition) for obtaining the standby mode and off mode wattage measurements for residential direct heating equipment and pool heaters.

In written comments on the August 2010 NOPR, the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and the Association of Home Appliance Manufacturers (AHAM) asked that DOE consider referencing a revised version of the industry standard—IEC Standard 62301 (Second Edition). Both commenters cited technical improvements in the latter version that they expect would enhance repeatability and reproducibility of test results. (AHRI, No. 13 at p. 1, AHAM, No. 15 at p. 2) AHAM additionally commented that the Final Draft International Standard (FDIS) version of IEC Standard 62301 would be preferable to the Committee Draft for Vote (CDV) version of the standard. (AHAM, No. 15 at p. 2) The CDV of IEC Standard 62301 was released on August 28, 2009. On this matter, DOE notes that because IEC has now formally adopted IEC Standard 62301 (Second Edition), DOE is no longer considering earlier draft versions. In any event, the adopted version is consistent with the preference suggested by AHAM.

As noted above, since the time of the August 2010 NOPR, the IEC Standard 62301 technical committee has revised its standard. Specifically, a second edition of IEC Standard 62301 has been issued by IEC with a final publication date of January 27, 2011. This standard can be purchased at: http://www.iec.ch/index.htm. The IEC reports in its abstract to the January 27, 2011 final publication that the second edition provides technical improvement from the previous edition as follows:

• Greater detail in set-up procedures and introduction of stability requirements for all measurement methods to ensure that results are as representative as possible;

• Refinement of measurement uncertainty requirements for power measuring instruments, especially for more difficult loads with high crest factor and/or low power factor;

• Updated guidance on product configuration, instrumentation, and calculation of measurement uncertainty.

DOE has conducted a review of the second edition of IEC Standard 62301, which is consistent with the requirement in EISA 2007 for DOE to consider the most current version of that standard. (42 U.S.C. 6295(gg)(2)(A)) As a result of its investigation, DOE agrees with the commenters mentioned above (AHRI, No. 13 at p. 1, AHAM, No. 15 at p.2), that some improvement is possible with the incorporation of the second edition as it applies to the products that are the subject of this rulemaking. Specifically, IEC Standard 62301 (Second Edition) revises the standard's power measurement accuracy provisions, based on technical submissions that showed the inability to achieve the accuracy levels required by the first edition for certain operating regimes with the use of typical instrumentation. A more comprehensive specification of required accuracy is provided in IEC Standard 62301 (Second Edition) that depends upon the characteristics of the power being measured. The other major change in IEC Standard 62301 (Second Edition) that relates to the measurement of standby power consumption in covered products involves the specification of the stability criteria required to measure that power. IEC Standard 62301 (Second Edition) contains more detailed techniques to evaluate the stability of the power consumption and to measure the power consumption for loads with different stability characteristics. The manufacturer is given a choice of measurement procedures, including less burdensome methods such as direct meter reading methods. The less burdensome methods are allowed if certain clearly described conditions are met. DOE believes that the changes incorporated in IEC Standard 62301 (Second Edition) would allow for use of less burdensome methods when appropriate and would ensure accurate measures of standby energy consumption over a range of operating conditions that may be present in residential heating products.

Accordingly, for the reasons discussed above, DOE is proposing to incorporate IEC Standard 62301 (Second Edition) into DOE's test procedure regulations for residential direct heating equipment and pool heaters. To this end, this supplemental notice is proposing to add a new reference in 10 CFR 430.3 for IEC Standard 62301 (Second Edition) alongside the existing reference to IEC Standard 62301 (First Edition). (Although DOE has tentatively determined that the provisions of IEC Standard 62301 (Second Edition) should be made applicable to residential direct heating equipment and pool heaters, the Department is currently maintaining the existing reference to IEC Standard 62301 (First Edition), because other products continue to reference that standard.) In addition, DOE is proposing a number of editorial changes in the various appendices (G, O, P) which are necessary for residential direct heating equipment and pool heaters to allow for the correct referencing. For example, the definition sections of the individual appendices need to define IEC Standard 62301 as the second edition instead of the first edition. Also, there are some section numbering differences in the second edition which impact the text of the measurement provisions of DOE's various test procedures. Finally, as an editorial improvement, DOE is unifying the standby mode and off mode nomenclature used in the various test procedures. Specifically, the uniform nomenclature would use the expressions: P W,SB and P W,OFF in all test procedures. All of these proposed changes are reflected in the regulatory text which can be found at the end of this SNOPR.

IEC Standard 62301 (Second Edition) includes specific guidance on rounding for the various wattage measurements. For clarification purposes, DOE is proposing to include the IEC rounding guidance in this supplemental proposal. Specifically, it is proposed that the following sentence be added to the measurement provisions of the proposed regulatory text where appropriate: “The recorded standby power (P W,SB ) (or off mode power P W,OFF, where appropriate) shall be rounded to the second decimal place, and for loads greater than or equal to 10W, at least three significant figures shall be reported.” DOE requests comments as to the adequacy and appropriateness of this additional clarification.

Currently, sampling plans for the products that are the subject of this proposal are located in 10 CFR 429.17 for water heaters, 10 CFR 429.22 for direct heating equipment, and 10 CFR 429.24 for pool heaters. These provisions specify the number of units of each basic model that a manufacturer must test to calculate the certified ratings for compliance and representation purposes. The sampling procedures provide that “ * * * a sample of sufficient size shall be randomly selected and tested to ensure [compliance].” Id. For these products, a minimum of two units must be tested in order for a manufacturer to calculate the certified rating for each basic model, make representations about the basic model's energy consumption or efficiency, and certify compliance to the Department. This minimum is implicit in the requirement to calculate a mean—an average—which requires at least two values, and is consistent with the general rule articulated under 10 CFR 429.11(b). Under no circumstances is a sample size of one (1) authorized. Manufacturers may need to test more than two samples depending on the variability of their sample.

Consequently, DOE is proposing here that the existing DOE sampling plans for residential water heaters, direct heating equipment, and pool heaters be applied to the measurement of standby mode and off mode energy consumption. Specifically, the proposed wattage measurements ( i.e., P W,SB and P W,OFF ), as well as any other measure of energy consumption based on these values, would be subject to those sampling plan provisions contained in 10 CFR 429.22 for direct heating equipment and 10 CFR 429.24 for pool heaters. (Note: No added measures of energy consumption are proposed for residential water heaters.) Clarifying further, the wattage measurements would be subject to the sampling provisions applicable to measures of energy consumption. 4 DOE invites comment on the application of the existing DOE sampling plans to standby mode and off mode measures of energy consumption, in particular the newly proposed metrics P W,SB and P W,OFF .

The effective date for these amendments would be 30 days after publication of the test procedure final rule in the Federal Register . At that time, representations may be made using the new metrics P W,SB and P W,OFF and any other measure of energy consumption which depends on P W,SB and P W,OFF, which were adopted pursuant to these amendments. The compliance date for any representations relating to standby mode and off mode is 180 days from date of publication of the test procedure final rule in the Federal Register ; on or after that date, any such representations must be based upon results generated under these test procedures and sampling plans.

However, DOE would clarify that use of these proposed test procedure amendments related to standby mode and off mode energy consumption would not be required for purposes of energy conservation standards compliance, until the compliance date of the next standards final rule that addresses standby mode and off mode.

EPCA requires that “[a]ny test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use * * * or estimated annual operating cost of a covered product during a representative average use cycle or period of use * * * and shall not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3))

Today's supplemental proposed amendments to the DOE test procedures for direct heating equipment and pool heaters would incorporate the most current version of IEC Standard 62301 in lieu of the previous version. DOE believes these new provisions would produce valid results, while reducing testing burden. Accordingly, this proposal would meet the requirements of 42 U.S.C. 6293(b)(3).

In addition, DOE has determined that these amendments would not alter the measured efficiency used by the current energy conservation standard for these products. (42 U.S.C. 6293(e)(1)) Consistent with its mandate pursuant to EISA 2007, DOE is clarifying in this SNOPR that use of these proposed test procedure amendments related to standby mode and off mode energy consumption would not be required for purposes of energy conservation standards compliance, until the compliance date of the next standards final rule that addresses standby mode and off mode. That standards rulemaking will factor in these new test procedure amendments when setting an appropriate standard level. Accordingly, no modifications to the applicable energy conservation standards are required at this time. (42 U.S.C. 6293(e)(2))

DOE has concluded that the determinations made pursuant to the various procedural requirements applicable to the August 30, 2010 NOPR remain unchanged for this SNOPR. These determinations are set forth in the August 30, 2010 NOPR. 75 FR 52892, 52901-03. If anything, the additional changes proposed in this SNOPR ( e.g., different options for stability criteria) would be expected to further reduce testing burden beyond what is specified in the August 30, 2010 NOPR.

DOE will accept comments, data, and information regarding the SNOPR no later than the date provided at the beginning of this notice. Comments, data, and information submitted to DOE's e-mail address for this rulemaking should be provided in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format. Stakeholders should avoid the use of special characters or any form of encryption, and wherever possible comments should include the electronic signature of the author. Comments, data, and information submitted to DOE via mail or hand delivery/courier should include one signed paper original. No telefacsimiles (faxes) will be accepted.

Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit two copies: One copy of the document that includes all of the information believed to be confidential, and one copy of the document with that information deleted. DOE will determine the confidential status of the information and treat it accordingly.

Factors of interest to DOE when evaluating requests to treat submitted information as confidential include the following: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information was previously made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person that would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.

Although comments are welcome on all aspects of this rulemaking, DOE is particularly interested in receiving comments and views of interested parties on the following issues:

1. Appropriateness of measurement instrument uncertainty requirements of IEC Standard 62301 (Second Edition). DOE invites comment on the appropriateness of the measurement instrument uncertainty requirements specified in Section 4.4 of IEC Standard 62301 (Second Edition) to measure standby mode and off mode power consumption for direct heating equipment and pool heaters.

2. Adequacy of the measurement approach described in IEC Standard 62301 (Second Edition). DOE invites comments on the adequacy of the measurement provisions described in Section 5 of IEC Standard 62301 (Second Edition) to measure standby mode and off mode power consumption for direct heating equipment and pool heaters.

3. Adequacy of clarification statements. DOE invites comments on the adequacy of incorporating into DOE regulations the following specific provisions from IEC Standard 62301 (Second Edition): Section 4.4 and Section 5 of IEC 62301, along with the clarification statements in the DOE test procedures

4. Adequacy of rounding guidance. DOE invites comment on the incorporation of the IEC Standard 62301 (Second Edition) rounding guidance into the DOE test procedures' proposed measurements of P W,SB and P W,OFF.

5. Adequacy of existing sampling plans. DOE invites comment on the application of the existing DOE sampling plans to standby mode and off mode measures of energy consumption, in particular the newly proposed metrics P W,SB and P W,OFF .

The Secretary of Energy has approved publication of this supplemental notice of proposed rulemaking.

For the reasons stated in the preamble, DOE proposes to amend part 430 of Chapter II, Subchapter D of Title 10 of the Code of Federal Regulations, to read as set forth below:

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2011-0867/Airspace Docket No. 11-AAL-16.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling (202) 267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

This action proposes to amend Title 14 Code of Federal Regulations (14 CFR) part 71 by revising Class E5 airspace at the Anaktuvuk Pass Airport in Anaktuvuk Pass, AK, to accommodate the creation of two standard instrument approach procedures at the Anaktuvuk Pass Airport. These standard instrument approach procedures were created in 2009 and the need for airspace upward from 1200 feet above the surface was only recently identified. This amended Class E airspace will provide adequate controlled airspace upward from 700 feet and 1200 feet above the surface, for the safety and management of IFR operations at the Anaktuvuk Pass Airport. This action also brings the coordinates for the Anaktuvuk Pass airport and the Anaktuvuk Pass NDB into agreement with those coordinates on file with the National Flight Data Center.

Class E airspace designated as 700 and 1200 foot transition areas are published in paragraph 6005 in FAA Order 7400.9U, Airspace Designations and Reporting Points, signed August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR 71.1. The airspaces listed in this document would be subsequently published in that Order.

The FAA has determined that this proposed 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. Because 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 1, 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 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it proposes to revise Class E airspace at the Anaktuvuk Pass Airport, Anaktuvuk, AK, and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

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

Comments Invited

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA 2011-0837 and Airspace Docket No. 11-ANM-17) and be submitted in triplicate to the Docket Management System (see ADDRESSES section for address and phone number). You may also submit comments through the Internet at http://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2011-0837 and Airspace Docket No. 11-ANM-17”. The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov . Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue, SW., Renton, WA 98057.

Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E airspace at Driggs, ID, to accommodate aircraft using RNAV (GPS) standard instrument approach procedures at Driggs-Reed Memorial Airport. The airport name also would be corrected from Teton Peaks/Driggs Municipal Airport to Driggs-Reed Memorial Airport, and the geographic coordinates of the airport would be updated to coincide with the FAA's aeronautical database. This action would enhance the safety and management of IFR operations at the airport.

Class E airspace designations are published in paragraph 6005, of FAA Order 7400.9V, dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in this Order.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, section 106, describes the authority for 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 the 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 would establish additional controlled airspace at Driggs-Reed Memorial Airport, Driggs, ID.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Background The Current Sequential Evaluation Process

We use a five-step “sequential evaluation process”  1 to decide whether a claimant is disabled  2 when he or she applies for disability benefits under title II of the Social Security Act (Act) or Supplemental Security Income payments based on disability under title XVI of the Act. We follow each step in a set order. If we can find that a claimant is disabled or not disabled at a step, we do not go on to the next step. 3 If we cannot find that a claimant is disabled or not disabled at a step, we evaluate the claim at the next step in the sequential evaluation process. 4 The following is a general overview of the five steps.

At step 1, we consider whether a claimant is working and whether the work qualifies as “substantial gainful activity.”  5 If the claimant is doing substantial gainful activity, we will find that the claimant is not disabled, regardless of his or her medical condition, age, education, and work experience. If the claimant is not performing substantial gainful activity, we go to the second step of the sequential evaluation process.

At step 2, we consider whether a claimant has any “severe” impairment(s), which significantly limits his or her physical or mental ability to do basic work activities  6 and whether the impairment(s) meets the statutory duration requirement. 7 If the claimant's impairment(s) is not severe or if it does not meet the duration requirement, we will find that the claimant is not disabled. 8 If the claimant has a severe impairment(s) that meets the duration requirement, we go to the third step of the sequential evaluation process.

At step 3, we consider whether a claimant's impairment(s) meets or medically equals in severity an impairment(s) in the Listing of Impairments. 9 If the claimant's impairment(s) meets or medically equals in severity a listed impairment, we will find that the claimant is disabled. If the claimant does not have an impairment(s) that meets or medically equals in severity a listed impairment, we determine the claimant's residual functional capacity (RFC) 10 before we go to the fourth step of the sequential evaluation process.

At step 4, we consider whether a claimant can perform any of his or her past relevant work (either as the claimant actually performed it or as the work is generally performed in the national economy) given his or her RFC. 11 Past relevant work is work that a claimant did within the past 15 years, that qualifies as “substantial gainful activity,” and that lasted long enough for the claimant to learn to do it. 12 If we find that the claimant can perform any of his or her past relevant work, we will find that the claimant is not disabled. If the claimant cannot perform any of his or her past relevant work, we go to the fifth step of the sequential evaluation process because we do not allow claims at step 4.

At step 5, we consider whether a claimant's impairment(s) prevents him or her from doing any other work that exists in significant numbers in the national economy, considering his or her RFC and vocational factors (age, 13 education, 14 and work experience  15 ). 16 If we find that the claimant cannot perform other work, we will find that the claimant is disabled. If we find that the claimant can perform other work, we will find that the claimant is not disabled.

At step 4, we determine whether a claimant can perform his or her past relevant work given his or her RFC. We require claimants to provide us with evidence about the work they performed during the relevant 15-year period. This evidence constitutes the claimant's work history.

We need information about each of the claimant's jobs, including but not limited to: (1) The claimant's job duties; (2) any tools, machinery or equipment he or she used; (3) the amount of walking, standing, sitting, lifting, and carrying the claimant did during the workday; (4) how long the claimant worked at each job; and (5) the physical and mental demands required of the job (either as the claimant actually performed it or as it is generally performed in the national economy). 17

A claimant provides us with work history information on the Form SSA-3368 “Disability Report—Adult” (or the Internet version of this form  18 ) and, when necessary, the Form SSA-3369 “Work History Report.”  19 Sometimes a claimant does not provide enough information on these forms for us to make a step 4 finding. If we do not have sufficient information, we will try to contact the claimant and possibly the claimant's former employer or other person who knows about the work, such as a family member or co-worker. 20

Once we have obtained all the information we need, we then compare the claimant's RFC to the physical and mental demands of these past relevant jobs to determine whether the claimant can still perform any of them. To make this comparison, we may use the services of vocational experts, vocational specialists, or other resources, such as the Dictionary of Occupational Titles, its companions, and supplements (published by the Department of Labor). 21 If we find that a claimant can perform any of his or her past relevant work, either as actually performed or as generally performed in the national economy, we will find that the claimant is not disabled. If the claimant cannot perform any of his or her past relevant work, we go to step 5 to determine whether he or she can perform other work that exists in significant numbers in the national economy.

At step 5, we determine whether a claimant's impairment(s) prevents him or her from doing any other work that exists in significant numbers in the national economy, considering his or her RFC (physical and mental) and vocational factors (age, education, and work experience). 22 We use several methods to help us make this finding.

First, we determine whether the claimant's impairment(s) and his or her vocational factors match one of the special medical-vocational profiles, which show an inability to adjust to other work. 23 If those profiles do not apply, we use the Medical-Vocational Guidelines (Guidelines) either directly or as a framework  24 to consider whether the claimant can perform any other work that exists in significant numbers in the national economy. 25 If a claimant's RFC and vocational factors do not coincide with any of the Guidelines, we use vocational experts, other vocational specialists, or other sources of reliable job information to obtain information to help us determine whether the claimant's RFC and vocational factors allow the claimant to perform other work that exists in significant numbers in the national economy. 26 If we find that a claimant cannot adjust to other work that exists in significant numbers in the economy, we find the claimant disabled. If we find that a claimant can adjust to other work that exists in significant numbers in the economy, we find the claimant not disabled.

Gathering and evaluating a claimant's work history can be a time-consuming and labor-intensive process, particularly when the claimant has performed multiple jobs during the relevant 15-year period. The time we spend obtaining the work history needed to make step 4 findings frequently delays the processing of claims and requires us to divert our limited administrative resources from processing other claims. This delay can occur at all levels of the administrative review process.

We propose to give disability adjudicators at all levels of the disability determination process the discretion to evaluate a claim at step 5 before making a step 4 finding if there is insufficient evidence to make a finding at step 4. If there is insufficient information, 27 the adjudicator would have the discretion to either develop the work history at step 4 or go to step 5. If the adjudicator proceeds to step 5, the adjudicator would consider whether the claimant may be disabled based on: (1) The special medical-vocational profiles, (2) the Guidelines, whether directly or as a framework, or (3) an inability to meet the mental demands of unskilled work. 28 If any of these rules would indicate that the claimant may be disabled or if the adjudicator has any doubt whether the claimant can perform other work existing in significant numbers in the economy, the adjudicator must return to step 4 to further develop the claimant's vocational information and determine whether the claimant can perform his or her past relevant work. The adjudicator must return to step 4 in this situation because the Act requires us to make a finding about a claimant's ability to do his or her past relevant work before we determine that he or she is disabled at step 5. 29

However, the Act does not require us to make such a specific finding before we determine that a claimant is not disabled. 30 Therefore, if the adjudicator can determine at step 5 that the claimant is not disabled based solely on age, education, and RFC, regardless of the claimant's skill level and transferability of those skills, the adjudicator would find the claimant is not disabled without returning to step 4. In some cases, we will be able to make a finding without developing a complete work history. 31 This proposed expedited process would not disadvantage any claimant or change our ultimate conclusion about whether a claimant is disabled.

The proposed process would also shorten processing times in some cases because we would not need to collect unnecessary work history at step 4 for claims that we can appropriately deny at step 5 based solely on the claimant's age, education, and RFC. For the same reason, this expedited process also would help us allocate our resources more efficiently and assist in reducing the disability backlog.

We have been using an expedited process similar to the one we propose for almost 12 years in our ten “prototype” States. 32 Adjudicators in the prototype States have been able to evaluate and deny a claim at step 5 in certain cases where there is insufficient information to make a finding at step 4. 33 Our experience in the prototype states supports the conclusion that the process does not change our ultimate decision as to whether or not a claimant is disabled.

We would apply this expedited process to adult disability and disabled adult child claims under titles II and XVI and to age 18 redeterminations under title XVI. We would also apply this process when we decide whether a current adult beneficiary's disability continues. 34 We would not use the proposed process to evaluate title XVI childhood disability claims because those claims do not use vocational criteria. 35

We propose to add this new procedure in new paragraphs 404.1520(h), 404.1594(f)(9), 416.920(h), and 416.994(b)(5)(viii). We also propose to make a number of conforming changes and plain language changes in other sections.

Executive Order 12866 requires each agency to write all rules in plain language. In addition to your substantive comments on this NPRM, we invite your comments on how to make them easier to understand.

For example:

• Would more, but shorter, sections be better?

• Are the requirements in the rules clearly stated?

• Have we organized the material to suit your needs?

• Could we improve clarity by adding tables, lists, or diagrams?

• What else could we do to make the rules easier to understand?

• Do the rules contain technical language or jargon that is not clear?

• Would a different format make the rules easier to understand, e.g., grouping and order of sections, use of headings, paragraphing?

We will not use these rules until we evaluate public comments and publish final rules in the Federal Register . All final rules we issue include an effective date. If we publish final rules, we will include a summary of relevant comments we received, responses to them, and an explanation of how we will apply the new rules.

We consulted with the Office of Management and Budget (OMB) and determined that this NPRM meets the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Thus, OMB reviewed it.

We certify that this NPRM will not have a significant economic impact on a substantial number of small entities because it only affects individuals. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

This NPRM does not impose new reporting or recordkeeping requirements and is not subject to OMB clearance.

For the reasons set out in the preamble, we propose to amend title 20 of the Code of Federal Regulations part 404 subpart P and part 416 subpart I as set forth below:

List of Subjects in 40 CFR Part 300

Environmental protection, Air pollution control, Chemicals, Hazardous Waste, Hazardous substances, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water Supply.

Accordingly, the amendment to Table 1 of Appendix B to Part 300 to remove the entry “Hipps Road Landfill”, “Duval County, FL” is withdrawn as of September 13, 2011.

This is a summary of the Bureau's Order, adopted and released on June 30, 2011 (DA 11-1151). The full text of this document is available for inspection and copying during normal business hours in the Commission Reference Center, 445 12th Street, SW., Washington, DC 20554. The document is also available for download over the Internet at http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0630/DA-11-1151A1.pdf. The complete text may also be purchased from the Commission's copy contractor, Best Copy and Printing, in person at 445 12th Street, SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-5300, via facsimile at (202) 488-5563, or via e-mail at Commission@bcpiweb.com.

On January 18, 2007, the Bureau released a Public Notice in IB Docket No. 07-23 (72 FR 9333-02, March 1, 2007), seeking comment on its proposal to further streamline the Section 214 authorization process by removing from the Section 214 Exclusion List those non-U.S.-licensed space stations that have been allowed to enter the U.S. market for satellite services pursuant to the procedures (DISCO II procedures) adopted in the DISCO II Order (62 FR 64167-01, December 4, 1997; as amended at 63 FR 6496-02, February 9, 1998). On June 30, 2011, the Bureau released this Order which adopts the proposal to remove from the Section 214 Exclusion List those non-U.S.-licensed space stations approved to serve the U.S. market pursuant to the DISCO II procedures. As part of this change, the Bureau will create a webpage that provides access to the space stations approved pursuant to the DISCO II procedures in one central location. Specifically, on the Bureau's web page, the Bureau plans to insert a link entitled Space Stations Approved for U.S. Market Access. Once users click on that link, they will be taken to a page with that same title that provides users a way to determine which space stations have been granted market access to the United States pursuant to the DISCO II procedures. The web page will include links to other lists already maintained for DISCO II purposes, such as the Permitted Space Station List and the I-SAT List, as well as entries for non-U.S.-licensed space stations approved for U.S. market access through other procedural means. The Bureau expects that centralizing this information on a web page will facilitate access to such information by common carriers and should address Inmarsat's concern about burdening carriers with the need to review multiple Commission orders in order to determine whether they may access a particular space station. In addition, the non-U.S. space station operator must inform customers that communication with its space station is subject to the conditions and technical requirements specified in the document approving its entry into the U.S. market in addition to the technical requirements in the Commission's rules.

It is ordered that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Section 0.261 of the Commission's rules, 47 CFR 0.261, this Order is adopted.

It is further ordered that this Order shall be effective September 13, 2011.

Petitions for reconsideration under Section 1.106 of the Commission's rules, 47 CFR 1.106, may be filed within 30 days from the date of public notice of this Order.

Background

FTA is authorized by 49 U.S.C. 5327 to conduct oversight of major capital projects, and to promulgate a rule for that purpose. The statute also obliges FTA to codify a definition of major capital project to delineate the types of projects governed by the rule. Further, the statute authorizes FTA to obtain the services of Project Management Oversight Contractors (PMOCs) to assist the agency in overseeing the expenditure of Federal financial assistance for major capital projects—both under the discretionary Major Capital Investment (“New Starts”) program and the formula Fixed Guideway Modernization (“FGM”) program authorized by 49 U.S.C. 5309.

FTA's predecessor agency, the Urban Mass Transportation Administration (UMTA), issued the original rule for oversight of major capital projects on September 1, 1989, at 49 CFR part 633 (54 FR 36708). At the time, UMTA's capital programs were comparatively small—the agency's annual capital grants totaled a little more than $2 billion—and there were a mere 25 task orders in effect for the services of PMOCs. Even then, however, the Congress recognized a compelling need to strengthen the agency's management and oversight of major capital projects. Thus, in 1987, the Surface Transportation and Uniform Relocation Assistance Act (STURAA) (Pub. L. 100-17, Sec. 324, 101 Stat. 132, 235) both directed a rulemaking for oversight of major capital projects and established a “take down” of up to one-half of one percent from the annual New Starts and FGM funding levels to finance the retention of PMOC services. Given its relative inexperience in the oversight of major capital projects, and its use of PMOCs for that purpose, UMTA chose to promulgate a limited rule that imposed only a very general requirement that the sponsor of a major capital project develop a project management plan for that project, and a very general framework for the responsibilities of UMTA's PMOCs. That original rule is still in effect.

Today, however, the annual dollar value of the Federal transit capital programs is nearly five times the level authorized under the STURAA in 1987. The number of active PMOC task orders is more than double the number during STURAA. The number of sponsors of New Starts across the United States—many of which are new to the transit industry—has increased exponentially. There is a compelling need for stronger management of fixed guideway modernization projects to help restore rail transit infrastructure to a state of good repair. FTA is participating in a larger number of “mega projects”— projects costing one billion dollars or more—which entail significant oversight challenges to the agency as the steward of Federal tax dollars. Moreover, FTA has become much more knowledgeable about the risks inherent in major capital projects, having conducted its own risk assessments since 2005, having studied the reasons for cost and schedule changes on a good many major capital projects, and having witnessed project sponsors' lack of management capacity and capability, and appropriate project controls, as discussed below.

The rule that FTA is proposing today follows the Advance Notice of Proposed Rulemaking (ANPRM) the agency published on September 10, 2009, at 74 FR 46515-21. This proposed rule would transform the current, narrow rule for project management oversight to a discrete set of managerial principles for sponsors of major capital projects; enable FTA to more clearly identify the necessary management capacity and capability of a sponsor of a major capital project; spell out the many facets of project management that must be addressed in a Project Management Plan; change the applicability of the rule from one based primarily on total project costs to one based primarily on the amount of Federal financial assistance for a project; tailor the level of FTA oversight to the costs, complexities, and risks of a major capital project; set forth the means and objectives of FTA risk assessments; and more clearly articulate the roles and responsibilities of PMOCs. What follows is a discussion of the comments on the ANPRM, FTA's responses to those comments, and a section-by-section description of the proposed rule and what FTA expects to accomplish through each section.

FTA received comments from twenty-one (21) entities, including seventeen (17) transit agencies, one (1) project management oversight contractor, and three (3) private not-for-profit organizations. FTA will address the comments in groups, by subject matter.

Comments: In FTA's proposal to shift the focus of its Project Management Oversight (PMO) rule from “project oversight only” to “project management and oversight,” many commenters stated that project management is not an appropriate Federal role. They stated that the shift would require more resources for FTA and that the overlay of the FTA project management processes may complicate project delivery and costs. Commenters also asserted that experienced sponsors already use the project management strategies proposed in the ANPRM. One commenter questioned whether FTA has the data and authority to support extending these requirements beyond inexperienced sponsors. Another commenter countered with the view that some sponsors have long shown problems with management capability and project controls and that even those that develop good Project Management Plans (PMPs) often fail to follow those plans. One commenter questioned whether the statute allows FTA to specify project management requirements.

FTA Response: FTA has no role whatsoever in a sponsor's hands-on management of a project. Rather, the FTA role is to oversee the effectiveness of a sponsor's project management. As the steward of the Federal funds that help finance these major capital projects, FTA is obliged to protect the taxpayer. The regulations FTA is proposing today are designed to ensure that sponsors of major capital projects possess resources and attributes necessary to successfully manage their major capital projects; that FTA has the means necessary to oversee the Federal investment in those projects; and that there are clear expectations of the PMOCs. Over the past several years, FTA has observed a number of characteristics of successful project management and is using this rule to establish them as minimum expectations for sponsors of major capital projects. Also, FTA has ample data to support the need for this rule. The types of problems the rule is meant to address are described in detail, below.

The plain text of 49 U.S.C. 5327(e) authorizes FTA to conduct oversight of major capital projects, and to promulgate regulations for that purpose. Further, the statute obliges FTA to codify a definition of “major capital project,” and 49 U.S.C. 5327(c) enables FTA to obtain the services of Project Management Oversight Contractors (PMOCs) to assist the agency in overseeing the expenditure of Federal financial assistance for major capital projects—both under the discretionary Major Capital Investment (“New Starts”) program and the formula Fixed Guideway Modernization (“FGM”) program authorized by 49 U.S.C. 5309.

Clearly, in authorizing FTA to approve or disapprove Project Management Plans, per 49 U.S.C. 5327(a) and (b), the Congress expects FTA to make judgments about the merits of those plans. Congress does not expect FTA to approve or disapprove plans arbitrarily or to reduce the qualitative assessment of Project Management Plans to mere checklists. In this proposed rule, FTA is making explicit and transparent the criteria by which FTA will determine whether a Project Management Plan merits approval. FTA expects this proposed rule to assist sponsors in developing and executing Project Management Plans of high quality. To the extent that some sponsors already use the project management strategies FTA looks for, the proposed rule will not be burdensome for them; indeed, their current practices attest to the validity of the proposed regulations.

Comments: In the ANPRM, FTA proposed to apply this rule to two categories of projects—fixed guideway capital projects and major capital projects—with greater oversight being applied to major capital projects. Many commenters perceived this as an attempt by FTA to extend the reach of its oversight and to take more control of local project management processes, leading to increased project costs and delays. Some questioned whether the statute allows FTA to specify project management requirements for non-major capital projects. Others suggested that FTA grandfather any project, already underway, which did not meet the definition of a major capital project, such that it would be exempt from the regulations. One commenter said no distinction should be made between types of projects or past experience of a project sponsor; rather, sound project management practices are good for all projects and all project sponsors.

FTA Response: These proposed regulations will apply only to projects designated as “major capital projects” under the proposed definition. Therefore, the proposed rule will not apply to fixed guideway capital projects unless they fall within the definition of major capital projects. Nonetheless, the project management principles identified by this NPRM reflect good practices that are germane to all capital projects, large and small; therefore, FTA encourages all FTA grant recipients to follow these principles in managing their capital projects.

The proposed regulations, together with other steps FTA is taking, are intended to reduce or eliminate delays in project development that have occurred in connection with some aspects of project risk assessments. From FTA's vantage, the most serious delays are attributable to sponsors' lack of understanding of the risk assessment process, incomplete submittals, or poor quality submittals. The proposed regulations, technical assistance provided at FTA's Annual New Starts Engineering Workshop, and a new guidance document called A Grantee's Guide to FTA's Risk Assessment Process, which FTA plans to issue in the near future, will provide every project sponsor with opportunities to thoroughly understand FTA's risk assessment process and better prepare to participate in the process. Moreover, FTA expects the risk assessments to occur concurrently with a sponsor's project development, thus, they should not lengthen the schedule or delay the Federal financing for a major capital project.

It is FTA's tentative view that the project management rule should not allow for a project to be grandfathered from the rule. FTA has every confidence, however, that the promulgation of a final rule will not impede either a New Starts or Fixed Guideway Modernization project already underway when the rule is promulgated.

Readers may be interested in a September 2010 report on FTA's project management oversight program by the United States Government Accountability Office (GAO), which examines the benefits of FTA's approach to project management oversight, challenges FTA faces in conducting that oversight, and FTA's use of both PMOCs and Financial Management Oversight Contractors to help the agency meet its oversight responsibilities. GAO-10-909, Public Transportation, “Use of Contractors is Generally Enhancing Transit Project Oversight, and FTA is Taking Actions to Address Some Stakeholder Concerns.” Among other matters, the GAO report notes recent PMOC contributions to ensuring that PMPs are accurate, and complete; also, that the PMOCs' participation in risk assessments has helped identify risks that threatened the budgets of major capital projects.

Comments: FTA presented three categories of major capital projects in the ANPRM, essentially: (1) New Starts projects; (2) Fixed Guideway Modernization projects costing $100 million or more; and (3) projects designated as major capital projects at the discretion of the Administrator. FTA also presented an expanded list of circumstances under which the Administrator could designate a project a “major capital project.” Many commenters disagreed with the precepts by which the Administrator might deem a capital project “major.” Some objected that the proposed criteria are ambiguous and subjective, giving FTA too much latitude to designate projects as “major.” Conversely, one commenter suggested that FTA omit the dollar threshold and use only the proposed criteria to which others objected. Some commenters objected to the use of any fixed dollar threshold. One commenter also suggested that FTA should focus this proposed rule on projects that expand a sponsor's fixed guideway system. Commenters further recommended that FTA use a risk-based approach to defining a major capital project; escalate the $100 million cost threshold for identifying a major capital project; and base FTA's level of oversight on the proportion Federal funding bears to the total project costs. Another commenter recommended that the project management regime discussed in the ANPRM should be extended to all capital projects, regardless of size or complexity.

FTA Response: FTA considered all of these recommendations. Today, the agency is proposing that a “major capital project” be defined as a project that meets either of two conditions:

(i) Any capital project for which the sponsor seeks $100 million or more in Federal financial assistance under either the Major Capital Investment or Fixed Guideway Modernization programs authorized by 49 U.S.C. 5309. (Note that in the current rule, the threshold is $100 million in total project cost.)

(ii) Any capital project the Administrator finds would benefit from the FTA project management program, given the size or complexity of the project, the uniqueness of the technology, the previous project management experience of the sponsor, or any other risks inherent in the project. (Note: This definition does not include routine acquisition, maintenance, or rehabilitation of rolling stock as specified both in statute and in the current rule.)

Comments: FTA stated in the ANPRM its minimum expectations for a sponsor to demonstrate technical capacity and capability. Commenters strongly supported the idea that sponsors must have “core competencies.” Several commenters suggested that a requirement for demonstrating technical capacity and capability through a PMP should not apply to Fixed Guideway Modernization projects, however. Some suggested that FTA consider a sponsor's experience and size, among other things, in determining the level of oversight of technical capacity and capability required for a major capital project. Others argued that the submittal of a staffing plan to FTA or simply self-certification of technical capacity should suffice.

FTA Response: In rule proposed today, FTA would explicitly require a sponsor to demonstrate that it possesses the management capacity and capability to successfully implement its proposed project. It must be emphasized, the proposed requirement for management capacity and capability is broader than the requirement that a recipient possess the technical capacity and capability necessary to carry out the scope of work under an FTA grant, which applies to any type of grant under the Federal Transit programs authorized by 49 USC Chapter 53.

Moreover, the argument that self-certification and FTA's ordinary progress reviews would suffice as evidence of a sponsor's technical capacity and capability inappropriately discounts the seriousness and consequences of the schedule delays and cost overruns that have occurred on past projects for which grant recipients self-certified. Experience has shown that those practices do not provide sufficient protection for the Federal funds invested in major capital projects. Certainly, FTA acknowledges that there are opportunities to tailor, and in some cases streamline, its oversight process to the size and complexity of a major capital project, as well as to a sponsor's past performance. However, as with any financial investment, a sponsor's past performance is not a guarantee of future results. The persons, processes, or even the organizational elements responsible for past successes may be gone. Moreover, as one commenter noted, a sponsor may possess the requisite expertise, but may not assign the individuals having it to the major capital project in question or may spread those individuals too thinly over too many projects. Likewise, a sponsor's successful experience with one particular approach to project development does not guarantee success under a different development approach. If a sponsor still has the capabilities and resources responsible for past success on a similar project and will devote them to the major capital project in question, FTA's review will be faster and easier. Before awarding Federal funding for the development of a major capital project, however, FTA must determine that the sponsor has sufficient capacity and capability to manage the scope of work for a Fixed Guideway Modernization or the appropriate phase of a New Starts project. While all organizations possess some degree of management capacity and capability, a given organization may need to enhance its management capacity and capability to meet the thresholds for a major capital project, given the constraints and risks of that particular project.

Comments: In the ANPRM, FTA suggested that a sponsor be required to submit a formal and documented Project Management Plan (PMP) setting forth its policies, practices, and procedures; to secure FTA's approval, the PMP would have to explain in sufficient detail the sponsor's plan for developing and implementing the project, including the monitoring that will take place to ensure that each major phase or stage in the project development process will be duly executed.

Several of the commenters suggested that a PMP be scaled based on project size and type. One commenter liked the idea of an integrated PMP that is modular, but believed it necessary for major capital projects, only. Some thought PMPs unnecessary for state of good repair projects regardless of size or complexity. Some commenters requested that FTA provide better guidelines for the development of PMPs. Others stated that the current rule does not and need not allude to sub plans under the PMPs. Another commenter strongly supported FTA's proposed emphasis on the PMP, while recommending that all sub plans be consolidated, the process be simplified, and FTA should act to ensure that a sponsor adheres to its PMP.

FTA Response: The proposed rule provides that PMPs will be required only for major capital projects as defined in this rule. Furthermore, PMPs will be scaled, based on project size and complexity. It is clear, however, that PMPs are effective management tools for any capital project. A PMP should provide for a series of project-specific performance measures that a sponsor can report against. This NPRM specifies a set of core contents for PMPs plus other requirements that are project-specific. Sub Plans are defined in the proposed rule to mean a document either within or related to a Project Management Plan which addresses a specific discipline or managerial practice for the purposes of planning and managing a major capital project.

Comments: In the ANPRM, FTA noted the agency has developed checklists that sponsors of New Starts projects can use as quick reference guides to evaluate and monitor their readiness to be approved into the next phase of the New Starts project development process. FTA proposed to create new checklists for all major capital projects as guides to project implementation. Many commenters disagreed that checklists are helpful and suggested, instead, that FTA formulate standard formats and data requirements to be filled out by transit agencies sponsoring major capital projects. These commenters also stated that the readiness evaluation process slows sponsors' receipt of Federal funds, and noted that only New Starts and Small Starts have a structured series of FTA approvals specified in law. Conversely, another commenter thought consolidation and simplification of the checklist would be very helpful. One commenter thought checklists are useful for high-risk projects, and that the checklists should be as demanding as possible but sufficiently flexible to prevent a project from stalling over an unnecessary detail.

FTA Response: This proposed rule limits application of the readiness evaluation criteria to enter a subsequent phase in project development to New Starts and Small Starts projects. FTA intends is to work with New Starts and Small Starts sponsors early in project development to make the readiness evaluation criteria very clear to the sponsors, and to speed up the approval process.

Comments: In the ANPRM, FTA proposed specific reporting requirements for sponsors of Federal funding for major capital projects, including, but not limited to, value engineering reports, safety and security management reports, monthly progress reports, and cost updates for FTA's cost databases. Some commenters requested clarification of these proposed requirements, and some suggested that FTA's TEAM grants management system be used for reporting. Another commenter thought that TEAM would not be optimal because milestones and details should be more integrated with the existing system of periodic reports and go deeper into detail than the level of reporting in TEAM.

FTA Response: This proposed rule clarifies the content of a PMP and its specific Sub-Plans for addressing critical aspects of project implementation. The NPRM further specifies monthly reporting requirements. In the near future, FTA will issue an update of its Project and Construction Management Guidelines, as well as its project management oversight procedures, which contain information on most of the requirements pertaining to oversight and project management.

Comments: In the ANPRM, FTA raised the possibility of relaxing requirements for sponsors who have successfully completed other major capital projects within the past seven to ten years. To illustrate, if a sponsor could demonstrate that it has retained its most critical resources, such as the project manager; that the sponsor organization's business processes and procedures have not been significantly altered; and that the project involves the same or similar technology, FTA could relax the requirements accordingly. The majority of commenters agreed with this approach and also suggested that the risk of the project be considered in determining the level of FTA oversight. A handful of commenters expressed a concern that this approach may not be consistently applied across projects and FTA Regional Offices, and that past performance does not guarantee future success. One commenter opposed the proposed approach, arguing that practices seven to ten years old are obsolete, and that all recipients should be held accountable to a consistent set of standards.

FTA Response: The proposed rule would make project risk one of the factors considered in determining the level of oversight required of a project. FTA will make every effort to ensure that the criteria to assess past performance are fair and consistent. Past performance will include making sure that previously implemented projects and any new project are similar in nature and that key personnel and practices are still available to manage the new project. FTA will consider, specifically, the level of complexity of the project, the amount of Federal financial assistance the sponsor seeks for the project, and the sponsor's past performance in managing its major capital projects.

Comments: In the ANPRM, FTA stated that the need for oversight has increased even faster than the available Federal funding because the growth in FTA's programs has generated both higher demand and more complex projects. Some commenters expressed concern that an expansion of the FTA oversight role would be inconsistent with FTA's intention to streamline project development under the New Starts program. Some expressed concern whether enhanced oversight would strain FTA's scarce resources. Some suggested that FTA's level of oversight should be based on the proportion of Federal investment, project complexity, or technical expertise of the project sponsor. Some commenters also said they would welcome early PMOC involvement in major capital projects, but noted that some of the PMOCs are not very experienced, and there remains a lack of consistency in the PMOC process. Also, some commenters asserted that FTA oversight activities are too detailed, and duplicative, in some cases, if one considers triennial reviews, annual and biennial certifications, and other FTA program reviews.

FTA response: FTA works continually to improve its oversight processes. Expanding FTA oversight in the ways FTA proposes need not slow the development of major capital projects or compromise efficiency, nor is it inconsistent with FTA's goal of streamlining the New Starts process. As mentioned above, a recent report by the GAO identifies a number of actions FTA has taken to improve its project and financial management oversight of New Starts projects. Both the GAO and the U.S. Department of Transportation's Office of Inspector General have identified challenges FTA faces in providing effective oversight of particularly large and complex major capital projects. Furthermore, FTA has initiated a top-to-bottom review of its oversight policies, procedures, and management practices to further improve its oversight programs. This includes, specifically, enhancing FTA's risk-informed PMO program to ensure robust oversight and monitoring of complex capital projects requiring a significant amount of Federal funding or having inexperienced project sponsors, while at the same time seeking opportunities to streamline the oversight of less costly projects being undertaken by experienced sponsors, and making all oversight more efficient and consistent. FTA has already started working with sponsors to ensure early involvement and will assign PMOCs to match the project complexity and its challenges. Also, FTA emphasizes that the definition of major capital projects in this proposed rule would be based principally on the amount of Federal funding a sponsor seeks for its project.

Comments: In the ANPRM, FTA observed that, over the past several years, the agency has increased its use of risk assessments, risk-informed management, and risk mitigation strategies to ensure that major capital projects are constructed on time and within budget, while delivering the promised project benefits. FTA relies on a portfolio of risk management tools to prevent project costs from escalating. In general, the comments on the ANPRM suggested that risk assessment should be more in the form of technical assistance designed to enable project sponsors to take greater “ownership” of the process. Some commenters argue that risk reviews should be relaxed for those project sponsors capable of performing their own assessments. Others believed that PMPs should be developed much earlier in the life of a project, and that risk assessments preceding preliminary engineering on New Starts projects should concentrate on identifying potential risks for that type of project, developing possible mitigation strategies, and determining key project milestones. One commenter urged that FTA not overemphasize risk to the exclusion of other relevant project management and oversight criteria.

FTA response: FTA does not see technical assistance as a sufficient substitute for the risk assessment and risk management approach set forth in this proposed rule. Obviously, it is desirable for the agency to provide some form of technical assistance in conjunction with risk assessments and risk reviews. This may take the form of suggestions or recommendations for ways to overcome deficiencies disclosed by an assessment or review. FTA already does this as resources and time permit. Certainly, FTA agrees that a PMP early in the life of a project would be useful to local management of the project development process. FTA also agrees with the suggested scope of risk assessments preceding preliminary engineering on New Starts projects, which is consistent with current practice in the New Starts program. Indeed, over the past several years, FTA has gained a great deal of experience in risk assessment, such that the agency is better able to perform a risk assessment at a level commensurate with the nature and characteristics of a major capital project. This experience now provides the means for explicit project execution planning, tools for risk mitigation and management, and allocation of costs and schedule contingencies, as appropriate. FTA's basic methodology for conducting risk assessments, whether done by FTA or the project sponsor, is set forth in the Appendix to the proposed rule.

Comment: One commenter argued that FTA should use only a qualification-based selection process for obtaining PMOC services.

FTA response: The procurement methods FTA uses to retain services from PMOCs are outside the scope of this rulemaking.

FTA is proposing a significant revision and restructuring of the rule at 49 CFR Part 633. Under the proposed rule, there would be three subparts and a single appendix. Subpart A (“General Provisions”) would address the purpose of the rule, the definitions of certain terms, the applicability of the rule, and FTA's rights of access to information. Subpart B (“Recipients' Responsibilities for Project Management”) would set a number of fundamental requirements for establishing a sponsor's management capacity and capability; specify the subjects that must be addressed in a sponsor's Project Management Plan; establish special requirements for certain projects based on cost, complexity, or risk; and spell out a sponsor's obligations to carry out all the particulars of its project management plan, report current data on budget and schedule, and meet with FTA and FTA's PMOCs on a quarterly basis. Subpart C (“FTA Project Management Oversight”) would present the principles of FTA project management oversight, describe the various uses of PMOC services, delineate the roles and responsibilities of PMOCs, address FTA's requirement for risk assessments, and specify the circumstances in which FTA may increase its oversight of a major capital project, based on the cost, complexity, or risks of that project. Additionally, in an Appendix to this proposed rule, FTA would set forth the basic methodology used for conducting risk assessments on major capital projects as it deems necessary or prudent.

The following is a section-by-section analysis of each proposed rule:

This section explains the mandate of 49 USC 5327(e) to perform oversight to both the Major Capital Investment and the Fixed Guideway Modernization programs authorized by 49 USC 5309.

This section sets forth the definitions of some key terms applicable to this rule. This section would establish new definitions in the rule for “Project Management Oversight Contractor,” “risk,” “sub plan,” and “management capacity and capability.” Also, this section would amend the current definitions for “major capital project,” “project management oversight,” and “project management plan.”

By definition, a `major capital project' will be a project using $100 million or more in Federal financial assistance under either the Major Capital Investment or Fixed Guideway Modernization programs authorized by 49 U.S.C. 5309, or any capital project the Administrator finds would benefit from the FTA project management program. Thus, the proposed change to the definition of “major capital project” entails a fundamental shift, as follows: The current definition at 49 CFR 633.5 is based on total project costs of $100 million or more, but the proposed definition would be based on a total amount of Federal funding of $100 million or more from programs under 49 U.S.C. 5309. FTA believes it more appropriate to apply the rule to any given project based on the level of Federal investment in that project, as opposed to the total costs of the project.

The proposed changes to the definitions of “project management oversight” and “project management plan” are simply for clarity.

Insofar as “project management oversight,” however, readers should be aware that FTA uses the term to connote the activities of both the agency and its PMOCs in all of the following: First, the activity of continuously assessing a project to evaluate its readiness for further project development, up through the point where FTA determines whether the project is ready for a grant award, based on sufficient confidence that the scope, costs, benefits, and impacts are firm and final. Second, the activity of making ongoing determinations whether the sponsor has the management capacity and capability necessary to carry out a project efficiently, and effectively; the effectiveness of the sponsor's project delivery; and whether the project is on time, within budget, and built to approved plans and specification, consistent with all applicable Federal requirements. Third, the activity of ensuring that a sponsor's management processes are based on sound decision making, driven by a thorough understanding and implementation of well documented, risk-informed project management practices.

Since the original rule was issued more than 20 years ago, a number of disciplines have developed as best practices in the transit industry, including risk and contingency and rail fleet management plans. Other disciplines are now required by law, including, notably, safety and security management plans. Thus, instead of requiring an all-inclusive project management plan, FTA proposes to institutionalize its practice of permitting sponsors to address these different disciplines in `sub plans.' The proposed definition of “sub plan” reflects the use of that term throughout the industry.

FTA framed the proposed definition for “risk” based upon the agency's experience in conducting various types of risk assessments for major capital projects over the last several years, including the Lower Manhattan Recovery projects and several New Starts projects entailing tunneling with geotechnical risks. The proposed definition is also consistent with the approaches to “risk assessment” taken by other governmental agencies in the fields of human health, nuclear power, defense, security, and other forms of public works. The study of risk is a broad subject. It can be applied to a sponsor's entire organization, or the many functions and levels of an organization, or specific functions, projects and activities. See, e.g., International Organization for Standardization (ISO), ISO/FDIS 31000:2009, Introduction. As a Federal grant agency making investments of taxpayer funds, FTA must examine a sponsor's management capacity and capability at all these levels in assessing risk.

For that very purpose, FTA is proposing a definition of “management capacity and capability” to capture the point that while every sponsor must have the underlying technical capacity and capability to carry out a project, for a major capital project, the sponsor's ability to deliver the project on time and within budget is driven by the robustness of both (a) its “management capacity,” which consists of the authority and resources of the project team, and (b) its “management capability,” which reflects the additional authority and resources the sponsor is able to call upon as necessary to deliver the project. These points are discussed further below.

This section would amend the current rule at 49 CFR 633.11 (“Covered projects”) by omitting the obsolete legal citations in the current section 633.11, and extending the rule to all major capital projects funded from any source under 49 USC Chapter 53, including those major capital projects using Chapter 53 funds that originate under the Surface Transportation Program (STP) or the Congestion Mitigation and Air Quality Program (“CMAQ”) authorized by the Federal-aid highway statutes.

Readers should note, moreover, that in his or her discretion, the Administrator could designate a Small Starts project as a major capital project subject to these requirements.

This section would make a minor change to the current rule at 49 CFR 633.15, but it would also recognize a preferred practice among FTA and many sponsors of major capital projects regarding the custody and control of documents and data that sponsors may wish to withhold from disclosure to third parties. Specifically, this section would allow FTA and its PMOCs to decline custody or control of documents which are or may be at issue in litigation between project sponsors and third parties.

All organizations that sponsor transit projects are capable of carrying out their projects with some degree of efficiency and effectiveness. To some degree, all of them are capable of managing risk. There is a fundamental linkage, however, between the experience of a sponsor's project “team” and the risks of a project. The experience level of a project team can increase or mitigate the risks of a project. Changes in the membership of a project team or the competency levels of acquired team members can precipitate changes to the schedule for a project, or the duration or particular project activities. See, e.g., Project Management Institute, Body of Knowledge (2004), Ch. 11.

This NPRM would establish an explicit link between the organizational performance of a project sponsor and the management capacity that is necessary to complete project activities. FTA is convinced that deficits in management capacity impair organizational performance and expose a major capital project to increased risk of negative consequences for costs and schedule. Clearly, a sponsor's project team requires certain minimum skills and competencies, delegated authorities, explicit accountabilities, and assigned resources to accomplish a project, which can be defined as “management capacity.”

Experience demonstrates, moreover, that the successful completion of a major capital project requires more than a minimum management capacity; it requires that the sponsor organization have the ability to both oversee the project team and provide additional support and resources, as necessary, to address emerging problems, or issues not identified in the original constraints or assumptions. FTA characterizes this as “management capability.” This NPRM would require the sponsor of a major capital project to possess both management capacity and management capability.

The greater the risks associated with the constraints or assumptions of a project, the greater the demand for management capacity and capability, and the higher the thresholds for managing the project and mitigating risk. At each stage of the process of project development—and prior to awarding a grant of Federal funds—FTA must determine whether a sponsor possesses the necessary management capacity and capability to accomplish that phase of the project or the purpose of that grant. If FTA finds that a gap exists in a sponsor's management capacity and capability, the sponsor must demonstrate, with documentation, an approach to acquiring the means to close the gap within an acceptable timeframe.

Likewise, from the earliest moments of developing a major capital project, a sponsor must balance the authority and resources allocated to that project against any competing priorities, and retain the ability to mobilize additional resources, as necessary. Specifically, the project team must have the sufficient delegated authority and resources to manage the activities to be accomplished at each successive phase of the project. Yet the project team must be explicitly accountable to the sponsor for its exercise of delegated authority and its use of allotted resources. The project team must also be responsible for reporting and elevating issues to higher management of the sponsor's organization—such as a chief executive officer and board of directors—in a manner that is both professional and ethical.

Many readers will be familiar with the term “technical capacity,” or “technical capacity and capability”—which is a subset of management capacity and capability. By law, a recipient of a grant under any of the FTA programs authorized by 49 U.S.C. Chapter 53 must have the legal, financial, and technical capacity to carry out the project that is the subject of that grant. In itself, of course, the absence of any key technical skill or the inadequacy of a technical process could lead to significant cost overruns and schedule delays. For example, the lack of geotechnical expertise for a tunnel project, or lack of real estate savvy on a project requiring large amounts of real estate acquisition could seriously jeopardize a project's budget or schedule, or both. And the requisite technical capacity and capability might differ in some aspects from project-to-project or even phase-to-phase within the same project. For example, some of the expertise required to successfully manage a light rail project will not be required for bus rapid transit. Similarly, some of the skills necessary for the construction phase of a project will differ from those needed for the earlier design phase of that same project. Nonetheless, good management is an underlying necessity regardless of the mode of transit, or phase of development, or the technical capacity a sponsor may possess. From the very beginning of a project, a sponsor must develop and maintain the expertise, processes, and procedures necessary to successfully implement and manage the project at each stage of planning, engineering, design, and construction.

In summary: Unlike the current rule at 49 CFR part 633, this NPRM would clearly establish FTA's expectations for management capacity and capability of sponsors of major capital projects. In effect, FTA would codify the skills and practices a sponsor must acquire and maintain to successfully deliver a major capital project. While the proposed rule would cover major capital projects, only, FTA is convinced the requirements of proposed section 633.9 are germane to any capital project, and encourages sponsors to follow these principles in managing all their capital projects.

The Project Management Plan (PMP) is altogether critical to successful management of any major capital project, throughout the development and implementation of that project. The PMP and its sub plans further enable the sponsor's staff to effectively manage the scope, budget, schedule, and quality of the project through a set of common objectives, while managing the safety and security of the public.

The proposed rule would provide for the scaling of the PMP to match the nature and characteristics of the project. It identifies core PMP requirements and states that depending on the characteristics of the project, additional requirements may apply. For example, the management of any major capital project benefits from the establishment of comprehensive and critical path-driven project schedules, as well as strong document control procedures and procedures for managing contractor performance. The proposed regulatory text would institutionalize FTA's risk-informed project management oversight process, and addresses risk and contingency management sub plans as core PMP requirements. On the other hand, real estate management sub plans would be required only when the acquisition of real estate is necessary to implement a project.

Note that many disciplines can be addressed in separate sub plans, as discussed above. FTA recognizes that some project sponsors have in-house project management tools, so the proposed rule would allow for the sponsor to incorporate by reference its plans, programs, and procedures already in existence which address the various PMP requirements.

Over the years the industry has forcefully asserted that not all sponsors are alike, nor are all projects alike, thus, FTA should take individual circumstances into account when applying its requirements for project management. FTA agrees. This section is proposed in direct recognition of that approach. Simply put, while Section 633.11 already recognizes that the PMP for any project has certain core components, there are other components that only apply in certain circumstances. The Administrator will review the sponsor's management capacity and capability, the complexity and risk of the project, the sponsor's experience implementing similar types of projects, and, based on that review, can impose additional requirements the sponsor must address in its PMP. The Administrator may then require the sponsor to report its progress in meeting those special requirements as well as to forecast whether the project will stay on schedule and on budget. This would be a targeted approach, based on individual circumstances, after a careful analysis. It is not and would not be the normal practice. Thus, while the proposed rule requires every sponsor to have in place basic management systems, it also recognizes that in certain circumstances, because of the nature of the investment or the sponsor's own experience level, additional management capacity and capability may need to be put in place to ensure that a project is delivered on time and on budget.

More important, these additional requirements are intended to be developed early enough that they can make a difference in how well the project is managed. These are not “cookie cutter” solutions; rather, they will be specific to the sponsor's structure and project approach. These requirements will also help the sponsor ensure that decisions about the project will be made based on the best information available at the time; in an open, transparent, informed manner; at the appropriate management level; and documented in a manner that can be reconstructed by third parties.

This particular provision in the NPRM reflects two corollary lessons learned by FTA in the 22 years since the agency issued the current regulation. First, any problems in implementing a project must be recognized and addressed as early as possible. The proposed rule would oblige a sponsor to anticipate a problem and have a solution already in place should the problem arise. Second, the proposed rule recognizes that if projects experience significant problems, unless the problems are recognized and addressed promptly by the sponsor, the range of options for solving the problems narrows rapidly, and may disappear altogether. Therefore, this proposed rule focuses on the need for the sponsor to track and forecast whether the project is, and is expected to stay, on schedule and within budget, to identify and develop immediate and effective solutions to remediate problems related to schedule and budget, and to report this information to FTA with the understanding that FTA will use this information in making funding decisions, even with respect to approving an annual increment of committed New Starts funds. At heart, these proposed requirements are intended to help FTA and project sponsors meet their stewardship responsibilities to guard against waste and misuse of taxpayer funds.

The fundamental basis for these requirements is substantiated by research. In 2005, an FTA-sponsored study on cost overruns on transit projects, primarily light rail new starts projects (Analysis of Capital Cost Elements and Their Effect on Operating Costs, NTIS report no. FTA-NY-26-7000), http://www.utrc2.org/research/assets/107/utrc-2005-fta1.pdf , noted in its introduction that cost overruns are a common phenomenon because “[a]s projects are developed, costs rise as projects become more complex, unforeseen conditions are encountered, and delays erode the real value of the original budget.” The study concluded in Section 2.1 that several factors contributed to overruns, including “[s]ystematic underestimation, including the failure to adequately assess risks, foreseeable adverse conditions, and the full range of project cost components.” An internal FTA study on risk management performance included an evaluation of forecasted versus actual performance for several projects and concluded that approximately 50 percent of the cost overruns in selected projects were related to poorly managed risk. Finally, in 2006, a TRB report (TCRP Project G-07—Managing Capital Costs of Major Federally Funded Public Transportation) http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_w31.pdf, identified a number of possible causes, which are described in the examples below, for the industry's inability to accurately estimate, manage, and control project costs. These three studies came to similar conclusions and reflect FTA's experience over the last twenty years of investing in major capital projects. Significant risks to major capital projects include:

Unforeseen engineering and construction complexities: Constructing transit projects in dense, older, urban cores may mean rebuilding infrastructure over 100 years old. A recent New Starts project was constructed above older masonry sewers. The sponsor did not realize the contractor would use mass excavation equipment in the street, and the heavy equipment collapsed the fragile, underlying utilities. On another project, the sponsor assumed that the existing utilities could be easily relocated with existing methods for temporary support of older cast iron pipe. That assumption was inaccurate. Correcting the consequences sharply increased the costs of the project. Another project sponsor replacing older storm sewer planned to add tunnel discharge to the waste water flow. The sewer had settled, which required extensive relaying to handle the planned discharge, all of which added to the project costs. Examples abound of problems stemming from construction complexity, but one in particular stands out: A tunnel portal was fully engineered and reviewed for constructability, but the engineers missed the detail that the portal was located in the middle of a municipal corporation yard resulting in significant delay and a substantial increase in cost. All of these risks were foreseeable, and avoidable.

Relevant costs not included in early estimates: In the early implementation of FTA's risk review process there were “mechanical inaccuracies” in estimates and frequent problems in the integration of cost data; this has improved in recent years, however. Another problem had to do with escalation in that, as a project advanced, portions of the cost estimate remained in earlier year base dollars. Most recently, one of FTA's major capital projects went through a protracted process towards an amendment of the Full Funding Grant Agreement. About a third of the overrun on that project was due to problems in the base estimate with earlier data that was not updated as part of the on-going budget process. A similar example has to do with indirect costs for construction; most sponsors still budget construction indirects on a percentage or “parametric” basis, even though they often develop extensive Division 1 specifications in terms of services, reports and personnel. Another problem has been under-budgeting of contractor design costs in design/build contracts.

Organizational and technical capacity to undertake the project: There are two recent examples where a transit agency that had successfully executed a number of light rail projects stumbled in building a commuter rail project. In a third instance, a transit agency that had successfully delivered a project using a traditional sealed bid approach ran into cost problems when it attempted a design/build project delivery.

Changes in project scope: For a New Starts project, FTA's expectation is that coming out of Final Design, the project scope will be well defined and experience relatively few changes thereafter. Recent experience has shown that this is not always the case. A number of New Starts projects have changed or reconfigured almost half of the construction scope before the projects were halfway bid. Often this was due to changing market conditions, but, in retrospect, the benefits that sponsors received for assuming such risk have been low, at best. At worst, not only have there been no benefits, but costs have actually increased. A less frequent, but still costly, factor is where the physical characteristics of the project have changed. This has happened because of problems identified during geotechnical exploration, and actual changes in the physical configuration of the project made to accommodate stakeholder demands or changes in underlying assumptions.

Geotechnical: The inability of a sponsor to deal with geotechnical issues up front has been shown to increase total geotechnical costs by as much as 40 percent and cause months of delays. For example, of seven recent projects with a planned total of eleven underground transit stations, four stations were moved after entry into Final Design and two were moved during construction. These moves were due to issues identified when better geotechnical information became available from more detailed soil borings during Final Design, which led to both additional redesign costs as increased costs from delays to the schedules. In one instance, a station had to be moved 90 feet deeper to avoid encountering an existing water tunnel. In another instance, the sponsor had to lower the tunnel to achieve the necessary rock cover.

Ability to Define Physical Configuration of a Project: This occurs most frequently when a project sponsor determines during Final Design or construction that a previously relied upon design standard or requirement is no longer valid. In one such instance, a sponsor had managed the design of the project based on an assumption that critical features of the storage yard and its connections with the mainline were determined by the morning peak load. Subsequent to entry into Final Design, the sponsor discovered that constrained yard movements and a new bridge were needed to accommodate evening peak load, which added 30% to the contract package costs and delayed the package design by an additional eighteen months.

FTA's review and approval of a PMP seeks to verify that a sponsor has all the relevant capabilities and resources in place to ensure successful management of the project using available best practices. It also verifies the sponsor's readiness to move a New Starts project from one phase of development to the next, and for other major capital projects, the receipt of Federal grant funds. A PMP is a dynamic management tool that requires periodic updates as a project transitions from one phase to another or as a result of other changes, such as turnover in personnel.

This proposed rule would continue the requirement for monthly reporting and clarify other requirements aimed at improving the management of a major capital project. Specifically, the proposed rule would document the need to report and manage the project, based on a risk-informed management process. This would include tracking and reporting on cost and schedule contingencies along with known risks to the budget and schedule, as well as ongoing or planned efforts to mitigate those risks.

Further, the proposed rule would codify FTA's long-standing practice of convening quarterly meetings with major capital project sponsors, as deemed necessary. These quarterly meetings—typically attended by FTA, its PMOC, and local agency management and technical staff—are opportune occasions to analyze the progress of a project and identify issues that threaten timely and cost-effective delivery, and develop remedies and alternatives to maintain cost and schedule. Moreover, in its effort to ensure the implementation of safe rail systems, FTA has recently begun to encourage a project's prospective state safety oversight agency representative to attend these quarterly meetings.

The basic oversight framework at 49 CFR part 633 has served FTA well, focusing on the assignment of to oversee major capital projects and requiring a project sponsor to develop a comprehensive PMP to guide the planning and implementation of its major capital project. The current rule has helped to protect taxpayer funds and to ensure the efficient, effective design, construction, and opening of transit projects to revenue service.

Today, however, FTA is investing in larger and more complex capital projects, as compared to those in years past. These more recent projects entail greater challenges to the agency as the steward of Federal tax dollars. They require further improvements in the ways sponsors manage their projects and the FTA program for oversight of major capital projects.

The proposed rule is designed to tailor the FTA oversight process for factors such as project complexity, the amount of Federal investment, and the experience level of the project sponsor. FTA has already started working with sponsors earlier in the project development process, and will assign PMOCs to match project complexities and challenges. The proposed rule sets forth the principles for FTA's project management oversight. It specifically establishes and documents FTA's risk assessment practices, the review of project management capacity and capability, and the review of project readiness. These reviews would “raise the bar” as compared to the minimal requirements in the current rule, which are limited, essentially, to review of the PMP and its implementation.

While FTA's capital programs have grown significantly since 1989, its staff size has stayed essentially the same for the past 30 years. FTA's PMOCs help fill the gaps between staff resources and both the number of major capital projects and the levels of Federal funding for those projects. Further, of course, the PMOCs provide specialized expertise for the challenges that confront a good many projects. Currently, the decision to assign PMOCs to projects is made based on the relative complexities of the major capital projects underway, as well as the experience level of the project sponsors. This proposed rule acknowledges conditions under which FTA may scale its provision of oversight services to the risks (or lack thereof) inherent in a project or to the experience level of its sponsor.

Each PMOC firm assigned to a major capital project is a team of experienced professionals who collectively possess expertise on all aspects of the development, construction, start-up, and overall management of transit capital projects, including major capital projects. All PMOCs serve as FTA's eyes and ears on-site; monitor and report on a project's development and implementation; and verify whether the management of a project is consistent with the approved project management plan and accepted engineering and project management practices. The PMOCs submit periodic reports to FTA, documenting project status, activities, and open issues.

In this proposed rule, additional project elements such as safety and security have been included as requiring PMOC oversight. These PMOC efforts keep FTA informed of a project's status and the adequacy of a sponsor's project management. They also help support FTA's decision whether to advance a New Starts project to the next phase of development, recommend a New Starts project for a Full Funding Grant Agreement, or provide a large grant to a sponsor of a Fixed Guideway Modernization.

As discussed previously, a PMOC's primary role is to support FTA in the oversight of a major capital project by reporting and making recommendations to FTA on the sponsor's management of the project. Acknowledging their professional expertise, this section of the proposed rule sets forth the explicit roles and responsibilities of the PMOCs. It also provides for related services that PMOCs may provide to FTA's oversight program. These may take the form of specialized assistance to FTA, for example, in developing oversight procedures, preparing reports on best practices, sharing of lessons learned, conducting independent reviews of capital cost estimates, and other efforts that help FTA improve its transit capital investment programs.

FTA must emphasize, however, that a PMOC has no authority to make decisions for FTA or to act on behalf of FTA in making any findings or judgments regarding a sponsor's compliance with Federal statutes, regulations, or administrative requirements. As explained herein, a PMOC does not and should not interfere with the project sponsor's responsibilities. A PMOC does not sign drawings, for example, nor does it perform field tests, conduct materials testing, or inspect work site conditions, so forth.

To protect all parties that are or may be involved in a major capital project, this NPRM reaffirms that a PMOC performs its services under strict privity of contract with FTA. Regrettably, on a few occasions, PMOC's have been subpoenaed for testimony or production of documents in third party law suits, or even sued in tort, in attempts to blame them for accidents, incidents or injuries related to the project, or to find them liable for errors and omissions associated with the design and construction of the project. FTA's PMOCs bear no such responsibility, of course, and this proposed rule memorializes that point.

FTA's risk assessment of major capital projects has evolved over the years, partly in response to the increasing complexity of projects, but certainly as the result of FTA's growing experience in the oversight of major capital project management. Since 2003, FTA has completed over 40 assessments of the risks associated with New Starts and other major capital projects. During this time, the risk assessment has transitioned from a stand-alone “bottom-up” risk analysis to an integrated “top-down” risk analysis, and FTA has employed a number of approaches to identify project risk.

The first approach was to identify “sources of risk” which are categories of possible risk events ( e.g., stakeholder actions, unreliable estimates, team turnover) that could affect the project for better or worse. This approach attempted to compile an estimate of total project risk exposure, which would then be used to determine budget adjustments or requirements for additional contingency. This process resulted in a project level estimate of risk from very detailed estimates but without tracking the estimate to specific contract packages or budget line items. This was characterized as a “bottoms up” approach. FTA's experience with the “bottoms up” approach was unsatisfactory.

Subsequently, FTA identified common characteristics of satisfactory risk assessments and realized that an evaluation of project deliverables and quality of management planning products tied to individual contract packages or budget line items consistently led to more accurate projections. This became known as the “top down” approach. A number of advantages materialized as a result of transitioning to the “top down” approach. Most significantly, FTA was able to bring to any individual project assessment a standardized risk classification system, as well as a risk framework to facilitate management planning. In the several years of implementing this “top down” approach, FTA has had considerable success in forecasting project risk, and has presented this information at various international forums. Indeed, this new approach has contributed to improvements in project management not only in terms of the tracking of risk, mitigation efforts, and available contingencies, but also in reporting on the risk response and effective contingency management. FTA has been continuously working with the PMOC community to document emerging lessons learned, which will serve as a guide to improving the risk models as well as developing new tools to improve the process.

FTA has also initiated risk assessments prior to entry into Preliminary Engineering for those New Starts projects that have shown signs of potential high risks. This enables the early identification of some critical project risk items and as a result the early development of mitigation strategies. Details of FTA's risk assessment methodology are set forth in Appendix A.

This proposed rule is the counterpart to Section 633.17 in Subpart B, which allows the Administrator to impose additional requirements for certain projects, based on the experience level of the sponsor and the nature of the project, and requires the sponsor to report on its progress. The proposed rule recognizes that, in appropriate circumstances, FTA will provide an increased level of analysis and oversight, again tailored to the specific circumstances of the project, to determine the adequacy of the sponsor's management of project activities, both pre-contract award and post-contract award; the reliability of the sponsor's current and forecast estimates of project costs, and the revenue service date; and the additional actions the sponsor needs to take to maintain that cost and schedule.

This section also provides for FTA to use analytical tools to assess the sufficiency of the sponsor's existing PMP to address the particular project and sponsor characteristics that could oblige the Administrator to call for additional requirements. Because these characteristics are specific to the sponsor and the project, there are no set, generic requirements that will be imposed. When FTA identifies areas that need improvement, the sponsor will be expected to tailor its response to its own organizational structure and project approaches. Through its analysis, FTA and its PMOC will develop an oversight approach that is specific to the situation. While FTA will provide additional guidance and, if requested, examples of how other sponsors have addressed an issue, there is no “cookie cutter” approach that a sponsor will be expected to use in responding to the situation, nor will those examples from other sponsors be used to determine whether a particular sponsor is in conformance with a specific requirement.

As part of its analysis and oversight, FTA will determine the most effective frequency and content of sponsor reporting necessary for it to conclude whether the sponsor is doing everything required to keep the project on budget and schedule. Monthly or quarterly reviews, or both, which are required under proposed Section 663.15, may be used as the forum for FTA to perform this additional oversight.

Many of the requirements directed by FTA in the past have focused on having an open, informed, transparent decision-making process where decisions are made at the appropriate level within the sponsor's organization and are appropriately documented, based on the best information available at the time, and are able to be reconstructed by third parties. These processes and tools need to be tailored to the project's specific stage of development.

In particular, in the development of the procurement documents, a sponsor may be able to include mechanisms, such as options, that allow it to retain the ability to mitigate cost increases at a later date. However, if the design is not done at the beginning to allow for this possibility, the cost and time of redoing the design at a later date becomes prohibitive. With good preplanning, a sponsor may negotiate a unit cost for unforeseen site conditions so that if they do occur, the need to negotiate with the contractor at that stage will be limited to agreeing on the amount of the change that has occurred, not how it should be priced.

It is imperative that a sponsor have an acknowledged process, as cost and schedule problems crop up, for projecting the results of those remedial actions on its ability to maintain the overall costs and schedule. An unacknowledged problem cannot be solved. Unsolved problems drive negative variances to costs and schedules. The forecast process should clearly explain when cost or delay will be recognized. Without a forecast, it is too easy to assume that a problem will be solved while the ability to actually find a solution slips further and further away.

All comments received on or before the close of business on the comment closing date above indicated will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, FTA will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period.

FTA has determined preliminarily that this action, although not economically significant, would be a significant regulatory action within the meaning of Executive Order 12866 and would be significant within the meaning of Department of Transportation regulatory policies and procedures because of substantial congressional, State and local government, and public interest. Those interests include the receipt of Federal financial support for transportation investments, appropriate compliance with statutory requirements, and balancing of transportation mobility and environmental goals. We anticipate that the direct economic impact of this rulemaking would be minimal. FTA evaluated the industry costs and benefits of this NPRM and has determined that it is not an economically significant rule under E.O. 12866. The proposals contained in this NPRM will not result in an impact on the economy of $100 million or more (adjusted annually for inflation).

As authorized by 49 U.S.C. 5327, this NPRM updates and clarifies FTA's existing oversight principles, tailors them to known risk factors, and redefines major capital project so that projects subject to FTA's project management oversight would change. The rule under this NPRM only imposes regulatory requirements upon applicants requesting funding under the program. The project management plans and their major elements that are the subject of this NPRM are Congressionally-mandated.

We consider this proposal a means to clarify and realign the existing regulatory requirements. Those proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs.

FTA has also considered the industry-wide costs and benefits of this NPRM. First, thanks to the practices adopted in the 1990s and 2000s under the current rule, the best of which are codified in the proposed NPRM, the typical (50th percentile) final costs of major capital projects have been kept within 22 percent of original estimates, compared to 51 percent in the years 1969 to 1987. 1 Further improvement is expected should the proposed NPRM become final. Given the scale and complexity of major capital projects and a history of cost overruns on such projects, these cost savings have been in the hundreds of millions of dollars. The proposed rule would standardize the best of these practices and refine the requirements of the current rule. Secondly, because project management oversight has evolved to incorporate the oversight principles set out in this NPRM (as reflected in the aforementioned cost control), significant increased costs borne by sponsors from the rule, per se, would be exceptional. For example, Project Management Plans and Risk Assessments are the norm in major capital projects. Because this proposed rule would apply on the basis of Federal funds rather than total project costs, as is the case with the current rule, fewer projects may be subject to FTA project management oversight. Also, because the level of oversight would be tailored to the costs, complexities and risks of a project, the rule is likely to reduce overall FTA oversight. Moreover, by their own initiative to reduce risk factors, project sponsors can reduce the level of FTA oversight under this proposed rule.

This proposed rule would apply FTA project management oversight to Fixed Guideway Modernization projects, but only such projects receiving $100 million or more in Federal financial assistance under 49 U.S.C. 5309 or those FTA designates as major capital projects. Sponsors of Fixed Guideway Modernization projects with the most effective track records would receive the least FTA oversight. Those sponsors with less effective track records can improve, with the assistance of the PMOCs employed by FTA. Sponsors that prepare Project Management Plans and Risk Assessments now would be able to prepare those required under the proposed NPRM for roughly the same cost or less, given the guidance provided concerning their contents. Finally, nearly all the other foreseeable incremental costs would be borne by PMOCs that are paid by FTA from a fixed portion of FTA capital program funds.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) FTA has evaluated the effects of this proposed action on small entities and has determined that the proposed action would not have a significant economic impact on a substantial number of small entities. For this reason, FTA certifies that this action would not have a significant economic impact on a substantial number of small entities.

This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $120.7 million or more in any one year (2 U.S.C. 1532).

This proposed action has been analyzed in accordance with the principles and criteria established by Executive Order 13132, and FTA has determined that this proposed action would not have sufficient Federalism implications to warrant the preparation of a Federalism assessment. FTA has also determined that this proposed action would not preempt any State law or State regulation or affect the States' abilities to discharge traditional State governmental functions. Consistent with Executive Order 13131, FTA examined the direct compliance costs of the NPRM on state and local governments, and determined that the collection and analysis of the data is eligible for Federal funding as part of the overall project costs. Representatives of state and local governments were invited to participate in the Webinars and submit formal comments to the docket on the ANPRM. Furthermore, the preparation of Project Management Plans by project sponsors would not preempt any state law or regulation or limit States' abilities to discharge traditional state governmental functions.

The regulations effectuating Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to these programs and were carried out in the development of this rule. FTA conducted two public meetings via webinar following publication of the ANPRM, in which representatives of state and local governments were able to participate. Also, FTA extended the comment period on the ANPRM for an additional thirty days, receiving twenty-one comments, seventeen of which were submitted by transit agencies representing units of state and local governments. FTA solicits comments on this subject.

In compliance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq. ) and the Office of Management and Budget (OMB) implementing regulation at 5 CFR 1320.8(d), FTA is seeking approval from OMB for the Information Collection Request abstracted below. FTA acknowledges that this NPRM entails project-specific information collections to facilitate project oversight for major FTA capital projects, including an effective Project Management Plan and accompanying risk assessments. Therefore, FTA is seeking comment whether the information collected will have practical utility; whether its estimation of the burden of the proposed information collection is accurate; whether the burden can be minimized through the use of automated collection techniques or other forms of information technology; and for ways in which the quality, utility, and clarity of the information can be enhanced.

Readers should note that the information collection will be specific to each project, to facilitate and record the project sponsor's exercise of project management and the PMOC's exercise of FTA-assigned oversight duties. The paperwork burden for each project will be proportionate to the level of oversight that, in turn, is governed by the project's scale, complexity, and risks. Moreover, the labor-burden of reporting requirements such as Risk Assessments and project milestone reports are largely borne by the PMOC, employed and paid for by FTA from program (not project) funds. Please refer to proposed Sections 633.11 and 633.13 for the content of the PMP. Proposed Section 633.23 provides a description of the risk assessment process, and refers to the appendix to the proposed rule, which provides additional information on the risk assessment process.

Type of Review: OMB Clearance. New information collection request.

Respondents: There are approximately 77 possible major capital project sponsors, of which 55 presently are implementing major capital projects. Of those projects in the New Starts program, FTA anticipates six (6) Preliminary Engineering (PE) requests, six (6) Final Design (FD) requests and four (4) Full Funding Grant Agreements (FFGAs) per year. In addition, FTA anticipates five (5) major Fixed Guideway Modernization projects per year. The PRA estimate was based on a total of 21 PMPs. This includes 6 projects entering PE, 6 entering FD, 4 entering into FFGAs and 5 Fixed Guideway Modernization projects. Insofar as risk assessments, the PRA estimate is based on 16 risk assessments for New Start projects.

Frequency: Information will be collected periodically whenever a respondent sponsoring a New Starts project enters into a new project management stage ( i.e., Preliminary Engineering, Final Design, or Full Funding Grant Agreement), and once for a respondent sponsoring a Fixed Guideway Modernization project.

Estimated Total Annual Burden Hours: 57,973. This has been estimated as follows: This represents the burden to the project sponsor (recipient) and includes 23,925 hours for preparation and support the review of the PMPs, 9,408 to support the risk assessments and 24,640 hours to report to FTA and hold quarterly meetings.

Additional documentation detailing FTA's Paperwork Reduction Act Information Collection Request, including FTA's Justification Statement, may be accessed from OMB's Web site at http://www.reginfo.gov/public/do/PRASearch . OMB is required to file comments or make a decision concerning the proposed information collections contained in this proposed rule within 60 days after receiving the information collection request submission from FTA. FTA will summarize and respond to any comments on the proposed information collection request from OMB and the public in its Final Rule.

This proposed action would not have any effect on the quality of the environment under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and is categorically excluded under 23 CFR 771.117(c)(20)), which covers the promulgation of rules, regulations and directives.

FTA has analyzed this proposed rule under Executive Order 12630, Government Actions and Interface with Constitutionally Protected Property Rights. The agency does not anticipate that this proposed rule would effect a taking of private property or otherwise have taking implications under Executive Order 12630.

This action 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.

FTA has analyzed this action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. FTA certifies that this proposed rule is not an economically significant rule and would not cause an environmental risk to health or safety that may disproportionately affect children.

FTA has analyzed this proposed rule under Executive Order 13175 (Nov. 6, 2000), and believes that the proposed action would not have substantial direct effects on one or more Indian tribes; would not impose substantial direct compliance costs on Indian tribal governments; and would not preempt tribal laws. The proposed rulemaking addresses obligations of Federal funds to States and local public transportation agencies for major capital transit projects and would not impose any direct compliance requirements on Indian tribal governments, nor would the proposed rule impose any new consultation requirements on tribal governments. Therefore, a tribal summary impact statement is not required.

FTA has analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). FTA has determined that it is not a significant energy action under that order since, although it is a significant regulatory action under Executive Order 12866, it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc. ). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-8).

A regulation identification number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN set forth in the heading of this document can be used to cross-reference this action with the Unified Agenda.

For the reasons set forth in the preamble, and under the authority of 49 U.S.C. 5309 and 5327, and the delegations of authority at 49 CFR 1.48(b) and 1.51, FTA proposes to amend Chapter VI of Title 49, Code of Federal Regulations, by revising Part 633 to read as follows:

Request for Information

When we make a finding that a petition presents substantial information indicating listing a species may be warranted, we are required to promptly review the status of the species (status review). For the status review to be complete and based on the best available scientific and commercial information, we request information on the Franklin's bumble bee throughout its range, which includes parts of Douglas, Jackson, and Josephine counties in Oregon, and Siskiyou and Trinity counties in California, from governmental agencies, Native American Tribes, the scientific community, industry, and any other interested parties. We seek information on:

(1) The species' biology, range, and population trends, including:

(a) Habitat requirements for feeding, breeding, and sheltering;

(b) Genetics and taxonomy;

(c) Historical and current range including distribution patterns;

(d) Historical and current population levels, and current and projected trends; and

(e) Past and ongoing conservation measures for the species, its habitat, or both.

(2) The factors that are the basis for making a listing determination for a species under section 4(a) of the Act (16 U.S.C. 1531 et seq. ), which are:

(a) The present or threatened destruction, modification, or curtailment of its habitat or range;

(b) Overutilization for commercial, recreational, scientific, or educational purposes;

(c) Disease or predation;

(d) The inadequacy of existing regulatory mechanisms; or

(e) Other natural or manmade factors affecting its continued existence.

(3) Information on pathogens and parasites within and near the range of the Franklin's bumble bee and potential pathways for introductions, including:

(a) Historical and recent records of Nosema bombi, Crithidia bombi, Apicystis bombi, Locustacarus buchneri, deformed wing virus and other bee pathogens and parasites within parts of Douglas, Jackson, and Josephine counties in Oregon and Siskiyou and Trinity counties in California, and recent studies about known or potential bumble bee pathogens and their effects on bumble bees; and

(b) The transport and use of commercial honey bees or bumble bees including species, year(s) of use, type(s) of use (e.g., greenhouse or open field pollination) and any associated State or Federal quarantine, inspection, permit, compliance, and enforcement action records related to the import and transport of bees in and around parts of Douglas, Jackson, and Josephine counties in Oregon and Siskiyou and Trinity counties in California;

(3) Information on environmental changes that have occurred within the range of the Franklin's bumble bee that may be associated with climate change or other factors.

If, after the status review, we determine that listing the Franklin's bumble bee is warranted, we will propose critical habitat (see definition in section 3(5)(A) of the Act), under section 4 of the Act, to the maximum extent prudent and determinable at the time we propose to list the species. Therefore, within the geographical range currently occupied by the Franklin's bumble bee, we request data and information on:

(1) What may constitute “physical or biological features essential to the conservation of the species,”

(2) Where these features are currently found, and

(3) Whether any of these features may require special management considerations or protection.

In addition, we request data and information on specific areas outside the geographical area occupied by the Franklin's bumble bee that are essential to the conservation of the species. Please provide specific comments and information as to what, if any, critical habitat you think we should propose for designation if the species is proposed for listing, and why such habitat meets the requirements of section 4 of the Act.

Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include.

Submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination. Section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”

You may submit your information concerning this status review by one of the methods listed in ADDRESSES . We request that you send comments only by the methods described in ADDRESSES . If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the website. If you submit a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this personal identifying information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

Information and supporting documentation that we received and used in preparing this finding is available for you to review at http://www.regulations.gov, or you may make an appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Oregon Fish and Wildlife Office (see FOR FURTHER INFORMATION CONTACT ).

Section 4(b)(3)(A) of the Act (16 U.S.C. 1533(b)(3)(A)) requires that we make a finding on whether a petition to list, delist, or reclassify a species presents substantial scientific or commercial information indicating that the petitioned action may be warranted. We are to base this finding on information provided in the petition, supporting information submitted with the petition, and information otherwise available in our files. To the maximum extent practicable, we are to make this finding within 90 days of our receipt of the petition and publish our notice of the finding promptly in the Federal Register .

Our standard for substantial scientific or commercial information in the Code of Federal Regulations (CFR) with regard to a 90-day petition finding is “that amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted” (50 CFR 424.14(b)). If we find that substantial scientific or commercial information was presented, we are required to promptly conduct a species status review, which we subsequently summarize in our 12-month finding.

On June 28, 2010, we received a petition dated June 23, 2010, from The Xerces Society for Invertebrate Conservation and Dr. Robbin W. Thorp, Department of Entomology, University of California, Davis, requesting that the Franklin's bumble bee be listed as endangered and that critical habitat be designated under the Act (hereafter cited as “Petition”). The petition clearly identified itself as such and included the requisite identification information for the petitioners, as required by 50 CFR 424.14(a). In a letter to the petitioners dated August 16, 2010, we responded that we had reviewed the information presented in the petition and determined that issuing an emergency regulation temporarily listing the species under section 4(b)(7) of the Act was not warranted. Our response also stated that we would not be able to address the petition at that time due to court orders and court-approved settlement agreements with specific deadlines, listing actions with absolute statutory deadlines, and high-priority listing actions that required us to spend most of our listing and critical habitat funding for fiscal year 2010. In fiscal year 2011, we received funding to address this petition.

On January 6, 1989, we published a notice of review that assigned category 2 status to the Franklin's bumble bee (54 FR 554). Category 2 candidates were species for which we had information indicating that protection under the Act may be warranted, but the information was insufficient to determine if elevation to category 1 candidate status was appropriate. Category 2 status was maintained for the Franklin's bumble bee in Candidate Review notices published on November 21, 1991 (56 FR 58804) and November 15, 1994 (59 FR 58982). We discontinued the practice of maintaining the list of category 2 candidate species in 1996 (61 FR 64481; December 5, 1996). Franklin's bumble bee has not held a Federal conservation status designation since 1996.

Bombus (formerly Bremus ) franklini was originally described by Frison (1921, pp. 144-148). Several studies have been published on the taxonomic relationship of the Franklin's bumble bee to other bumble bees ((Stephen 1957, pp. 79-81; Milliron 1971, pp. 58-67; Plowright and Stephen 1980, pp. 475-479; Thorp et al. 1983, pp. 29-30; Scholl et al. 1992, pp. 46-51; Cameron et al. 2007, p. 173) (Note—common names are used in this finding, when presented in the petition or available in our files; otherwise, only the scientific names are used.). With the exception of Milliron (1971), who assigned the Franklin's bumble bee subspecific status under B. terricola occidentalis, all of these studies have accorded the Franklin's bumble bee its own specific rank. The Franklin's bumble bee is also recognized as a valid species in the Integrated Taxonomic Information System (ITIS 2011). Therefore, we recognize the Franklin's bumble bee as a valid species and, therefore, a potentially listable entity under the Act.

As described by the petitioners (Petition, pp. 5-6), the Franklin's bumble bees is readily distinguished from other bumble bees in its range by: (1) The extended yellow coloration on the anterior thorax (the middle division of an insect between the head and abdomen), which extends well beyond the wing bases and forms an inverted U-shape around the central patch of black; (2) the lack of yellow on the abdomen; (3) a predominantly black face with yellow on the top of the head; and (4) white coloration at the tip of the abdomen. Other bumble bees with similar coloration in the range of the Franklin's bumble bee have the yellow coloration extending back to the wing bases or only slightly beyond, and usually have one or more bands of yellow either on the middle or slightly behind the middle of the abdomen. Females of most species have yellow pubescence (fine hair-like structures) on the face, in contrast to black on the Franklin's bumble bee. Females of the western bumble bee ( Bombus occidentalis ) and B. californicus that have black pubescence on the face also have the same coloration on the vertex (the top or crown of the head), in contrast to the yellow pubescence on the vertex in the Franklin's bumble bee. Females of B. californicus have a long face in contrast to the round face of the Franklin's bumble bee and the western bumble bee. The two types of females (queens and workers), and the males share similar characteristics, although there are some differences.

As described in the petition (pp. 10-11), the Franklin's bumble bee is a primitively eusocial bumble bee (i.e., the queen is not well-differentiated from her workers). Eusocial organisms live in cooperative groups with both reproductive and nonreproductive individuals, and different types of individuals carry out different specialized tasks such as reproduction, defense, or foraging. Like all other bumble bees, this species lives in colonies consisting of a queen and her female workers and male offspring. Queens are responsible for initiating colonies and laying eggs. Workers are responsible for most food collection, colony defense, nest construction, and feeding of the young. The function of male bumble bees is to mate with new queens produced at the end of the colony season. Bumble bee colonies depend on floral resources for their nutritional needs; nectar provides carbohydrates and pollen provides protein. The petitioners state that the Franklin's bumble bee is restricted to habitat patches where its host species are present, and its limited historical distribution suggests that it probably has a limited ability to disperse.

The nesting biology of the Franklin's bumble bee is unknown, but like other Bombus species, it is believed to nest underground in grassy areas, presumably in abandoned rodent burrows (Plath 1927, pp. 122-128; Hobbs 1968, p. 157; Thorp et al. 1983, p. 1; Thorp 1999, p. 5). It may occasionally nest on the ground (Thorp et al. 1983, p. 1) or in rock piles (Plowright and Stephen 1980, p. 475). Bumble bee colonies are annual occurrences, starting from colony initiation in spring by solitary, mated queens that emerge out of hibernation to search for appropriate nesting sites. There are differences among various bumble bee species in their foraging ranges. Species such as B. terrestris and B. lapidaries forage farther afield than so-called “doorstep” foragers, such as B. pascuorum, B. sylvarum, B. ruderarius, and B. muscorum. It is perhaps significant that the former two species remain ubiquitous in much of Europe, whereas three of the four doorstep foragers have declined. In theory, a larger foraging range gives a greater chance of colony survival in areas where the average density of floral resources is highly patchy (Goulsen et al. 2007, p. 11.12). Although the maximum flight distance of B. franklini is not known, as noted above, the petitioners suggest that the species is most likely not capable of long-distance flight, based on its restricted range. Franklin's bumble bee has been observed collecting pollen from lupine ( Lupinus spp.) and California poppy ( Eschscholzia californica ), and collecting nectar from horsemint or nettle-leaf giant hyssop ( Agastache urticifolia ) and mountain monardella ( Monardella odoratissima ) (Petition, p. 11).

In the early stages of colony development, the queen is responsible for all food collection and care of the larvae. The queen collects nectar and pollen from flowers to support the production of her eggs, which are fertilized by sperm she has stored since mating the previous fall. As the colony grows, the workers take over the duties of food collection, colony defense, nest construction, and larval care, while the queen remains within the nest and spends most of her time laying eggs (Petition, pp. 10-11). Generally, bumble bee colonies consist of multiple broods, with the number of workers for some species ranging from 50 to 400 at their peak (Plath 1927, pp. 123-124; Thorp et al. 1983, p. 2, Macfarlane et al. 1994, p. 7). Two colonies of Franklin's bumble bees that were initiated in the laboratory and moved to a field location to complete development contained over 60 workers each when censused (counted) in early September, and may have reached a total worker complement of well over 100 individuals by the end of the season (Plowright and Stephen 1980, p. 477).

The flight season of the Franklin's bumble bee is typically from mid-May to the end of September (Thorp et al. 1983, p. 30), although a few individuals have been encountered as late as October (Petition, pp. 34-40). Reproductive queens and males are produced near the end of the colony cycle. Queens usually mate with only one male, but males may mate with multiple queens. After mating, the queens feed to build up their fat reserves. The founding queen and all workers and males from the colony die by the end of the season, and inseminated new queens go into hibernation and are left to carry on the line the following year (U.S. Forest Service and Bureau of Land Management 2009, p. 3).

The Franklin's bumble bee is thought to have the most limited distribution of all known North American bumble bee species (Plowright and Stephen, p. 479; Petition, p. 6), and one of the most limited geographic distributions of any bumble bee in the world (Williams 1998, as cited in the petition (p. 6)). The original description by Frison (1921, pp. 313-315) was based on two queens reported from Nogales, Arizona. These localities were later determined to be outside of the distribution of all other specimens subsequently assigned to the species, and the location reports were invalidated (Stephen 1957, p. 79; Thorp 1970, pp. 177-180). All other specimens assignable to the species have been found in an area about 190 miles (mi) (306 kilometers (km)) to the north and south and 70 mi (113 km) to east to west between 122° to 124° west longitude and 40° 58′ to 43° 30′ north latitude in Douglas, Jackson, and Josephine counties in southern Oregon, and in Siskiyou and Trinity counties in northern California (Thorp 1999, p. 3; Thorp 2005c, p. 1; IUCN 2009, p. 1).

A survey effort specifically focused on the Franklin's bumble bee began in 1998 and continued through 2009 at sites representing both historical and potential new localities for the species. According to the information provided in the petition (Thorp 2001, 2004, 2005a, 2005c), from 9 to 17 historical sites (averaging 13.8 sites annually), and from 2 to 23 additional sites were surveyed each year during this period, and some sites were visited more than once per year, or in multiple years. As presented in Table 1 of the petition, these surveys appear to have been conducted throughout the known range of the species (Petition, p. 9).

During the surveys, the Franklin's bumble bee was observed at 11 sites, including 7 locations where it had not been previously documented. According to the petitioners, despite continued surveys through 2009, no observations of the Franklin's bumble bee have been reported since 2006, when a single worker was observed at Mt. Ashland in Oregon (Thorp 2008, p. 5). The number of sightings was at its highest in 1998 when surveys were initiated and 94 individuals were documented (Petition, p. 9), and then fluctuated between 0 and 20 individuals in subsequent years up until 2006. In 2006, the Bureau of Land Management conducted a survey of 16 sites that were believed to provide optimal habitat for the Franklin's bumble bee. Each site was surveyed twice by trained technicians, but no Franklin's bumble bees were found (Code and Haney 2006, p. 3). While it has been postulated that the species may be extinct (Natural Research Council 2007, p. 43; NatureServe 2010, p. 1), we do not consider the available evidence to be conclusive, since one individual was observed during surveys in 2006 even after none had been observed in the previous 2 years (Petition, p. 4), and there may be other unknown populations. The failure to detect a species during surveys is not equivalent to a conclusive demonstration of its absence, but may simply reflect the detection probability for that species, which decreases as a function of rarity.

Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations at 50 CFR part 424 set forth the procedures for adding a species to, or removing a species from, the Federal Lists of Endangered and Threatened Wildlife and Plants. A species may be determined to be an endangered or threatened species due to one or more of the five factors described in section 4(a)(1) of the Act:

(A) The present or threatened destruction, modification, or curtailment of its habitat or range;

(B) Overutilization for commercial, recreational, scientific, or educational purposes;

(C) Disease or predation;

(D) The inadequacy of existing regulatory mechanisms; or

(E) Other natural or manmade factors affecting its continued existence.

In considering which factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a threat it is. If the threat is significant, it may drive or contribute to the risk of extinction of the species such that the species may warrant listing as threatened or endangered as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively may not be sufficient to compel a finding that listing may be warranted. The information shall contain evidence sufficient to suggest that these factors may be operative threats that act on the species to the point that the species may meet the definition of threatened or endangered under the Act.

In making this 90-day finding, we evaluated whether information regarding threats to the Franklin's bumble bee, as presented in the petition and other information available in our files, is substantial, thereby indicating that the petitioned action may be warranted. Our evaluation of this information is presented below. The petitioner stated it is likely that disease outbreak in commercial bee pollination facilities in North America, such as the one reported in 1998 (see below discussion), is one major cause responsible for the major severe declines seen in the Franklin's bumble bee since that time, although their current status is not known in detail (Code et al. 2006, p. 2). There is some information available on threats specific to the Franklin's bumble bee, although much of the information presented in the petition was extrapolated from what is known about other bumble bee species.

The petition asserts that threats that have altered Franklin's bumble bee habitat include agricultural intensification (increases in farm sizes and operating efficiencies related to production (irrigation, tilling, etc.)), water impoundments, livestock grazing, urban development, fragmentation of landscapes, natural and introduced fire, and invasive species. The petitioners believe these threats are even more significant and can have a more pronounced impact on the extinction potential of an animal that has been reduced to just a few locations, which they believe is the case with the Franklin's bumble bee (Petition, p. 12). Many of the petitioner's assertions involve activities that may have historically affected habitat for the Franklin's bumble bee, but may no longer be acting on the species. Factor A requires an evaluation of the present (i.e., ongoing) or threatened (i.e., foreseeable) impacts to a species' habitat or range. Accordingly, although historical habitat loss may be instructive with regard to conditions leading to a species' current status, it does not represent an ongoing or foreseeable threat under Factor A. Each of the petitioner's assertions is described in more detail below.

The petitioners reported one pre-2004 agricultural activity within the Franklin's bumble bee's historical range near Gold Hill in Jackson County, Oregon, where significant excavation and soil deposition altered approximately 50 percent of the available bumble bee foraging habitat (Petition, p. 12). Several references provided with the petition confirm that agricultural intensification can negatively impact wild bees by reducing the floral resource diversity and abundance needed for forage (Johansen 1977, p. 177; Williams 1986, p. 57; Kearns et al. 1998, p. 89; Hines and Hendrix 2005, p. 1477; Carvell et al. 2006, p. 481; Diekötter et al. 2006, p. 57; Fitzpatrick et al. 2007, p. 185; Kosior et al. 2007, pp. 81, 84-86; Öckinger and Smith 2007, p. 50; Goulson et al. 2008, p. 11.1; IUCN 2009, p. 2; Le Féon et al. 2010, p. 143) and causing loss of nest sites (Johansen 1977, p. 177; Kearns et al. 1998, p. 89; Diekötter et al. 2006, p. 57; Öckinger and Smith 2007, p. 50; Goulson et al. 2008, p. 11.4). Agricultural intensification was determined to be a primary factor leading to the local extirpation and decline of Illinois bumble bees (Grixti et al. 2009, p. 75), and the decline of bumble bees and cuckoo bees ( Bombini spp. ) in countries across western and central Europe (Kosior et al. 2007, pp. 81). The petition did not present any information indicating impacts related to agricultural intensification are ongoing or foreseeable in currently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

The petitioners reported that two historical Franklin's bumble bee sites in Jackson County, Oregon, were inundated following the completion of Applegate Dam in 1980; historical records for the Franklin's bumble bee were documented at this location in 1963 and 1968. The petition did not present any information indicating that impacts related to water impoundments are ongoing or foreseeable in currently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

The petitioners stated that U.S. Bureau of Land Management and U.S. Forest Service lands historically occupied by the Franklin's bumble bee are periodically subject to substantial livestock impact (Petition, p. 13). According to the petition, livestock grazing may adversely impact bumble bee populations by: (1) Depleting food resources (Morris 1967, p. 472; Sugden 1985, p. 299; Kruess and Tscharntke 2002b, p. 1570; Vazquez and Simberloff 2003, p. 1081; Hatfield and LeBuhn 2007, p. 150); (2) trampling nesting sites (Sugden 1985, p. 299); and (3) negatively impacting ground-nesting rodents (Johnson and Horn 2008, p. 444; Schmidt et al. 2009, p. 1), which may in turn reduce the number of nest sites available for bumble bees.

The petition stated that livestock grazing has differing impacts on flora and fauna based on the type, habitat, intensity, timing and length of grazing (Gibson et al. 1992, p. 174; Carvell 2002, p. 44; Kruess and Tscharntke 2002a, p. 293; Kruess and Tscharntke 2002b, p. 1577). Several studies of livestock grazing impacts on bees suggest increased intensity of livestock grazing negatively affects the species richness of bees (Morris 1967, p. 473; Sugden 1985, p. 309; Vazquez and Simberloff 2003, p. 1080; Hatfield and LeBuhn 2007, p. 156). Interestingly, one study cited by the petitioners suggests that grazing, especially by cattle (as opposed to sheep or mowing), can play a key positive role in maintaining the abundance and species richness of preferred bumble bee forage (Carvell 2001, p. 44). The petition did not present any information indicating that livestock grazing impacts are ongoing or foreseeable in currently or most recently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

One study in Boston, Massachusetts, concluded that human-built structures, such as roads and railroads, can fragment plant populations and restrict bumble bee movement (Bhattacharya et al. 2003, p. 37). Another study of the factors adversely affecting bumble bees and cuckoo bees in western and central Europe found the expansion of urban areas to be an important driver of pollinator loss in approximately half of the countries examined (Kosior et al. 2007, p. 81). The petitioners stated that while urban parks and gardens may provide habitat for some pollinators, including bumble bees (Frankie et al. 2005, p. 227; McFrederick and LeBuhn 2006, p. 372), they tend not to support the species richness that was either present historically or found in nearby wild landscapes (petition p. 13; McFrederick and LeBuhn 2006, p. 378). The petitioners reported that the Franklin's bumble bee has been found in urban areas of Ashland, Oregon, and that nests of a close relative, the western bumble bee, have been found in urban San Francisco, California (Petition, p. 13).

Thorp (1999, p. 12) stated that increased urbanization in areas in Oregon (Ashland, Medford-Central Point, Grants Pass and Roseburg) may have already reduced historical populations of the Franklin's bumble bee. The author also stated that the Franklin's bumble bee was found on the Southern Oregon University campus as recently as spring 1998, and acknowledged that most major urban areas within the range of the species have not been intensively surveyed (Thorp 1999, p. 8). The petition did not present any information indicating urban development impacts are ongoing or foreseeable in currently or most recently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

The petitioners asserted that habitat fragmentation from land uses such as agriculture, grazing, urban development and other factors is a threat to the Franklin's bumble bee (Petition, p. 13). One study found that populations of a number of bumble bee species have become increasingly small, making them more vulnerable to local extinctions and less able to recolonize extirpated habitat patches (Goulsen et al. 2008, pp. 11.6-11.7). Fragmentation can alter pollinator community composition, change foraging behavior of bumble bees and reduce bee foraging rates (Kearns and Inouye, 1997, p. 299; Öckinger and Smith 2007, p. 50; Rusterholz and Baur 2010, p. 148). Bumble bees have been found to be susceptible to the disruption of healthy metapopulation structures due to fragmentation (National Research Council 2007, p. 93; Goulson et al. 2008, p. 11.7), and studies suggest fragmented bumble bee populations can suffer from inbreeding depression as a result of geographic isolation (Darvill et al. 2006, p. 601, Goulson et al. 2008, p. 11.7). Fragmentation is believed to be one of the factors contributing to the decline of bumble bees and cuckoo bees in countries across western and central Europe (Kosior et al. 2010, pp. 81). Information regarding the effects of habitat fragmentation on the Franklin's bumble bee was not provided by the petitioners, although they did present conclusions from studies of other bumble bee species (Petition, p. 13). We have no information available in our files regarding habitat fragmentation of Franklin's bumble bee habitat. However, as stated earlier, there are differences among bumble bee species in their foraging range; some forage farther afield than other species. A larger foraging range gives a greater chance of colony survival in areas where the average density of floral resources becomes highly patchy because of habitat fragmentation (Goulsen et al. 2007, p. 11.12). Although further study would be required, the threat of habitat fragmentation would be expected to be greater if the Franklin's bumble bee's geographically limited range is related to a limited foraging distance, as suggested by the petitioners (Petition, p. 20).

The petition asserted that current fuel loads, including invasive trees and shrubs, combined with reduction and fragmentation of Franklin's bumble bee populations, and reduction in size of native meadows, makes natural or prescribed burning a potential threat (Petition, p. 14). Generally, fire suppression can lead to increased fuel loads and tree densities that dramatically increase the risk of severe fire (Huntzinger 2003, p. 1), and degradation and loss of native prairies and grasslands can occur in the absence of fire due to succession of plant communities to habitats dominated by invasive and woody vegetation (Schultz and Crone 1998, p. 245). Using prescribed fire is a common practice for restoring and managing native prairie and grassland plant communities (Panzer 2002, p. 1297). Although the use of prescribed fire is generally beneficial to insect populations that rely on grassland habitats by maintaining suitable habitat conditions, some taxa can be negatively affected, especially in the short-term (Schultz and Crone 1998, p. 244; Panzer 2002, p. 1296).

The petitioners believe that increased fuel loads due to long-term fire suppression could result in a large- scale, high-temperature fire that could potentially extirpate an entire population of the Franklin's bumble bee if it were to occur in an area where they are concentrated (Petition, p. 14). The petition did not present any information indicating the extent to which natural or prescribed fire has occurred in currently or most recently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard. The petition characterized natural or prescribed fire as a threat to the Franklin's bumble bee because of current site fuel loads (invasive trees and shrubs), combined with the reduction and fragmentation of populations and habitat (Petition, p. 14). Because of current site fuel loads, as characterized by the petitioner, we consider this potential threat to be reasonably foreseeable, even though the timing, magnitude, and location of natural fire events (or prescribed fires that become wild fire events) is unpredictable.

The petitioners stated that the “invasion and dominance of native grasslands by exotic plants is a common issue” (Warren 1993, p. 47; Schultz and Crone 1998, p. 244), which has likely occurred at historical Franklin's bumble bee sites (Petition, p. 14). Invasive plant species that displace native plant communities have the potential to negatively impact the Franklin's bumble bee if they provide less pollen or nectar than the native species, or if they bloom during a different time period than the native plant species available for foraging (Petition, p. 14; Kearns et al. 1998, p. 103). The petition did not present any information indicating that invasive species-related impacts are occurring in currently or most recently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

The publications cited by the petitioners appear to support their assertions that agricultural intensification, livestock grazing, urban development, fragmentation of landscapes, natural and introduced fire, and invasive species can pose threats to bumble bees and other pollinators in general; however, very little information was presented with which to correlate these potential threats to habitat occupied specifically by the Franklin's bumble bee. In addition, one of the petition references indicates that, during surveys conducted from 1998 to 2004, it was observed that most of the sites surveyed remained suitable habitat, based on the constant abundance of other bumble bee species (Thorp 2005c, p. 4). The petition does not indicate whether the sites surveyed from 1998 to 2004 encompass all areas potentially habitable by the Franklin's bumble bee, and implies that at least some sites may have become unsuitable habitat. We have no information available in our files that provides any additional information in this regard.

We find that the petition presents substantial scientific or commercial information indicating that the Franklin's bumble bee may warrant listing due to the present or threatened destruction, modification, or curtailment of habitat, primarily due to the potential impacts of natural or prescribed fire to remaining populations. Habitat fragmentation may additionally pose a threat to the Franklin's bumble bee, although at present we do not have sufficient information to assess the degree of fragmentation that has occurred within its range, or to determine the dispersal limitations of the species. There is no substantial information indicating that agricultural intensification, water impoundments, livestock grazing, urban development, or invasive species specifically, are currently impacting Franklin's bumble bee habitat, or will impact the species' habitat in the foreseeable future. However, we will assess each of these potential threats more thoroughly during our status review, in order to better quantify potential effects on the Franklin's bumble bee.

The petitioners asserted that, while generally the collection of insects does not present a threat to their populations, the collection of a small number of Franklin's bumble bee queens could significantly reduce the production of offspring and pose a threat to the entire species due to its rarity, small populations, and relatively low fecundity compared to most insects (Petition, p. 14). Based on a table of historical and recent records presented by the petitioners, Franklin's bumble bee specimens (including queens) have been collected as recently as 1998, and deposited at several universities and museums. There are records of 28 queens collected between 1950 and 1998; the records since 1998 are based on observations only with no collections of males, workers, or queens noted (Petition, pp. 34-40). In 1998, the year that the most recent surveys for the Franklin's bumble bee were initiated and the last year for any documented collections (i.e., where specimens were retained), the highest number of individuals ever documented was recorded (94 individuals), and 4 queens were collected by another individual. We are unaware of any collections beyond those documented in the table of historical and recent records provided in the petition (Petition, pp. 34-40). The petition did not present any information indicating that the collection of Franklin's bumble bee queens is currently occurring, and we have no information in our files in this regard.

Neither the petition nor information available in our files presents substantial scientific or commercial information that collection of Franklin's bumble bee queens is still occurring, or if so, occurring at a level that impacts the overall status of the species. In addition, we have no information indicating pre-1998 collections may have been a factor resulting in the Franklin's bumble bee's current population status, although queen specimens have been retained for scientific collections in the past (last recorded in 1998). Therefore, we find that the petition does not present substantial scientific or commercial information to indicate that overutilization for commercial, recreational, scientific, or educational purposes may present a threat such that the petitioned action may be warranted. However, we will assess this factor more thoroughly during our status review for the species.

The petitioners asserted there is potential for the spread of an exotic strain of the microsporidium (parasitic fungus) Nosema and other disease organisms, such as the protozoan parasite Crithidia bombi, tracheal mite Locustacarus buchneri, or deformed wing virus through wild populations of the Franklin's bumble bee and other species in the subgenus Bombus in North America. While no specific examples were provided within the range of the Franklin's bumble bee, the petitioners hypothesize that the main cause of the decline of the Franklin's bumble bee is due to a disease organism introduced through the use of commercially reared bumble bee colonies (Petition, p. 14).

Commercial bumble bee production started in North America in the early 1990s (Petition, p. 15). The petitioners stated that commercially produced bumble bee colonies that were potential carriers of pests or disease were distributed throughout much of North America, when the Franklin's bumble bee and other closely related wild bumble bees started to decline. In addition to being used for commercial pollination, western bumble bee colonies were used in field research between 1991 and 2000 in California, Washington, and Alberta, Canada (Mayer et al. 1994, p. 21; Mayer and Lunden 1997, p. 283; Richards and Myers 1997, p. 293; Mayer and Lunden 2001, p. 277; Thomson 2004, p. 460). The petition referenced a news story published by the Associated Press that highlighted a strawberry and vegetable grower in Grants Pass, Oregon (within the range of the Franklin's bumble bee), who purchased Bombus impatiens hives in 2007 to pollinate his crop (Associated Press 2007; Petition, p. 18). In 2007, there was also a proposal by a commercial bee company to import nonnative bumble bees ( B. impatiens ) for the pollination of field crops in the State of California (California Department of Food and Agriculture 2006, pp. 1-59).

The Service found that bees were proposed for use less than 150 mi (241 km) from the southern extent of the historical range of the Franklin's bumble bee and raised concerns about potential impacts to the species. In a comment letter to the California Department of Agriculture dated January 17, 2007, the Service specifically mentioned the risk of potential disease transmission that could occur if infected hives were shipped through or used in areas where commercial bees could come into contact with Franklin's bumble bee, and requested that an analysis of potential effects to the species be conducted in accordance with the California Environmental Quality Act (U.S. Fish and Wildlife Service 2007, pp. 1-2). Information about the outcome is not available in our files. Parasites and pathogens have been found to spread from commercial bee colonies to native bee populations through a process sometimes referred to as “pathogen spillover” (Colla et al. 2006, p. 461; Otterstatter and Thompson 2008, p. 1). Pathogens specifically addressed in the petition are discussed below.

Nosema bombi has been detected in native bumble bees in North America, but whether it is an introduced species or occurs naturally is uncertain (Petition, p. 16). As described by the petitioners, N. bombi is a microsporidian that infects bumble bees, primarily in the malpighian tubules (small excretory or water regulating glands), but also in fat bodies, nerve cells, and sometimes the tracheae (Macfarlane et al. 1995, as cited by the petitioners, Petition, p. 15). Colonies can appear to be healthy but still carry N. bombi and transmit it to other colonies. The effect of N. bombi on bumble bees varies from mild to severe (Macfarlane et al. 1995, as cited by the petitioners (Petition, pp. 15-16); Otti and Schmid-Hempel 2007, p. 118; Larson 2007, as cited by the petitioners (Petition, pp. 15-16); Rutrecht et al. 2007, p. 1719; Otti and Schmid-Hempel 2008, p. 577).

The petition described the probable route of introduction and spread as follows: In the early 1990s, queens of both the western bumble bee and Bombus impatiens were shipped from the United States to rearing facilities in Belgium that were also likely rearing B. terrestris, a close relative of the western bumble bee and the Franklin's bumble bee. The commercially-reared colonies produced from these queens were shipped back into the United States between 1992 and 1994. The petitioners hypothesize that a virulent strain of Nosema bombi from B. terrestris spread to B. impatiens and the western bumble bee prior to their shipment back into the United States, and once in this country the commercially reared colonies of the western bumble bee may have spread this virulent strain of N. bombi to wild populations of the Franklin's bumble bee (Petition, p. 15).

Bumble bee producers experienced major problems with Nosema bombi infection in commercial western bumble bee colonies in 1997 (Flanders et al. 2003, p. 108; Velthius and van Doorn 2006, p. 432), and eventually stopped producing_the western bumble bee. In addition, the morphology of N. bombi found in a native bumble bee in China, Bombus leucorum, was found to be the same as that found in B. terrestris imported from New Zealand (Jilian et al. 2005, p. 53), suggesting the disease may have been introduced to native bumble bee populations in China by commercial bees.

Researchers at the University of Illinois recently identified a strain of Nosema bombi in multiple species of North American bumble bees (Petition, p. 16). Studies suggest the disease can spread from commercial bumble bees to nearby wild bumble bees (Niwa et al. 2004, p. 60; Whittington et al. 2004, p. 599; Jilian et al. 2005, p. 53; Colla et al. 2006, p. 461), even when commercial bumble bees are used for pollination in greenhouses, because commercial bumble bees frequently forage outside greenhouse facilities (Petition, p. 15), and can transmit disease at shared flowers (Whittington et al. 2004, p. 599; Colla et al. 2006, p. 461). The extent to which this pathogen occurs within the current range of the Franklin's bumble bee was not described in the petition, and we have no information in our files in this regard.

The petitioners believe the internal protozoan parasite, Crithidia bombi, could also be leading to the decline of the Franklin's bumble bee. C. bombi has been shown to have detrimental effects on colony founding success of queens, the fitness of established colonies, and the survival and foraging efficiency of bumble bee workers (Brown et al. 2000, p. 421; Brown et al. 2003, p. 994; Otterstatter et al. 2005, p. 388; Gegear et al. 2005, p. 1; Gegear et al. 2006, p. 1073).

As with Nosema bombi, studies suggest that Crithidia bombi can spread from commercial bumble bees to nearby wild bumble bees through shared use of flowers, even when commercial bumble bees are used for pollination in greenhouses, because they can escape to forage outside and transmit the disease (Durrer and Schmid-Hempel 1994, p. 299; Whittington et al. 2004, p. 599; Colla et al. 2006, p. 461; Otterstatter and Thompson 2008, p. 1). Although C. bombi is considered to be a bumble bee parasite, honey bees have also been shown to be possible vectors (Ruiz-González and Brown 2006, p. 621). This parasite has been shown to be present in higher frequencies in bumble bees near greenhouses where commercial colonies of Bombus impatiens are used than in bumble bees remote from these facilities (Colla et al. 2006 in litt., p. 3). The extent to which this pathogen occurs within the current range of the Franklin's bumble bee was not described in the petition, and we have no information in our files in this regard. However, as described above, the petition referenced a news story published by the Associated Press that highlighted a strawberry and vegetable grower in Grants Pass, Oregon (within the range of the Franklin's bumble bee), who purchased B. impatiens hives in 2007 to pollinate his crop (Associated Press 2007; Petition, p. 18). We are also aware of a proposal to use commercial B. impatiens for field pollination at a site in California within 150 mi (241 km) of the historical range of the Franklin's bumble bee (U.S. Fish and Wildlife Service 2007, p. 1). As B. impatiens is a potential carrier of C. bombi, B. impatiens would be a potential vector for transmission to the Franklin's bumble bee.

The petition stated that Locustacarus buchneri is a tracheal mite that affects bumble bees (Petition, p. 17), and that bumble bees in the subgenus Bombus, such as the Franklin's bumble bee, may be more susceptible to tracheal mite infestation than other bumble bees, based on a study in southwestern Alberta, Canada, by Otterstatter and Whidden (2004, p. 351). One of the cited references (Goka et al., 2001, pp. 2095-2099) documents the presence of this mite in bumble bee ( Bombus spp.) populations in Japan, the Netherlands, and Belgium. The petitioners did not describe the specific effects of L. buchneri on bumble bees, but Ottersatter and Whidden (2004) found bumble bees containing tracheal mites to have significantly reduced lifespans in the laboratory. Otterstatter and Whidden (2004, p. 351) and Goka et al. (2001) cite a study that found heavy mite infestation can severely injure bumble bees (Goka et al. 2001, p. 2098). In that study, diarrhea was observed, and some bees became lethargic and no longer able to forage.

Commercially raised bumble bees from Europe were found to be infested with tracheal mites at higher rates than detected in wild bees (Goka et al. 2001, p. 2098). The petitioners stated that the method of mite dispersal is not well understood, but they could spread from commercial to wild colonies through drifting workers or contact on shared flowers. The petitioners cited a study of parasitic mites in native and commercial bumble bees in Japan, cautioning that the transportation of bumble bee colonies will cause overseas migration of parasitic mites (Goka et al. 2001, p. 2098). The extent to which this pathogen occurs within the current range of the Franklin's bumble bee was not described in the petition, and we have no information available in our files in this regard.

The petitioners stated that deformed wing virus, a honey bee pathogen that results in crippled wings, may also be a threat to the Franklin's bumble bee. Deformed wing virus (DWV) was thought to be specific to honey bees until 2004, when dead Bombus terrestris and B. pascuorum queens with deformities resembling those in honey bees were observed. These DWV-infected specimens were observed in European commercial bumble bee breeding facilities at a frequency of approximately ten percent (Genersch et al. 2006, p. 63). In addition to the potential transmission of this and other diseases from honey bees in apiaries to bumble bees, commercial bumble bee rearing may also provide an opportunity for transmission. Commercial bumble bee producers sometimes introduce young honey bees to nesting bumble bee queens to stimulate egg-laying, thus providing a potential interface that exposes bumble bees to diseases carried by the honey bees (Genersch et al. 2006, pp. 61-62).

DWV infection could pose a serious threat to bumble bee populations, as infected bumble bees with deformed wings are not able to forage. Those found with the observed deformities were also not viable (Genersch et al. 2006, p. 61). The petitioners are aware of unpublished personal observations of DWV symptoms in commercially raised Bombus impatiens colonies in North America, but stated that research has not been conducted to determine if other species of bumble bees are also susceptible to this disease (Petition, p. 17). The petitioners did not present any information linking DWV to the Franklin's bumble bee, and we have no information available in our files in this regard.

Information specific to the occurrence of Nosema bombi, Crithidia bombi, Locustacarus buchneri or deformed wing virus within the range of the Franklin's bumble bee was not provided by the petitioners, and we have no information in our files regarding these pathogens. However, the studies cited by the petitioners appear to support their assertions related to the threats of the diseases and parasites to bumble bees in general, and it appears each of these diseases may be readily transferred from commercial to wild bumble bees. We, therefore, find that the petition presents substantial scientific or commercial information indicating that the Franklin's bumble bee may warrant listing due to disease, since (1) a microsporidian pathogen genetically identical to N. bombi in European bumble bees has been found in bumble bees in the United States (Solter et al. 2007, p. 15; Thorp 2008, p. 7); (2) studies on the effects of N. bombi generally demonstrate bumble bees are negatively affected; (3) Bombus impatiens is a potential carrier of C. bombi, and would be a potential vector for transmission to Franklin's bumble bee; and (4) studies have demonstrated infected bumble bees with deformed wings are unable to forage.

There is no information presented in the petition indicating the Franklin's bumble bee is threatened by the tracheal mite L. buchneri, and we have no information in our files in this regard. Although this mite has been known to attack at least 25 bumble bee species across the holarctic region (the geographic region that includes the northern areas of the earth), it typically occurs in only a small fraction of the host species available at a site (Otterstatter et al. 2004, p. 351). The mite has also parasitized B. vagans and B. bimaculatus in the eastern United States (Otterstatter et al. 2004, p. 351); however, there are no indications it occurs within the known geographic range of the Franklin's bumble bee or within the western United States. The petitioners did not present any information indicating predation was an ongoing or foreseeable threat to the Franklin's bumble bee, and we have no information in our files in this regard. Accordingly, we find that the petition does not present substantial information indicating that predation is a threat to the species. However, we will assess this factor more thoroughly during our status review for the species.

The petition stated there are currently no Federal regulations that limit the interstate transportation of bumble bees, even outside their native range (Petition, p. 18). The petitioners also stated the Franklin's bumble bee has no substantive protection for habitat or take under Federal law or State laws in Oregon or California, and neither Oregon nor California allows listing of insects under their State endangered species statutes (Petition, p. 17).

The petitioners believe the spread of disease introduced by commercial bees may be the primary threat to the species, and existing regulatory mechanisms are inadequate to protect against this threat (Petition, pp. 21-22). They stated that few precautions are taken to prevent commercially reared colonies from interacting with wild populations. While bumble bee colonies imported to commercial rearing facilities are typically subject to inspection, typical inspections only include honey bee parasites and diseases, even though honey bee diseases and pests are not transmitted to bumble bees (Velthius and van Doorn 2006, p. 430).

The U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) is responsible for implementing the Honey Bee Act (HBA) (Petition, p. 18). According to the petition, sections 322.4 and 322.5 of the HBA allow the transport of two species of bumble bees from Canada ( Bombus impatiens and the western bumble bee) to all U.S. States except Hawaii, and section 322.12 of the HBA provides for requests to import bumble bees from other countries. The petitioners stated that APHIS is responsible for evaluating applications and making importation determinations (Petition, p. 18). One reference cited by the petitioners stated that the HBA has helped protect the U.S. beekeeping industry from exotic parasites and pathogens, and undesirable bee species and strains of honey bees (Flanders et al. 2003, p. 101). The petitioners also stated the California Department of Food and Agriculture allows B. impatiens to enter the State for greenhouse pollination (but not for open field pollination), although the law may not be regularly enforced or growers may not be aware of it (Petition, p. 18)). They stated that the Oregon State Department of Agriculture currently does not allow B. impatiens to enter the State (Petition, p. 18), but acknowledge a 2007 news story published by the Associated Press that documented a strawberry grower in Oregon who purchased colonies of B. impatiens for pollination (Associated Press, 2007; Petition, p. 18). Accordingly, the petitioners asserted that existing regulations and authorities do not effectively protect against the threat of exposure to disease that may be carried by commercial bumble bees (Petition, p. 18), since B. impatiens has apparently been successfully imported into the State, despite the existing regulations.

One study cited by the petitioner stated that nearly all laws and regulations addressing the importation, movement, and release of bees in the United States focus almost exclusively on bee diseases and parasites, with little or no consideration for possible adverse environmental impacts associated with the bees themselves (Flanders et al. 2003, p. 99). One reference cited by the petitioners stated “current federal laws pertaining to bees restrict APHIS' oversight to preventing the introduction of parasites and pathogens that may harm bees. Except for the provisions in the HBA about undesirable species and strains of honey bees, it remains unclear whether APHIS has a basis for restricting the release of exotic bee species. Similarly, APHIS has little jurisdiction over the interstate movement and release of native bees, even when that movement is to an area previously unoccupied by the species” (Flander et al. 2003, p. 109). As an example, even though APHIS has regulations in place, problems associated with heavy infestations of Nosema bombi in the western bumble bee were discovered in rearing facilities in 1996 (Velthuis and van Doorn 2006, p. 432), and Flanders et al. (2003, p. 108) reported disease was found in commercially produced western bumble bees in 1997 (Flanders et al. 2003, p. 108). The petitioners reported that bumble bee producers in North America eventually stopped producing the western bumble bee due to the N. bombi infestation.

Factor D concerns whether the existing regulatory mechanisms are adequate to address the current threats identified under Factors A, B, C, or E. We find that the petition presents substantial scientific or commercial information indicating (1) the existing regulatory mechanisms may be inadequate to protect against the spread of disease introduced by commercial bumble bees; (2) that few precautions appear to be taken to prevent commercially reared colonies from interacting with wild bumble bee populations; (3) inspections of bumble bee colonies imported to commercial rearing facilities may be ineffective; and (4) open field pollination restrictions may not be regularly enforced by the California Department of Food and Agriculture, which may exacerbate the potential for commercially raised bumble bees to transfer disease to the Franklin's bumble bee. We will assess this factor more thoroughly during our status review for the species.

The petitioners assert that several other natural or manmade factors may be threats to the Franklin's bumble bee, including the use of pesticides, population dynamics and structure, global climate change and competition from honey bees and other nonnative bees. Each of the petitioner's assertions is described in more detail below.

The petitioners asserted the application of pesticides, including insecticides, herbicides, and fungicides, may negatively affect remaining populations of the Franklin's bumble bee (Petition, p. 18-20). Numerous studies were cited related to pesticide use for various purposes in varied environments, including wild, agricultural, urban, and forested areas. Some of the references cited in the petition identify a concern that, while data related to the toxicity of pesticides to honey bees is considered to be generally applicable to other bees (Kevan and Plowright 1995, p. 609), pesticide risk assessments conducted for honey bees may be inadequate for evaluating the risks to bumble bees due to differences in foraging behavior and phenology (Thompson and Hunt 1999, p. 147; Thompson 2001, p. 305; Goulson et al. 2008, p. 11.4). Phenology refers to the relationships between regularly recurring biological phenomenon and climatic or environmental influences (i.e., bumble bees and honey bees may have different biological schedules with regard to their ecological needs or behaviors).

Bumble bee exposure can occur from direct spray or drift (Johansen and Mayer 1990, as cited by the petitioners (Petition, p. 19)), or from gathering or consuming contaminated nectar or pollen (Morandin et al. 2005, p. 619). Lethal and sublethal effects on bumble bee eggs, larvae, and adults have been documented for many different pesticides under various scenarios (Kevan 1975, p. 301; Johansen 1977, p. 178; Plowright et al. 1978, p. 1145; Plowright et al. 1980, p. 765; Kearns and Inouye 1997, p. 302; Kearns et al. 1998, p. 91-92; Kevan 1999, p. 378; Thompson 2001, p. 305; Gels et al. 2002, p. 722; Morandin et al. 2005, p. 619; Mommaerts et al. 2006, p. 752; Goulson et al. 2008, pp. 11.4-11.5). Studies have also found evidence of adverse impacts to bumble bee habitat associated with pesticides due to changes in vegetation and the removal or reduction of flowers needed to provide consistent sources of pollen, nectar, and nesting material (Johansen 1977, p. 188; Plowright et al. 1978, p. 1145; Williams 1986, 54; Kearns and Inouye 1997, p. 302; Smallidge and Leopold 1997, p. 264; Kearns et al. 1998, p. 91-92; Shepherd et al. 2003, as cited by the petitioners (Petition, p. 19)). Declines in bumble bees in parts of Europe have been at least partially attributed to the use of pesticides (Williams 1986, p. 54; Kosior et al. 2007, p. 81).

The petition did not present any information indicating that impacts related to pesticide application are occurring or are foreseeable in currently or most recently occupied habitat for the Franklin's bumble bee, and we have no information in our files in this regard.

The petitioners asserted that small populations are generally at greater risk of extirpation from normal population fluctuations due to predation, disease, and changing food supply, as well as from natural disasters such as droughts (Petition, p. 20), and small and isolated populations can experience a loss of genetic variability (Cox and Elmqvist 2000, p. 1237). The petitioners believe the Franklin's bumble bee is rare and has very small populations, and likely has low genetic diversity. They believe this population structure likely makes the species more vulnerable to habitat change or loss, parasites, diseases, stochastic events, and other natural disasters such as droughts (Petition, p. 20).

Between 1998 and 2009 (when surveys specifically for the Franklin's bumble bee were conducted and for which we have data), the number of Franklin's bumble bee observations declined precipitously from 94 individuals in 1998 to 20 in 1999. Nine individuals were observed in 2000, and one individual in 2001. Although 20 were observed in 2002, only 3 were observed in 2003 (at a single locality), and a single worker was observed in 2006. There were no observations documented in 2007, 2008, or 2009 (Petition, p. 7).

The petitioners cited several papers that discuss the particular susceptibility of bumble bees to threats related to small population size and low genetic diversity, in part because bumble bees exhibit a haplodiploidy sex determination system, as do all other hymenopterans (bees, wasps, ants). In a haplodiploidy sex determination system, unfertilized, or haploid, eggs become males that carry a single set of chromosomes, and fertilized, or diploid, eggs become females that carry two sets of chromosomes. This may result in lower levels of genetic diversity than the more common diploid-diploid sex determination system, in which both males and females carry two sets of chromosomes (Petition, p. 20).

Haplodiploid organisms may be more prone to population extinction than diploid-diploid organisms, due to their susceptibility to low population levels and loss of genetic diversity (Packer and Owen 2001, p. 26; Zayed and Packer 2005, p. 10742; Darvill et al. 2006, p. 601; Ellis et al. 2006, 4375; Goulson et al. 2008, p. 11.7-11.9). Inbreeding depression in bumble bees can lead to the production of sterile diploid males (Goulson et al. 2008, p. 11.7), and has been shown to negatively affect bumble bee colony size (Herrmann et al. 2007, p. 1167), which are key factors in a colony's reproductive success. Until recently, diploid male production had not been detected in naturally occurring populations of bumble bees, and recent modeling work has shown that diploid male production, where present, may initiate a rapid extinction vortex (a situation where genetic traits and environmental conditions combine to make a species gradually become extinct) (Goulsen et al. 2008, p. 11.8).

The petitioners asserted that global climate change may threaten the Franklin's bumble bee (Petition, pp. 20-21). For example, changing climate may cause shifts in the range of host plant species, which can be especially detrimental to dependent pollinators when combined with habitat loss (Petition p. 20). The petitioners state that the Franklin's bumble bee is restricted to habitat patches where its host species are present, and its limited historical distribution suggests that it probably has a limited ability to disperse. The petition did not clarify which plant species represent host species for the Franklin's bumble bee, and we have no information in our files in this regard. The petition characterized the Franklin's bumble bee as a generalist forager, meaning they gather pollen and nectar from a wide variety of flowering plants (Petition, p. 11), which may somewhat mitigate any potential impacts of climate change relative to food resources. Darvell et al. (2010) suggest the decline of another bumble bee species, Bombus muscorum, from the United Kingdom mainland has been severe because of its limited ability to disperse, although in this study the stressor was agricultural intensification (Petition, pp. 20-21). The petitioners believe the ecology of the Franklin's bumble bee, combined with the patchy distribution of its remaining habitat, might similarly hinder dispersal made necessary by climate change and cause the extirpation of the remaining populations (Petition, p. 21), although no specific supporting information was presented and we have no information in our files in this regard.

The petitioners asserted that an increase in atmospheric carbon dioxide from global climate change may alter plant nectar production, which could negatively impact bumble bees (Petition, p. 21). They also believe the reduction in ozone, as a result of climate change, could delay flowering in plants and reduce the amount of flowers plants produce, which could have negative effects on all bumble bees (Petition, p. 21). However, no specific supporting information was presented correlating these potential impacts to the Franklin's bumble bee or its host plants, and we have no information in our files in this regard.

The petitioners believe European honey bees ( Apis mellifera ), which are not native to North America, could be a threat to the Franklin's bumble bee (Petition, p. 21). The honey bee was first introduced to eastern North America in the early 1620s, and introduced to California in the early 1850s. The petition acknowledges that honey bees have been present without noticeable declines in bumble bee populations over large portions of their ranges (Petition, p. 21), but cited several studies on the effects of honey bees on native bumble bees, which found: (1) Resource overlap and competition for resources (Thomson 2004, p. 458; Thomson 2006, p. 407); (2) decreased foraging activity and lowered reproductive success of Bombus (bumble bee) colonies nearest honey bee hives (Evans 2001, p. 32-33; Thomson 2004, p. 458; Thomson 2006, p. 407); and (3) reduced native bumble bee worker sizes where honey bees were present, which may be detrimental to bumble bee colony success (Goulson and Sparrow 2009, p. 177).

The petitioners stated it is likely that the effects discussed in these studies are local in space and time, and most pronounced where floral resources are limited and large numbers of commercial honey bee colonies are introduced (Petition, p. 21). They also stated that due consideration should be given to when, where, and how many honey bee colonies should be imported to areas with sensitive bumble bee populations (Petition. p. 21), to minimize competition for floral resources. The petition did not present information related to the placement of commercial honey bee colonies in or near Franklin's bumble bee habitat, and we have no information in this regard.

The petitioners asserted there is potential for nonnative commercially raised bumble bees to naturalize and outcompete native bumble bees for limited resources such as nesting sites and forage areas. Five commercially reared Bombus impatiens workers and one queen were captured in the wild near greenhouses where commercial bumble bees are used, suggesting this species has naturalized outside of its native range. In this study, B. impatiens, which has a native range in eastern North America, was detected in western North America (Ratti and Colla 2010, pp. 29-31). A study of bumble bees in Japan found that nonnative B. terrestris colonies founded by bees that had escaped from commercially produced colonies had over four times the mean reproductive output of native bumble bees (Matsumura et al. 2004, p. 93). A study in England found that commercially raised B. terrestris colonies had higher nectar-foraging rates and greater reproductive output than a native subspecies of B. terrestris (Ings et al. 2006, p. 940). The petitioners stated commercial bumble bee producers have likely selected for colonies that are highly productive to ensure strong colony populations for use in pollination. They expressed concern that while this is a desirable quality for commercial rearing, this practice could introduce nonnative bumble bees that could outcompete native bumble bee populations (Petition, pp. 21-22). As stated earlier, the petitioners cited a 2007 Associated Press story on the importation of B. impatien s colonies to pollinate agricultural crops and strawberries in Grants Pass, Oregon, which is within the range of the Franklin's bumble bee (Associated Press 2007; Petition, p. 18).

The assertions made by the petitioners appear to be supported by the cited references and information available in our files for bumble bees and other pollinators in general. Pesticides, global climate change, small population size, and low genetic variability are of concern for other rare invertebrates for reasons similar to those outlined by the petitioners for the Franklin's bumble bee. The potential adverse impacts of honey bee competition on declining Bombus species in western and central Europe have been recognized by surveyed experts from several European countries (Kosior et al. 2007, p. 85). Possible negative effects of introduced bees on native organisms may include competition with native pollinators for floral resources, competition for nest sites, and introduction of pathogens (Goulsen 2003, pp. 1, 18).

It remains uncertain whether or to what extent any of the threats suggested by the petitioners are occurring within habitat currently or most recently occupied by the Franklin's bumble bee. We acknowledge that some of the information presented by the petitioners addresses other bumble bee species, and not the Franklin's bumble bee. However, survey results for this species clearly demonstrate a precipitous decline in the number of individuals observed since 1998 (94 in 1998; 1 in 2006; none in 2007, 2008, or 2009). Therefore, we believe it is reasonable to conclude that the potential threats associated with pesticides, global climate change, competition from honey bees, competition with other nonnative bees, or some other presently unknown natural or manmade factor may be affecting the continued existence of Franklin's bumble bee. In addition, any threats acting on the Franklin's bumble bee are likely particularly perilous in light of the species' limited geographic distribution and extremely low population numbers, based on recent surveys. Therefore, we find that the petition presents substantial scientific or commercial information indicating the Franklin's bumble bee may warrant listing due to other natural or manmade factors affecting its continued existence. We will assess each of these factors more thoroughly during our status review for the species.

On the basis of our determination under section 4(b)(3)(A) of the Act, we determine that the petition presents substantial scientific or commercial information indicating that listing the Franklin's bumble bee throughout its entire range may be warranted. This finding is based on the information presented in the petition documenting the precipitous decline of the Franklin's bumble bee since 1998, to the point that only a single individual of the species has been observed since 2006, despite continued survey efforts. The petition additionally presented information regarding a variety of threats that may potentially be acting on the species; this suite of threats falls under Factors A, C, D, and E, as discussed above. Although the information presented does not allow us to definitively identify which of these threats, acting either singly or in concert, may be the causative factor of the species' decline, we believe the petition has presented substantial information demonstrating that some natural or manmade factor is affecting the continued existence of the Franklin's bumble bee to the point that the species may be considered threatened or endangered. Because we have found that the petition presents substantial information indicating that listing the Franklin's bumble bee may be warranted, we are initiating a status review to determine whether listing the species under the Act is warranted.

The “substantial information” standard for a 90-day finding differs from the Act's “best scientific and commercial data” standard that applies to a status review to determine whether a petitioned action is warranted. A 90-day finding does not constitute a status review under the Act. In a 12-month finding, we will determine whether a petitioned action is warranted after we have completed a thorough status review of the species, which is conducted following a substantial 90-day finding. Because the Act's standards for 90-day and 12-month findings are different, as described above, a substantial 90-day finding does not mean that the 12-month finding will result in a warranted finding.

A complete list of references cited is available on the Internet at http://www.regulations.gov and upon request from the Oregon Fish and Wildlife Office (see FOR FURTHER INFORMATION CONTACT ).

The primary authors of this notice are the staff members of the Oregon Fish and Wildlife Office.

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ).