The Homeland Security Act of 2002 transferred the functions of the Immigration and Naturalization Service (INS) to DHS. See Pub. L. 107-296, tit. IV, subtits. D, E, F, 116 Stat. 2135, 2192. DOJ and its administrative component, the Executive Office for Immigration Review (EOIR), retained the functions of EOIR, see 6 U.S.C. 521, including jurisdiction over regulations currently codified in chapter V of title 8 of the Code of Federal Regulations (CFR). On February 28, 2003, the Attorney General published a final rule in the Federal Register that reflects the transfer of authorities from the INS to DHS and the current division of regulations between DHS and EOIR. See 68 FR 9824-01 (Feb. 28, 2003). Pursuant to that rule, certain parts of chapter I of title 8 of the CFR (pertaining to DHS) were duplicated in chapter V (pertaining to EOIR) to ensure that all relevant authority relating to the shared responsibilities was preserved. See id. at 9825. Part of those duplicative regulations pertain to civil monetary penalties assessed under the INA.

The Federal Civil Penalties Inflation Adjustment Act of 1990 (Adjustment Act), Public Law 101-410, 104 Stat. 890, 28 U.S.C. 2461 note, provides for the regular evaluation of civil monetary penalties to ensure that the penalty amounts continue to maintain their deterrent effect and that the penalty amounts owed to the Federal Government are properly accounted for and collected. The Debt Collection Improvement Act of 1996 (Improvement Act) amended the Adjustment Act to require the head of each agency to “by regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency.” Public Law 104-134, § 31001(s)(1), 110 Stat. 1321. The Improvement Act requires inflation adjustments every four years.

The penalties that may be assessed by U.S. Customs and Border Protection (CBP) upon carriers and persons who violate specified provisions of the INA currently are enumerated in 8 CFR 280.53. This section is repeated in chapter V of title 8 of the CFR at § 1280.53 in regulations relating to DOJ. As discussed above, this duplication was done in 2003 to ensure that all relevant authority was preserved.

After the revisions in this final rule take effect, the penalties for specified violations of the INA will be enumerated only in 8 CFR 280.53. Those penalties will be for the following violations of the INA:

• Section 231(g) of the INA, Penalties for non-compliance with arrival and departure manifest requirements for passengers, crewmembers, or occupants transported on commercial vessels or aircraft arriving to or departing from the United States.

• Section 234 of the INA, Penalties for non-compliance with landing requirements at designated ports of entry for aircraft transporting aliens.

• Section 240B(d) of the INA, Penalties for failure to depart voluntarily.

• Section 243(c)(1) of the INA, Penalties for violations of removal orders relating to aliens transported on vessels or aircraft under section 241(d) of the INA or for costs associated with removal under section 241(e) of the INA and penalties for failure to remove alien stowaways under section 241(d)(2) of the INA.

• Section 251(d) of the INA, Penalties for failure to report an illegal landing or desertion of alien crewmen, and for each alien not reported on arrival or departure manifest and lists in accordance with section 251 of the INA and penalties for use of alien crewmen for longshore work in violation of section 251(d) of the INA.

• Section 254(a) of the INA, Penalties for failure to control alien crewmen.

• Section 255 of the INA, Penalties for employment on passenger vessels of aliens afflicted with certain disabilities.

• Section 256 of the INA, Penalties for discharge of alien crewmen.

• Section 257 of the INA, Penalties for bringing into the United States alien crewmen with intent to evade immigration laws.

• Section 271(a) of the INA, Penalties for failure to prevent the unauthorized landing of aliens.

• Section 272(a) of the INA, Penalties for bringing to the United States aliens subject to denial of admission on a health-related ground.

• Section 273(b) of the INA, Penalties for bringing to the United States aliens without required documentation.

• Section 274D of the INA, Penalties for failure to depart.

• Section 275(b) of the INA, Penalties for improper entry.

The penalty amounts for the violations of the INA enumerated in 8 CFR 280.53 were last adjusted for inflation in 1999, when DOJ published a final rule in the Federal Register , in accordance with the Adjustment and Improvement Acts. See 64 FR 47099 (Aug. 30, 1999). The final rule, however, did not adjust the penalties for certain violations of the INA that had only been in effect since 1996. DOJ noted at that time that the “[p]enalties not being adjusted by this rule will be adjusted, if appropriate, during the next adjustment required by the Debt Collection Improvement Act.” Id. at 47100. DOJ listed those penalties under paragraph (d) of 8 CFR 280.53, including for violations of sections 240B(d), 243(c)(1)(A) and (B), 274D, and 275(b) of the INA.

This final rule reflects compliance with Congress's mandate to adjust civil penalties for inflation. Congress has detailed the method for calculating inflation adjustments. Section 5(a) of the Adjustment Act provides that the inflation adjustment shall be determined by increasing the maximum civil penalty or the range of minimum and maximum civil monetary penalties, as applicable, for each civil monetary penalty by the cost-of-living adjustment, as defined in section 5(b). See 5 U.S.C. 2461 note. The cost-of-living adjustment is defined in section 5(b) as the percentage (if any) by which—

(1) The Consumer Price Index for the month of June of the calendar year preceding the adjustment, exceeds

(2) The Consumer Price Index for the month of June of the calendar year in which the civil monetary penalty was last set or adjusted pursuant to law.

Id. Section 3(3) of the Adjustment Act defines “Consumer Price Index” to mean the Consumer Price Index for all-urban consumers [`CPI-U'] published by the Department of Labor. Id. The CPI-U is accordingly used for all calculations in this final rule.

Section 5(a) of the Adjustment Act further provides that any increase required by the cost-of-living adjustment is subject to rounding according to the following standards:

• For penalties less than or equal to $100, increases are rounded to multiples of $10;

• For penalties greater than $100 but less than or equal to $1,000, increases are rounded to multiples of $100;

• For penalties greater than $1,000 but less than or equal to $10,000, increases are rounded to multiples of $1,000;

• For penalties greater than $10,000 but less than or equal to $100,000, increases are rounded to multiples of $5,000;

• For penalties greater than $100,000 but less than or equal to $200,000, increases are rounded to multiples of $10,000; and

• For penalties greater than $200,000, increases are rounded to multiples of $25,000.

In 2002, after the publication of DOJ's final rule, Congress redesignated 8 U.S.C. 1221(d) (section 231(d) of the INA) as 8 U.S.C. 1221(g) (section 231(g) of the INA) and increased the penalty for noncompliance from $300 per person to $1,000 per person. See Public Law 107-173, tit. IV, § 402(c), 116 Stat. 559. For that reason, the penalty in section 231(g) of the INA, which is currently listed as corresponding to section 231(d) in 8 CFR 280.53(c)(1) and 8 CFR 1280.53(c)(1) as $330 per person, has been superseded by the subsequent legislation and is currently $1,000 per person.

In this final rule, DHS is adjusting the civil monetary penalty amounts specified in 8 CFR 280.53, as well as in section 231(g) of the INA (8 U.S.C. 1221(g)), relating to penalties imposed for various violations of the INA, in accordance with the cost-of-living adjustment formula and the rounding provisions.

To explain how we calculated the inflation increase adjustment for those penalties that were previously adjusted in 1999, as adjusted for cost-of-living, we will use the current penalty in section 234 of the INA (8 U.S.C. 1224), listed in 8 CFR 280.53(c)(2), as an example.

First, we must determine the CPI factor. Because we are adjusting the civil monetary penalty in 2011 and the penalty was last adjusted in 1999, we use the CPI-U for June of 2010 (217.965) and the CPI-U for June of 1999 (166.2). We calculate the CPI factor by subtracting the CPI-U for June of 1999 (166.2) from the CPI-U for June of 2010 (217.965) and then dividing by the CPI-U for June of 1999 (166.2). The result is 31.15%.

Second, to calculate the raw increase for each civil penalty (before rounding), we multiply the current penalty by the CPI factor. In our example, we multiply $2,200 by 31.15%, which equals $685.30.

In the third step, we round the raw increase according to the rules in section 5(a) of the Adjustment Act. Under these rules, because the current penalty ($2,200) is greater than $1,000, but less than or equal to $10,000, we round the raw increase ($685.30) to the nearest multiple of $1,000. The result is a rounded increase of $1,000.

In the fourth and final step, we add the rounded increase ($1,000) to the current penalty ($2,200). Therefore, in our first example, the adjusted penalty for section 234 of the INA is $3,200.

To explain how we calculated the inflation increase adjustment for the penalty in section 231(g) of the INA (8 U.S.C. 1221(g)), which was set by legislation in 2002, we first must determine the CPI factor. Because we are adjusting the civil monetary penalty in 2011 and the penalty in section 231(g) was set in 2002, we must use the CPI-U for June of 2010 (217.965) and for June of 2002 (179.9). We calculate the CPI factor by subtracting the CPI-U for June of 2002 (179.9) from the CPI-U for June of 2010 (217.965) and then dividing by the CPI-U for June of 2002 (179.9). The result is 21.16%.

Second, to calculate the raw increase (before rounding), we multiply the current penalty by the CPI factor. Here, we multiply $1,000 by 21.16%, which equals $211.60.

In the third step, we round the raw increase according to the rules in section 5(a) of the Adjustment Act. Since the current penalty ($1,000) is greater than $100, but less than or equal to $1,000, we round to the nearest multiple of $100, which makes the rounded increase $200.

In the fourth and final step, we add the rounded increase ($200) to the current penalty ($1,000). Therefore, here, the adjusted penalty for section 231(g) would increase to $1,200. However, section 31001(s)(2) of the Improvement Act provides that the initial adjustment of a civil monetary penalty may not exceed 10% of such penalty. Because the penalty in section 231(g) was set by legislation in 2002, it has not been previously adjusted; therefore, the 10% statutory cap applies.

To apply the statutory cap, we must calculate 10% of the penalty. To calculate the statutory cap for the penalty, we take 10% of $1,000, which equals $100. We then add that result to the current penalty, $1,000. The result is $1,100. Because the adjusted penalty is higher than the 10% statutory cap, the 10% statutory cap must be used. Therefore, the adjusted civil monetary penalty for violations of section 231(g) is $1,100.

Because DHS is also adjusting certain other penalties for the first time (namely, the penalties set forth in sections 240B(d), 243(c)(1)(A) and (B), 274D, and 275(b) of the INA), those increases are also subject to the 10% statutory cap. Accordingly, we must first apply the normal formula and then, if necessary, apply the statutory cap.

To explain our calculations for adjusting the civil monetary amounts for those penalties that are being adjusted for the first time, we will use section 240B(d) of the INA (8 U.S.C. 1229c(d)) as our example. Section 240B(d) provides that each alien who fails to depart the U.S. voluntarily after being permitted to do so is liable for a $1,000 minimum and a $5,000 maximum penalty.

First, we must determine the CPI factor. The civil monetary penalty was enacted in 1996, so we must use the CPI-U for June of 1996 (156.7). We calculate the CPI factor by subtracting the CPI-U for June of 1996 (156.7) from the CPI-U for June of 2010 (217.965) and then dividing by the CPI-U for June of 1996 (156.7). The result is 39.10%.

Second, to calculate the raw increase (before rounding), we multiply the current penalty by the CPI factor. For the minimum penalty, the raw increase is calculated by multiplying $1,000 by 39.10%, which is $391.00. For the maximum penalty, we multiplied $5,000 by 39.10%, which equals $1,955.00.

In the third step, we round the raw increase according to the rules in section 5(a) of the Adjustment Act and then add this rounded increase to the current penalty. In this instance, the raw increase for the minimum penalty ($391.00) rounds to $400, resulting in an adjusted penalty of $1,400. For the maximum penalty, the raw increase ($1,955.00) rounds to $2,000, resulting in an adjusted penalty of $7,000. However, as stated above, under section 31001(s)(2) of the Improvement Act, the initial adjustment of a civil monetary penalty may not exceed 10% of such penalty.

To apply the statutory cap, we must calculate 10% of the minimum and maximum penalties. To calculate the statutory cap for the minimum penalty, we take 10% of $1,000, which equals $100. We then add that result to the current minimum, $1,000. The result is $1,100. We follow the same steps to calculate the maximum statutory penalty: We take 10% of $5,000, which equals $500. We then add that number ($500) to the current maximum, $5,000. The result is $5,500. Because the adjusted penalties are higher than the 10% statutory cap, the 10% statutory cap must be used. Therefore, the minimum and maximum adjusted civil monetary penalties for violations of section 240B(d) of the INA are $1,100 and $5,500, respectively.

As shown above in the first example, application of the cost-of-living adjustment formula results in an inflation adjustment of 31.15%, based on a CPI-U of 217.965 for June 2010 and a CPI-U of 166.2 for June 1999 (when the last adjustment was made). This results in new civil monetary penalties for violations of sections 234, 251(d), 254(a), 257, 271(a), 272(a), and 273(b) of the INA and for the maximum penalty for violations of section 256 of the INA. There will be no inflation adjustment to the civil monetary penalty for violations of section 255 or the minimum penalty for violations of section 256 of the INA because, due to rounding, the application of the cost-of-living adjustment formula results in the same adjusted penalty as the current penalty, as demonstrated in the chart below. Additionally, there will be an inflation adjustment to the civil monetary penalty for violations of section 231(g) of the INA. DHS has also adjusted the civil monetary penalties for violations of sections 240B(d), 243(c)(1), 274D, and 275(b) of the INA. The adjustments are shown in the chart below:

The increased penalty amounts will apply only to violations that occur on or after the effective date of this rule. For violations that occurred before the effective date, the current penalties listed as the first amount in the regulation (and shown in the chart above) will apply.

DHS is amending 8 CFR 280.53(c) to adjust the listed penalty amounts pursuant to the statutory formula discussed above. DHS is also amending 8 CFR 280.53(c) to add to the list those civil monetary penalties that are being adjusted for the first time. These include the penalties prescribed in sections 240B(d), 243(c)(1), 274D, and 275(b) of the INA. These penalties were previously listed in § 280.53(d), entitled, “Identification of sections requiring no adjustment to penalties.” Because these penalties will be incorporated in 8 CFR 280.53(c) in the final rule, DHS is removing 8 CFR 280.53(d).

As explained further in the following section discussing changes to the DOJ regulations, part 280 contains two existing regulations (last amended in 1989), that have never been updated to reflect subsequent changes in the relevant regulatory provisions. DHS is making two technical, conforming amendments to provide revised language referring to the correct, current regulatory provisions. Sections 280.13(b) and 280.51(c) are being revised to delete the phrase “an appeal may be taken to the Board of Immigration Appeals (Board) within 15 days after the mailing of the notification of decision as provided in part 3 of this chapter” and to substitute the phrase “an appeal may be taken to the Board as provided in 8 CFR part 1003.”

DOJ has concluded that it is not necessary to retain the provisions of 8 CFR 1280.53 to reflect the inflation adjustments to the penalties imposed by DHS. Section 1280.53, which, as noted above, simply reproduces the DHS regulations at 8 CFR 280.53, was promulgated in 2003 in connection with the transfer of authority from the former INS to DHS. See 68 FR 9824 (Feb. 28, 2003). To ensure that all relevant authority relating to the shared responsibilities of DHS and DOJ was preserved, DOJ duplicated in their entirety the regulations in 8 CFR 280 into new part 1280 so that these provisions would also continue to be a part of the DOJ regulations. See id. at 9827. Following the transfer of authority, the Board retained appellate authority to review DHS decisions involving certain administrative fines and penalties listed in 8 CFR 280.53. See 8 CFR 1003.1(b)(4). Because the Board's appellate authority to review DHS decisions involving the penalty provisions set forth in 8 CFR 280.53 is provided in 8 CFR part 1003 and because the duplicative language in 8 CFR 1280.53 does not add anything to the existing regulatory provisions, DOJ is removing § 1280.53 to eliminate the duplicative language.

Upon review of the remaining provisions in part 1280 other than § 1280.53, DOJ has concluded that these other provisions do not need to be retained in the EOIR regulations either. These other provisions in part 1280 duplicate regulatory provisions in 8 CFR 280 and almost all of them relate solely to the authority of DHS to impose fines and civil monetary penalties. It is unnecessary to duplicate in the EOIR regulations the text of provisions that pertain to DHS's internal authority.

There are two provisions in part 1280 relating directly to the authority of the Board, §§ 1280.13(b) and 1280.51(c), each of which provides that “an appeal may be taken to the Board [from DHS's decision] within 15 days after the mailing of the notification of decision as provided in part 3 of this chapter.” These two provisions, and the corresponding provisions in part 280 from which they were taken, have not been substantively revised since 1989 and have long been out-of-date. Sections 1280.13(b) and 1280.51(c) still refer to 8 CFR part 3, even though the relevant provisions of that part were redesignated as part 1003 in 2003, as discussed above. More significantly, the current language in §§ 1280.13(b) and 1280.51(c) (and the corresponding language in §§ 280.13(b) and 280.51(c) of the DHS regulations) refers to a 15-day period for the filing of an appeal to the Board. Those provisions have never been revised to conform to the regulatory amendments that were made years ago to extend the period for filing an appeal to the Board from a DHS decision to 30 days, as is provided in § 1003.3(a)(2). See 67 FR 54878, 54904 (Aug. 26, 2002). These provisions accordingly need to be removed from part 1280 to avoid confusion given that the controlling regulations relating to the Board's appellate review are set forth in § 1003.3.

For these reasons, DOJ is removing all of the current provisions in part 1280 and adding a new § 1280.1, which cross-references the DHS regulations in 8 CFR part 280 and the EOIR regulations in 8 CFR part 1003 governing the appellate authority of the Board. The removal of these duplicative regulatory provisions does not affect the current legal regime or the authority of the Board to adjudicate appeals from DHS decisions imposing fines and civil penalties under 8 CFR part 280.

DOJ has already made similar changes to its regulations at 8 CFR part 1274a, addressing control of employment of aliens. See 76 FR 16525 (Mar. 24, 2011); 74 FR 2337, 2339 (Jan. 15, 2009). There, DOJ removed duplicative regulations in part 1274a, and replaced them with a new § 1274a.1 that contains a cross-reference to the DHS regulations at 8 CFR part 274a. A statement was added indicating that these DHS regulations apply, to the extent relevant, in proceedings before EOIR. The changes that DOJ is making to 8 CFR part 1280 in this final rule are modeled on the changes DOJ previously made to 8 CFR part 1274a in an analogous context. These changes to part 1280 do not alter the current legal regime because the regulations in part 1280, which have been applicable to the Board, merely duplicate the existing regulations in part 280.

This final rule is being promulgated to ensure that the amount of civil penalties assessed or enforced by DHS reflect the statutorily mandated ranges as adjusted for inflation. Pursuant to 5 U.S.C. 553(b)(3)(B), the Secretary and the Attorney General find that good cause exists for immediate implementation of this final rule without prior notice and comment because it would be unnecessary to delay publication of this rule in final form, pending notice and an opportunity for public comment. This rule is a nondiscretionary ministerial action as the calculations of the adjustments follow the mathematical formula set forth in section 5 of the Adjustment Act, as amended. In addition, the other changes to part 1280 do not alter the current legal requirements or the authority of the Board to adjudicate appeals from DHS decisions imposing fines and penalties under 8 CFR part 280 because the regulations in part 1280 merely duplicate the existing regulations in part 280. For these reasons, notice and comment would be unnecessary.

This final rule does not meet the criteria of a “significant regulatory action” as specified under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by the Office of Management and Budget. Furthermore, the Regulatory Flexibility Act applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). See 5 U.S.C. 601 et seq. The Regulatory Flexibility Act does not apply to this final rule because a notice of proposed rulemaking is not required for the reasons stated above.

This final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of the government. Therefore, in accordance with Executive Order 13132, it is determined that this final rule does not have sufficient federalism implications to warrant a preparation of a Federalism Assessment.

This final rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the Unfunded Mandates Reform Act of 1995.

The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this final rule because there are no new or revised recordkeeping or reporting requirements triggered by this final rule.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

This amendment to the regulations is being issued in accordance with 8 U.S.C. 1103 pertaining to the authority of the Secretary of Homeland Security (or his/her delegate) and the Attorney General (or his/her delegate) to prescribe regulations regarding immigration and nationality.

For the reasons stated in the preamble, the Secretary amends part 280 of title 8 of the Code of Federal Regulations as set forth below.

For the reasons stated in the preamble, the Attorney General amends part 1280 of title 8 of the Code of Federal Regulations, as set forth below.

The NRC is issuing a new guide in the agency's “Regulatory Guide” series. This series was developed to describe and make available to the public information such as methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, techniques that the staff uses in evaluating specific problems or postulated accidents, and data that the staff needs in its review of applications for permits and licenses.

This guide describes a method that the NRC staff considers acceptable to implement the requirements in Title 10, Section 50.54(q), of the Code of Federal Regulations (10 CFR) part 50, “Domestic Licensing of Production and Utilization Facilities.” Requirements in 10 CFR 50.54(q)), “Conditions of Licenses,” relate to emergency preparedness and specifically to making changes to emergency response plans.

Draft Guide (DG)-1237 was published in the Federal Register on May 18, 2009 (74 FR 23220), for a 60 day public comment period. The public comment period closed on August 3, 2009. Public comments on DG-1237 and the staff responses to the public comments are available in ADAMS under Accession Number ML102520241.

This regulatory guide provides the NRC's first guidance on compliance with the revised provisions of 10 CFR 50.54(q). This regulation was recently published in the Federal Register (76 FR 72560; November 23, 2011) and will become effective on December 23, 2011. Licensees must implement the amended 10 CFR 50.54(q) by January 23, 2012. The statement of considerations for the final rule that amended 10 CFR 50.54(q) discussed compliance with applicable backfitting provisions (76 FR 72560; November 23, 2011 at Page 72594). The first issuance of guidance on a new rule does not constitute backfitting, inasmuch as the guidance must be consistent with the regulatory requirements in the new rule and the backfitting considerations applicable to the new rule must, as a matter of logic, also be applicable to this newly-issued guidance. Therefore, issuance of this new regulatory guide does not constitute issuance of “new” guidance within the meaning of the definition of “backfitting” in 10 CFR 50.109(a)(1), nor does the issuance of this new regulatory guide, by itself, constitute an action inconsistent with any of the issue finality provisions in 10 CFR part 52.

Table of Contents I. Background II. Overview of Comments III. Scope IV. Capital Planning A. Annual Capital Planning Requirement B. Mandatory Elements of a Capital Plan C. Data Submissions D. Federal Reserve Review of a Capital Plan E. Federal Reserve Action on a Capital Plan F. Federal Reserve Objection to a Capital Plan G. Re-submission of a Capital Plan V. Approval Requirements A. General Requirements B. Contents of Request for Approval and Procedures for Review VI. Conforming Changes to Section 225.4(b) of Regulation Y VII. Administrative Law Matters A. Regulatory Flexibility Act B. Paperwork Reduction Act I. Background

On June 17, 2011, the Board published a proposal in the Federal Register to require large bank holding companies to submit capital plans to the Federal Reserve on an annual basis and to require such bank holding companies to provide prior notice to the Federal Reserve under certain circumstances before making a capital distribution (the proposed rule or NPR). 1 The public comment period on the proposed rule closed on August 5, 2011. The Board is adopting the rule in final form with certain modifications that are discussed below (final rule). 2 The final rule applies only to bank holding companies with $50 billion or more of total consolidated assets.

During the years leading up to the recent financial crisis, many bank holding companies made significant distributions of capital, in the form of stock repurchases and dividends, without due consideration of the effects that a prolonged economic downturn could have on their capital adequacy and ability to continue to operate and remain credit intermediaries during times of economic and financial stress. The final rule is intended to address such practices, building upon the Federal Reserve's existing supervisory expectation that large bank holding companies have robust systems and processes that incorporate forward-looking projections of revenue and losses to monitor and maintain their internal capital adequacy. 3

The Federal Reserve has long held the view that bank holding companies generally should operate with capital positions well above the minimum regulatory capital ratios, with the amount of capital held commensurate with the bank holding company's risk profile. 4 Bank holding companies should have internal processes for assessing their capital adequacy that reflect a full understanding of their risks and ensure that they hold capital corresponding to those risks to maintain overall capital adequacy. 5 Bank holding companies that are subject to the Board's advanced approaches risk-based capital requirements must satisfy specific requirements relating to their internal capital adequacy processes in order to use the advanced approaches to calculate their minimum risk-based capital requirements. 6

As part of their fiduciary responsibilities to a bank holding company, the board of directors and senior management bear the primary responsibility for developing, implementing, and monitoring a bank holding company's capital planning strategies and internal capital adequacy process. The final rule does not diminish that responsibility. Rather, the final rule is designed to (i) establish common minimum supervisory standards for such strategies and processes for certain large bank holding companies; (ii) describe how boards of directors and senior management of these bank holding companies should communicate the strategies and processes, including any material changes thereto, to the Federal Reserve; and (iii) provide the Federal Reserve with an opportunity to review large bank holding companies' proposed capital distributions under certain circumstances.

In the Board's view, the analytical techniques and other requirements set forth in the final rule are necessary to identify, measure, and monitor risks to the financial stability of the United States. 7 An elevated capital planning standard for large bank holding companies is appropriate because of the heightened risk they pose to the financial system and the importance of capital in mitigating these risks. 8 Under section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the Board is required to impose enhanced prudential standards on large bank holding companies, including stress testing requirements; enhanced capital, leverage, liquidity, and risk management requirements; and a requirement to establish a risk committee. 9 The Board expects that large bank holding companies will reflect these enhanced prudential standards, including the results of any required stress tests, in their capital planning strategies and internal capital adequacy processes.

The Dodd-Frank Act also requires the Board to implement early remediation requirements on large bank holding companies under which a large bank holding company experiencing financial distress must take specific remedial actions in order to minimize the probability that the company will become insolvent and minimize the potential harm of such insolvency to the United States. 10 These early remediation requirements must impose limitations on capital distributions in the initial stages of financial decline and increase in stringency as the financial condition of the company declines. 11 Depending on a large bank holding company's financial condition, early remediation requirements imposed under the Dodd-Frank Act may result in limitations on a company's capital distributions in addition to the requirements that are imposed by the final rule.

The Board received 16 comments on the proposed rule. Commenters included financial trade associations, bank holding companies, policy institutions, and individuals. Commenters generally expressed support for the proposed rule. Several commenters recommended one or more changes to specific provisions of the proposed rule.

For instance, many commenters provided suggestions on the timeframe under which the Federal Reserve would review and act on a bank holding company's capital plan. Commenters asked for more information related to the data submissions that accompany the capital plan submission. In addition, many of the commenters asked for clarification on the content of the capital plans and provided views on the standards under which the Federal Reserve could object to capital plans. Other commenters provided suggestions on whether firms should be able to make capital distributions not specified in their capital plans without providing prior notice to the Federal Reserve and how such a standard should be crafted. In addition, three commenters raised issues that would be relevant to savings and loan holding companies should the final rule's requirements extend to these institutions at a future date.

In developing this final rule, the Board has carefully considered the comments received on the proposed rule. In response to these comments, the Board has clarified the requirements of the rule and modified the proposed rule in certain respects. For example, the Board has—

• Clarified in the preamble that a notice of a non-objection to a capital plan will extend through the first quarter of the subsequent year;

• Clarified in the preamble that large bank holding companies will remain subject to SR letter 09-4, which provides guidance regarding capital distributions;

• Revised the final rule to provide that, if the Federal Reserve objects to a bank holding company's capital plan, the bank holding company may not make any capital distribution (other than a capital distribution with respect to which the Federal Reserve did not object) until such time as the Federal Reserve issues a non-objection to the company's capital plan; and

• Added a limited exception that permits well capitalized large bank holding companies that are performing in accordance with baseline projections to make modest capital distributions in excess of the amount described in the company's capital plan under certain circumstances.

In addition, in response to commenters' requests for additional guidance on the data collection, the Federal Reserve has published a detailed description of the data that it intends to collect for supervisory purposes and to support the review of capital plans in a separate Federal Register notice. 12

These changes, as well as the Board's other responses to the comments received, are discussed in greater detail below.

The final rule applies to every top-tier bank holding company domiciled in the United States that has $50 billion or more in total consolidated assets (large bank holding companies). 13 As of September 30, 2011, there were approximately 34 large bank holding companies. The Board notes that the asset threshold of $50 billion is consistent with the threshold established by section 165 of the Dodd-Frank Act relating to enhanced supervision and prudential standards for certain bank holding companies. 14

The Board received a comment suggesting that the $50 billion asset threshold be measured over a four-quarter period in order to minimize the likelihood that temporary asset fluctuations would trigger the rule's application. In response to this comment, the Board has amended the proposal to measure “total consolidated assets” as the average of a company's total consolidated assets over the previous four calendar quarters, as reflected on the bank holding company's Consolidated Financial Statements for Bank Holding Companies (FR Y-9C). This calculation will be effective as of the due date of the bank holding company's most recent FR Y-9C. The final rule also applies to any institution that the Board determines, by order, shall be subject in whole or in part to the rule's requirements based on the institution's size, level of complexity, risk profile, scope of operations, or financial condition. The final rule provides that a bank holding company that becomes subject to the final rule by operation of the asset threshold after the 5th of January of a calendar year will not be subject until January 1 of the next calendar year to the final rule's requirement to file a capital plan with the Federal Reserve, resubmit a capital plan under certain circumstances, or to obtain prior approval of capital distributions in excess of those described in the firm's capital plan.

Consistent with the phase-in period for the imposition of minimum risk-based and leverage capital requirements established in section 171 of the Dodd-Frank Act, until July 21, 2015, the final rule does not apply to any bank holding company subsidiary of a foreign banking organization that is currently relying on Supervision and Regulation Letter SR 01-01 issued by the Board of Governors (as in effect on May 19, 2010). 15

Several commenters suggested that the Board grant a transition period to large bank holding companies that did not participate in the 2011 Comprehensive Capital Analysis and Review (CCAR). One commenter further suggested that, during the transition period, this set of large bank holding companies (non-CCAR firms) participate in a capital planning exercise where they would submit data templates and conduct stress testing, but would not be subject to the other requirements of the rule, including the prior notice requirements. The Board has carefully considered these comments and has decided not to provide for a formal transition period for non-CCAR firms. Thus, all large bank holding companies will be required to submit capital plans in January 2012 and will generally be subject to the rule's requirements. The Board notes that the final rule is designed to be flexible enough to accommodate bank holding companies of varying degrees of complexity and to adjust to changing conditions over time. The level of detail and analysis expected in a capital plan will vary based on the large bank holding company's size, complexity, risk profile, and scope of operations. Moreover, the Federal Reserve will work with non-CCAR firms to communicate the review process and the information requirements of the rule.

The Board understands that non-CCAR firms may need additional time to build and implement the internal systems necessary to satisfy the data collection requirements required with respect to stress scenarios provided by the Board. Thus, for purposes of the Federal Reserve's evaluation of capital plans due January 5, 2012, non-CCAR firms will not be required to submit the complete set of data templates required of the CCAR firms. Instead, as discussed in section IV.C. of the preamble, some non-CCAR firms may be asked to submit limited, summary information to the Federal Reserve about their projections of revenues and losses.

Finally, three commenters raised issues that would be relevant to savings and loan holding companies should the final rule's requirements extend to these institutions at a future date. If the Board decides to extend the final rule to savings and loan holding companies through separate rulemaking or by order, it intends to take these comments into account.

The final rule requires a large bank holding company to develop and maintain a capital plan. At least annually, the bank holding company's board of directors or a designated committee thereof is required to review the robustness  16 of the holding company's process for assessing capital adequacy, ensure that any deficiencies in the firm's process for assessing capital adequacy are appropriately remedied, and approve the bank holding company's capital plan. 17

Robustness of a large bank holding company's capital adequacy process should be evaluated based on the following elements:

(i) A sound risk management infrastructure that supports the identification, measurement, and assessment of all material enterprise-level risks arising from the exposures and business activities of the bank holding company;

(ii) An effective process for translating risk measures into estimates of potential loss over a range of adverse scenarios and environments—using multiple, complementary loss forecasting methodologies—and for aggregating those estimated losses across the bank holding company;  18

(iii) A clear definition of available capital resources and an effective process for forecasting available capital resources (including any forecasted revenues) over the same range of adverse scenarios and environments used for loss forecasting;

(iv) A process for considering the impact of loss and resource estimates on capital adequacy, in line with the bank holding company's stated goals for the level and composition of capital, and taking into account any limitations of the company's capital adequacy process and its components;

(v) A process, supported by the bank holding company's capital policy, to use its assessments of the impact of loss and resource estimates on capital adequacy to make key decisions regarding the current level and composition of capital, specific capital actions, and capital contingency plans as they affect capital adequacy;

(vi) Robust internal controls governing capital adequacy process components, including sufficient documentation; change control; model validation and independent review; and audit testing; and

(vii) Effective board and senior management oversight of the bank holding company's capital adequacy process, including periodic review of capital goals, assessment of the appropriateness of adverse scenarios considered in capital planning, regular review of any limitations and uncertainties in the process, and approval of planned capital actions.

Under the proposed rule, a large bank holding company would have been required to submit its capital plan by January 5th. Commenters provided suggestions on the proposed deadline. One commenter expressed the concern that a large bank holding company will be required to rely on tentative fourth quarter financial statements in developing its capital plan and suggested that the deadline be pushed to later in the first quarter. Another commenter suggested that the Board adopt a rolling submission process to permit firms to align capital plan submission with internal capital planning process. As discussed below, these concerns were motivated in part by the concern that the timing of the capital plan submission and review interrupted firms' ability to make capital distributions in the first quarter. The Board has addressed these concerns to a degree by clarifying in the preamble that, for a capital plan submitted in the first quarter, a non-objection would cover the four-quarter period commencing with the second quarter and extend through the first quarter of the following year. For a capital plan resubmitted after the first quarter, a non-objection would extend through the first quarter of the subsequent year.

As further discussed below, the Board has decided to maintain the proposed submission date of January 5th for capital plans. Doing so will permit review of capital plans within the first quarter, thus minimizing to the greatest extent possible the potential to disrupt a large bank holding company's ability to make capital distributions in subsequent quarters of that year. In addition, a single submission date ensures that firms are finalizing their capital plans based on the same quarter's data, which permits the Board to perform a cross-firm comparison of capital plans based on the same scenarios and to determine whether to object to firms' capital plans based on consistent scenarios.

Consistent with the NPR, the final rule defines a capital plan as a written presentation of a large bank holding company's capital planning strategies and capital adequacy process that includes certain mandatory elements. These mandatory elements are organized into four main components:

(i) An assessment of the expected uses and sources of capital over the planning horizon (at least nine quarters, beginning with the quarter preceding the quarter in which the bank holding company submits its capital plan) that reflects the bank holding company's size, complexity, risk profile, and scope of operations, assuming both expected and stressful conditions;

(ii) A detailed description of the bank holding company's process for assessing capital adequacy;

(iii) The bank holding company's capital policy; and

(iv) A discussion of any expected changes to the bank holding company's business plan that are likely to have a material impact on the firm's capital adequacy or liquidity.

The mandatory elements under each component are described below. While the final rule reflects a different organizational structure than the proposed rule, the elements are substantively the same. 19

Effective July 30, 2008, the Housing and Economic Recovery Act of 2008 (HERA), Public Law 110-289, 122 Stat. 2654, created FHFA as a new independent agency of the Federal Government, and transferred to FHFA the supervisory and oversight responsibilities of OFHEO over the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation (collectively, the Enterprises), the oversight responsibilities of the Finance Board over the Banks and the Office of Finance (OF) (which acts as the Banks' fiscal agent) and certain functions of the Department of Housing and Urban Development. See id. at section 1101, 122 Stat. 2661-62. FHFA is responsible for ensuring that the Enterprises and the Banks operate in a safe and sound manner, including that they maintain adequate capital and internal controls, that their activities foster liquid, efficient, competitive and resilient national housing finance markets, and that they carry out their public policy missions through authorized activities. See id. at section 1102, 122 Stat. 2663-64. The Enterprises, the Banks, and the OF continue to operate under regulations promulgated by OFHEO and the Finance Board, respectively, until such regulations are superseded by regulations issued by FHFA. See id. at sections 1301, 1302, 1311, 1312, 122 Stat. 2794-95, 2797-98.

Section 1201 of HERA requires the Director, when promulgating regulations “of general applicability and future effect” relating to the Banks, to consider the differences between the Banks and the Enterprises as they may relate to the Banks' cooperative ownership structure; mission of providing liquidity to members; affordable housing and community development mission; capital structure; and joint and several liability. See section 1201, Public Law 110-289, 122 Stat. 2782-83 ( amending 12 U.S.C. 4513). This final rule does not impose any new obligations on the Banks, but instead simply removes two existing Finance Board regulations that, as a result of other events, no longer have any practical or legal effect. Furthermore, as explained below, the repeal of parts 912 and 997 of title 12 of the Code of Federal Regulations (CFR) would not have a “future effect” on the rights and responsibilities of the Banks. For these reasons, FHFA believes that a section 1201 analysis is not required for this final rule.

Part 912 of title 12 of the CFR was issued by the Finance Board pursuant to the Government in the Sunshine Act (Sunshine Act), which generally requires that meetings of Federal agencies that are headed by collegial bodies be open to the public, and that such agencies promulgate regulations to implement the provisions of the Sunshine Act. Section 2 of the Sunshine Act states that the purpose of the Act is to provide the public the “fullest practicable information regarding the decisionmaking processes of the Federal Government” while protecting legitimate individual privacy and “the ability of the Government to carry out its responsibilities.” Public Law 94-409, section 2, 90 Stat. 1241 (Sept. 13, 1976) reprinted in 5 U.S.C. 552b notes. In order to implement the purposes of the Sunshine Act as articulated in Article 2, part 912 was designed to provide the public with access to information regarding the decision-making processes of the Board of Directors of the Finance Board, while protecting the privacy rights of individuals and the ability of the Board of Directors of the Finance Board to carry out its responsibilities. Part 912 accomplished these goals through the use of various procedures applicable to open and closed meetings of the Board of Directors of the Finance Board.

The Sunshine Act does not apply to FHFA, which is not administered by a collegial body. For purposes of 5 U.S.C. 552b, the term “agency” means “any agency * * * headed by a collegial body composed of two or more individual members * * *.” FHFA is headed by a single Director and therefore does not fall within the scope of this definition. Consequently, the procedures that the Finance Board had adopted in part 912 for its board meetings are no longer necessary, and should not be adopted by FHFA, because FHFA does not have a board of directors and is not subject to the Sunshine Act. Therefore, FHFA is hereby repealing part 912 in its entirety.

In 1989, Congress established RefCorp as a vehicle to provide funding for the Resolution Trust Corporation to finance resolution of the savings and loan crisis. 12 U.S.C. 1441b(a), (b). RefCorp issued approximately $30 billion of long-term bonds, the last of which will mature in April 2030. The interest due on the RefCorp bonds is paid from several sources, including mandatory contributions from the Banks. As initially enacted, the law required the Banks to contribute $300 million annually toward the RefCorp interest payments. Public Law 101-73, Title V, section 511(a), 103 Stat. 394, (August 9, 1989). In 1999, the Gramm-Leach-Bliley Act changed the manner in which the Banks' RefCorp annual contributions were to be calculated by requiring each Bank to pay 20 percent of its annual net earnings, rather than $300 million. Public Law 106-102, Title VI, section 607(a), 113 Stat. 1455, (November 12, 1999), codified at 12 U.S.C. 1441b(f)(2)(C)(i). Those amendments further provided that the Banks' RefCorp obligation was to terminate when the value of the contributions made under the revised formula equaled the value of a benchmark annuity of $300 million per year that commenced when the RefCorp bonds were issued and ended on their maturity date. The Finance Board promulgated part 997 to implement those Gramm-Leach-Bliley Act amendments, and the regulations specified the method to be used for making the present value calculations required to determine the value of the Banks' payments, relative to the benchmark annuity, and for adjusting the termination date for the payments.

This year, after consulting with the Department of the Treasury and conducting the calculations in accordance with part 997, FHFA determined that the RefCorp payment made by the Banks on July 15, 2011, caused the value of all RefCorp payments made by the Banks to that date to equal the value of the benchmark annuity, which terminated the obligation of the Banks to make any further contributions toward the debt service for the RefCorp bonds. See 76 FR 49477 (August 10, 2011). The termination of the Banks' required RefCorp payments made part 997, which relates solely to the calculation of the aggregate value of, and end date, for those payments, unnecessary and of no effect. Therefore, FHFA is hereby repealing part 997 in its entirety.

Currently, parts 1781 to 1799 of title 12 of the CFR, which are OFHEO regulations, are designated as “reserved.” These reserved parts are also currently the only items under subchapter D (Rules of Practice and Procedure) of chapter 17 of title 12. Because these parts contain no substantive provisions, there is nothing to revise and relocate to the FHFA regulations, as is the case with other OFHEO and Finance Board regulations. Nonetheless, unless FHFA affirmatively removes the reference to those parts as being reserved and removes subchapter D, those references and an empty subchapter D will remain in the CFR after FHFA has removed or relocated all of the other substantive OFHEO regulations. Therefore, in the interest of ensuring that all OFHEO regulations that will not be carried forward into the FHFA regulations are removed, FHFA is hereby repealing parts 1781 to 1799 and subchapter D in their entirety.

FHFA finds that good cause exists for adopting these rule changes as a final rule without public notice and comment under 5 U.S.C. 553(b)(B) because the subject regulations currently have no legal or practical effect and thus their removal would not alter the rights or responsibilities of any party. The provisions of part 912 relate solely to the operations of the Board of Directors of the Finance Board, which no longer exists. The provisions of part 997 relate solely to the manner in which the Finance Board and FHFA calculate the Banks' RefCorp obligation, which has been terminated. The references to the “reserved” parts of the OFHEO regulations in subchapter D have no substantive effect on any party. None of these regulations includes provisions that are appropriate for FHFA to carry over and incorporate into its own regulations, and thus they should be removed from the CFR. For these reasons, FHFA believes that public comments are unnecessary and would serve no purpose.

The final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). Therefore, FHFA has not submitted any information to the Office of Management and Budget for review.

The final rule applies only to the Banks and Enterprises, which do not come within the meaning of small entities as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore in accordance with section 605(b) of the RFA, FHFA certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

Accordingly, for reasons stated in the preamble and under the authority of 12 U.S.C. 4511, 4512, 4513, and 4526, FHFA is amending subchapters B and L of chapter IX and subchapter D of chapter XVII of title 12 of the Code of Federal Regulations as follows:

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, the FAA is charged with promoting safe flight of civil aircraft in air commerce by prescribing regulations and minimum standards for the design and performance of aircraft that the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority. It prescribes new safety standards for the design and operation of transport category airplanes.

This rulemaking harmonizes specific airworthiness certification standards for transport category airplanes with those of the European Aviation Safety Agency (EASA). Harmonizing these airworthiness standards reduces certification costs to airplane manufacturers and improves product performance and capability for operators while increasing the level of safety.

During certification, applicants for a type certificate must determine at what speed a pilot begins rotating the airplane to the liftoff pitch attitude during the takeoff roll. This speed (V R ) must be fast enough to provide a safe speed margin between the resulting liftoff speed (V LOF ) and the minimum safe liftoff speed, also known as the minimum unstick speed (V MU ). This rule allows the speed margin between V LOF and V MU to be reduced, and hence V R to be reduced, for airplanes where the minimum value of V MU is limited by the geometry of the airplane ( i.e., ground contact of the tail of the airframe with the runway when the airplane is rotated to the takeoff pitch angle). Because the geometry of the airplane provides protection against early or over-rotation beyond the safe liftoff pitch attitude at or near V MU , V R can be reduced without lowering the level of safety. Reducing V R reduces the takeoff distance needed at the same weight or allows a higher weight ( e.g., capability to carry more payload or fuel) at the same takeoff distance.

The static lateral-directional stability requirements are amended to reinstate the standards that existed prior to Amendment 25-72 that treat the specific lateral and directional stability requirements as separate entities.

This final rule also adds a requirement that, when conducting the sideslip tests required by § 25.177(c), the sideslip angles evaluated must include those resulting from applying at least one-half of the available rudder control, but no more than 180 pounds of force. For sideslip angles greater than those appropriate to the operation of the airplane, up to the angle achieved using a full rudder control input or a rudder control force of 180 pounds, this rule reduces the range of speeds and power settings that must be evaluated. The reduced scope of the evaluation will lower flight test safety risks as well as harmonize and standardize current practices.

The final rule adds requirements for minimum roll capability that a transport category airplane must have and for airplane flight characteristics following extension of speedbrakes at high speeds. The new requirements are:

(1) There must be adequate roll capability to assure a prompt recovery from a lateral upset condition, and

(2) Speedbrake extension at high speed must not result in an excessive positive load factor when the pilot does not act to counteract the effects of the extension.

Extending the speedbrakes at high speed also must not cause—

(a) Buffeting that would impair the pilot's ability to read the instruments, or

(b) A tendency for the airplane to pitch down, which could cause a further increase in speed, unless the pitching moment is small.

Lastly, this rule adds a requirement that the non-icing stall warning requirements prescribing the speed at which stall warning must begin (V SW ) also apply to icing conditions when the airplane is in the landing configuration.

Part 25 prescribes airworthiness standards for type certification of transport category airplanes for products certificated in the United States (U.S.). EASA Certification Specifications for Large Aeroplanes (CS-25) prescribe the corresponding airworthiness standards for products certificated in Europe. While part 25 and CS-25 are similar, they differ in some areas.

The FAA tasked the Aviation Rulemaking Advisory Committee (ARAC) to review existing regulations and recommend changes to eliminate differences between part 25 and CS-25 performance and handling characteristic standards by harmonizing to the higher standards. This rule is a result of that harmonization effort.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register on November 19, 2010 (75 FR 70854). The proposal discussed changes to part 25 in four areas:

1. Selection of the takeoff rotation speed,

2. Static lateral-directional stability,

3. Roll capability and extension of speedbrakes at high speeds, and

4. Stall warning onset speed for the landing configuration in icing conditions.

Three of the four proposed changes respond to the ARAC recommendations and EASA's actions in response to those recommendations. The fourth, pertaining to the stall warning onset speed for the landing configuration in icing conditions, responds to an action taken by EASA regarding a public comment made during the harmonized rulemaking that led to adoption of Amendment 121 to part 25 and Amendment 3 to CS-25. The comment period closed February 17, 2011.

The FAA received comments from Airbus, the Boeing Company, the Cessna Aircraft Company, the General Aviation Manufacturers Association (GAMA), and the Air Line Pilots Association, International (ALPA). ALPA provided a general comment in support of the proposed changes. None of the commenters opposed the proposed changes.

Boeing questioned the wording of proposed § 25.177(c), which was taken directly from EASA's CS 25.177(c) and requires application of at least 180 pounds of force to the rudder control to show compliance. Boeing believes the intent is to require a control input of at least one-half the available rudder control, but no more than 180 pounds of pedal force. Airbus commented that there is no need to consider a rudder control input beyond that corresponding to the maximum commanded sideslip angle for the current flight conditions, even if it is lower than one-half of the maximum possible displacement of the rudder pedal control input.

We agree. The language in the final rule reflects the original intent (as described in Boeing's comment) of the proposed § 25.177(c). We notified EASA that the wording of CS 25.177(c) is in error and confirmed it will be corrected.

We also agree with the Airbus interpretation of the requirement. We recognize there is no need to apply more rudder control input than that which results in the maximum available sideslip, even if that control input is less than one-half of the maximum possible displacement of the rudder pedal control. This can occur due to a rudder travel limiting system or other feature of the airplane's flight control system. Further rudder control input would not result in additional sideslip, and therefore would not affect compliance with the rule.

Airbus also commented on proposed § 25.21(g)(1) to require the stall warning requirements of § 25.207(c) and (d) to be met in icing conditions for the landing configuration. Airbus noted that special conditions are used to identify appropriate safety standards for Airbus fly-by-wire airplanes that have high incidence protection features as part of their flight control system design. These special conditions include requirements used in lieu of § 25.207. We anticipate that special conditions will continue to be used in lieu of § 25.207 to provide an equivalent level of safety to that established in the regulations.

Except for the change to § 25.177(c), in response to the Boeing comment discussed above, a minor clarifying addition to § 25.177(a), and correcting errors in the references to § 25.147(f) in §§ 25.253(b) and (c) noted in comments by Cessna and GAMA, this final rule is adopted as proposed.

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

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

The reasoning for this determination follows: The final rule will amend §§ 25.21(g)(1), 25.107(e)(1)(iv), 25.177, and 25.253 to harmonize with EASA requirements already in CS-25. A review of current practice of U.S. manufacturers of transport category airplanes has revealed the manufacturers intend to fully comply with the EASA standards (or are already complying) as a means of obtaining joint certification. Since future certificated transport category airplanes are expected to meet the existing CS-25 requirements and this final rule will simply adopt the same requirements, the manufacturers will incur no additional costs. The final rule will provide benefits from reduced joint certification costs from the harmonization itself, and for the parts of the rule harmonizing with less stringent EASA requirements, manufacturers can expect additional benefits inherent in the reduced stringency. The FAA, therefore, has determined that this final rule will have no costs, and positive benefits, and does not warrant a full regulatory evaluation. We discuss the basis for our findings below.

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

Manufacturers of transport category airplanes.

For this amendment we are adopting an EASA requirement that has no counterpart in the current CFR. Manufacturers' compliance with the EASA requirement increases the safety of their airplanes. However, since the manufacturers are already complying (or intend to comply) with the EASA requirement, there will be no additional safety benefits from compliance with the harmonizing amendment.

As we are adopting an EASA requirement that has no counterpart in the current CFR, this action will not reduce certification costs, which include costs of data collection and analysis, paperwork, and time spent applying for and obtaining approval from the regulatory authorities. Since the manufacturers intend to comply with the EASA requirement, however, they will incur no additional costs to comply with the FAA harmonizing amendment.

Manufacturers will benefit as a result of reduced certification costs from the harmonization of § 25.107(e)(1)(iv) with CS 25.107(e)(1)(iv). These benefits will result because the amendment is a less stringent requirement that will reduce the required minimum takeoff speed for geometry-limited (viz., tail contact with the runway) airplanes. As discussed in the NPRM, since the minimum takeoff speed is, in part, intended to reduce the probability of an airplane reaching a takeoff pitch attitude beyond that shown to be safe, the additional protection against such a condition inherent in a geometry-limited airplane allows the minimum takeoff speed to be safely reduced. The less stringent requirement implies higher takeoff weights, increases in payload, and shorter takeoff distances for geometry-limited airplanes. These are operator benefits, much of which will accrue to part 25 airplane manufacturers by increasing airplane value.

As this amendment is relieving, there will be no increase in costs.

Section 25.177(a) and (b) (requiring separate directional and lateral stability assessments) were removed by Amendment 25-72, published in the Federal Register (55 FR 29756), July 20, 1990. The FAA considered them unnecessary since directional and lateral stability could be determined using an “alternative test” based on data obtained in showing compliance with § 25.177(c). EASA's retention of CS 25.177(a) and (b), however, allows manufacturers to use the “basic test” outlined by CS 25.177(a) and (b). Reinstatement of § 25.177(a) and (b) will lower certification costs for manufacturers preferring instead to use the “basic test.” Transport category airplane manufacturers preferring to satisfy the stability requirements with the “alternative test” of § 25.177(c) will face no increase in cost since they may still use that test. In any case, since manufacturers intend to comply with CS 25.177(a) and (b), they will incur no additional costs from complying with the harmonizing amendment regardless of the cost situation.

Compared to the current § 25.177(c) and (d), CS 25.177(c) and (d) have both more stringent and less stringent requirements. As discussed in the NPRM, the less stringent requirement will increase the safety of flight tests without reducing test validity. Compliance with the more stringent requirement will entail some certification costs and, as noted in the NPRM, reduce payload-carrying capability under certain conditions. However, since the manufacturers intend to comply with CS 25.177(c) and (d) (or are already complying), they will incur no additional costs to comply with the harmonizing amendment.

Manufacturers will benefit as a result of reduced certification costs from the harmonization of § 25.253 with CS 25.253. Compliance of manufacturers with the more stringent EASA requirements will also increase the safety of their airplanes. However, the manufacturers intend to comply with the EASA requirements (or are already complying). So, there will be no additional safety benefits from compliance with the FAA harmonizing amendment.

Transport category airplane manufacturers will face additional certification costs—especially additional flight testing costs—to meet the EASA requirements. Since the manufacturers intend to comply with the EASA requirements, however, they will incur no additional costs to comply with the FAA harmonizing amendment.

The benefits of an FAA rule harmonizing with a more stringent EASA rule necessarily flow from reduced certification costs brought about by the harmonization itself. Just as any costs are attributable to complying with the existing EASA rule, so too are any benefits from increased safety. Accordingly, the benefits of the more stringent §§ 25.21(g)(1), 25.253, 25.177(a) and (b), and the more stringent parts of § 25.177(c) and (d) will be reduced certification costs from harmonization.

For an FAA rule harmonizing with a less stringent EASA rule, there will be reduced certification costs from the harmonization itself, but also benefits inherent in the reduced stringency. For § 25.107(e)(1)(iv), the inherent benefits will be higher takeoff weights, increases in payload, and shorter takeoff distances for geometry-limited airplanes allowed by the reduced minimum takeoff speeds. For the less stringent parts of § 25.177(c) and (d), the inherent benefits will be the increase in test flight safety brought about by the less stringent requirement.

As no commenters have disputed this same rationale used in the NPRM, the FAA has determined that this final rule will have minimal costs with positive net benefits and does not warrant a full regulatory evaluation.

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

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

As noted above, this final rule will not entail any additional costs to transport category airplane manufacturers as they are already in compliance, or intend to fully comply, with more stringent EASA standards. Moreover, all U.S. manufacturers of transport category airplanes exceed the Small Business Administration small-entity criteria of 1,500 employees. We received no comments on our determination in the NPRM of no significant economic impact.

Therefore as the FAA Administrator, I certify that this rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this final rule and determined that it will promote international trade by harmonizing with corresponding EASA regulations thus reducing the cost of joint certification.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $143.1 million.

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

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

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

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

Section 1205 of the FAA Reauthorization Act of 1996 (110 Stat. 3213) requires the FAA, when modifying its regulations in a manner affecting intrastate aviation in Alaska, to consider the extent to which Alaska is not served by transportation modes other than aviation, and to establish appropriate regulatory distinctions. In the NPRM, the FAA requested comments on whether the proposed rule should apply differently to intrastate operations in Alaska. The agency did not receive any comments, and has determined, based on the administrative record of this rulemaking, that there is no need to make any regulatory distinctions applicable to intrastate aviation in Alaska.

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

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

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

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

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

3. Access the Government Printing Office's Web page at http://www.gpo.gov/fdsys/

Copies may also be obtained by sending a request (identified by notice, amendment, or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680.

Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search FAA-2010-0310 for this action. Anyone is able to search the electronic form of all comments received into any of the FAA's 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.).

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

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of Title 14, Code of Federal Regulations as follows:

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

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart III, section 44701, “General Requirements,” Section 44702, “Issuance of Certificates,” and Section 44704, “Type Certificates, Production Certificates, and Airworthiness Certificates.” Under Section 44701, the FAA is charged with prescribing regulations and minimum standards for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. Under Section 44702, the Administrator may issue various certificates including type certificates, production certificates, air agency certificates, and airworthiness certificates. Under Section 44704, the Administrator must issue type certificates for aircraft, aircraft engines, propellers, and specified appliances when the Administrator finds the product is properly designed and manufactured, performs properly, and meets the regulations and minimum standards prescribed under section 44701(a). This regulation is within the scope of these authorities because it will promote safety of composite structures by updating the existing minimum prescribed standards, used during the type certification process, to address advances in composite structural fatigue substantiation technology. It will also harmonize this standard with international standards for evaluating the fatigue strength of normal and transport category rotorcraft composite primary structural elements.

Composite structures present unique material behaviors and react differently from metallic structures to damage and loading conditions. This rule addresses the unique characteristics of composite materials and requires applicants to evaluate these materials in a different manner from traditional metallic materials. This rulemaking addresses the type certification requirements for substantiating and certifying composite rotorcraft structures, including different aspects of the evaluation for the most critical issues for each class of materials.

This rule changes the certification standards in areas of frequent non-standardization and misinterpretation by applicants for certification of rotorcraft composite structures. This rule is intended to require damage tolerance and fatigue evaluation of composite structures in order to prevent reduction of structural strength of rotorcraft. In composite structures, low cycle fatigue often yields minimal damage growth, whereas accidental damage from impact can immediately reduce residual structural strength. This is different in metals, where any critical damage to the structure is sensitive to cyclic fatigue loads.

These rule changes also address material and process variability and environmental effects. A strength requirement for ultimate loads will be applied when maximum acceptable manufacturing defects and service damage are present. However, these rule changes provide an exception to the requirement for a damage tolerance evaluation if the applicant can establish that the damage tolerance evaluation is impractical within the limits of geometry, inspectability, and good design practice. In that instance, the applicant may be allowed to perform a fatigue evaluation for some rotorcraft structures and damage scenarios based on supplemental procedures, such as establishing a retirement time. Under this exception, an applicant could demonstrate that certain damage will not grow or does not grow beyond a certain threshold or size, and that the damaged structure could still carry ultimate loads. In this case, an inspection may not be necessary and the structure could be assigned a retirement life instead of a required inspection program. Further, this rule will require an applicant to conduct a threat assessment, which is associated with the service history of composite structures.

The rule requires that applicants consider varying types of damage, loading conditions, threat assessments, manufacturing defects, and the residual strength associated with composite structures. In developing these requirements, the FAA recognized that it may be impractical within the limits of geometry, inspectability, or good design practice to evaluate all the composite structures of a rotorcraft using a damage tolerance evaluation. Therefore, the rule allows for a fatigue evaluation of particular rotorcraft composite structures under §§ 27.573(e) and 29.573(e), where appropriate, if the applicant can establish that performing a damage tolerance evaluation is impractical within the limits of geometry, inspectability, and good design practice for those principal structural elements (PSEs). As part of the approval process for fatigue evaluation of a particular rotorcraft composite structure, the applicant will be required to identify the PSEs and the types of damage considered, establish supplemental procedures to minimize the risk of catastrophic failure associated with those types of damage, and include procedures in the Airworthiness Limitation section of the Instructions for Continued Airworthiness. These requirements minimize the risk of catastrophic failure of composite structures used on rotorcraft certificated in accordance with part 27 and part 29 standards.

Some of the requirements for evaluating composite structures came from the current § 29.571 standards. These requirements in the evaluation process include certain steps, such as identification of the PSEs, the in-flight measurements of loads, and the use of loading spectra, as severe as those expected in-service. These rule changes add more detailed steps and do not refer to the current flaw tolerant safe-life and fail-safe evaluations because there are more suitable ways of describing each approach under damage tolerance. Further, this rule does not refer to the traditional safe-life method because composites have sensitivities to defects and damage that must be considered in design and certification testing that makes the traditional safe-life method inappropriate.

These rule changes revise the standards for determining inspection intervals and retirement times based on results of damage tolerance and fatigue evaluation. Currently, the minimum residual structural strength requirement for any damage or defect that can be found by inspection is tied to limit loads (maximum loads to be expected in service). These rule changes link the required residual structural strength to the probability of a given damage type, inspection interval, and damage detectability. This link is necessary for at least two reasons. First, one of the more critical threats—impact damage—could immediately lower residual structural strength to well below ultimate loads (limit loads multiplied by prescribed factors of safety) if it occurs. These requirements will help ensure that, as the residual structural strength is lowered, the earlier damage will be detected and repaired. Inspections will be required that will be frequent and comprehensive enough to reveal any damage or defect growth to minimize the time that the rotorcraft might be operated at less than an ultimate load capability. Second, the requirements address rare damage (such as a high-energy, blunt impact) that is not detectable with the currently prescribed inspection schemes for aircraft in operational service. Although such damage may have a low probability of occurring, the rules require that sufficient residual structural strength exists to compensate for such damage.

These rule changes require that all PSEs, the failure of which could result in catastrophic failure of the rotorcraft, meet ultimate load residual structural strength requirements or require a retirement time if there could be any damage that may not be found by a maintenance inspection. Under this rule, an applicant will establish a retirement time to address the damage that may not be found by inspection or to eliminate the burden of the repeated inspection by the rotorcraft owners. For damage detectable by inspection, the rule establishes a limit load requirement to repair and restore the structure to its ultimate strength capability.

These rule changes add all PSE assessments for damage threats, residual strength, and fatigue characteristics to the list of requirements for inspection intervals or require replacement times as stated in §§ 27.573(d)(2) and 29.573(d)(2). The fatigue evaluation will include the PSEs of the airframe, main and tail rotor drive systems, main and tail rotor blades and hubs, rotor controls, fixed and movable control surfaces, engine and transmission mountings, landing gear, and other parts. In addition, performing damage tolerance evaluations of the strength of composite detail design points and fabrication techniques is considered critical by the FAA to avoid catastrophic failure due to static or fatigue loads.

The rule requires consideration of the effects of fatigue damage on stiffness, dynamic behavior, loads, and functional performance of composite structures. These characteristics are not considered to be a serious threat to residual structural strength. Currently, such requirements are limited to fail-safe evaluations.

The FAA recognizes there may be limited cases in which a damage tolerance evaluation may be impractical. In these rare cases, the applicant is required to identify the nature of the evaluation and provide a justification to the FAA for the impracticality determination. The justification must support the specific types of damage to the PSE to qualify for a fatigue evaluation. Finally, the rule requires the applicant to establish replacement times, structural inspection intervals, and related structural inspection procedures to minimize the risk of catastrophic failure because of PSE damage. The required replacement times, inspection intervals, and structural inspections will be included in the Instructions for Continued Airworthiness as required by §§ 27.1529 and 29.1529.

Additionally, the FAA recognizes that rare types of damage, such as high-energy, blunt impacts may not be uncovered as part of a base field inspection during scheduled maintenance inspection intervals. Therefore, this rule requires that the applicant substantiate sufficient residual structural strength to maintain an adequate level of safety in the event of an occurrence of rare damage. Supplemental procedures may be required to adequately address rare impact damage.

These sections require the mandatory replacement times, structural inspection intervals, and related structural inspection procedures produced under the requirements of §§ 27.571 and 29.571, the new §§ 27.573 and 29.573, and any other similar requirement for type certification be included in the Airworthiness Limitations Section of the Instructions for Continued Airworthiness.

This final rule adopts as regulatory requirements past FAA and industry practice regarding the use of composites on rotorcraft, including special conditions and advisory circulars. Although we anticipate both cost savings and improved safety as a consequence of the requirement for testing, inspection, and replacement schedules, we are unable to quantify these benefits. Nevertheless, based on industry-provided data, we believe that this final rule will yield benefits exceeding the estimated costs.

The evolution of composite technology used in rotorcraft structures is advancing rapidly. These rapid changes, along with the increased use of composites in rotorcraft structures, issues discovered during certification of composite structures, and service experiences of composite rotorcraft structures over the last 25 years, have caused us to reconsider the current regulations and guidance materials for damage tolerance and fatigue evaluation and to address the state of technology in composite structures. The current certification process is based on a broad interpretation of metallic fatigue substantiation and the design and construction airworthiness standards. However, composite and metal structures are different. Composites are complex materials that have unique advantages in fatigue strength, weight, and tolerance to damage. The methodologies for evaluating metallic structures are not necessarily suitable for composite structures. Because composite structures differ from metallic structures, the current regulations, §§ 27.571 and 29.571, do not adequately provide the fatigue certification requirements for composite rotorcraft structures.

This may lead to inconsistent interpretations from one rotorcraft certification project to another, resulting in different burdens on applicants to substantiate their composite rotorcraft structures. It has also caused confusion for some certification applicants. These applicants state there is no clear, complete guidance for certification of composite rotorcraft structures.

To address these concerns, the FAA tasked the Aviation Rulemaking Advisory Committee (ARAC)  1 through its Composite Rotorcraft Structure working group to provide advice and recommendations as follows:

• Recommend revisions to FAA Regulations/Joint Aviation Regulations (JAR) parts 27 and 29 for composite structures that are harmonized.

• Evaluate and recommend, as appropriate, regulations, advisory material, and related guidance to achieve the goal of improved tolerance to flaws and defects in composite structure with methodology and procedures that are practical and appropriate to rotorcraft.

This rule is based on ARAC's recommendations to the FAA. The recommendations have been placed in the docket for this rulemaking.

At the same time ARAC was tasked with providing advice and recommendations for composite rotorcraft structures, they were also tasked with providing advice and recommendations for metallic rotorcraft structures. However, because of the unique characteristics and structural capabilities of composite structures, the FAA established a separate rule for the damage tolerance and fatigue evaluations of rotorcraft composite structures. In response to the ARAC recommendations for improved standards for metallic structures, the FAA has developed a separate rule entitled “Fatigue Tolerance Evaluation of Metallic Structures.”

The FAA published the NPRM for this composite structures rule in the Federal Register on January 6, 2010 (75 FR 793). The comment period for the NPRM closed on April 6, 2010. However, in response to a European Aviation Safety Agency (EASA) request, the FAA subsequently reopened the comment period to July 16, 2010 (published in the Federal Register on May 5, 2010, 75 FR 24502). The FAA received 12 comments to the docket on the NPRM. Commenters included two manufacturers, a government agency, and an engineering company.

The FAA received various comments from four commenters—Adhesion Associates, Eurocopter France, Sikorsky Aircraft, and Transport Canada. All of the commenters generally supported the proposed changes; however, some suggested changes and clarifications to the rule, as discussed more fully in the next section of this document. The FAA received comments on the following general areas of the proposal.

• Definition of the term “composites.”

• Reconciling differences related to compliance methodology approval authority between § 29.571 (metallics) and § 29.573 (composites).

• Reevaluating the economic impact of the rule.

• The manner of the application of “safe life evaluation” as established in the Advisory Circular (AC) 27-1B or 29-2C, Miscellaneous Guidance-08 and its relationship to these new rule changes.

• Rewording To clarify that the application of the changes to the Appendix A required by this rule applies to structures only.

• Requesting further rulemaking to address the potential for subsequent service adhesion failures and the effect of micro-voiding on bonding strength.

Sikorsky Aircraft recommended a further definition of “composites,” beyond that contained in Advisory Circular (AC) 21-26, because it believes this is a necessary part of compliance for determining, for a given structure, whether to use § 29.571 or § 29.573.

The term “composites” is widely understood throughout the aviation industry to be different materials that are bonded or composed to create a structural component material. It has been defined in AC 21-26 as a material containing two or more distinct materials (fillers, reinforcing materials, and compatible plastic resin) designed to exhibit specific performance properties. A further definition is unnecessary. This definition is consistent with the FAA intent when it uses the term “composites” in both §§ 27.573 and 29.573. Therefore, the FAA is adopting the rule as proposed.

Sikorsky Aircraft identified the difference between §§ 27.573 and 29.573, which refer to FAA approval, and § 29.571 (metallics), which refers to the Administrator's approval. It states that the language used in the approval process should be similar for § 29.571 (metallics) and § 29.573 (composites).

The FAA agrees that this could cause confusion. The wording is changed in this rule to make it consistent with the wording in § 29.571 (metallics). The intent of §§ 29.571, 27.573, and 29.573 is that the approval of the methodology for the evaluation remains with the FAA (Administrator).

Eurocopter France recommended rewording the proposed amended language to part 29, Appendix A, from “required for type certification” to “required for type certification of structures” to eliminate addressing non-structural elements. It further recommended implementation of the policy statement ASW-100-09-003 (Subj: Policy Statement Concerning Life Limits and Instructions for Continued Airworthiness for Rotorcraft), and for the FAA to address mandatory Instruction for Continued Airworthiness (ICA) for non-structural elements through a new rulemaking task, in coordination with the European Aviation Safety Agency (EASA).

The intent of the policy statement and this rule is to require that any life limit or required inspection interval for type certification is included in the Airworthiness Limitations Section of the Instructions for Continued Airworthiness. This is the same wording used in the current 14 CFR part 23, Appendix G23.4. This is also consistent with the intent of the airworthiness limitations section of the Appendix to highlight certification limitations regardless of whether they are structural or non-structural.

The FAA does not anticipate further rulemaking to implement the policy statement because it does not differentiate between structural or non-structural elements. Therefore, the FAA is adopting the provision as proposed.

Sikorsky Aircraft believes the cost estimates for this rule should be calculated based on 12,000 hours per certification project.

Based on this commenter's cost estimate of 12,000 hours, at $86 per hour, the total nominal dollar estimate will be $1,032,000 ($567,000 in present value). The original hours provided in the ARAC recommendation were 8290 hours at $86 per hour. Taking into account the intervening 27 years, the present value difference between these estimates is $175,000. Based on this information, we estimate the nominal total compliance costs of this final rule to be between our original estimate of $713,000 and the commenter based estimate of $1,032,000.

Transport Canada requested confirmation of the FAA's position concerning the acceptability of the “traditional safe life” approach for flaw tolerance requirements, and asks that the FAA consider amending MG 8 to clarify that the “traditional safe life” is not appropriate for composites, if that is the case. Transport Canada further suggested that the FAA amend §§ 27.573 and 29.573 to include clarification to this effect, since the flaw tolerance concept is applicable to both static and fatigue strength, and to consider incorporating into the new rule requirements for environmental conditions, maximum manufacturing defects and service damages, and the effect of repeat loading (after fatigue).

Intentionally, the proposed rule did not address flaw tolerance or safe life. This was only addressed in MG 8 based on the requirements of the current § 29.571. The requirement is for evaluating damage tolerance as addressed in paragraphs (d) of §§ 27.573 and 29.573. If impractical, paragraph (e) will require a fatigue evaluation. The proposed rule did not specifically address static requirements because they are covered in the current requirements of §§ 27.305 and 29.305. The draft AC for this rule is similar in format to the current MG 8, but has been updated to address the damage tolerance fatigue requirements of composite structures. All of these damage tolerance concerns must be considered under the requirements of paragraphs (d) and (e) of this rule. The miscellaneous guidance referred to in the comment is the applicable guidance for compliance until §§ 27.573 and 29.573 become effective; it is not the guidance for this new rule. Therefore, the FAA is adopting the rule as proposed.

Adhesion Associates Proprietary, Limited, recommended that the FAA address the in-service degradation of the chemical bonds in a new regulation (§ 2x.605 for parts 27 and 29); and that information on the significance, causes, and management procedures for micro-voids be incorporated into AC 20-107B.

The recommendation for a new regulation is beyond the scope of this rulemaking. However, it will be considered in future rulemaking. Likewise, the recommended changes to AC 20-107B will be considered in future AC revisions.

Sections §§ 27.573(b) and 29.573(b) are reworded to be consistent with the wording in § 29.571 for metallic structures.

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

In conducting these analyses, FAA has determined that this final rule:

(1) Has benefits that justify its costs;

(2) Is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866;

(3) Is “non-significant” as defined in DOT's Regulatory Policies and Procedures;

(4) Would not have a significant economic impact on a substantial number of small entities;

(5) Would not have a significant effect on international trade; and

(6) Would not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the monetary threshold identified.

The estimated total cost of this final rule is between $713,000 ($392,000 in present value at 7%) and $1,032,000 ($567,000 in present value at 7%). The final rule systematizes past FAA and industry practice regarding the use of composites on rotorcraft, including special conditions and advisory circulars. Although we anticipate both cost savings and improved safety as a result of required inspection and replacement schedules, we are unable to quantify these benefits. Nevertheless, we believe that the qualitatively estimated benefits are real and significant and exceed the final rule's costs.

Who is Potentially Affected by this Rulemaking?

• Manufacturers of U.S.-registered part 27 and part 29 rotorcraft.

Our Cost Assumptions and Sources of Information.

• Discount rate—7%.

• Period of analysis of 27 years equals the 27 years of National Transportation Safety Board accident history. During this period, manufacturers will seek new certifications for 10.5 part 27 rotorcraft and six part 29 rotorcraft.

The final rule adopts as regulatory requirements past FAA and industry practice regarding the use of composites on rotorcraft, including special conditions and advisory circulars. Although we anticipate both cost savings and improved safety as a result of required inspection and replacement schedules, we are unable to quantify these benefits. Nevertheless, we believe that the qualitatively estimated benefits are real and significant and exceed the final rule's costs. We did not receive any comments regarding our conclusion that the benefits exceed the costs.

Based upon the ARAC recommendation, we estimated the costs of this final rule to be about $713,000 ($392,000 in present value) over the 27-year analysis period. Manufacturers of 14 CFR part 27 rotorcraft would incur costs of about $101,000 ($55,000 in present value) and manufacturers of 14 CFR part 29 helicopters would incur costs of about $612,000 ($337,000 in present value).

One commenter provided a cost estimate of 12,000 hours as the cost of the rule. Converting the hours to dollars results in a nominal cost of $1,032,000 ($567,000 in present value); therefore, we estimate that the nominal cost of the final rule will have a range of $713,000 to $1,032,000.

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

Agencies must perform a review to determine whether a proposed or final rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a proposed or final rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

This final rule directly affects rotorcraft manufacturers.

Size standards for small entities are published by the Small Business Administration (SBA) on their Web site at http://www.sba.gov/size . The size standards used herein are from “SBA U.S. Small Business Administration, Table of Small Business Size Standards, Matched to North American Industry Classification System Codes.” The table is effective August 22, 2008 and uses the NAICS 2007 NAICS codes.

Helicopter manufacturers are listed in the referenced table under Sector 31-33—Manufacturing; Subsector 336—Transportation Equipment Manufacturing; NAICS Code 336411—Aircraft Manufacturing. The small entity size standard is 1,500 employees.

Table R1 shows there are six U.S. part 27 helicopter manufacturers that produce composite helicopters. MD Helicopters, with 400 employees, is the only part 27 helicopter manufacturer to qualify as a small entity. It is estimated that MD Helicopters has annual revenues of $175,000,000. The cost of this rule for one part 27 helicopter certification for a part 27 manufacturer is estimated to be $9,600. This is less than 0.01 percent of MD Helicopters annual revenue. We do not believe that is a significant cost. Therefore, it is not anticipated that this final rule would have a significant economic impact on a substantial number of part 27 helicopter manufacturers.

Size standards for part 29 manufacturers are the same as the size standards for part 27 manufacturers.

Table R2 shows there are four U.S. part 29 helicopter manufacturers currently producing helicopters. None of these manufacturers qualify as a small entity. Therefore, this final rule will not have a significant economic impact on a substantial number of part 29 helicopter manufacturers.

For the initial regulatory flexibility analysis we made the same determination that this rule would not have a significant economic impact on a substantial number of small entities and we did not receive any comments regarding our analysis or determination regarding small entities. Consequently, the FAA Administrator certifies that this final rule will not have a significant economic impact on a substantial number of part 27 or part 29 rotorcraft manufacturers.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, establishing standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

The FAA has assessed the potential effect of this proposed rule and determined that it would impose the same costs on domestic and international entities and thus has a neutral trade impact.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation) in any 1 year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $140.8 million in lieu of $100 million. This proposed rule does not contain such a mandate.

The Paperwork Reduction Act of 1995 requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the collection of information, nor may it impose any information collection requirement unless it displays a currently valid Office of Management and Budget (OMB) control number.

This final rule will impose the following new information collection requirements. As required by 44 U.S.C. 3507(d) of the Paperwork Reduction Act of 1995, the FAA has submitted requirements associated with this rule to OMB for its review. Notice of OMB approval for this information collection will be published in a future Federal Register document.

Summary: This rule adds new certification standards for normal and transport category rotorcraft to address advances in structural damage tolerance and fatigue substantiation technology for composite rotorcraft structures. The rule increases the current minimum safety standards to require compliance with certain current industry practices and FAA policies that would result in higher safety standards, and result in harmonized international standards. The rule helps ensure that if damage occurs to composite structures during manufacturing or within the operational life of the rotorcraft, the remaining structure can withstand fatigue loads that are likely to occur, without failure, until the damage is detected. The damaged structure must be repaired or the part must be replaced to restore ultimate load capability. Sections 27.573 and 29.573 require that applicants get FAA approval of their proposed methods for complying with the certification requirements for damage tolerance and fatigue evaluation of composite structures.

Public comments: No public comments were received on the information collection requirements discussed in the NPRM.

Use: The required damage tolerance and fatigue evaluation information will be determined for principal composite structural elements or components, detail design points, and fabrication techniques and will be collected from rotorcraft certification applicants. The FAA will use the approval process for the applicant's submitted compliance methodology to determine whether the proposed methods are sufficient to comply with the certification requirements for damage tolerance and fatigue evaluation of composite structures. The FAA also will use the approval process for the applicant's submitted compliance methodology to determine if the rotorcraft has any unsafe features in the composite structures.

Respondents (including number of): The likely respondents to this damage tolerance and fatigue evaluation information are applicants requesting type certification of composite structures. We anticipate about 16.5 normal and transport category rotorcraft certification applicants (including supplemental type certificate applicants) over the 27 year analysis period or about 0.6 per year.

Frequency: The frequency of determining the damage tolerance and fatigue evaluation methodologies will depend on how often an applicant seeks certification of a composite structure. This compliance methodology will be provided during each certification. We anticipate 16.5 certifications over the 27 year analysis period or about 0.6 per year.

Annual Burden Estimate: The compliance methodology will be required to be submitted and approved during each certification of a composite rotorcraft structure. We anticipate there will be 0.6 certifications each year and it will take 182 hours to submit and approve the compliance methodology for each certification, for a total annual time burden of 109 hours. We anticipate that submitting and approving the compliance methodology for each certification will cost $100 per hour. Therefore, the estimated total annual cost burden will be $10,900.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform our regulations to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has reviewed the corresponding ICAO Standards and Recommended Practices and has identified no “differences” with these regulations.

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

Section 1205 of the FAA Reauthorization Act of 1996 (110 Stat. 3213) requires the FAA, when modifying its regulations in a manner affecting intrastate aviation in Alaska, to consider the extent to which Alaska is not served by transportation modes other than aviation, and to establish appropriate regulatory distinctions. In the NPRM, the FAA requested comments on whether the proposed rule should apply differently to intrastate operations in Alaska. The agency did not receive any comments, and has determined, based on the administrative record of this rulemaking, that there is no need to make any regulatory distinctions applicable to intrastate aviation in Alaska.

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

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

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

1. Search the Federal Docket Management System ( http://www.regulations.gov );

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

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

Copies may also be obtained by sending a request (identified by notice, amendment, or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680.

Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search the docket number for this action. Anyone is able to search the electronic form of all comments received into any of the FAA's 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.).

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

In consideration of the foregoing, the Federal Aviation Administration amends chapter I, parts 27 and 29 of Title 14, Code of Federal Regulations as follows:

The Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2011-02, dated February 1, 2011 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

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

DECA Aviation Engineering Limited has issued Engineer Order EI4394, Revision 2, dated February 5, 2011. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

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

There are no products of this type currently registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these products are placed on the U.S. Register in the future.

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

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

Since there are currently no domestic operators of this product, notice and opportunity for public comment before issuing this AD are unnecessary.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2011-1256; Directorate Identifier 2011-NM-036-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

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

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

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

For the reasons discussed above, I certify this AD:

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

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

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

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2010-01-09, Amendment 39-16167 (75 FR 1527, January 12, 2010). That AD applies to the specified products. The NPRM published in the Federal Register on September 1, 2011 (76 FR 54399). That NPRM proposed to continue to require repetitive external non-destructive inspections to detect cracks in the fuselage skin along the chem-mill step at stringers S-1 and S-2 right, between station (STA) 827 and STA 847, and repair if necessary. That NPRM also proposed to add inspections for cracking in additional fuselage crown skin locations, and repair if necessary. That NPRM also proposed to reduce the inspection thresholds for certain airplanes, extend certain repetitive inspection intervals, and add airplanes to the applicability of the existing AD.

We gave the public the opportunity to participate in developing this AD. We have considered the comments received. Boeing and the National Transportation Safety Board support the NPRM.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD as proposed.

We consider this proposed AD interim action. If final action is later identified, we might consider further rulemaking then.

We estimate that this AD affects 654 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We have received no definitive data that would enable us to provide a cost estimate for the on-condition actions specified in this AD.

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

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

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

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

(1) Is not a “significant regulatory action” under Executive Order 12866,

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

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

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

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

NMFS manages the groundfish fisheries in the U.S. exclusive economic zone (EEZ) of the GOA under the Fishery Management Plan for Groundfish of the GOA (FMP). The North Pacific Fishery Management Council (Council) prepared, and NMFS approved, the FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the FMP appear at 50 CFR parts 600 and 679.

The Notice of Availability for Amendment 83 was published in the Federal Register on June 28, 2011 (76 FR 37763), with a 60-day comment period that ended August 29, 2011. The Secretary of Commerce (Secretary) approved Amendment 83 on September 22, 2011. The Council submitted the proposed rule to NMFS, and it was published in the Federal Register on July 26, 2011 (76 FR 44700). The 45-day comment period on the proposed rule ended September 9, 2011. NMFS received a total of 6 letters, from five unique persons, on Amendment 83 and the proposed rule implementing the amendment. The letters contained 29 individual comments. A summary of these comments and the responses by NMFS are provided under Response to Comments below.

A detailed review of the provisions of Amendment 83 and its implementing rule is provided in the preamble to the proposed rule (76 FR 44700, July 26, 2011), and is not repeated here. The proposed rule is available from the NMFS Alaska Region web site (see ADDRESSES ). The following provides a list and brief review of the regulatory changes made by this final rule to the management of the GOA Pacific cod fishery. NMFS' responses to public comments on Amendment 83 and the proposed rule to implement Amendment 83 are also presented below.

Amendment 83 was adopted by the Council in December 2009 to supersede the current inshore/offshore processing allocation of Western and Central GOA Pacific cod among various harvesting sectors. Pacific Cod is second only to walleye pollock as the predominant GOA fishery. As one of the most valuable fish species in the GOA, Pacific cod is the primary species targeted by vessels using pot and hook-and-line gear and is an important species for vessels using the trawl gear. Smaller amounts of Pacific cod are taken by vessels using jig gear. Currently, Pacific cod in the GOA is apportioned on the basis of processor component (inshore and offshore) and season, as implemented under Amendment 23 to the GOA FMP (57 FR 23321, June 3, 1992). Under inshore/offshore management, 90 percent of the Western, Central, and Eastern GOA TAC is allocated to vessels catching Pacific cod for processing by the inshore component, and 10 percent to vessels catching Pacific cod for processing by the offshore component. The Council recognized that competition among participants in the Western and Central GOA Pacific cod fisheries has intensified in recent years. Because the TACs are divided by inshore/offshore processing components of the fishery and not divided among gear or operation types, there is a derby-style race for fish and competition among the various gear types for shares of the TACs.

Amendment 83 establishes sector allocations for each gear and operation type in the Western and Central GOA Pacific cod fisheries. In both regulatory areas, the sectors are jig, hook-and-line catcher/processor (C/P), pot catcher vessel (CV) and C/P combined, trawl C/P, trawl CV, and hook-and-line CV; however, in the Central GOA, the hook-and-line CV sector are further divided by vessel length. In the Central GOA, hook-and-line CVs less than 50 ft (15.2 m) LOA (< 50 ft (15.2 m) LOA) are in one sector and hook-and-line CVs greater than or equal to 50 ft (15.2 m) (≥ 50 ft (15.2 m)) are in another sector. Historically, the majority of catch by hook-and-line CVs has been harvested by vessels < 50 ft (15.2 m) LOA, but in recent years, there has been a substantial increase in catch by hook-and-line CVs that are between 50 ft (15.2 m) and 60 ft (18.3 m) LOA. Dividing this sector at 50 ft (15.2 m) LOA protects smaller boats from an influx of effort by vessels ≥ 50 ft (15.2 m) LOA. The Council recognized that in the Central GOA the increased competition appears to result in safety concerns at sea, as smaller boats compete with larger vessels in a race for fish. However, by establishing a CV hook-and-line split, vessels ≥ 50 ft (15.2 m) LOA that are long-time participants in the fishery would share an allocation with these more recent entrants. A similar CV sector split was not recommended for the Western GOA because the Western GOA has not seen a similar increase in effort by CVs ≥ 50 ft (15.2 m) LOA. Moreover, the Western GOA hook-and-line CV sector has historically harvested a small percentage of the TAC, and if the TAC was further apportioned by vessel length, this sector's allocation would not support a directed fishery.

This rule implements the combined pot CV and pot C/P sectors in the Western and Central GOA because catch by pot C/Ps has been relatively small, and if apportioned individually, Pacific cod allocations for pot C/Ps would be extremely low. NMFS' experience with similar sector allocations has shown that small allocations can be difficult to manage inseason. Moreover, most vessels that participated as pot C/Ps in the GOA Pacific cod fishery in recent years also have fishing history as pot CVs, and would contribute catch history to both the pot C/P and CV allocations.

This final rule divides the GOA Pacific cod TACs among gear and operation type, based primarily on historical dependency and catch history by each sector, while also considering the economic dependence of communities on this fishery. This action is intended to stabilize sector allocations for each gear and operation type in the Western and Central GOA Pacific cod fisheries, based primarily on historical catches, as well as conservation, catch monitoring, and social objectives, including considerations for small boat sectors and coastal communities traditionally participating in the inshore Pacific cod processing sector. NMFS and the Council recognize that participants with significant long-term investments and extensive catch histories are highly dependent on the GOA Pacific cod fisheries and need stability in the form of sector allocations.

Amendment 83 sector allocations are based on historical dependency, each sector's retained catch history of the Pacific cod resource, and on socioeconomic and community concerns. One of the fundamental issues identified in the Council's problem statement was that competition among sectors in the fishery may contribute to higher rates of bycatch, discards, and out-of-season incidental catch of Pacific cod. The sector allocations of Pacific cod TAC are intended to institutionalize the historical pattern of utilization of this resource and facilitate the development of management measures to address Steller sea lion mitigation, bycatch reduction, and prohibited species catch (PSC) avoidance. The effects of this action on management, monitoring, and enforcement were addressed in Section 2.3.3 of the analysis for this action. The allocations to the jig sectors are intended to expand entry-level opportunities in the GOA Pacific cod fishery. In addition to expanding this fishery, this action is intended to reduce uncertainty and help stabilize the Pacific cod fishery across the sectors and promote sustainable fishing practices in the Western and Central GOA.

This final rule does not establish sector allocations in the Eastern GOA. In recent years, only a small proportion of the Eastern GOA TAC has been harvested each year, although effort and catch has increased. NMFS recognizes the possibility that having no sector allocations in the Eastern GOA would encourage increased effort in that fishery. However, the Council did not perceive a need for such an action due, in part, to the differences in the prosecution of the Pacific cod fisheries in the Eastern regulatory area, such as the extensive trawl closures effectively prohibiting trawl fishing in the Southeast Outside district of the Eastern regulatory area. As a result, the Council recommended that the Eastern GOA Pacific cod TAC not be allocated among sectors under Amendment 83.

The Council considered a broad range of historic and recent participation when selecting the allocations to sectors. Allocations were calculated by taking each sector's “best option” from four sets of years in the Western GOA and from six sets of years in the Central GOA to calculate catch history, and then scaling allocations so that they sum to 100 percent. In the Western GOA, the four options for calculating catch history included one option consisting of all retained catch during 1995 through 2005. This period includes six years of catch history prior to implementation of the Steller sea lion protection measures in 2001. The Steller sea lion measures resulted in a shift of catch from trawl gear to pot gear. By including the earlier time period, this action accounts for the catch history of the trawl sector prior to this shift and generally favors trawl vessels. In the Central GOA, the catch histories include more recent years (2002 through 2008) and generally favor the pot CV sector, and, to a lesser extent, the hook-and-line sectors. The options in the Central GOA do not include retained catch from 1995 through 2000 because the reduction in trawl catch concurrent with implementation of the Steller sea lion protection measures in the Central GOA was less than in the Western GOA. The Council considered and rejected including the time period prior to 2000 in the Central GOA because the overall effect on sector allocations was not determined to be substantively different from the allocation resulting from years used after 2000.

Amendment 83 is intended to protect historical processing and community delivery patterns established in the GOA groundfish fisheries under the inshore/offshore management structure. The action limits the use of mobile floating processors, commonly known as motherships. In the Central GOA, no motherships have processed groundfish since 2000. In the Western GOA, there has been limited mothership activity. Amendment 83 establishes a mothership processing cap at 2 percent of the Western GOA Pacific cod TAC. Because the Central GOA has had no mothership activity since 2000, NMFS prohibits vessels from receiving deliveries of groundfish in most locations in the Central GOA. NMFS is establishing separate processing caps for motherships operating within the marine municipal boundaries of specific GOA communities reliant on GOA fishery resources. Annually, eligible permit holders are allowed to process up to 3 percent of the respective Western and Central GOA TACs on a mothership, provided that it operates within the municipal boundaries of a Community Quota Entity (CQE) community. The action is intended to provide CQE communities additional processing opportunities and possibly economic benefits, such a tax revenues and employment, resulting from any increase in mothership processing activity.

This action limits access to the Pacific cod parallel fishery for Federal fishery participants throughout the GOA. The GOA parallel fishery occurs within State of Alaska (State) waters and is opened by the State concurrent with the Federal season to allow vessels to fish off of the Federal TAC within State waters. This rule precludes federally permitted vessels that do not have a properly endorsed license limitation program (LLP) licenses from participating in the Western or Central GOA Pacific cod parallel fishery. Owners of some vessels that fish for Pacific cod in the Federal waters have surrendered their FFP licenses before fishing in the parallel waters or in the non-parallel-State waters Pacific cod fishery to avoid NMFS observer, VMS, and recordkeeping and reporting requirements, only to have the permits reissued for the opening of the Federal waters fishery. Surrendering or amending an FFP may degrade the quality of information available to manage the Pacific cod fishery. This action is intended to prevent the harvest, by federally permitted vessel operators who did not hold LLP licenses, from eroding the catches of historical participants who contributed catch history to the sector allocations and depend on the GOA Pacific cod resource. Vessels fishing in Federal waters must hold an LLP license with the appropriate area, gear, and species endorsements, but vessels fishing in parallel State waters fisheries were not required to hold an LLP license. This action is necessary to prevent vessels without LLP licenses from avoiding conservation, management, and recordkeeping measures while fishing for Pacific cod in State parallel fisheries.

Sideboards are collective catch limits that apply to all vessels in a particular sector. Vessels subject to a sideboard are allowed to fish up to the sideboard allocation but may not exceed it. Sideboards do not guarantee that a sector will harvest a specific amount of TAC. Sideboards limit participation by specific vessels in most GOA groundfish fisheries in Federal waters and in State waters during the State parallel fisheries. In general, sideboards are intended to limit the ability of vessels in rationalized fisheries from exceeding historic levels of participation in the GOA, which otherwise might exacerbate a “race for fish.” Harvests in both the Federal fisheries and State parallel fisheries accrue toward an inshore or offshore sideboard limit.

NMFS implements sideboards through the harvest specification process and these are specified as amounts, in metric tons, of fish. NMFS publishes proposed and final sideboard limits in the Federal Register as part of the annual harvest specifications (See http://alaskafisheries.noaa.gov/sustainablefisheries/specs11_12 for the specific harvest specifications). Once these sideboard limits are published, NMFS reviews the number of vessels that are subject to the sideboard and compares that to the sideboard limit. If the sideboard limit is small for a fishery and the potential harvest rate of the sideboard vessels is high, NMFS may choose not to open directed fishing for a sideboard fishery. If NMFS determines that the sideboard limit would not be exceeded, a sideboard fishery may be opened. NMFS determines whether to open a specific sideboard fishery on a case-by-case basis. The impacts of the sideboard limits recommended by the Council were analyzed as part of the Alaska Groundfish Harvest Specifications Final Environmental Impact Statement (FEIS) and the annual Supplementary Information Report associated with the FEIS.

As part of Amendment 83, the Council recommended operational and gear-specific non-AFA crab sideboards based on participation in the GOA Pacific cod fishery prior to the implementation of the crab rationalization program. The king and Tanner crab fisheries in the EEZ of the Bering Sea and Aleutian Islands (BSAI) are managed under the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs (Crab FMP). Amendments 18 and 19 to the Crab FMP implemented the BSAI Crab Rationalization Program (CR Program) in a final rule published on March 2, 2005 (70 FR 10174). Regulations implementing the Crab FMP, including the CR Program, are located at 50 CFR part 680. Regulations implementing the GOA FMP are at 50 CFR part 679.

The CR Program allocates BSAI crab resources among harvesters, processors, and coastal communities. GOA groundfish fishery sideboards apply to CR Program vessels that (1) are not authorized to conduct directed fishing for pollock under the American Fisheries Act of 1998 (Pub. L. 105-227, Title II of Division C); (2) fished snow crab from 1996 through 2000; and (3) fish using any LLP groundfish licenses derived from these “non-AFA crab” vessels. Non-AFA crab sideboards are calculated by adding up the catches of vessels subject to sideboards during 1996 through 2000 and dividing that by the catches of all vessels in that fishery to yield a sideboard ratio ( e.g., 0.10 or 10% of the Western GOA pollock fishery). The sideboard ratio is multiplied by the TAC for that year; the sideboard limit is also divided into seasons. As described in the previous section, NMFS determines whether to open the sideboard fishery to directed fishing based on the sideboard limit and the potential harvest rate of participating vessels.

The Council recognized during its Amendment 83 deliberations that the non-AFA crab sideboard percentages resulting from its recommended sector allocations were not likely to provide enough TAC to support directed sideboard fisheries for all C/P gear types, in aggregate, let alone for individual C/P gear types.

The Council considered—and rejected—combining the GOA inshore and offshore non-AFA crab sideboards into a single Western GOA sideboard and a single Central GOA sideboard. Section 2.2.4 of the analysis prepared for this action notes that combining the inshore and offshore sideboards into a single non-AFA crab sideboard may not be desirable. The analysis notes that several C/Ps have participated in the GOA offshore non-AFA crab sideboard fisheries in recent years (see Table 2-24 of the analysis). Combining the inshore and offshore sideboards into a single amount for both C/Ps and CV sectors could result in one gear or operational type preempting the other in a race for the sideboards. Such a derby style fishery is inconsistent with the purpose and need for this action. Instead, the Council's motion recommending Amendment 83 specified that the non-AFA crab sideboards would be recalculated to establish separate CV and C/P sideboards by gear type. The participation years used to recalculate the non-AFA crab sideboards remain 1996 through 2000. These recalculated sideboard ratios are shown in Table 2-51 of the analysis for this action. The Council and the analysis for this action noted that many of the sideboard ratios are only a small fraction of the respective area TACs, and are not likely to support a directed fishery.

During its October 2011 meeting, the Council received public comment requesting that the Council/NMFS reconsider proposed Amendment 83 non-AFA crab sideboard provisions. Representatives of longline C/Ps subject to non-AFA sideboards asserted that the application of proposed Pacific cod sideboard limits could constrain their ability to use longline gear in a sideboard fishery. The Council noted that the proposed sideboard ratios were included in the analysis for this action and were considered by the Council at final action. During the meeting, NMFS noted that the proposed regulations would not exclude any individual vessels from a sideboarded fishery. As proposed, each vessel currently subject to non-AFA crab sideboards could continue to participate in the Central and Western GOA Pacific cod sideboard fisheries; however, each vessel must use the gear and operational type attributed to its catch history ( i.e, for non-AFA crab sideboards, 1996 through 2000). After considering testimony during the October meeting, the Council did not recommend rescinding or otherwise revisiting the non-AFA crab sideboard fishing restrictions in § 680.22(a), LLP endorsements or restrictions, nor did it recommend changing how the sideboard ratios are calculated, per § 680.22(d), as part of the proposed regulations implementing Amendment 83; therefore, no changes were made to the proposed non-AFA crab sideboards in this final rule.

Amendment 83 expands opportunities for jig vessels by (1) potentially extending the Federal jig sector seasons to allow additional access to Federal waters; (2) providing an initial allocation that is higher than the sector's historical catch in the fishery; and (3) potentially increasing the jig allocation, if a prior annual allocation is fully harvested. Historically, jig gear has been used by small-boat operators. The Council sought to enhance access for these entry-level participants. One consequence of any increase in the jig allocation is a proportional reduction in allocations to the other sectors.

In Amendment 83, the Council supported the increase of entry-level jig fishing opportunities, but recommended that NMFS coordinate State and Federal jig fishing seasons through the Joint Protocol Committee with the State Board of Fisheries (BOF). The Council's objective is to maximize seasonal access to Federal waters for jig vessels in conjunction with State waters jig fisheries, thereby increasing jig vessel fishing opportunities.

Coordination with the BOF has occurred recently. At its October 2011 meeting in Dutch Harbor, AK, the Council received a management report from NMFS describing how the proposed regulations to implement Amendment 83 may result in concurrent Federal and State guideline harvest level (GHL) fisheries for jig gear. The Council noted that the proposed rule meets the Council's intent to provide maximum access to Federal waters to vessels using jig gear, and that it provides maximum flexibility to the BOF to manage the State water GHL and parallel fisheries. NMFS and the Council noted that the State has the authority to open and close both the State GHL and parallel fisheries irrespective of the timing of Federal Pacific cod jig fishery Federal TAC seasons. Similarly, the Council and NMFS acknowledge the authority of the State to balance the increased management burden of concurrent State and Federal seasons and fully harvest the annual GHL.

At the October 2011 meeting, the Council requested that the BOF consider options to provide jig fishing opportunities concurrently in State and Federal waters, as proposed under Amendment 83, when State regulations allow and where the BOF and State managers find it practical to implement. Subsequently, at the BOF October 2011 meeting in Anchorage, AK, the BOF recommended regulations for each State management area that synchronize, to the extent practicable, the State waters Pacific cod GHL season opening and closing dates with the Federal jig seasons opening and closing dates proposed under Amendment 83. Based on the actions of the BOF, no changes were required to be made to the proposed jig season dates in this final rule.

In order to implement Amendment 83's conservation and management objectives, this final rule implements the following amendments to the existing regulatory text at 50 CFR parts 679 and 680:

• Revises references to the inshore/offshore Pacific cod fishery in the Western and Central GOA throughout 50 CFR part 679;

• Modifies existing regulations for surrendering and amending federal fishing permits (FFPs) at § 679.4;

• Prohibits vessels from participating in the State of Alaska's parallel fishery unless the vessel has the required FFP and LLP endorsements;

• Adds an FPP CQE floating processor endorsement, and a new Western and Central GOA CV endorsement on LLP licenses at § 679.4;

• Adds prohibitions necessary to monitor and enforce community protection provisions for processing entities in the Western and Central GOA at § 679.7;

• Establishes seasonal Pacific cod TAC allocations by sector in the Western and Central GOA regulatory areas, at § 679.20;

• Modifies existing regulations for apportioning halibut prohibited species catch (PSC) limits at § 679.21;

• Adds regulations to implement operational, vessel length, and gear type Pacific cod TAC allocations and reapportionments in the Western and Central GOA at § 679.20;

• Modifies existing regulations to include new jig seasons and remove expired regulations at § 679.23;

• Requires vessel monitoring systems (VMS) on all vessels engaged in mothership activity in the Western and Central GOA at § 679.28; and

• Adds operation and gear type specifications for non-AFA crab sideboard ratios at § 680.22.

NMFS has changed proposed prohibitions at § 679.7(b)(5) and § 679.7(k)(1) and (2) to clarify that prohibitions on specified at-sea processing activity apply only in the GOA within the same calendar year. See the response to Comment 7 in the Response to Comments section below.

NMFS has changed proposed regulations at § 680.22(d) to clarify that non-AFA crab sideboards are assigned based on operation type and gear type. Proposed regulations erroneously added only the gear type and did not directly specify operation type. (See the response to Comment 9 in the Response to Comments section below.) Proposed regulations at § 680.22(d) were also modified consistent with regulations implementing Amendment 34 to the Crab FMP. (See the response to Comment 10 in the Response to Comments section below.)

NMFS has removed redundant regulatory text proposed at § 679.4(b)(4)(iii)(D), which addressed amending FFPs to add or remove species designations. Regulations at § 679.4(b)(5)(vi)(B) allow vessel owners with an FFP to add or remove species designations for Pacific cod, pollock, and Atka mackerel. (See Comment 22 in the Response to Comments section below.)

NMFS has dropped the proposed regulations at § 679.4(k)(10)(vii)(B)( 1 ), redesignated § 679.4(k)(10)(vii)(B)( 2 ) and ( 3 ) to ( 1 ) and ( 2 ), respectively, and added a new prohibition at § 679.7(b)(4)(vi) to clarify and complement these regulatory requirements. NMFS notes that the proposed regulatory text at § 679.4(k)(10)(vii)(B)( 1 ) included an erroneous citation that was corrected in this final rule. (See Comment 23 in the Response to Comments section below.)

NMFS has modified the regulatory provision at § 679.20(a)(12)(ii) to clarify the sector hierarchy the NMFS Regional Administrator would consider during B season reallocation of the projected unused TAC allocations. (See Comment 28 in the Response to Comments section below.)

This rule amends regulations at 15 CFR section 902.1 to display the control number assigned by the Director of OMB for the collection of information requirement imposed by this final rule.

During review of the proposed regulatory text to implement Amendment 83 to the FMP, NMFS identified several non-substantive technical errors that are corrected and text that is clarified in this final rule. NMFS removed redundant text from § 679.4(f)(2)(v) because proposed regulations at § 679.4(f)(2)(v)(B) and (C) would require a CQE applicant to submit information that is currently collected by NMFS RAM division or that is required in regulation by the definitions for “CQE floating processor” at § 679.2. NMFS corrected grammatical errors in the definitions of “Hook-and-line catcher/processor,” “Inshore component of the GOA,” “Mothership,” and “Pot catcher/processor at § 679.2. NMFS corrected a typing error in the regulatory provisions at § 679.4(f)(2)(v)(C) to clarify that SFP endorsements appear on FPPs not on FFPs. In addition, NMFS made minor modifications to the proposed text to clarify the following sections: In § 679.4(b)(4)(ii)(B) and (C), NFMS removed the words “in” and “for” and NMFS added the words “for,” “the following combination of,” and “and/” to clarify the regulatory text; in § 679.4(b)(5)(iv) NMFS removed the number “45.7” to clarify that the correct metric conversion is “38.1); in § 679.4(k)(10)(vii)(A), NMFS added the words “Pacific cod for the same gears and areas for which the license is currently endorsed, for” to clarify that the additional endorsements provided by this section apply to the same gears and regulatory area for which the license is currently endorsed; in § 679.4(k)(10)(viii)(F), NMFS added the words “that is accepted by the National Appeals Office” to clarify that appeals need to be accepted by the National Appeals Office; in § 679.7(b)(7), NMFS moved the phrase “and retain” from one part of the sentence to another to clarify that “and retain” applies to Pacific cod, not catch; in § 679.20(a)(12)(iii)(C) and (D), NMFS added the word “to” in order to clarify that the word modified the gear; and, in § 679.20(a)(12)(v), NMFS added the letter “s” to the word vessel to clarify that the word should be plural.

As mentioned above, NMFS received 6 letters containing 29 unique comments during the public comment periods. Two non-industry letters were received and 4 letters were received from the fishing industry. A summary of those comments, grouped by subject matter and NMFS' responses, follow.

Comment 1: Several commenters expressed general support for Amendment 83 to the FMP and its implementing regulations.

Response: NMFS acknowledges this comment.

Comment 2: Several commenters recommended partial approval of Amendment 83 to the FMP stating that particular provisions of the action were not adequately considered by the Council and that the Council process did not provide a meaningful opportunity for public comment. One comment requested that the Secretary not approve provisions of the action that would increase allocations to the jig sector based on the performance of that sector. Furthermore, the comment suggested that additional analysis and public comment is needed to evaluate any additional increases of Pacific cod TAC allocations to the jig sector, and the effect of those increases on the trawl CV sector. A second comment requested that the Secretary not approve the proposed TAC allocations to the trawl CV sector because the Council's recommended participation estimates did not include the trawl CV sector's historic use of Pacific cod discards in other fisheries. A third comment suggested that the Secretary reject the non-AFA crab sideboards; however, the FMP amendment does not address sideboards.

Response: The Secretary considered the comments recommending partial approval when he approved Amendment 83 on September 22, 2011. The Council described the rationale and mechanisms for jig and trawl CV allocations during its deliberations. The Council considered an extensive range of allocations under section 2.2.4 of the analysis prepared for this action and established a specific method to allocate catch based on a sector's best historic catch. The Council discussed the impacts of the proposed increase in allocation to the jig sector and recommended that the jig sector be allocated TAC prior to the allocation of TAC to other sectors. Thus, each subsequent non-jig sector allocation would be reduced proportionally. The Council considered, but did not recommend, using historic discard rates of Pacific cod to calculate historic participation to establish each sector's allocation. The Council did not recommend including discards in part because the Council did not want to reward fishing practices that may not have minimized bycatch to the extent practicable. In both cases, the record reflects that the data used was the best available and does not bias the allocation for or against any particular sector. The Council evaluated the impacts of these provisions in the analysis, which was made available for public comment before the Council adopted Amendment 83. Public comments and the analysis were considered by the Council prior to adoption. NMFS considered all comments received by the end of the comment period, whether specifically directed to the FMP amendment or the proposed rule, in the decision to approve Amendment 83. (See sideboard discussion in the preamble above.)

Comment 3: Delay implementation of Amendment 83. NMFS should release a subsequent proposed rule that is responsive to public comments. A subsequent joint Council/BOF public process is needed to synchronize State and Federal Pacific cod jig fisheries before provisions to increase the jig allocation are implemented. NMFS should target the 2013 fishing year for implementation of Amendment 83.

Response: NMFS disagrees. As noted in the preamble to this final rule, the BOF acted to synchronize State regulation with the Federal regulations implemented by this final rule. Amendment 83 will be implemented by the 2012 fishing year. NMFS reviewed the provisions of Amendment 83 and has determined that it is consistent with the national standards, other provisions of the MSA, and other applicable law. The Secretary approved Amendment 83 to the FMP on September 22, 2011.

Comment 4: Several commenters noted several errors in the preamble to proposed rule—

• In the third column, second paragraph on pg. 44709, the last sentence in that paragraph misstates the Council's final motion. The motion accurately states that the jig sector B season would open on June 10 or after the State GHL season closes, or whichever happens later.

• The maximum retainable amount (MRA) for arrowtooth flounder is 5 percent, not 20 percent, as the proposed rule suggests. The MRA for arrowtooth flounder is described in Table 10 to Part 679, Gulf of Alaska Retainable Percentages.

• Prince William Sound is not within the Central GOA. The map suggests that the Eastern Gulf is NMFS Regulatory Area 649.

Response: NMFS agrees with these comments and has corrected descriptive text as necessary in the preamble of this final rule. No changes were necessary to regulatory text.

Comment 5: Allocating catch to each sector will not stop the race for fish within the sectors. Proposed regulations make it extremely difficult for NMFS fishery managers to control harvest within each sector's allocation. Management measures are needed to minimize Pacific cod discards, minimize halibut bycatch, and address the race for fish within each sector for the sectors to survive under the proposed reduced Pacific cod allocation to some sectors.

Response: The objective of this action is to establish allocations for each gear sector in the GOA Pacific cod fishery in order to protect the relative catch distribution among sectors, and not to stop the race for fish within each sector. Section 2.2 of the analysis for this action noted that sector allocations may reduce competition among sectors, but may not reduce the competition among vessels within each sector, nor slow down the rate at which fisheries are prosecuted. The problem statement notes that dividing the TAC among sectors may also facilitate the development of management measures to address Steller sea lion mitigation issues, bycatch reduction, and PSC avoidance issues. The effects of this action on management, monitoring, and enforcement were evaluated in Section 2.3.3 of the analysis, which indicates that the allocations of Pacific cod were based primarily on historical catch levels by each sector. The commenter seems to be promoting the use of catch shares in the fishery; however, catch share management of this fishery was not contemplated by the Council, and is outside the scope of this action.

Comment 6: One commenter supported the Council's intent to retain historic processing delivery patterns, including community participation in processing. The commenter supported prohibiting motherships from receiving deliveries of groundfish in the Central GOA and the two-percent processing cap in the Western GOA.

Response: NMFS acknowledges this comment.

Comment 7: NMFS should revise the regulatory text to restrict stationary floating processors in the GOA from mothership and C/P activity in the BSAI and the GOA within the same calendar year. Similarly, vessels that receive and process fish from other vessels within the boundaries of CQE communities should be prohibited from mothership and C/P activity in the BSAI and the GOA within the same calendar year. The Council motion clearly states, “Allow Federally-permitted vessels that do not meet the definition of stationary floating processor and that do not harvest groundfish off Alaska in the same calendar year.”

Response: NMFS disagrees that regulatory prohibitions should be modified in the final rule to include mothership activity and C/P activity in the BSAI. The Council was explicit during deliberations that this action would only apply to the GOA. Specifically, the Council noted during deliberations that this action would affect participants in the Western and Central GOA and that the only provisions affecting participants in the Eastern GOA would be the FFP reissue limits, sideboard limits, and changes to halibut PSC limits.

This action is also intended to supersede the inshore/offshore allocations only in the Western and Central GOA. Moreover, NMFS disagrees with the commenter's interpretation of the Council's motion. When read in its entirety, the motion states as follows: “Retain the current definition of a stationary floating processor, but revise as follows so that there is no reference to the inshore component as applied to Pacific cod.” The proposed rule for Amendment 83 included the modified definition and corresponding prohibitions as reflected in the Council's motion. NMFS notes that the title of Component 8 of the Council motion is “Community protection provisions (Western and Central GOA).” The BSAI is only mentioned in Component 8 of the Council's motion regarding AFA motherships and C/Ps that operate in the BSAI. In this specific instance, the Council recommends that a “vessel cannot operate as a stationary floating processor for Pacific cod in the GOA and as an AFA mothership in the BSAI during the same year” and that a “vessel cannot operate as a stationary floating processor for Pacific cod in the GOA and as a CP in the BSAI during the same year.”

In response to this comment, NMFS has modified provisions at § 679.20(a)(12)(iii)(C), § 679.7(b)(5)(ii) and (iii), § 679.7(k)(1)(iv)(B), and § 679.7(k)(2)(ii) to clarify that these prohibitions apply to activity only in the GOA and not the BSAI.

Comment 8: The recommended non-AFA crab sideboards were not properly analyzed and would result in substantial economic impacts for the hook-and-line C/P sector that were not contemplated by the Council at final action and received little or no public comment. The set of years used to determine historical catch are arbitrary and were not included in initial review or discussion documents created for this action. As proposed, five licensed and endorsed hook-and-line C/P vessels would not be able to participate in the Pacific cod fishery in the GOA. NMFS should establish non-AFA crab vessel sideboards as separate C/P and CV sideboards, not by gear type.

Response: See discussion of sideboards in the preamble to this final rule above. The Council's motion explicitly specified that the non-AFA crab sideboards would be recalculated to establish separate CV and C/P sideboards by gear type. NMFS has modified § 680.22(d), which addresses GOA sideboard ratios, in this final rule to clarify that non-AFA crab sideboards can be allocated by operation type as well as gear type. The Council displayed these recalculated sideboard ratios in Table 2-51 of the analysis, which was available to the public for comment. These sideboard ratios were based on participation in the snow crab fishery from 1996 through 2000, years prior to the implementation of the CR Program. The Council noted that many of the Amendment 83 sideboard ratios are only a small fraction of the respective area TACs, and are not likely to support a directed fishery for C/Ps in aggregate, let alone for the hook-and-line C/P vessels. As part of this action, the Council considered and rejected single, combined C/P and CV, non-AFA crab sideboards for the Western and Central GOA regulatory areas. Section 2.2.4 page 86 of the analysis for this action notes that combining the inshore and offshore sideboards into a single sideboard may not be desirable for the non-AFA crab sideboards. The analysis notes that several C/Ps have participated in the crab sideboard fisheries in recent years (see Table 2-24). Combining the inshore and offshore sideboards into a single amount for both C/Ps and CVs combined could result in one sector preempting the other in a race for the sideboards. Such a derby style fishery is not consistent with the purpose and need for this action.

Comment 9: The AFA sideboards proposed by the regulations exactly match the AFA CV sideboards listed in the 2011 specifications when combining the seasonal inshore and offshore allocations. Based on 2011 TACs, the proposed rule suggests that 2,794 metric tons (mt) of cod would be the annual limit, when combining the seasonal inshore and offshore limits, while the 2011 specifications suggest an annual limit of 2,793 mt for the Central GOA when the same calculation is made ( i.e., combining the separate inshore and offshore allocations). This would be the expected outcome.

Response: NMFS agrees that a comparison of the actual 2011 non-exempt AFA CV sideboards with the example in the Amendment 83 proposed rule that depicts the same sideboards should match (with a minor difference due to rounding). The example in the proposed rule portrays how these sideboards will be calculated beginning in 2012, with area and seasonal sideboards for the Western and Central GOA.

Comment 10: The non-AFA crab sideboards in the proposed rule suggest that the combined C/P and CV annual allocation for all gear types is 1,873 mt; however, according to the final rule for Amendment 34 to the Crab FMP the annual limit for the combined inshore and offshore sectors is 2,563 mt. The annual caps for the two rules do not match; these two rules need to be reconciled. It is unclear whether the proposed rule for Amendment 83 incorporated the correction to the sideboard limits now that the appeals have been resolved.

Response: NMFS agrees, and has updated the non-AFA crab sideboards ratios associated with this final action. NMFS recalculated the non-AFA crab sideboard amounts using the agency's official catch records for vessels and LLP licenses subject to relevant crab sideboard restrictions. These data include the updated catch records that reflect the exemption of several vessels and their catch history from these records due to the implementation of Amendment 34 to the Crab FMP (76 FR 35772, June 20, 2011). Amendment 34 to the Crab FMP exempts additional recipients of crab quota share from GOA Pacific cod and pollock harvest sideboard limits. These sideboards apply to some vessels' LLP licenses that are used to participate in the GOA Pacific cod fisheries.

As part of the harvest specifications process, NMFS is updating the non-AFA crab sideboards ratios for each of the sectors and management areas from what was originally described in the proposed rule for this action. The sector-specific ratios originally calculated as part of the analysis associated with Amendment 83 were accurate based on the catch history of crab sideboarded vessels at that time. However, the aggregate non-AFA crab sideboard limits per management area originally were not calculated correctly. For example, the analysis for this action suggested that the aggregate Central GOA sideboard percent of TAC was 4.64 percent. By comparison, the aggregate sideboard percent of TAC for the Central GOA as calculated by NMFS in association with the implementation of Amendment 34 to the Crab FMP is 6.4 percent. Applying the sector-specific sideboard ratios to the correct, aggregate non-AFA crab sideboard portion of each TAC limit yields revised sideboard limits that reconcile the differences between the aggregate limits, as noted in the comment. This methodology will be used in future annual harvest specifications to calculate the non-AFA crab sideboard limits for each applicable Pacific cod sector. As mentioned several times in this preamble, sideboards are implemented through the harvest specification process. The example table below is not implemented through this final rule and is included here only as an example. This table portrays how these updated ratios would have been applied to the 2011 Pacific cod TAC and seasonal apportionments.

Example calculation of the GOA Pacific cod sideboard limits for non-AFA crab vessels by sector and season, using the 2011 Pacific cod TACs for the Western and Central GOA.

Comment 11: Amendment 80 sideboards are not mentioned in the proposed rule text, which incorporates GOA Pacific cod sideboards in the BSAI non-AFA trawl C/P trawl catch share program (Amendment 80). The commenter wanted clarification that these sideboards will remain effective and that when merging the Amendment 80 and Amendment 83 programs, the most restrictive management regime will apply as appropriate. Presently, Amendment 80 sideboard limits are 4.4 percent of the Central GOA Pacific cod TAC and 2.0 percent of the Western GOA Pacific cod TAC. Applying these sideboard ratios to the 2011 Central GOA TAC of 40,362 mt would suggest that the Amendment 80 sideboard limit in the Central GOA would be 1,776 mt annually (60 percent—A season = 1,066 mt and 40 percent—B season = 710 mt). The commenter compares these estimates to the C/P trawl allocation proposed in Amendment 83 for the GOA split of 4.2 percent of the non-jig allocation and divided based on historical catch of the C/P trawl sector, 47.6 percent for the A season and 52.4 percent for the B season. The calculations are based on 2011 TAC (after the jig allocation), suggesting an annual allocation of 1,678 mt (A season = 801 mt and B season = 877 mt).

Response: NMFS agrees with these calculations, as portrayed (1) in the final 2011 and 2012 harvest specifications for groundfish of the GOA, which specifies the Amendment 80 sideboard limits; and (2) in the proposed trawl C/P allocations in the proposed rule for Amendment 83. NMFS will use the C/P trawl sector allocation and seasonal allowances to determine future management actions, such as directed fishing closures that affect this sector.

Comment 12: Uphold the rule as proposed. This action protects the Pacific cod fishery from shifting effort to vessels using trawl gear, and ensures the long-term productivity and viability of the fishery.

Response: NMFS notes that this action will provide stability to the participants in the Pacific cod fishery. This action establishes Pacific cod sector allocations in the Western and Central GOA based primarily on historical catch levels by each sector. With the exception of the jig sector, the timing, location, and overall level of fishing effort in the GOA Pacific cod fishery is not expected to change the management of the fishery. The Western and Central GOA jig sector allocation initially will be set above historic catch levels (typically less than 1 percent of the TAC in each area), and will increase further if the initial allocations are fully harvested. Similarly, jig allocations will decrease if TAC allocated to the jig sector remains unharvested. However, the jig sector allocation will not drop below its initial level. By establishing Pacific cod gear allocations based on the historical catch for non-jig sectors, this action provides a stable proportion of the Pacific cod TAC to all participants in the fishery, regardless of gear type. This assurance of the available proportion of the annual TAC to each gear type provides for long-term participation from all current gear sectors.

Comment 13: The final rule is necessary to protect the endangered western distinct population segment of Steller sea lions and their designated critical habitat.

Response: NMFS disagrees. Although this action may indirectly benefit Steller sea lions by promoting a shift to less intensive gear types, it is not necessary for the protection of Steller sea lions and their designated habitat. This action is intended to stabilize the GOA Pacific cod fishery. See response to Comment 12. The effects on Steller sea lions and their designated critical habitat and on other ESA-listed species are described in an environmental assessment for Amendment 83. No adverse effects on ESA-listed species or their designated critical habitat beyond those already analyzed for the GOA Pacific cod fisheries in previous biological opinions are expected from this action. The GOA Pacific cod fishery as currently prosecuted was analyzed in the 2010 Biological Opinion for the Authorization of Groundfish Fisheries under the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area, the Authorization of Groundfish Fisheries under the Fishery Management Plan for Groundfish of the Gulf of Alaska, and State of Alaska Parallel Groundfish Fisheries. This biological opinion determined that no further restrictions were needed to ensure the GOA Pacific cod fisheries as currently prosecuted would not likely adversely modify designated critical habitat for Steller sea lions or put it in jeopardy of extinction.

Comment 14: The proposed concurrent jig seasons are in direct conflict with the Council motion and intent. Concurrent State and Federal jig seasons could strand State-waters GHL jig quota. A fixed March 15 A-season Federal jig season closure is necessary to allow the jig sector to access State GHL before it harvests its Federal TAC. The final rule should revise the jig gear opening and closure dates to match the Council motion, which specified that the jig A-season closure date should be when the TAC is reached or on March 15, whichever occurs first.

Response: See discussion of BOF and jig provisions above in the preamble to this final rule and the discussion of the jig season in the preamble to the proposed rule implementing this action. During its October 2011 meeting, the BOF chose not to recommend that the Council and NMFS implement a March 15 closure date; therefore, no change to the proposed regulations implementing the jig A and B season start dates is necessary.

Comment 15: This action increases demand for limited management resources in ways that were not contemplated by the State or by this action. If concurrent jig seasons occur, as proposed, the burden on State managers would increase and would require Kodiak managers to increase outreach and coordination with the jig fleet to ensure accurate accounting of landings.

Response: See discussion of BOF and jig provisions above in the preamble to this final rule. NMFS acknowledges this comment and notes that during its October 2011 meeting, the BOF recommended management measures to mitigate many of the State managers' concerns in the event that concurrent seasons occur. The regulations implementing these management measures can be found in State regulations at: 5 AAC 28.467 for the Kodiak Area Pacific Cod Management Plan; 5 AAC 28.537 for the Chignik Area Pacific Cod Management Plan; 5 AAC 28.577 for the South Alaska Peninsula Area Pacific Cod Management Plan; 5 AAC 28.367 for the Cook Inlet Pacific Cod Management Plan; and 5 AAC 28.267 for the Prince William Sound Pacific Cod Management Plan. In the preamble to the proposed rule to implement Amendment 83, NMFS acknowledged the burden that concurrent Federal and State Pacific cod jig seasons could have on State fishery managers.

Comment 16: The Joint Protocol Committee is a collaboration of the Council and the BOF, and not a NMFS/BOF process. The Council sets Federal fisheries policy, NMFS regulates the Federal fisheries, the BOF sets State policy, and the Alaska Department of Fish and Game regulates State fisheries.

Response: See discussion of BOF and jig provisions above in the preamble to this final rule. The preamble to this final rule has been clarified to accurately describe the relationship between the NMFS and the BOF.

Comment 17: The proposed rule does not specify how the stair-step provisions for the jig fishery will work in the Western GOA, where the initial allocation is 1.5 percent.

Response: NMFS notes that the stair-step provisions for the jig fishery will be addressed in future notices of proposed annual fishery specifications. However, NMFS has modified Table 3 from the preamble to proposed rule to provide examples how the stair-step provisions might be implemented in the annual fishery specification process—

Comment 18: If the BOF recommends a March 15 closure, or any fixed date closure of the Federal A season for vessels using jig gear following the close of the comment periods for the Amendment 83 proposed rule, could it be incorporated into the final rule implementing Amendment 83 without additional due process?

Response: See discussion of BOF and jig provisions above in the preamble to this final rule. Any BOF recommendation not described in the proposed rule or analysis for this action would occur through the Joint Protocol Committee as a subsequent action that would require additional Council review and notice and comment rulemaking. No subsequent action is necessary at this time because the BOF synchronized State management with the proposed concurrent season dates. Similarly, no change is necessary to the Federal A season for the jig sector in this final rule from those dates proposed in the proposed rule.

Comment 19: The commenter suggested that the jig sector has large growth potential and should be held to the same standards and requirements as other Federal Pacific cod fishery participants for reporting, recordkeeping, species and gear endorsement on their FFP, VMS, and observer coverage requirements (including proposed observer restructuring program). The proposed jig seasons guarantee Federal jig allocations will be fished and accessed first, thus reducing Pacific cod allocations to non-jig sectors. Jig sectors will automatically reach the 6 percent cap in 5 years.

Response: The Council anticipated the potential for growth in the jig sector under a gradually increasing allocation that could also be adjusted downward if specific catch limits are not met. If the growth of the jig sector increases more than the Council and NMFS anticipate, the Council could recommend, and NMFS could implement, additional management measures to limit that growth. As described in detail in the proposed rule for this action, the initial jig sector allocations in the Western and Central GOA Pacific cod fisheries implemented by this action are already higher than historic catch levels. There are no data to indicate harvests are likely to increase. The commenter is raising concerns that do not appear to be supported by current data trends. Jig vessel operators fishing exclusively in State waters are not required to hold an FFP or a groundfish LLP license. No observer coverage is currently required in the State GHL fisheries.

As described in the preamble to the proposed rule of this action, jig gear is exempt from some requirements that apply to other gear types in Federal waters, including the requirement for VMS in Federal waters and in the requirements of the Federal Observer Program. Jig vessels fishing in Federal waters must obtain an FFP and comply with Federal recordkeeping and reporting requirements. Vessels using jig gear are not required to have an endorsement on their FFP to participate in the directed Pacific cod fisheries in the GOA. Consequently, vessels using jig gear are exempt from the VMS requirement (§ 679.7(a)(18)).

The impacts of requiring vessels to have species and gear endorsements on their FFP and VMS were discussed in section 2.2.10 of the analysis for this action. The jig exemptions are intended to ensure that there are opportunities for vessels to use jig gear in the GOA Pacific cod fisheries. These exemptions meet the purpose and need for this action by providing a limited opportunity for entry-level vessel operators to participate in the Federal Pacific cod fishery without the obligations and costs that they may incur if a Pacific cod endorsement and VMS were required.

The Council's October 2010 motion to restructure the funding and deployment system for observers in North Pacific groundfish and halibut fisheries does not exempt vessels using jig gear from the observer program.

Comment 20: One commenter supported proposed regulations to prevent federally permitted vessels from surrendering and reactivating their FFP on an unlimited basis.

Response: NMFS acknowledges the comment.

Comment 21: Vessels that have an LLP license with a Pacific cod endorsement in the Central or Western GOA with trawl, hook-and-line, or pot gear endorsements should be prohibited from harvesting Pacific cod allocated to the jig sector to preserve the entry-level opportunities for new participants. The jig allocation was not intended to expand opportunities for vessels with fishing history that qualified for LLP endorsements under the Amendment 86 fixed gear recency action that became effective on April 21, 2011 (76 FR 15826).

Response: NMFS disagrees. NMFS clarifies that vessels with LLP license endorsements for other gear types in Western or Central GOA can participate in the jig sector. The Council's motion did not recommend limiting new entrants to the jig fishery, and no changes to the proposed regulatory text were made in response to this comment.

The RIR for this action analyzed the number of vessels using jig gear that also had groundfish LLP licenses from 2000 through 2009, in Table 2-54 of section 2.2.5. In the Western GOA, one to six vessels, and in the Central GOA, five to eight vessels participated in the GOA Pacific cod fishery with jig gear and held LLP licenses. Similarly NMFS analyzed the impacts of increasing the jig allocation to 6 percent of the TAC in the Western and Central GOA. Prior to taking final action, the Council considered options to establish initial allocations of 1 percent, 1.5 percent, or 2 percent of the Central GOA Pacific cod TAC, and 1 percent or 1.5 percent of the Western GOA Pacific cod TAC for the jig sector, with a stair-step provision to increase the jig allocation by 1 percent, if 90 percent of the Federal jig allocation in a management area is harvested in a given year. The Council also considered the impacts of a jig allocation capped at 5 percent, 6 percent, or 7 percent of the respective Western and Central GOA Pacific cod TACs.

NMFS agrees that the intent of this action is to provide entry-level opportunities in the jig fishery and notes that participants in the jig fishery have historically used small vessels. As part of this action, the Council did not define “entry-level” as it pertains to the jig fishery. The Council and NMFS did, under the Amendment 86 fixed-gear recency action, exempt jig vessels from the LLP license requirements if the vessels are limited to no more than five jigging machines, 30 hooks per line, and one line per machine (§ 679.4(k)(2)(iii)). Vessels that do not meet the participation requirements of the fixed- gear or trawl recency actions could participate in the jig fishery if they conform to the gear limits of the exemption. Moreover, any vessel that did not participate in the jig fishery prior to the Pacific cod sector allocation could be considered an entry-level and/or new participant in the jig sector. It is equally possible under this action that vessel owners with LLP licenses endorsed for other gear types may choose to use jig gear to fish for Pacific cod in the Western or Central GOA during a non-jig gear season or after the season and/or the allocation for that non-jig gear season has closed. This action does not limit traditional small boat operators from entering the fishery. In fact, the action expands entry-level opportunities for small vessels by making more TAC available and retaining an LLP license exemption that favors small vessels, as it may not be economically feasible for large vessels to operate only 5 jig machines.

Comment 22: One commenter suggested that the proposed regulations would not restrict an FFP holder from removing Pacific cod species endorsements from that FFP. They suggested that § 679.4(b)(4)(iii)(D) should be revised to include pollock and Atka mackerel gear type endorsements along with Pacific cod. This would allow a vessel to remove all species endorsements to participate in a State fishery and then add the endorsement when the vessel wishes to again participate in a Federal fishery requiring VMS coverage.

Response: NMFS agrees that the proposed regulations at § 679.4(b)(4)(iii)(D) would not restrict an FFP holder from removing Pacific cod species endorsements from that FFP. However, existing regulations allow a vessel owner to amend their FFP to add or remove species designations for Pacific cod, pollock, and Atka mackerel. In response to the comment NMFS has determined that the proposed regulation at § 679.4(b)(4)(iii)(D) superfluous with the existing regulations. Therefore, NMFS has removed the redundant proposed regulation at § 679.4(b)(4)(iii)(D) from this final rule. This action limits holders of an FFP from removing endorsements for C/P operation type, CV operation type, trawl gear, hook-and-line gear, pot gear or jig gear, and the GOA area endorsement. NMFS notes that GOA Pacific cod endorsements are not simple species endorsements; they are compound endorsements that include a species, operation type, and a gear as part of the same one endorsement. To clarify, this action will not preclude an FFP holder from amending the species endorsements on the FFP. Currently, a vessel owner can amend their FFP to add or remove species designations for Pacific cod, pollock, and Atka mackerel under regulations at § 679.4(b)(5)(vi)(B). To simplify the regulations, NMFS has removed the redundant regulatory text proposed at § 679.4(b)(4)(iii)(D).

Under Amendment 83, vessels participating in the directed Pacific cod fishery in Federal waters using trawl, pot, or hook-and-line gear are required to have an FFP with a Pacific cod fishery endorsement, and are required to use VMS to facilitate enforcement of closed areas around sea lion rookeries and haulouts, and to enforce gear closures in sensitive habitat. Vessels using jig gear are exempt from this requirement. The VMS requirement only applies if the FFP has an Atka mackerel, Pacific cod, or pollock species endorsement. These FFP species endorsements are required to participate in the directed fisheries for these species. An FFP holder can remove the species endorsement from the FFP (without surrendering the FFP) at any time during the 3-year term of the permit and participate in State fisheries exempt from VMS coverage. Only a small number of vessels have surrendered the FFP in recent years. In 2008, there were approximately 1,700 FFPs, 1,500 of which had GOA area endorsements. Data provided by NMFS Restricted Access Management Program (RAM) indicate that 12 to 25 FFPs with GOA area endorsements were surrendered per year, during 2003 through 2008 (see Table 2-66 in 2.2.10 of the analysis for this action). Based on the timing of these surrenders, it appears that some vessels surrendered the FFP prior to participating in the Aleutian Islands or GOA State waters Pacific cod fisheries.

Comment 23: One commenter supported provisions of the action providing the holder of an LLP license with a C/P endorsement with the opportunity to make a one-time selection to add a CV endorsement for Pacific cod if the LLP was used to make at least one Pacific cod landing while the vessel was operating as a CV. The commenter recommended that NMFS clarify that under Amendment 83, a holder of an LLP license with a C/P endorsement electing to add a CV endorsement for Pacific cod could continue to operate as a C/P in other directed fisheries; however, incidental catch of Pacific cod in those fisheries would accrue to the CV cod allocation.

Response: NMFS acknowledges the support for this provision, and agrees that clarification is necessary. NMFS clarifies that each eligible LLP license holder with a C/P endorsement that elects to permanently add a CV endorsement for Pacific cod to their Central and/or Western GOA license will retain their C/P endorsement on their license. The additional CV endorsement(s) will not affect the license's existing operation type endorsement, and the license holder will continue to be eligible to participate as a C/P in all other GOA and BSAI groundfish fisheries. It is important to note that NMFS cannot require that a vessel process its catch on board; however, the license holder would need a CV FFP operation type endorsement to act as a CV, and a separate C/P FFP endorsement to process its own harvest at sea. Therefore, Pacific cod catch in the Western and Central GOA Pacific cod fisheries using LLP licenses held by persons that decline to receive a CV Western and/or Central GOA endorsement will accrue to the C/P allocations. The result is that holders of an LLP license with a C/P Pacific cod endorsement can operate as either a C/P or CV, but catch from their vessels will accrue only to the C/P allocation for their respective gear type. Conversely, C/P LLP license holders that elect to receive an additional CV Pacific cod endorsement could no longer participate as a C/P in the Western or Central GOA directed Pacific cod fisheries, and their catch would only accrue to the respective CV allocations. Requiring vessels to make a one-time election to operate as either a C/P or CV in the GOA Pacific cod fishery simplifies the administration of this licensing restriction, and meets the Council's objective of preventing C/P license holders from opportunely fishing off of both the C/P and CV Pacific cod sector allocations.

In response to this comment, NMFS has modified these regulatory provisions and added prohibitions to clarify these requirements in the final rule. Regulations proposed at § 679.4(k)(10)(vii)(B) and (C) establish these LLP permit requirements. NMFS notes that the proposed regulations at § 679.4(k)(10)(vii)(B)( 1 ) included an erroneous citation. First, NMFS has removed proposed regulations at § 679.4(k)(10)(vii)(B)( 1 ) and has redesignated proposed § 679.4(k)(10)(vii)(B)( 2 ) and ( 3 ) as ( 1 ) and ( 2 ), respectively. Finally, this rule includes a prohibition at § 679.7(b)(4)(vi) to clarify and complement these regulatory requirements. NMFS notes that this action is consistent with the analysis for this action as described in the preamble to the proposed rule (page 44719; first column; second full paragraph) that stated in order “[t]o protect communities historically invested in the inshore sector under the inshore/offshore split, C/Ps electing to add a CV endorsement in the Western or Central GOA would be prohibited from acting as a C/P in the directed Pacific cod fishery.”

Comment 24: One commenter suggested that the proposed measures to limit access to the Pacific cod parallel fishery should be expanded to all Federal fisheries with concurrent parallel fisheries. NMFS should prohibit all Federal fishery participants from surrendering their FFP for any Federal fishery, not just Pacific cod. Such a measure would simplify regulations.

Response: NMFS acknowledges this comment; however, limiting access to other parallel fisheries is beyond the scope of the action. The Council could take up such measures as part of a subsequent action. NMFS notes that surrendering an FFP is voluntary and is not prohibited by this action. Under this action, NMFS will not reissue an FFP that is surrendered until the end of the 3-year FFP reissue cycle.

Comment 25: The rule suggests that RAM will notify only eligible holders of LLP licenses with a C/P endorsement of the one-time election opportunity to add a CV Pacific cod endorsement. All C/P LLP license holders should receive notice from RAM with regards to their ability or inability to add the CV endorsement and their opportunity to appeal the decision. NMFS should clarify that there is no deadline for the holders of C/P licenses to make the one-time election, and that an LLP license holder can change endorsement status anytime within a calendar year.

Response: This action allows holders of Western and Central GOA LLP licenses with a C/P endorsement to make a permanent, one-time election to operate as a CV in the Western and Central GOA Pacific cod fisheries, if the LLP license was used to make a minimum of one Pacific cod landing while operating as a CV under the authority of the C/P-endorsed LLP license during the qualifying period. NMFS notes that only LLP holders that apply for the one-time election can appeal an initial administrative determination to disapprove the addition of a CV Pacific cod endorsement. Electing to add a CV endorsement is voluntary. RAM will notify only the holders of C/P-endorsed LLP licenses meeting the qualifying criteria following a review of the official record established for the Amendment 86 fixed gear recency action, which includes catch history from 2002 through December 8, 2008. RAM will notify only holders of C/P-endorsed LLP licenses that they have been identified as candidates for the election. However, any LLP holder can apply for the election to add the CV endorsement.

NMFS will make this final rule available to the public through publication in the Federal Register (see ADDRESSES ). LLP license holders are urged to apply for the CV endorsement whether or not they receive a letter from NMFS. If a holder of a C/P-endorsed LLP license is denied the endorsement after requesting it, he or she can submit information regarding eligibility to NMFS as described in the appeals process at § 679.43. Table 2-47 of Section 2.2.2 of the analysis for this action shows the number of C/P-endorsed LLP licenses that qualified under the trawl or fixed gear recency actions and have at least one CV Pacific cod landing in the GOA during 2002 through 2008. If a vessel owner uses multiple LLP licenses on a vessel and one of those is a C/P-endorsed LLP license eligible to harvest Pacific cod in the Western or Central GOA, all Pacific cod catch in the Western or Central GOA will count against the C/P sector allocation. NMFS clarifies that eligible holders of C/P-endorsed LLP licenses can make the one-time CV endorsement election at any time of the year or at a future date. NMFS notes that this one-time election is permanent and the CV endorsement cannot be removed from the LLP license at a later date, by the current or any subsequent LLP holder.

Comment 26: According to the preamble to the proposed rule, NMFS estimates that 171 mt of Pacific cod would be deducted from the Central GOA trawl CV TAC. The proposed rule calculates this value by multiplying 2.09 percent by B season trawl CV allocation of 8,171 mt (8,171 mt times 2.09 percent = 171 mt). This calculation is incorrect. The regulatory impact review, environmental assessment, and initial regulatory flexibility analysis (RIR/EA/IRFA) state that the incidental catch allocated to trawl CVs for the Central GOA Rockfish Program (currently, 2.09 percent of the Central GOA Pacific cod TAC) will be deducted from the Central GOA trawl CV B season allocation. So the calculation should be (Total Pacific cod TAC, 2011 as the example, of 40,362 mt times 2.09 percent = 844 mt). Thus, the Rockfish Program Pacific cod cooperative quota is 844 mt, and the B season CV trawl cod allocation is 8,171 mt minus 844 mt, which equals 7,327 mt for the limited access Central GOA trawl CV sector.

Response: NMFS agrees. The example calculation included in the preamble to the proposed rule to implement Amendment 83 was not accurate. Although no changes are necessary to this final rule, each proposed and final harvest specifications rulemaking will apply the correct method for estimating the amount of Pacific cod that would be deducted from the Central GOA trawl CV TAC allocation.

Comment 27: The Council typically recommends each TAC so that total harvests in the State GHL and Federal TAC fisheries are equal to the acceptable biological catch (ABC). However, the rule states, “The Council recommends each TAC so that total harvests under the State GHL and Federal TAC fisheries are slightly below the ABC to ensure that the ABC is not exceeded.”

Response: The FMP requires TACs to be set at or below ABCs. For Pacific cod, the TAC is recommended by the Council based on the ABC minus the amount of harvest authorized by the State for its GHL fishery. If the management of a fishery is sufficient to reliably limit harvests to the TAC, the TAC is more likely to be set close to or at ABC. For fisheries with more management uncertainty, the TAC is generally set lower than ABC. For Pacific cod in the GOA, there is less management uncertainty than for other stocks and the combined TAC and State GHL is set equal to the ABC.

Comment 28: The proposed rule is unclear about how NMFS and the Alaska Regional Administrator would reallocate any projected unused allocations of Pacific cod TAC. NMFS should clarify if the combined pot C/P and CV sector would be treated as a CV sector ( i.e., before C/P sectors), or if the combined pot CV and C/P sector would receive reallocation priority over other sectors. According to the Council motion, CV sectors have the first priority for reallocated Pacific cod.

Response: NMFS agrees. NMFS recognizes the potential for Pacific cod TAC to rollover from the A season to the B season, within the fishing year. Similarly, NMFS can reallocate the projected unused allocation in the B season among gear types, to harvest the remaining Pacific cod TAC. NMFS has modified the regulatory provision at § 679.20(a)(12)(ii)(B) to clarify that the NMFS Alaska Regional Administrator would consider reallocation of the projected unused allocation in the B season to the CV sectors first. Then the Regional Administrator would consider a reallocation in the B season to the combined CV and C/P pot sector. Finally, the Regional Administrator would consider reallocation in the B season to all other C/P sectors. The Regional Administrator would take into account the capability of a sector to harvest the remaining Pacific cod TAC in any reallocation decision. Any portion of the CV, C/P, or jig allocation determined by the NMFS Regional Administrator to remain unharvested during the remainder of the fishing year will be reallocated as soon as practicable. While the CV sectors will have priority, it is possible the Regional Administrator may choose to allocate unused TAC to C/P sectors to fully harvest the remaining TAC, as required at § 679.20(a)(12)(ii)(B) by this final rule.

NMFS notes that combined pot CV and C/P catch history is largely comprised of pot CV landings, as described by Table 2-43 of the analysis for this action. The Council noted that the potential allocation to the pot C/P sector may not support a directed fishery; therefore, the Council recommended a combined pot CV and C/P sector to ensure that pot C/Ps may participate in the Western and Central GOA directed Pacific cod fishery.

Comment 29: Regulations implementing Amendment 83 will negatively impact the Central GOA CV trawl sector and will create economic instability for this sector that has significant long-term investments in the fishery. The allocation method adopted by the Council was arbitrarily designed to reduce the Central GOA CV trawl sector's allocation and instead favored pot, hook-and-line, and jig (non-trawl) sectors. The Council should have considered catch history from 1995 through 2005 in the Central GOA, which favored the CV trawl sector and disfavored some non-trawl sectors. No rationale for treating the Western and Central GOA catch history differently was presented. The proposed Central GOA CV Pacific cod allocations are based on retained catch only (no discarded catch). Therefore, the Central GOA trawl CV sector will receive a smaller Pacific cod allocation than their historical usage. Historically, the Central GOA trawl CV sector has discarded as much as 27 percent of its annual catch due to regulatory discard requirements. Halibut PSC limits will close the Central GOA CV trawl sector B cod fishery prior to the full harvest of the sector's TAC allocation. NMFS should increase the Pacific cod A season and reduce the sector's B season allocation under Amendment 83 to address halibut bycatch concerns, as was done in the Western GOA.

Response: NMFS disagrees. No changes were made to the sector allocations implemented by this final rule. The Council's recommended TAC allocation for the Central GOA CV trawl sector is based on the best available science, as described in section 2.2 of the analysis for this action. Specifically, the analysis considered the catch history from 1995 through 2010 by each of the sectors in both the Western and Central GOA, These data are summarized in Table 2-42.

Section 2.2.4 of the analysis describes the Council's rationale for selecting each sector's best catch history for assigning sector allocations. In making its allocation recommendations, the Council considered that, in general, the amount of Pacific cod harvested by trawl CVs in the Western and Central GOA has declined, while the amount harvested by pot CV sector has increased. The Council noted that using each sector's best catch tends to increase each sector's allocation to a percentage that is substantially higher than the sector's average. The Council also noted that the potential sector allocations it considered generally favored non-trawl sectors in more recent years. This trend is particularly apparent for trawl CVs in the Western GOA, so the Council chose to adjust allocations accordingly. NMFS notes that the Council did not recommend similar adjustments for trawl CVs in the Central GOA because this area was less impacted by Steller sea lion mitigation measures than the Western GOA.

The Council chose to define qualifying catch as all retained catch of Pacific cod from Federal and State parallel fisheries based on its experience with similar actions, public testimony during Council meetings, and historic catch estimates by sector, as reported in the analysis for this action. The tables in Appendix A to the analysis for this action report annual catches by each sector in the Western and Central GOA Pacific cod fisheries during 1995 through 2008 and, in some cases, through 2010. The Council's recommendation to not include discards in historic use estimates is consistent with the purpose and need statement that recognizes that competition among sectors may increase discards. Including discards would be contrary to the intent of this action to promote sustainable fisheries. Although the Council did not include discards in establishing each sector's catch history, the Council included catch destined for meal production. The Council noted the high rates of meal production for the trawl CV sector in section 2.2.3 of the analysis for this action.

NMFS notes that this action does not change the halibut PSC limits for trawl CVs. The analysis describes that trawl vessels, and to a lesser extent hook-and-line vessels, currently race to catch Pacific cod at the highest possible rate during the B season, because halibut PSC limits could close directed fishing for Pacific cod in the B season at any time. Amendment 83 is not expected to directly impact halibut PSC removals. However, the Council is considering separate action to address halibut PSC limits for trawl and fixed gear in the GOA.

The Administrator, Alaska Region, NMFS determined that this final rule is necessary for the conservation and management of the groundfish fisheries off Alaska and that it is consistent with the MSA and other applicable law.

The preamble to the proposed rule and this final rule serve as the small entity compliance guide required by Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. This action does not require any additional compliance from small entities that is not described in the preamble. Copies of this final rule are available from NMFS at the following Web site: http://alaskafisheries.noaa.gov.

This rule has been determined to be not significant for purposes of Executive Order 12866.

This final regulatory flexibility analysis (FRFA) incorporates the Initial Regulatory Flexibility Analysis (IRFA), a summary of the significant issues raised by the public comments, NMFS' responses to those comments, and a summary of the analyses completed to support the action. NMFS published the proposed rule on July 26, 2011 (76 FR 44700) with comments invited through September 9, 2011. An IRFA was prepared and summarized in the “Classification” section of the preamble to the proposed rule. The description of this action, its purpose, and its legal basis are described in the preamble to the proposed rule and are not repeated here. The FRFA describes the impacts on small entities, which are defined in the IRFA for this action and not repeated here. Analytical requirements for the FRFA are described in Regulatory Flexibility Act, section 304(a)(1) through (5), and summarized below. The FRFA must contain:

1. A succinct statement of the need for, and objectives of, the rule;

2. A summary of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments;

3. A description and an estimate of the number of small entities to which the rule will apply, or an explanation of why no such estimate is available;

4. A description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and

5. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

The “universe” of entities to be considered in a FRFA generally includes only those small entities that can reasonably be expected to be directly regulated by the proposed action. If the effects of the rule fall primarily on a distinct segment of the industry, or portion thereof ( e.g., user group, gear type, geographic area), that segment would be considered the universe for purposes of this analysis.

In preparing a FRFA, an agency may provide either a quantifiable or numerical description of the effects of a rule (and alternatives to the rule), or more general descriptive statements, if quantification is not practicable or reliable.

The Council developed a purpose and need statement defining the reasons for considering this action, as described in Section 1.1 of the analysis for this action. The Western and Central GOA Pacific cod fisheries are currently managed as limited access fisheries in which the sectors race each other for shares of the TACs. Participants who have made significant long-term investments, who have extensive catch histories, and who are highly dependent on the GOA Pacific cod fisheries desire stability in the form of sector allocations. Without sector allocations, future harvests by some sectors may increase and impinge upon historical levels of catch by other sectors, with undesirable economic, socioeconomic, and social consequences for fishery participants and the communities that support and depend upon them. The objective of this action is to establish direct allocations for each gear sector in the GOA Pacific cod fishery, in order to preserve the relative catch distribution among sectors. The problem statement notes that dividing the TAC among sectors may also facilitate the development of management measures to address Steller sea lion mitigation issues, bycatch reduction, and PSC mortality avoidance issues. As noted in the preamble to this final rule, these management measures also promote conservation.

The legal basis for this action is the MSA. One of the stated purposes of the MSA is to promote domestic commercial fishing under sound conservation and management principles and to achieve and maintain the optimum yield from each fishery. The MSA also requires conservation and management measures take into account the importance of fishery resources to fishing communities in order to (A) provide for the sustained participation of such communities, and (B) to the extent practicable, minimize adverse economic impacts on such communities.

No comments were received that raised significant issues in response to the IRFA specifically; therefore, no changes were made to the rule as a result of comments on the IRFA. However, several comments were received on the economic impacts of Amendment 83 on different sectors of the industry. For a summary of the comments received, refer to the section above titled “Comments and Responses.”

This final action directly regulates CVs and C/Ps that participate in the Pacific cod fisheries in the GOA. The number of small entities potentially directly regulated by the final action was estimated by calculating 2009 gross earnings for CVs, and 2009 first wholesale revenues for C/Ps, from their respective participation in all commercial fisheries in and off Alaska. Earnings estimates for 2010 are not currently available.

In 2009, 445 CVs retained Pacific cod in the GOA, including vessels that did not participate in the directed Federal fisheries, and that only had incidental catch of Pacific cod. Forty-five of these CVs were members of AFA cooperatives and, as such, are not considered small entities for the purpose of the RFA. The remaining 401 CVs are all considered small entities. In 2009, 41 C/Ps retained Pacific cod in the GOA, and seven of these vessels are estimated to be small entities.

In addition, five processing entities will be directly regulated by this final action. A review of processor activity from 2002 through 2010 revealed that five active processing entities own seven stationary floating processors and four motherships that have participated in the GOA Pacific cod fisheries. In the absence of detailed employment data, size determinations were based on a staff review of known ownership information and knowledge of Alaska processing firms. On this basis, nine of these processing vessels are not considered small entities for the purpose of the RFA, because they appear to be owned by firms that exceed the “500 or more employees” threshold for small businesses engaged in fishing processes, when all their affiliates worldwide are included. NMFS estimates that two vessels, owned by two different processing entities, are small entities.

It is likely that additional CVs, C/P vessels, or processing entities are affiliated through partnerships, or in other ways, with other entities, and would be considered large entities for the purpose of this action, if more complete ownership information were available.

Implementation of this action requires NMFS to modify the catch accounting system to track catch by each sector. However, vessels fishing off these allocations will have to report their catch through existing information collections, and catch will be deducted from the appropriate account by the Agency, in accordance with the revisions to the catch monitoring and accounting program.

The Council considered two alternatives for this action, along with a suite of components and options that could be adopted singly or in combination. Alternative 1 is the no action alternative, in which the Western and Central GOA Pacific cod TACs would not be allocated among the various sectors, and the fisheries would continue to be managed as a limited access race for fish. Under Alternative 2, the Western and Central GOA Pacific cod TACs would be allocated among the various gear sectors and operation types. Allocations would be based on retained catch history over a series of years from 1995 through 2005, 2000 through 2006, 2002 through 2007, or 2002 through 2008. The action would have similar impacts on small and large entities. Allocations would stabilize catches of the sectors.

The recommendation under Alternative 2, the preferred alternative, to increase the jig sector allocation beyond historical catch levels will be advantageous to jig vessels, which are among the smallest entities participating in the fisheries. The jig allocation allows for potential growth in entry-level opportunities in the GOA Pacific cod fisheries. From 1995 through 2008, the jig sector harvested, on average, less than 1 percent of the Western and Central GOA Pacific cod TACs. This action could potentially increase the jig sector allocation to 6 percent of the Western and Central GOA TACs, but is not expected to do so, in the foreseeable future. Nonetheless, this provision explicitly recognizes and accommodates the special circumstances of this group of small entities.

The Council considered, but rejected, options to establish separate allocations for trawl and hook-and-line C/Ps that have historically fished the inshore TACs. Establishing distinct inshore C/P allocations would protect harvests of smaller C/Ps, if combined with a provision to limit entry to the inshore processing component. Prior to removing the option to create distinct inshore C/P allocations, the Council reviewed data that showed that during most years, nearly all C/Ps less than 125 ft (38.1m) LOA elected to fish inshore. Therefore, if C/P allocations were to be based on vessel length ( e.g., vessels less than, and vessels greater than 125 ft (38.1m) LOA), these allocations would be nearly identical to allocations based on catch by the inshore and offshore processing components. This result would not serve the objectives for this action.

The Council considered options to assign mothership processing caps as high as 10 percent of the Western and Central GOA Pacific cod TACs. Higher processing caps would benefit mothership vessels that have traditionally processed little Pacific cod in the GOA. From 2002 through 2008, less than 2 percent of the Western GOA TAC was processed annually by motherships, and no mothership processing activity occurred in the Central GOA. The Council declined to increase processing caps above recent participation levels (2002 through 2008), because such a recommendation is inconsistent with the objectives of this action and could redistribute catch, imposing greater economic burdens on other directly regulated entities with documented dependence ( i.e., recent catch history) on these resources.

Based upon the best available scientific data and information, none of the alternatives to the final action accomplish the stated objectives of the MSA and other applicable statutes, while minimizing any significant adverse economic impact on small entities, beyond those achieved under the final rule. Compared with the other alternatives and options, the associated suite of options composing the preferred alternative best minimizes adverse economic impacts on small entities, while providing the most benefits to the directly regulated small entities. The action provides greater economic benefits for participants in the small boat CV fleet, including entry-level participants in the jig fishery, by providing additional harvesting opportunities and increasing regional community based processing opportunities for CVs. The Council chose to recommend the preferred alternative because it best meets the goals of this action. This action minimizes the potential negative impacts to small entities directly, by eliminating the derby-style race for TAC among sectors, which tends to favor larger vessels that fish at higher rates and have higher hold capacity. Moreover, this alternative promotes stability in a region that has traditionally benefited from the inshore/offshore processing management.

This rule contains collection-of-information requirements subject to review and approval by Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). These requirements have been approved by OMB. The collections are listed below by OMB control number.

Public reporting burden per response is estimated to average 21 minutes for Federal Fisheries Permit applications; and 21 minutes for Federal Processor Permit applications.

Public reporting burden per response is estimated to average 31 minutes for a Mothership Daily Cumulative Production Logbook.

Public reporting burden per response is estimated to average 20 hours for Application for a CQE to receive a Non-trawl groundfish LLP license; 1 hour for CQE Authorization Letter; and 40 hours for CQE Annual Report.

Public reporting burden is estimated to average 12 minutes for Vessel Monitoring System (VMS) check-in report; and 4 hours for VMS operation (includes installation, transmission, and maintenance).

Public reporting burden is estimated to average 15 minutes for the Interagency Electronic Reporting System (IERS) processor registration; 35 minutes for eLandings landing report; 10 minutes for shoreside eLanding production report; and 20 minutes for at-sea eLanding production report.

Public reporting burden includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see ADDRESSES ) and by email to OIRA_Submission@omb.eop.gov, or fax to (202) 395-7285.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

For the reasons set out in the preamble, NMFS amends 15 CFR chapter IX and 50 CFR chapter VI as follows:

Pursuant to the provisions of the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention, codified into U.S. law as the Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601 et seq. ), the United States entered into a bilateral agreement with Bolivia on December 4, 2001, concerning the imposition of import restrictions on certain archaeological and ethnological material from Bolivia. On December 7, 2001, the United States Customs Service published Treasury Decision (T.D.) 01-86 in the Federal Register (66 FR 63490), which amended 19 CFR 12.104g(a) to reflect the imposition of these restrictions and included a list designating the types of articles covered by the restrictions.

Import restrictions listed in 19 CFR 12.104g(a) are effective for no more than five years beginning on the date on which the agreement enters into force with respect to the United States. This period can be extended for additional periods not to exceed five years if it is determined that the factors which justified the initial agreement still pertain and no cause for suspension of the agreement exists (19 CFR 12.104g(a)).

On August 26, 2011, after reviewing the findings and recommendations of the Cultural Property Advisory Committee, the Acting Assistant Secretary for Educational and Cultural Affairs, United States Department of State, concluding that the cultural heritage of Bolivia continues to be in jeopardy from pillage of certain archaeological and ethnological materials, made the necessary determination to extend the import restrictions for an additional five years. On November 10, 2011, diplomatic notes were exchanged reflecting the extension of those restrictions for an additional five-year period.

Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect the extension of the import restrictions. The Designated List of Archaeological and Ethnological Material from Bolivia covered by these import restrictions is set forth in T.D. 01-86. The Designated List and accompanying image database may also be found at the following Internet Web site address: http://exchanges.state.gov/heritage/culprop/blfact.html .

The restrictions on the importation of these archaeological and ethnological materials from Bolivia are to continue in effect through December 4, 2016. Importation of such material continues to be restricted unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met.

This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure under 5 U.S.C. 553(a)(1). For the same reason, a delayed effective date is not required under 5 U.S.C. 553(d)(3).

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) do not apply.

Because this rule involves a foreign affairs function of the United States, it is not subject to Executive Order 12866.

This regulation is being issued in accordance with 19 CFR 0.1(a)(1).

For the reasons set forth above, part 12 of Title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below:

The value of cultural property, whether archaeological or ethnological in nature, is immeasurable. Such items often constitute the very essence of a society and convey important information concerning a people's origin, history, and traditional setting. The importance and popularity of such items regrettably makes them targets of theft, encourages clandestine looting of archaeological sites, and results in their illegal export and import.

The United States shares in the international concern for the need to protect endangered cultural property. The appearance in the United States of stolen or illegally exported artifacts from other countries where there has been pillage has, on occasion, strained our foreign and cultural relations. This situation, combined with the concerns of museum, archaeological, and scholarly communities, was recognized by the President and Congress. It became apparent that it was in the national interest for the United States to join with other countries to control illegal trafficking of such articles in international commerce.

The United States joined international efforts and actively participated in deliberations resulting in the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (823 U.N.T.S. 231 (1972)). U.S. acceptance of the 1970 UNESCO Convention was codified into U.S. law as the “Convention on Cultural Property Implementation Act” (Pub. L. 97-446, 19 U.S.C. 2601 et seq. ) (the Act). This was done to promote U.S. leadership in achieving greater international cooperation towards preserving cultural treasures that are of importance to the nations from where they originate and contribute to greater international understanding of our common heritage.

Since the Act entered into force, import restrictions have been imposed on the archaeological and ethnological materials of a number of signatory nations. These restrictions have been imposed as a result of requests for protection received from those nations. More information on import restrictions can be found on the International Cultural Property Protection Web site ( http://exchanges.state.gov/heritage/culprop.html ).

This document announces that import restrictions are now being imposed on certain archaeological and ethnological materials from Greece.

Under 19 U.S.C. 2602(a)(1), the United States must make certain determinations before entering into an agreement to impose import restrictions under 19 U.S.C. 2602(a)(2). On July 12, 2011, the Assistant Secretary for Educational and Cultural Affairs, Department of State, made the determinations required under the statute with respect to certain archaeological materials originating in Greece that are described in the designated list set forth below in this document. These determinations include the following: (1) That the cultural patrimony of Greece is in jeopardy from the pillage of archaeological materials representing Greece's cultural heritage from the Upper Paleolithic (beginning approximately 20,000 B.C.) through the 15th century A.D. and ecclesiastical ethnological material representing Greece's Byzantine culture (approximately the 4th century through the 15th century A.D.) (19 U.S.C. 2602(a)(1)(A)); (2) that the Greek government has taken measures consistent with the Convention to protect its cultural patrimony (19 U.S.C. 2602(a)(1)(B)); (3) that import restrictions imposed by the United States would be of substantial benefit in deterring a serious situation of pillage and remedies less drastic are not available (19 U.S.C. 2602(a)(1)(C)); and (4) that the application of import restrictions as set forth in this final rule is consistent with the general interests of the international community in the interchange of cultural property among nations for scientific, cultural, and educational purposes (19 U.S.C. 2602(a)(1)(D)). The Assistant Secretary also found that the materials described in the determinations meet the statutory definition of “archaeological or ethnological material of the state party” (19 U.S.C. 2601(2)).

On July 17, 2011, the United States and Greece entered into a bilateral agreement pursuant to the provisions of 19 U.S.C. 2602(a)(2). Following completion of all internal legal requirements by the governments of Greece and the United States, the agreement entered into force on November 21, 2011, with the exchange of diplomatic notes. The agreement enables the promulgation of import restrictions on certain archaeological materials representing Greece's cultural heritage from the Upper Paleolithic (beginning approximately 20,000 B.C.) through the 15th century A.D. and ecclesiastical ethnological material representing Greece's Byzantine culture (approximately the 4th century through the 15th century A.D.) In this document, CBP announces that import restrictions are now being imposed on certain archaeological and ethnological materials from Greece for a period of 5 years from the date the bilateral agreement between the United States and Greece entered into force. Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect this imposition of import restrictions.

A list of the categories of archaeological and ethnological materials subject to the import restrictions (the Designated List) is set forth later in this document.

In accordance with the Agreement, importation of materials designated below are subject to the restrictions of 19 U.S.C. 2606 and § 12.104g(a) of the Customs and Border Protection (CBP) regulations (19 CFR 12.104g(a)) and will be restricted from entry into the United States unless the conditions set forth in 19 U.S.C. 2606 and § 12.104c of the regulations (19 CFR 12.104c) are met. CBP is amending § 12.104g(a) of the CBP regulations (19 CFR 12.104g(a)) to indicate that these import restrictions have been imposed.

The bilateral agreement between the United States and Greece includes, but is not limited to, the categories of objects described in the designated list set forth below. These categories of objects are subject to the import restrictions set forth above, in accordance with the above explained applicable law and the regulation amended in this document (19 CFR 12.104(g)(a)). The import restrictions cover complete objects and fragments thereof.

The archaeological materials represent the following periods, styles, and cultures: Upper Paleolithic, Neolithic, Minoan, Cycladic, Helladic, Mycenaean, Submycenaean, Geometric, Orientalizing, Archaic, Classical, Hellenistic, Roman, and Byzantine.

a. Architectural Elements —In marble, limestone, gypsum, and other kinds of stone. Types include acroterion, antefix, architrave, base, capital, caryatid, coffer, column, crowning, fountain, frieze, pediment, pilaster, mask, metope, mosaic and inlay, jamb, tile, triglyph, tympanum, basin, wellhead. Approximate date: 3rd millennium B.C. to 15th century A.D.

b. Monuments —In marble, limestone, and other kinds of stone. Types include menhir, “horns of consecration,” votive statues, funerary and votive stelae, and bases and base revetments. These may be painted, carved with relief sculpture, and/or carry dedicatory or funerary inscriptions. Approximate date: 3rd millennium B.C. to 15th century A.D.

c. Sarcophagi —In marble, limestone, and other kinds of stone. Some have figural scenes painted on them, others have figural scenes carved in relief, and some just have decorative moldings. Approximate date: 3rd millennium B.C. to 15th century A.D.

d. Large Statuary —Primarily in marble, also in limestone and sandstone, including fragments of statues. Subject matter includes human and animal figures and groups of figures in the round. Common types are large-scale, free-standing statuary from approximately 1 m to 2.5 m in height and life-size busts (head and shoulders of an individual). The style may be naturalistic, as in the Classical Period, highly stylized, as in the Bronze Age culture of the Cyclades, or somewhere in between. Approximate date: 4th millennium B.C. to 15th century A.D.

e. Small Statuary and Figurines —In marble and other stone. Subject matter includes human and animal figures and groups of figures in the round. These range from approximately 10 cm to 1 m in height. The style may be naturalistic, as in the Classical Period, highly stylized, as in the Bronze Age culture of the Cyclades, or somewhere in between. Approximate date: 20,000 B.C. to 15th century A.D.

f. Reliefs —In marble and other stone. Types include carved slabs with figural, vegetative, floral, or decorative motifs, sometimes inscribed, and carved relief vases. Used for architectural decoration, funerary, votive, or commemorative monuments. Approximate date: 3rd millennium B.C. to 15th century A.D.

g. Furniture —In marble and other stone. Types include tables, thrones, and beds. Approximate date: 12th century B.C. to 15th century A.D.

2. Vessels —In marble, steatite, rock crystal, and other stone. These may belong to conventional shapes such as bowls, cups, jars, jugs, and lamps, or may occur in the shape of an animal or part of an animal. Approximate date: 7th millennium B.C. to 15th century A.D.

3. Tools and Weapons —In flint/chert, obsidian, and other hard stones. Chipped stone types include blades, small blades, borers, scrapers, sickles, cores, and arrow heads. Ground stone types include grinders ( e.g., mortars, pestles, millstones, whetstones), choppers, axes, hammers, and mace heads. Approximate date: 20,000 B.C. to 15th century B.C.

4. Seals and beads —In marble, limestone, and various semiprecious stones including rock crystal, amethyst, jasper, agate, steatite, and carnelian. Approximate date: 6th millennium B.C. to 12th century B.C.

a. Large Statuary —Primarily in bronze, including fragments of statues. Subject matter includes human and animal figures and groups of figures in the round. Common types are large-scale, free-standing statuary from approximately 1 m to 2.5 m in height and life-size busts (head and shoulders of an individual). Approximate date: 2nd millennium to 324 A.D.

b. Small Statuary and Figurines —Subject matter includes human and animal figures, groups of figures in the round, masks, and plaques. These range from approximately 10 cm to 1 m in height. Approximate date: 3rd millennium B.C. to 324 A.D.

c. Inscribed or Decorated Sheet Metal —In bronze or lead. Engraved inscriptions, “curse tablets,” and thin metal sheets with engraved or impressed designs often used as attachments to furniture. Approximate date: 4th millennium B.C. to 15th century A.D.

2. Vessels —In bronze, gold, and silver. These may belong to conventional shapes such as bowls, cups, jars, jugs, strainers, cauldrons, and lamps, or may occur in the shape of an animal or part of an animal. Approximate date: 5th millennium B.C. to 15th century A.D.

3. Personal Ornaments —In bronze, gold, and silver. Types include rings, beads, pendants, belts, belt buckles, earrings, diadems, spangles, straight and safety pins, necklace, mirror, wreath, cuff. Approximate date: 7th millennium B.C. to 15th century A.D.

4. Tools —In copper, bronze and iron. Types include hooks, weights, axes, scrapers, (strigils), trowels, keys and the tools of craftspersons such as carpenters, masons and metal smiths. Approximate date: 4th millennium B.C. to 15th century A.D.

5. Weapons and Armor —In copper, bronze and iron. Types include both launching weapons (spears and javelins) and weapons for hand-to-hand combat (swords, daggers, etc. ). Armor includes body armor, such as helmets, cuirasses, shin guards, and shields, and horse armor often decorated with elaborate engraved, embossed, or perforated designs. Approximate date: 6th millennium B.C. to 30 B.C.

6. Seals —In lead, tin, copper, bronze, silver, and gold. Types include rings, amulets, and seals with shank. Approximate date: Approximate date: 4th millennium B.C. to 15th century A.D.

7. Coins —Many of the mints of the listed coins can be found in B.V. Head, Historia Numorum: A Manual of Greek Numismatics (London, 1911) and C.M. Kraay, Archaic and Classical Greek Coins (London, 1976). Many of the Roman provincial mints in Greece are listed in A. Burnett et al., Roman Provincial Coinage I: From the Death of Caesar to the Death of Vitellius (44 BC-AD 69) (London, 1992) and id., Roman Provincial Coinage II: From Vespasian to Domitian (AD 69-96) (London, 1999).

a. Greek Bronze Coins —Struck by city-states, leagues, and kingdoms that operated in territory of the modern Greek state (including the ancient territories of the Peloponnese, Central Greece, Thessaly, Epirus, Crete and those parts of the territories of ancient Macedonia, Thrace and the Aegean islands that lay within the boundaries of the modern Greek state). Approximate date: 5th century B.C. to late 1st century B.C.

b. Greek Silver Coins —This category includes the small denomination coins of the city-states of Aegina, Athens, and Corinth, and the Kingdom of Macedonia under Philip II and Alexander the Great. Such coins weigh less than approximately 10 grams and are known as obols, diobols, triobols, hemidrachms, and drachms. Also included are all denominations of coins struck by the other city-states, leagues, and kingdoms that operated in the territory of the modern Greek state (including the ancient territories of the Peloponnese, Central Greece, Thessaly, Epirus, Crete, and those parts of the territories of ancient Macedonia, Thrace and the Aegean islands that lie within the boundaries of the modern Greek state). Approximate date: 6th century B.C. to late 1st century B.C.

c. Roman Coins Struck in Greece —In silver and bronze, struck at Roman and Roman provincial mints that operated in the territory of the modern Greek state (including the ancient territories of the Peloponnese, Central Greece, Thessaly, Epirus, Crete, and those parts of the territories of ancient Macedonia, Thrace and the Aegean islands that lie within the boundaries of the modern Greek state). Approximate date: late 2nd century B.C. to 3rd century A.D.

a. Architectural Elements —Baked clay (terracotta) elements used to decorate buildings. Elements include acroteria, antefixes, painted and relief plaques, metopes, cornices, roof tiles, and revetments. Approximate date: 3rd millennium B.C. to 30 B.C.

b. Large Statuary —Subject matter includes human and animal figures and groups of figures in the round. Common types are large-scale, free-standing statuary from approximately 1 m to 2.5 m in height and life-size busts (head and shoulders of an individual). Approximate date: 3rd millennium B.C. to 30 B.C.

c. Small Statuary —Subject matter is varied and includes human and animal figures, human body parts, groups of figures in the round, shrines, houses, and chariots. Includes Mycenaean and later Tanagra figurines. These range from approximately 10 cm to 1 m in height. Approximate date: 7th millennium B.C. to 324 A.D.

d. Sarcophagi —Block- or tub-shaped chests, often painted, known as larnax (plural, larnakes). Approximate date: 3rd millennium B.C. to 30 B.C.

a. Neolithic Pottery —Handmade, often decorated with a lustrous burnish, decorated with appliqué and/or incision, sometimes with added paint. These come in a variety of shapes from simple bowls and vases with three or for legs to handled scoops and large storage jars. Approximate date: 7th millennium B.C. to 3rd millennium B.C.

b. Minoan, Cycladic, and Mycenaean Pottery —Handmade and wheelmade pottery in shapes for tableware, serving, storing, and processing, with lustrous burnished, matte, appliqué, incised, and painted decoration; includes local styles such as Kamares ware, Pictorial Style, and extraordinary shapes such as “frying pans” and “kernoi.” Approximate dates: 4th millennium B.C. to 12th century B.C.

c. “Submycenean” and Pottery of the Geometric Period (including “sub-Geometric”). —Handmade and wheelmade pottery that succeeds the styles of the Late Bronze Age and is produced in decorated and undecorated styles, often reflecting that of the Late Bronze Age but predominately using compasses for circles and linear “geometric” decoration, as well as schematic representations of humans, animals and birds. Approximate dates: 12th century B.C. to 7th century B.C.

d. Attic Black Figure, Red Figure and White Ground Pottery —These are made in a specific set of shapes ( e.g. amphorae, kraters, hydriae, oinochoi, kylikes) decorated with black painted figures on a clear clay ground (Black Figure), decorative elements in reserve with background fired black (Red Figure), and multi-colored figures painted on a white ground (White Ground). Approximate date: 6th century B.C. to 4th century B.C.

e. Corinthian Pottery —Painted pottery made in Corinth in a specific range of shapes for perfume and unguents and for drinking or pouring liquids. The very characteristic painted and incised designs depict human and animal figural scenes, rows of animals, and floral decoration. Approximate date: 8th century B.C. to 6th century B.C.

f. West Slope Ware —This ware is named after a type of pottery from the west slope of the Athenian Acropolis. It has a black-glaze with relief and polychrome decoration and was produced first in Athens in the fourth century B.C., but the style is also manufactured elsewhere, such as at Corinth, Macedonia and Crete down to the first century. Approximate date: 4th century—1st century B.C.

g. Byzantine Pottery —Includes undecorated plain wares, utilitarian, tableware, serving and storage jars, special shapes such as pilgrim flasks. and can be matte painted or glazed, including incised “sgraffitto” and stamped with elaborate polychrome decorations using floral, geometric, human, and animal motifs; it is generally locally manufactured, though places like Corinth were major producers. Approximate date: 324 A.D. to 15th century.

3. Inscriptions —These are typically unbaked and should be handled with extreme care, even when hard-fired through accidental burning. They typically take the form of tablets shaped like leaves or rectangular or square and they are often lined, with incised, and sometimes stamped, characters known as “Linear A” and “Linear B.” Approximate date: 2nd millennium B.C. to 12th century B.C.

1. Small Statuary and Figurines —Subject matter includes human and animal figures and groups of figures in the round. These range from approximately 10 cm to 1 m in height. Approximate date: 7th millennium B.C. to 15th century A.D.

2. Personal Ornaments —In bone, ivory, and spondylus shell. Types include amulets, combs, pins, spoons, small containers, bracelets, buckles, and beads. Approximate date: 7th millennium B.C. to 15th century A.D.

3. Seals and Stamps —Small devices with at least one side engraved with a design for stamping or sealing; they can be discoid, cuboid, conoid, or in the shape and animals or fantastic creatures ( e.g. a scarab). Approximate date: 7th millennium B.C. to 2nd millennium B.C.

4. Musical Instruments —In bone, ivory and tortoise shell. Types include pipe and flute. Approximate date: 3rd millennium B.C. to 15th century A.D.

5. Vessels made of ostrich egg shell. Approximate date: 3rd millennium B.C. to 2nd millennium B.C.

1. Vessels —Shapes include small jars, bowls, animal shaped, goblet, spherical, candle holders, perfume jars (unguentaria). Approximate date: 2nd millennium to 15th century A.D.

2. Beads —Globular and relief beads. Approximate date: 2nd millennium B.C.

Clothing or fragments of clothing or carpets or cloth for hanging. Approximate date: 1100 B.C. to 15th century A.D.

Documents made from papyrus and written upon in ink; these are often rolled, fragmentary, and should be handled with extreme care. Approximately 7th century B.C. to 324 A.D.

1. Domestic and Public Wall Painting —These are painted on mudplaster, lime plaster (wet—buon fresco—and dry—secco fresco); types include simple applied color, bands and borders, landscapes, scenes of people and/or animals in natural or built settings. Approximate date: 3rd millennium B.C. to 324 A.D.

2. Tomb Paintings —Paintings on plaster or stone, sometimes geometric or floral but usually depicting gods, goddesses, or funerary scenes. Approximate date: 2nd millennium B.C. to 500 A.D.

3. Panel Paintings on wood depicting gods, goddesses, or funerary scenes. Approximate date: 1st millennium B.C. to 324 A.D.

Floor mosaics including landscapes, scenes of humans or gods, and activities such as hunting and fishing. There may also be vegetative, floral, or decorative motifs. Approximate date: 5th century B.C. to 500 A.D.

The ecclesiastical ethnological materials represent the Early Christian and Byzantine periods and include objects made from 324 A.D. through the 15th century A.D.

1. Architectural elements —In marble and other stone, including upright “closure” slabs, circular marking slabs omphalion, which may be decorated with crosses, human, or animal figures.

2. Monuments —In marble and other stone; types such as funerary inscriptions.

3. Vessels - Containers for holy water.

4. Reliefs —Carved as icons in which religious figures predominate in the figural decoration.

1. Reliefs —Cast as icons in which religious figures predominate in the figural decoration.

2. Boxes —Containers of gold and silver, used as reliquaries for sacred human remains.

3. Vessels —Containers of lead, which carried aromatic oils and are called “pilgrim flasks.”

4. Ceremonial paraphernalia —In bronze, silver, and gold including censers (incense burners), book covers, liturgical crosses, archbishop's crowns, buckles, and chests. These are often decorated with molded or incised geometric motifs or scenes from the Bible, and encrusted with semi-precious or precious stones. The gems themselves may be engraved with religious figures or inscriptions. Ecclesiastical treasure may include all of the above, as well as rings, earrings, and necklaces (some decorated with ecclesiastical themes) and other implements ( e.g., spoons).

Vessels which carried aromatic oils and are called “pilgrim flasks.”

Ceremonial paraphernalia including boxes, reliquaries (and their contents), plaques, pendants, candelabra, stamp rings, crosses. Carved and engraved decoration includes religious figures, scenes from the Bible, and floral and geometric designs.

Wooden objects include architectural elements such as painted wood screens (iconstasis), carved doors, crosses, painted wooden beams from churches or monasteries, furniture such as thrones, chests and other objects, including musical instruments. Religious figures predominate in the painted and carved figural decoration. Ecclesiastical furniture and architectural elements may also be decorated with geometric or floral designs.

Vessels of glass include lamps and candle sticks.

Robes, vestments and altar clothes are often of a fine fabric and richly embroidered in silver and gold. Embroidered designs include religious motifs and floral and geometric designs.

Documents such as illuminated manuscripts occur in single leaves or bound as a book or “codex.” and are written or painted on animal skins (cattle, sheep/goat, camel) known as parchment.

1. Wall paintings —On various kinds of plaster and which generally portray religious images and scenes of Biblical events. Surrounding paintings may contain animal, floral, or geometric designs, including borders and bands.

2. Panel Paintings (Icons) —Smaller versions of the scenes on wall paintings, and may be partially covered with gold or silver, sometimes encrusted with semi-precious or precious stones and are usually painted on a wooden panel, often for inclusion in a wooden screen (iconastasis).

Wall mosaics generally portray religious images and scenes of Biblical events. Surrounding panels may contain animal, floral, or geometric designs. They are made from stone and glass cut into small bits (tesserae) and laid into a plaster matrix.

This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure (5 U.S.C. 553(a)(1)). For the same reason, a delayed effective date is not required under 5 U.S.C. 553(d)(3).

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) do not apply.

Because this rule involves a foreign affairs function of the United States, it is not subject to Executive Order 12866.

This regulation is being issued in accordance with 19 CFR 0.1(a)(1).

For the reasons set forth above, part 12 of Title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below:

DEA's Legal Authority

DEA implements the Comprehensive Drug Abuse Prevention and Control Act of 1970, often referred to as the Controlled Substances Act (CSA) and the Controlled Substances Import and Export Act (CSIEA) (21 U.S.C. 801-971), as amended. DEA publishes the implementing regulations for these statutes in Title 21 of the Code of Federal Regulations (CFR), Parts 1300 to 1321. These regulations are designed to ensure that there is a sufficient supply of controlled substances for legitimate medical, scientific, research, and industrial purposes and to deter the diversion of controlled substances to illegal purposes.

The CSA mandates that DEA establish a closed system of control for manufacturing, distributing, and dispensing controlled substances. Any person who manufactures, distributes, dispenses, imports, exports, or conducts research or chemical analysis with controlled substances must register with DEA (unless exempt) and comply with the applicable requirements for the activity. The CSA as amended also requires DEA to regulate the manufacture and distribution of chemicals that may be used to manufacture controlled substances illegally. Listed chemicals that are classified as List I chemicals are important to the manufacture of controlled substances. Those classified as List II chemicals may be used to manufacture controlled substances.

On March 9, 2006, the President signed the Combat Methamphetamine Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). CMEA amended the CSA to regulate the sale of products that contain ephedrine, pseudoephedrine, and phenylpropanolamine, their salts, optical isomers, and salts of optical isomers, that may be marketed or distributed lawfully in the United States under the Federal Food, Drug, and Cosmetic Act as nonprescription drugs. CMEA defines these products as “scheduled listed chemical products” (21 U.S.C. 802(45)). Ephedrine, pseudoephedrine, and phenylpropanolamine are List I chemicals because they are used in, and important to, the illegal manufacture of methamphetamine and amphetamine, both Schedule II controlled substances. The Methamphetamine Production Prevention Act of 2008 (MPPA) (Pub. L. 110-415) was enacted in 2008 to clarify the information entry and signature requirements for electronic logbook systems permitted for the retail sale of scheduled listed chemical products. On March 23, 2010, DEA published a Notice of Proposed Rulemaking to implement the provisions of the MPPA and make its regulations consistent with the new requirements. 75 FR 13702. This finalizes that proposed rulemaking.

CMEA defines nonprescription drug products marketed or distributed lawfully in the United States under the Federal Food, Drug, and Cosmetic Act containing ephedrine, pseudoephedrine, or phenylpropanolamine as “scheduled listed chemical products” (21 U.S.C. 802(45)). Direct, in-person sales to a customer, whether by a regulated seller (e.g., grocery store, general merchandise store, drug store) (21 U.S.C. 802(46), (49)) or a mobile retail vendor (e.g., kiosk, flea market), (21 U.S.C. 802(47)) are subject to requirements for training of employees who either are responsible for delivering scheduled listed chemical products into the custody of purchasers or who deal directly with purchasers by obtaining payments for the products (21 U.S.C. 830(e)(1)(A)(vii)). The regulated seller must certify to DEA that the employees have been trained (21 U.S.C. 830(e)(1)(B)). These regulated sellers must also check identifications of purchasers and maintain specific records (the logbook) of each sale of scheduled listed chemical products (21 U.S.C. 830(e)(1)(A)). The only sales exempt from recordkeeping are sales of single packages where the package contains not more than 60 milligrams of pseudoephedrine (21 U.S.C. 830(e)(1)(A)(iii)).

On September 26, 2006, DEA published in the Federal Register an Interim Final Rule, “Retail Sales of Scheduled Listed Chemical Products; Self-Certification of Regulated Sellers of Scheduled Listed Chemical Products” (71 FR 56008; corrected at 71 FR 60609, October 13, 2006). That rule incorporated the standards set forth by the CMEA, requiring regulated sellers of scheduled listed chemical products to maintain logbooks regarding their sales on and after September 30, 2006. If a regulated seller maintains the logbook on paper, DEA requires that the book be bound, as is currently the case for records of sales of Schedule V controlled substances that are sold without a prescription (21 CFR 1314.30(a)(2)). The records must be readily retrievable and available for inspection and copying by DEA or other State or local law enforcement agencies (21 U.S.C. 830(e)(1)(C)(i), 21 CFR 1314.30(i)). Logs must be kept for not fewer than two years from the date the entry was made (21 CFR 1314.30(g)). CMEA required the logs include the information entered by the purchaser (name, address, signature, date and time of sale) and the quantity and form of the product sold.

DEA permitted by regulation that where the record was entered electronically, the computer system may enter the date and time automatically. An electronic signature system, such as the ones many stores use for credit card purchases, could be employed to capture the signature for electronic logs (21 CFR 1314.30(c)). The information that the seller must enter could be accomplished through a point-of-sales system and bar code reader.

On October 14, 2008, the President signed the MPPA. The Act amended the existing language in 21 U.S.C. 830(e)(1)(A) by revising clauses (iv) through (vi). The purpose of this Act was to facilitate the creation of electronic logbooks. Several options were provided for obtaining signatures of purchasers and recording transactions at the time of the sale.

Specifically, the requirements now state that a regulated seller of scheduled listed chemical products may not sell such a product unless the purchaser:

• Presents a government issued photographic identification; and

• Signs the written logbook with his or her name, address, time and date of the sale, or signs in one of the following ways:

○ In the case of an electronic logbook, the device must capture the signature in an electronic format.

○ In the case of a bound paper book, a printed sticker must be affixed to the book at the time of sale adjacent to the signature line. The sticker must display the product name, quantity, name of purchaser, date and address, or a unique identification that can be linked to that information.

○ In the case of a printed document, the document must include a clear line for the purchaser's signature and include product name, quantity, name and address of purchaser, and date and time of sale.

The MPPA expressly permits the regulated seller to capture information regarding the name of the product and the quantity sold through bar code, electronic data capture, or similar technology. The regulated seller remains responsible for determining that the name entered corresponds to the photographic identification presented by the purchaser. The MPPA indicates that if the prospective purchaser enters the information into the logbook, the regulated seller must determine that the name entered in the logbook corresponds to the name provided on the photographic identification and must determine that the date and time of the sale as entered by the purchaser are correct. If the regulated seller enters the information into the logbook, the prospective purchaser must verify that the information is correct.

In addition, the written or electronic logbook must continue to include a notice to purchasers that entering false statements or misrepresentations in the logbook, or supplying false information or identification that results in the entry of false statements or misrepresentations, may subject the purchaser to criminal penalties under section 1001 of title 18 of the U.S. Code (21 U.S.C. 830(e)(1)(A)(v)). The logbook must be maintained by the regulated seller for not fewer than two years after the date on which the entry is made (21 U.S.C. 830(e)(1)(A)(vi)).

The changes made by the MPPA and implemented in this rulemaking will provide greater flexibility for regulated sellers of scheduled listed chemical products. These persons may now choose several alternative ways in which to capture and maintain required logbook information: A fully written logbook, a fully electronic logbook, or a logbook where some information is captured electronically and the prospective purchaser's signature is captured and linked to that information.

DEA received one comment on its Notice of Proposed Rulemaking. An association representing chain drug stores commented that the proposed rule allowed for flexibility in complying with Federal and State logbook requirements. The commenter also stated that the proposed rule was both logical and time-saving. By allowing regulated sellers to scan purchaser identifications, the proposed rule makes it possible for regulated sellers to simultaneously check purchaser identification and electronically capture purchaser information.

DEA appreciates the support for its Notice of Proposed Rulemaking regarding the implementation of the MPPA, and is finalizing the Proposed Rule without change.

This final rule implementing the MPPA has been developed in accordance with the principles of Executive Orders 12866 and 13563. As discussed above, this action incorporates statutory provisions into existing regulations. This statutory change imposes no new costs on regulated sellers of the List I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. Rather, it provides greater flexibility for regulated sellers who may choose to capture required logbook information in a written form, in an electronic form, or in a manner that combines written and electronic information. While not economically significant, this final rule has been reviewed by the Office of Management and Budget.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

This rulemaking does not preempt or modify any provision of State law, impose enforcement responsibilities on any State, or diminish the power of any State to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132.

This rule is required by statute, will not have tribal implications and will not impose substantial direct compliance costs on Indian tribal governments.

This rule has been reviewed in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Deputy Assistant Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities. This rule simply incorporates the statutory provisions of the MPPA into existing regulations. This rule will provide greater flexibility to regulated sellers, permitting them to capture required logbook information in a variety of ways.

Although the requirements of the MPPA revise the ways in which logbook information may be captured or presented, these requirements are not substantially different than the previously existing requirements for documentation of sales in logbooks. DEA believes that these revised requirements will have a negligible impact on the time estimated to document a sale. Estimates of this time burden are included in information collection 1117-0046, “Certification, Training, and Logbooks for Regulated Sellers of Scheduled Listed Chemical Products.” Therefore, as DEA does not believe that the burden associated with this collection will measurably change, DEA is not revising this information collection.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $136,000,000 or more (adjusted for inflation) in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act). This rule will not result in an annual effect on the economy of $100,000,000 or more, a major increase in costs or prices, or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

For the reasons set out above, 21 CFR Part 1314 is amended as follows:

The Pension Benefit Guaranty Corporation (PBGC) administers the pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974 (ERISA). PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) sets forth (in subpart B) the methods for valuing plan benefits of terminating single-employer plans covered under Title IV. Guaranteed benefits and benefit liabilities under a plan that is undergoing a distress termination must be valued in accordance with subpart B of part 4044. In addition, when PBGC terminates an underfunded plan involuntarily pursuant to ERISA section 4042(a), it uses the subpart B valuation rules to determine the amount of the plan's underfunding.

Under § 4044.51(b) of the asset allocation regulation, early retirement benefits are valued based on the annuity starting date, if a retirement date has been selected, or the expected retirement age, if the annuity starting date is not known on the valuation date. Sections 4044.55 through 4044.57 set forth rules for determining the expected retirement ages for plan participants entitled to early retirement benefits. Appendix D of part 4044 contains tables to be used in determining the expected early retirement ages.

Table I in appendix D (Selection of Retirement Rate Category) is used to determine whether a participant has a low, medium, or high probability of retiring early. The determination is based on the year a participant would reach “unreduced retirement age” (i.e., the earlier of the normal retirement age or the age at which an unreduced benefit is first payable) and the participant's monthly benefit at unreduced retirement age. The table applies only to plans with valuation dates in the current year and is updated annually by the PBGC to reflect changes in the cost of living, etc.

Tables II-A, II-B, and II-C (Expected Retirement Ages for Individuals in the Low, Medium, and High Categories respectively) are used to determine the expected retirement age after the probability of early retirement has been determined using Table I. These tables establish, by probability category, the expected retirement age based on both the earliest age a participant could retire under the plan and the unreduced retirement age. This expected retirement age is used to compute the value of the early retirement benefit and, thus, the total value of benefits under the plan.

This document amends appendix D to replace Table I-11 with Table I-12 in order to provide an updated correlation, appropriate for calendar year 2012, between the amount of a participant's benefit and the probability that the participant will elect early retirement. Table I-12 will be used to value benefits in plans with valuation dates during calendar year 2012.

PBGC has determined that notice of and public comment on this rule are impracticable and contrary to the public interest. Plan administrators need to be able to estimate accurately the value of plan benefits as early as possible before initiating the termination process. For that purpose, if a plan has a valuation date in 2012, the plan administrator needs the updated table being promulgated in this rule. Accordingly, the public interest is best served by issuing this table expeditiously, without an opportunity for notice and comment, to allow as much time as possible to estimate the value of plan benefits with the proper table for plans with valuation dates in early 2012.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this regulation, the Regulatory Flexibility Act of 1980 does not apply (5 U.S.C. 601(2)).

In consideration of the foregoing, 29 CFR part 4044 is amended as follows:

The AIPA amended 35 U.S.C. 154(b) to provide patent term adjustment for certain delays during the patent examination process. See Public Law 106-113, 113 Stat. 1501, 1501A-552 through 1501A-591 (1999)). Specifically, under the patent term adjustment provisions of 35 U.S.C. 154(b) as amended by the AIPA, an applicant is entitled to patent term adjustment for the following reasons: (1) If the Office fails to take certain actions during the examination and issue process within specified time frames (35 U.S.C. 154(b)(1)(A)); (2) if the Office fails to issue a patent within three years of the actual filing date of the application in the United States (35 U.S.C. 154(b)(1)(B)); and (3) for delays due to interference, secrecy order, or successful appellate review (35 U.S.C. 154(b)(1)(C)). The AIPA, however, sets forth a number of conditions and limitations on any patent term adjustment accrued under 35 U.S.C. 154(b)(1). Specifically, 35 U.S.C. 154(b)(2)(C) provides, in part, that “[t]he period of adjustment of the term of a patent under [35 U.S.C. 154(b)(1)] shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application” and that “[t]he Director shall prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application.” 35 U.S.C. 154(b)(2)(C)(i) and (iii). The Office implemented the patent term adjustment provisions of 35 U.S.C. 154(b) as amended by the AIPA, including setting forth the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application, in a final rule published in September of 2000. See Changes to Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 FR 56366 (Sept. 18, 2000) (patent term adjustment final rule).

Section 1.704(c) provides that the submission of an information disclosure statement either that is after a notice of allowance, an initial reply, or that requires a supplemental Office action, results in a reduction of any patent term adjustment under 37 CFR 1.703. See 37 CFR 1.704(c)(6), 1.704(c)(8), 1.704(c)(9), and (c)(10). Section 1.704(d) provides that an information disclosure statement will not result in a patent term adjustment reduction under 37 CFR 1.704(c)(6), 1.704(c)(8), 1.704(c)(9), or (c)(10) if it is accompanied by a statement that each item of information contained in the information disclosure statement was first cited in a communication from a foreign patent office in a counterpart application and that this communication was not received by any individual designated in 37 CFR 1.56(c) more than thirty days prior to the filing of the information disclosure statement. 37 CFR 1.704(d) permits applicants to submit information first cited in a communication from a foreign patent office in a counterpart application to the Office without a reduction in patent term adjustment if an information disclosure statement is promptly (within thirty-days of receipt of the communication) submitted to the Office.

Recent decisions by the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) underscore the importance of making information cited and Office actions issued in related copending foreign and domestic applications of record. See Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358 (Fed. Cir. 2003) and McKesson Info. Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 897 (Fed. Cir. 2007); see also Larson Mfg. Co. v. Aluminart Products Ltd., 559 F.3d 1317 (Fed. Cir. 2009) (relating to disclosure in a U.S. reexamination proceeding of U.S. Office actions that were issued in a continuation application of the patent under reexamination). The Office is revising 37 CFR 1.704(d) to also embrace information first cited in a communication from the Office, as well as the communication ( e.g., Office action) in a counterpart foreign or international application. These revisions are intended to ensure compliance with AIPA in light of the evolving case law. Obviously, meeting the conditions set forth in 37 CFR 1.704(d) does not substitute for compliance with any relevant requirement of 37 CFR 1.97 or 1.98.

Title 37 of the Code of Federal Regulations, Part 1, is amended as follows:

Section 1.704: Section 1.704(d) is amended to change “any communication from a foreign patent office in a counterpart application” to “any communication from a patent office in a counterpart foreign or international application or from the Office,” and to add to this definition “a communication that was issued by a patent office in a counterpart foreign or international application or by the Office.” This change revises § 1.704(d) to also embrace information first cited in a communication from the Office, as well as the communication ( e.g., Office action) in a counterpart foreign or international application or from the Office itself.

Response to Comments: The Office published a notice in April of 2011 proposing to change the rules of practice pertaining to patent term extension and adjustment to: (1) Indicate that in most circumstances an examiner reopening prosecution of the application after a notice of appeal has been filed will be considered a decision in the review reversing an adverse determination of patentability for purposes of patent term adjustment or extension purposes; and (2) exclude information disclosure statements resulting from the citation of information by a foreign patent office in a counterpart application that are promptly filed with the Office from the provisions for the reduction of patent term adjustment for applicant delays. See Revision of Patent Term Extension and Adjustment Provisions Relating to Appellate Review and Information Disclosure Statements, 76 FR 18990 (Apr. 6, 2011). The Office received eight written comments in response to this notice. The Office is revising its proposal concerning the reopening of prosecution of an application by the Office after a notice of appeal has been filed and will publish that proposal for public comment in a separate rulemaking. The comments and the Office's responses to the comments pertaining to information disclosure statements resulting from the citation of information by a foreign patent office in a counterpart application that are promptly filed with the Office follow.

The comments on the Office's proposed change to 37 CFR 1.704(d) pertaining to information disclosure statements supported the proposed change. The Office also received comments on provisions of 37 CFR 1.704 that the Office did not propose to change: (1) One comment suggested changing the thirty day to a three month period; and (2) one comment indicated that an information disclosure statement filed after a notice of appeal should not result in reduction under 37 CFR 1.704(c)(8).

The Office did not propose to change the thirty-day period in 37 CFR 1.704(d). The Office adopted the provisions of 37 CFR 1.704(d) in 2000 to permit applicants to avoid a patent term adjustment impact if an information disclosure statement containing information that was cited in a communication from a foreign patent office in a counterpart application is promptly submitted to the Office. The Office does not consider an information disclosure statement filed more than thirty days after the information has been brought to applicant's attention to be promptly submitted.

Regarding the second comment, 37 CFR 1.704(c)(8) does not provide for a reduction of any patent term adjustment simply because an applicant files an information disclosure statement after a notice of appeal has been filed.

A. Regulatory Flexibility Act: For the reasons set forth herein, the Deputy General Counsel for General Law of the United States Patent and Trademark Office has certified to the Chief Counsel for Advocacy of the Small Business Administration that the changes in this rulemaking will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 605(b).

This rulemaking expands the exception to the patent term adjustment reduction for filing an information disclosure statement after a notice of allowance or reply, or for filing an information disclosure statement that requires a supplemental Office action, for information cited by a foreign patent office in a counterpart application that is promptly filed with the Office, to embrace information first cited by the Office in another application. This rulemaking does not add any additional requirements (including information collection requirements) or fees for patent applicants or patentees. Therefore, the changes in this rulemaking will not have a significant economic impact on a substantial number of small entities.

B. Executive Order 12866 (Regulatory Planning and Review): This rulemaking has been determined to be not significant for purposes of Executive Order 12866 (Sept. 30, 1993).

C. Executive Order 13563 (Improving Regulation and Regulatory Review): The Office has complied with Executive Order 13563. Specifically, the Office has, to the extent feasible and applicable: (1) Made a reasoned determination that the benefits justify the costs of the rule; (2) tailored the rule to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector and the public as a whole, and provided on-line access to the rulemaking docket; (7) attempted to promote coordination, simplification and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes.

D. Executive Order 13132 (Federalism): This rulemaking does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

E. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) Have substantial direct effects on one or more Indian Tribes; (2) impose substantial direct compliance costs on Indian Tribal governments; or (3) preempt Tribal law. Therefore, a Tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

F. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking 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 under Executive Order 13211 (May 18, 2001).

G. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

H. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

I. Executive Order 12630 (Taking of Private Property): This rulemaking will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

J. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), prior to issuing any final rule, the United States Patent and Trademark Office will submit a report containing the final rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General of the Government Accountability Office. The changes in this notice are not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this notice is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

K. Unfunded Mandates Reform Act of 1995: The changes in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

L. National Environmental Policy Act: This rulemaking will not have any effect on the quality of environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

M. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions which involve the use of technical standards.

N. Paperwork Reduction Act: The rules of practice pertaining to patent term adjustment and extension have been reviewed and approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) under OMB control number 0651-0020. As discussed previously, this rulemaking expands the exception to the patent term adjustment reduction for filing an information disclosure statement after a notice of allowance or a reply, or for filing an information disclosure statement that requires a supplemental Office action, for information cited by a foreign patent office in a counterpart application that are promptly filed with the Office, to embrace information first cited by the Office in another application. This notice does not propose to add any additional requirements (including information collection requirements) or fees for patent applicants or patentees. Therefore, the Office is not resubmitting information collection packages to OMB for its review and approval because the changes in this rulemaking do not affect the information collection requirements associated with the information collections approved under OMB control number 0651-0020.

Notwithstanding any other provision of law, no person is required to respond to nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

For the reasons set forth in the preamble, 37 CFR part 1 is amended as follows:

Section 118 of the Copyright Act, title 17 of the United States Code, creates a compulsory license for the use of published nondramatic musical works and published pictorial, graphic, and sculptural works in connection with noncommercial broadcasting. Terms and rates for this compulsory license, applicable to parties who are not subject to privately negotiated licenses, are published in 37 CFR parts 253 and 381.

Final regulations governing the terms and rates of copyright royalty payments with respect to certain uses by public broadcasting entities of published nondramatic musical works, and published pictorial, graphic, and sculptural works for the license period beginning January 1, 2008, and ending December 31, 2012, were published in the Federal Register on November 30, 2007. See 72 FR 67646. Pursuant to these regulations, on or before December 1 of each year, the Judges shall publish a notice of the change in the cost of living as determined by the Consumer Price Index (all urban consumers, all items (“CPI-U”)) during the period from the most recent index published prior to the previous notice, to the most recent index published prior to December 1 of that year. See 37 CFR 381.10(a)(requiring publication of a revised schedule of rates for 37 CFR 381.5). Accordingly, the Judges are hereby announcing the change in the CPI-U and applying the annual COLA to the rates set out in 37 CFR 381.5(c).

The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2010, to the most recent index published before December 1, 2011, is 3.5%. 1 Rounding to the nearest dollar, 2 the royalty rates for the performance of published nondramatic musical compositions in the repertories of ASCAP, BMI, and SESAC are $312, $312, and $125, respectively.

For the reasons set forth in the preamble, part 381 of title 37 of the Code of Federal Regulations is amended to read as follows:

The satellite carrier compulsory license establishes a statutory copyright licensing scheme for the retransmission of distant television programming by satellite carriers. 17 U.S.C. 119. Congress created the license in 1988 and has reauthorized the license for additional five-year periods, most recently with the passage of the Satellite Television Extension and Localism Act of 2010, (“STELA”), Public Law 111-175.

The Copyright Royalty Judges adopted as final the rates for the section 119 compulsory license for the period 2010-2014 after publication in the Federal Register of the rates, as proposed by Copyright Owners and Satellite Carriers, 1 yielded no objections. See 75 FR 53198 (August 31, 2010). Section 119(c)(2) requires the Judges annually to adjust these rates “to reflect any changes occurring in the cost of living adjustment (for all consumers and for all items) [“CPI-U”] published * * * at least 25 days before January 1.” Id. Today's notice fulfills this obligation.

The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2010, to the most recent index published before December 1, 2011, is 3.5%. 2 Rounding to the nearest cent, the royalty rates for the secondary transmission of broadcast stations by satellite carriers for private home viewing and viewing in commercial establishments are 26 cents and 53 cents, respectively.

For the reasons set forth in the preamble, part 386 of title 37 of the Code of Federal Regulations is amended as follows:

On August 15, 2011, the Postal Service published a Federal Register proposed rule (76 FR 50438-50441) for changes to the design and construction of folded self-mailers and unenveloped mailpieces that are mailed at automation or machinable prices. The proposed standards were issued after two years of collaborative work with mailers to analyze and test a wide variety of folded self-mailer letter-size designs. In response to the proposed standards, the Postal Service received 51 comments. Many of those who commented provided input on more than one aspect of the proposal. Each comment was given consideration and modifications were made to the proposed standards when possible. This final rule will be adopted based on our proposed rule with only minor revisions. These standards do not apply to cards, envelopes, booklet style letters, or mailpieces designed to carry discs.

The final rule includes DMM recommendations for design elements and sealing methods for FSMs. To avoid confusion about the types of mailpieces included in this change, the Postal Service renames mailpieces that are designed to carry discs in 201.3.4. To simplify the requirements that apply to tabs that can be used to seal unenveloped letter-sized mailpieces, DMM 201.3.11 is modified to include folded self-mailers. The final rule also includes recommended revisions to the proposed requirements based on observations of a wide variety of FSMs tested over the past several years.

Although the effective date of these revisions is not until January 5, 2013, we encourage all customers who prepare FSMs mailed at automation or machinable prices to begin conversion to these design concepts as soon as possible.

A folded self-mailer is formed of panels that are created when one or more unbound sheets of paper are folded together and sealed to make a letter-size mailpiece. The number of sheets in the mailpiece and the number of the times the sheets are folded determine the number of panels. Sheets that are bound by one or more staples are not considered folded self-mailers even when all other preparation recommendations are met.

The maximum height for all automation and machinable FSMs is 6 inches and the maximum length is 10 1/2 inches, with a maximum thickness of 1/4 inch. The maximum weight of three ounces is applicable to all mailpieces prepared without envelopes.

The paper basis weight for folded self-mailers is based on book-grade paper unless otherwise specified and varies depending on the total weight of the mailpiece and/or optional elements that are incorporated in the design. The final fold must be at the bottom for all designs except oblong style pieces. For oblong-style FSMs the final fold is on the leading edge. Tabs cannot be placed on the bottom open edge of an oblong-style FSM.

A minimum of two tabs will be required to seal all FSMs when tabs are used as the sealing method. Tabs used as seals may not have perforations. Glue may be used as an alternate sealing method when applied according to the standards for FSMs.

After January 5, 2013, folded self-mailers that do not meet these requirements will be assessed postage as follows: First-Class Mail® and Standard Mail® customers will pay nonmachinable prices; Periodicals mailers will pay nonbarcoded prices.

Eleven commenters recommended that the proposed standards be abandoned and asked that no changes to the existing mailpiece format be made at this time. The commenters cited the economy and the lack of equipment capable of producing the types of designs expressed in the proposed standards. Commenters were also concerned about time and cost incurred for mailpieces that may already be designed and produced, but not mailed. Many new formats and sealing requirements not defined in current standards for FSM are added. To accommodate the mailing industry, the Postal Service will delay adoption of the new standards until January 5, 2013. This postponement will provide enough time for mailers to complete outstanding contracts for mailpieces that do not meet the new standards and will allow those pieces to be entered as automation compatible folded self-mailers prior to the effective date.

Mailers entering FSMs before the effective date are encouraged to design and prepare their mailpieces using these standards.

Four commenters expressed concern regarding the Postal Service's proposal to require an additional tab on mailpieces weighing more than one ounce. As pieces get thicker and heavier it becomes more difficult for those pieces to pass through processing equipment. The mailpieces do not retain their integrity and cause jams and damage to the mail and processing equipment. Heavier weight FSMs experience more stress on the leading edge, especially when it is not a folded edge. An additional tab placed on the lower leading edge improves efficient feed capability and serves as added protection for the mailpiece during processing. The additional tab also maintains closure as pieces are handled and processed multiple times. Until January 5, 2013, three tabs are recommended to maintain sufficient sealing and to provide additional protection for heavier mailpieces and specific design formats.

Three commenters asked why it is necessary to limit the number of panels within an FSM. The number of panels affects the shape, thickness, and ability to create crisp folds required to maintain a streamlined shape. It also reduces the amount of stress placed on closures, and maintains the integrity of a mailpiece from acceptance to delivery. However, in order to provide increased options and ability to qualify for automation letter prices, the Postal Service will increase the allowed panel count to 12 for FSMs constructed of non-newsprint paper. Additionally, to accommodate the common practice of including half-pages in quarter-fold pieces made with newsprint paper, we increase the panel count for quarter-fold FSMs to a maximum of 24 panels.

Seven commenters expressed concern about the 10 1/2 inch-maximum length requirement. They expressed concern because smaller sizes will decrease the amount of space available to print advertising in a single mailpiece, and in some cases stock mailpieces will need to be redesigned to conform to the new size requirements. The FSM study revealed that, similar to booklets, mailpieces that exceeded 9 inches in length experienced a decline in machinability with significantly higher rates of damage and jams. The Postal Service maintains the proposed maximum length of 10 1/2 inches to balance the need for machinability with the customer's need for the maximum amount of usable space.

Eight commenters questioned the thickness standards of .05 and .09 inches. USPS® revises the language to clarify that these thickness standards apply only to interior loose enclosures (single sheets that are not captured by the folds) and attachments. The standard for maximum thickness of a finished FSM letter is 1/4 inch, the same maximum thickness for all letter-size mail. Additionally, we allow the insertion of remittance envelopes, meeting all requirements for enclosed envelopes within automation letters, as enclosures when the envelopes are incorporated into the first (manufacturing) fold of the quarter-fold mailpiece format.

Two commenters asked that tabs made of material other than paper and tabs with perforations be used as seals for FSMs. To accommodate this request, the current standards that describe the types of materials used to manufacture tabs are expanded to permit their use for both booklets and FSMs. Tabs with perforations may not be used as a seals.

Nine commenters asked for clarification of tab placement and the number of tabs required. Section 201.3.14.4 is revised to clarify sealing mailpieces using tabs. Studies showed that sealing FSMs with one tab did not provide sufficient closure to withstand the rigors of automation processing for letter-size mail. The requirement to seal with a minimum of two tabs is retained.

Two commenters asked to use glue to seal the lead and trail edge instead of gluing along the top edge when the final fold is the bottom edge. We have revised and clarified the language to allow this as an additional sealing option.

One commenter suggested that the paper basis weight is unreasonably high. The basis weight of paper is one of the major factors that affect the machinability of a mailpiece. Pieces prepared with lower paper weight were unable to withstand the rigors of automation processing, resulting in higher rates of damage and jams and a diversion to more costly flat sorter and manual processing methods. We retain the paper basis weights as proposed.

One commenter asked about the perforation cut-tie ratio. The necessary cut to tie ratio is based on many correlative factors. A ratio that provides enough strength to prevent premature breaking of the perforation tie is needed. This need is balanced by the necessity of preparing a perforated line that can be opened by the recipient without causing unintended damage to the mailpiece. Due to the significant variation in cut-to-tie ratios of mailpieces currently in the mailstream, we modified the proposed standard and will allow a 1 to 1 cut-tie ratio for all perforated lines. The Postal Service will monitor the performance of mailpieces prepared with perforations and if the 1 to 1 ratio does not prove sufficient for machine processing, we will modify the standards to require a higher cut to tie ratio. Customers who have mailpieces that do not meet this reduced standard may ask that the FSMs be sent to the Pricing and Classification Service Center for review.

Three commenters asked for clarification regarding the need to print address information in a mid-to-left position. Section 201.3.14.10 is introduced as a recommendation for folded self-mailers produced on uncoated paper. Testing revealed higher rates of delamination and peel-back (cosmetic damage) to the lead edge of uncoated (raw) paper. This type of damage often exceeded 1/2 inch in length and impeded the ability of letter sorting machines to read address elements.

With this final rule, the Postal Service implements requirements and options that describe the construction of folded self-mailers and other unenveloped mailpieces. These standards allow significant design flexibility while maintaining mailpiece automation compatibility and address most current and proposed designs. Mailers designing and mailing FSMs before the effective date are encouraged to prepare mailpieces using these standards.

The Postal Service adopts the following changes to Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR 111.1.

Accordingly, 39 CFR part 111 is amended as follows:

The information in this section is organized as follows:

The EPA is finalizing:

(1) The decision to grant Beaumont Refinery's petition to have its centrifuge solids excluded, or delisted, from the definition of a hazardous waste, subject to certain continued verification and monitoring conditions; and

(2) To use the Delisting Risk Assessment Software to evaluate the potential impact of the petitioned waste on human health and the environment. The Agency used this model to predict the concentration of hazardous constituents released from the petitioned waste, once it is disposed. After evaluating the petition, EPA proposed and issued a direct final rule, on October 1, 2010 to exclude the Beaumont Refinery waste from the lists of hazardous wastes under §§ 261.31 and 261.32. The direct final rule received adverse comments and was subsequently withdrawn on November 16, 2010. This decision is based on the proposed rule issued on October 1, 2010. The comments received on this rulemaking will be addressed as part of this decision.

Beaumont Refinery's petition requests a delisting for the centrifuge solids listed as F037, F038, K048, K049, K051, K052, K169, and K170. Beaumont Refinery does not believe that the petitioned wastes meet the criteria for which EPA listed them. Beaumont Refinery also believes no additional constituents or factors could cause the wastes to be hazardous. EPA's review of this petition included consideration of the original listing criteria, and the additional factors required by the Hazardous and Solid Waste Amendments of 1984 (HSWA). See section 3001(f) of RCRA, 42 U.S.C. 6921(f), and 40 CFR 260.22(d)(1)-(4). In making the initial delisting determination, EPA evaluated the petitioned waste against the listing criteria and factors cited in § 261.11(a)(2) and (a)(3). Based on this review, EPA agrees with the petitioner that the waste is non-hazardous with respect to the original listing criteria. If EPA had found, based on this review, that the waste remained hazardous based on the factors for which the waste was originally listed, EPA would have proposed to deny the petition. EPA evaluated the waste with respect to other factors or criteria to assess whether there is a reasonable basis to believe that such additional factors could cause the waste to be hazardous. EPA considered whether the waste is acutely toxic, the concentration of the constituents in the waste, their tendency to migrate and to bioaccumulate, their persistence in the environment once released from the waste, plausible and specific types of management of the petitioned waste, the quantities of waste generated, and waste variability. EPA believes that the petitioned wastes do not meet the listing criteria and thus should not be a listed waste. EPA's decision to delist wastes from the facility is based on the information submitted in support of this rule, including descriptions of the waste and analytical data from the Beaumont Refinery, Beaumont, Texas facility.

This exclusion applies to the waste described in the petition only if the requirements described in Table 1 and 2 of part 261, Appendix IX and the conditions contained herein are satisfied. The one-time exclusion applies to 8,300 cubic yards of centrifuge solids waste resulting from the treatment of tank bottoms from five tanks in the Lower Park Tank Farm.

Beaumont Refinery will dispose of the storage containers of the centrifuge solids. The centrifuge solids will be transported and disposed of at a permitted municipal solid waste landfill or a commercial industrial waste landfill regulated by the Texas Commission on Environmental Quality (TCEQ).

This rule is effective December 1, 2011. The Hazardous and Solid Waste Amendments of 1984 amended Section 3010 of RCRA to allow rules to become effective in less than six months when the regulated community does not need the six-month period to come into compliance. That is the case here because this rule reduces, rather than increases, the existing requirements for persons generating hazardous wastes. These reasons also provide a basis for making this rule effective immediately, upon publication, under the Administrative Procedure Act, pursuant to 5 U.S.C. 553(d).

Because EPA is issuing this exclusion under the Federal RCRA delisting program, only states subject to Federal RCRA delisting provisions would be affected. This would exclude two categories of States: States having a dual system that includes Federal RCRA requirements and their own requirements, and States who have received our authorization to make their own delisting decisions.

Here are the details: We allow states to impose their own non-RCRA regulatory requirements that are more stringent than EPA's, under section 3009 of RCRA. These more stringent requirements may include a provision that prohibits a Federally issued exclusion from taking effect in the State. Because a dual system (that is, both Federal (RCRA) and State (non-RCRA) programs) may regulate a petitioner's waste, we urge petitioners to contact the State regulatory authority to establish the status of their wastes under the State law.

EPA has also authorized some States (for example, Louisiana, Georgia, Illinois) to administer a delisting program in place of the Federal program, that is, to make State delisting decisions. Therefore, this exclusion does not apply in those authorized States. If Beaumont Refinery transports the petitioned waste to or manages the waste in any State with delisting authorization, Beaumont Refinery must obtain delisting authorization from that State before they can manage the waste as nonhazardous in the State.

A delisting petition is a request from a generator to EPA or another agency with jurisdiction to exclude from the list of hazardous wastes, wastes the generator does not consider hazardous under RCRA.

Under 40 CFR 260.20 and 260.22, facilities may petition the EPA to remove their wastes from hazardous waste control by excluding them from the lists of hazardous wastes contained in §§ 261.31 and 261.32. Specifically, § 260.20 allows any person to petition the Administrator to modify or revoke any provision of Parts 260 through 266, 268 and 273 of Title 40 of the Code of Federal Regulations. Section 260.22 provides generators the opportunity to petition the Administrator to exclude a waste on a “generator-specific” basis from the hazardous waste lists.

Petitioners must provide sufficient information to EPA to allow the EPA to determine that the waste to be excluded does not meet any of the criteria under which the waste was listed as a hazardous waste. In addition, the Administrator must determine, where he/she has a reasonable basis to believe that factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste.

Beaumont Refinery petitioned EPA on September 9, 2009, to exclude from the lists of hazardous wastes contained in §§ 261.31, and 261.32, from its centrifuge solids from the treatment of tank bottoms from five tanks in the Lower Park Tank Farm.

The waste stream was generated from the Beaumont Refinery facility located in Beaumont, Texas. The centrifuge solids are listed under EPA Hazardous Waste No. F037, F038, K048, K049, K051, K052, K169, and K170. Specifically, in its petition, Beaumont Refinery requested that EPA grant an one time exclusion for 8,300 cubic yards of the centrifuge solids.

The 40 CFR Part 261 Appendix VII hazardous constituents which are the basis for listing can be found in Table 1.

Specifically, in its petition, Beaumont Refinery requested that EPA grant an one time exclusion for 8,300 cubic yards of the centrifuge solids.

To support its petition, Beaumont Refinery submitted:

1. Analytical results of the toxicity characteristic leaching procedure (TCLP) analysis for volatile and semivolatile organics, and metals for ten samples and one duplicate of the centrifuge solids;

2. Analytical results of the total constituent analysis for volatile and semivolatile organics, and metals for three samples of the centrifuge solids;

3. Analytical results for Appendix IX volatile and semivolatile organics, pesticides, herbicides, dioxins/furans, PCBs, and metals for one sample of the centrifuge solids;

4. Analytical results for the EPA Region 6 TCLP analysis for Appendix IX metals for one sample of the centrifuge solids;

5. Analytical results for the oily waste extraction procedure (OWEP) for Beaumont Refinery metals for one sample of the centrifuge solids;

6. Analytical results for total reactive cyanides for three samples of the centrifuge solids;

7. Analytical results for total reactive sulfides for three samples of the centrifuge solids;

8. Analytical results for total oil and grease for ten samples of the centrifuge solids; and

9. Descriptions of the operations and waste generated from the centrifuging of tank bottoms at the Lower Park Tank Farm.

The EPA received public comments on October of 2010, proposed rule from three interested parties, the Environmental Technology Council (ETC), and Heritage Environmental and one citizen. Heritage Environmental submitted comments objecting to the absence of the full administrative record not appearing electronically on the regulations.gov site on October 28, 2010. ETC submitted three rounds of comments dated October 28, 2010, February 7, 2011, and March 7, 2011. The comments and responses are addressed below. Some responses to the October 28, 2010 items are not included because the actual records were sent to the commenter for verification purposes and no further comment is warranted.

Comment 1. These materials are listed hazardous wastes. The centrifuged solids fail to meet the treatment standards for placement in a fully permitted hazardous waste landfill that is designed to contain and manage toxic hazardous waste. It is completely inconsistent with EPA land disposal restrictions to grant even a variance to the LDR for these materials based on their exceeding the LDR treatment standards by a factor of 100 times greater concentration of the hazardous waste constituents. It is therefore unacceptable to delist these solids from hazardous waste regulation and allow their placement in a substantially less restrictive municipal solid waste landfill. The entire petition should be rejected.

Response 1. The Delisting Program and the LDR program serve different purposes. Different standards of compliance apply. “A waste is eligible for delisting only if that waste as generated at a particular facility does not meet any of the criteria under which the waste was listed as a hazardous waste. In addition, the waste may not contain any other Appendix VIII constituents that would cause the waste to be hazardous.” RCRA § 3001(f) and 40 CFR 260.22.

The derived-from rule states that any solid waste generated from the treatment, storage, or disposal of a listed hazardous waste, including any sludge, spill residue, ash, emission control dust, or leachate, remains a hazardous waste unless and until delisted (§ 261.3(c)(2)(i)).

EPA's regulations establish two ways of identifying solid wastes as hazardous under RCRA. A waste may be considered hazardous if it exhibits certain hazardous properties (“characteristics”) or if it is included on a specific list of wastes EPA has determined are hazardous (“listing” a waste as hazardous) because we found them to pose substantial present or potential hazards to human health or the environment. EPA's regulations in the Code of Federal Regulations (40 CFR) define four hazardous waste characteristic properties: Ignitability, corrosivity, reactivity, or toxicity (see 40 CFR 261.21-261.24).

In order to list wastes EPA conducts a more specific assessment of a particular waste or category of wastes. The Agency will “list” them if they meet criteria set out in 40 CFR 261.11.

As described in § 261.11, EPA may list a waste as hazardous if the waste:

EPA places a substance on the list of hazardous constituents in Appendix VIII if scientific studies have shown the substance has toxic effects on humans or other life forms. Generally, listing of wastes is not driven by threshold limits except in the case of the toxicity characteristic determination. Several of the limits cited by the commenter are the TC limit for the constituents stated. If the waste is characteristic, then it can't be delisted. The delisting limit is constrained by the TC limit.

In 1984, Congress created EPA's Land Disposal Restrictions (LDR) program. The LDR program ensures that toxic constituents present in hazardous waste are properly treated before hazardous waste is land disposed. Since then, the LDR team has developed mandatory technology-based treatment standards that must be met before hazardous waste is placed in a landfill. These standards help minimize short and long-term threats to human health and the environment, which directly benefits local communities where hazardous waste landfills are located. The LDR Program does not determine if a waste is hazardous, it regulates how hazardous wastes are to be managed at the time of disposal.

We do believe that the concentrations specified as delisting levels do minimize short term and long term threats to human health and the environment. Whereas, some LDR treatment standards are based on the best demonstrated technology, the delisting exit levels are risk based standards. We have not stated that ExxonMobil's waste is not subject to the LDR standards, because the waste was not delisted at the point of generation, ExxonMobil may submit a variance to the treatment standards as described in 268.42(b) or 268.44 in order to ensure compliance with the LDR standards, but the Delisting decision may still be made. However, wastes destined for disposal in Subtitle C landfills are subject to the LDR limits. Wastes when delisted must comply with all applicable Subtitle D landfill requirements.

Comment 2. EPA has given specific guidance for the generation of sampling plans for the delisting of hazardous waste. This guidance is presented in the document SW846, Chapter 9, Sampling Plans. The variability of the waste must be established as part of a delisting petition. No such statistical analysis is presented for either the original wastes, or the centrifuged solids. The petitioner simply states without justification that the studied solids were thought to be representative of the highest concentration materials. However, no laboratory analysis data are presented to show the variability of the concentrations of the hazardous constituents in the subject waste materials. Also, EPA's own guidance states that the minimum number of samples required for a delisting petition shall “in no case be less than four samples,” even when the variability has been determined and the 90% upper confidence limit has been shown to be below the regulatory threshold for a specific analytical parameter. The petitioner consistently presents one to three sample data results, with no statistical analysis of the data. The entire petition should be rejected for failure to properly characterize both the original waste material and the centrifuged solids with a sampling plan that meets USEPA guidance for this type of delisting request.

Response 2. Eleven samples of waste were analyzed to support this delisting petition. In prediction of the worst case scenario, EPA selects the maximum waste concentration of the data provided for the waste. The Sampling and Analysis Plan for the Centrifuge Solids was reviewed and approved by EPA. The Sampling and Analysis of this material is acceptable for demonstration that the waste sampled is representative of the waste to be disposed.

Comment 3. Uncontrolled disposal of these materials could result in the creation of a Federal Superfund site. The constituent concentrations of carcinogenic PAH compounds at over 350 mg/kg PAH in the centrifuged solids exceed the cleanup standards for numerous Federal Superfund sites. It is unimaginable that EPA would grant permission for non-hazardous disposal of a toxic waste that would require a large scale remediation at a Superfund site. The purpose of RCRA is to prevent the creation of Superfund sites, not promote them. The entire petition should be denied so that additional Superfund sites are not created as a result of the uncontrolled non-hazardous disposal of these materials.

Response 3. Since the Risk Assessment Guidance for Superfund was published, the risk-based cleanup levels should be established from the toxicity of an individual compound of concerns (COC) in PAHs. The equations and exposure parameter inputs for carcinogen risk calculations are mainly in Part A & B of the Guidance. 10E-6 is the departure risk for a carcinogen with standardized exposure default values. The total risk in PAHs is the sum from the risk of each compound in PAHs. However, site-specific cleanup levels can be established by site-specific exposure parameter inputs through site-specific risk assessment.

Therefore, the cleanup levels are different from one chemical to another in PAHs. The screening levels of COCs with a risk level, 10E-6 are in Regional Screening Level Summary Table. The web address for the Table is http://www.epa.gov/reg3hwmd/risk/human/rb-concentration_table/index.htm.

Comment 4: A listed hazardous waste is prohibited from land disposal under RCRA, unless the hazardous waste is first treated to the level or by a method of treatment which substantially diminishes the toxicity of the waste or substantially reduces the likelihood of migration of hazardous constituents from the waste so that short-term and long-term threats to human health and the environment are minimized. RCRA & 3004(d), (g) & (m). No other form or method of treatment is allowed by law, except treatment that complies with RCRA § 3004(m). In addition, no generator may “ in any way dilute a restricted waste or the residual from treatment of a restricted waste as a substitute for adequate treatment” that achieves the mandatory treatment standards. 40 CFR § 268.3 (emphasis added).

For the F037, F038, K048, K049, K051, K052, K169 and K170 hazardous wastes generated from the slop oil tanks in the Beaumont Refiner Lower Park Tank Farm, the mandatory treatment standards require treatment to concentration-based levels for a plethora of regulated constituents ranging alphabetically from acenaphthene to xylenes. 40 CFR 268.40. These treatment levels are based on the best demonstrated available treatment achieved through high-temperature incineration.

Contrary to these basic principles and applicable law, EPA has proposed to delist and allow land disposal of the slop oil solids generated at the Beaumont tank farm at concentration levels greatly in excess of the mandatory treatment standards. In doing so, EPA attempts to perpetrate a sham by delisting the slop oil solids from ineffective treatment that is nothing more than prohibited dilution of the hazardous waste. In the preamble EPA claims that Exxon has petitioned to delist the “centrifuge solids from the treatment of tank bottoms from the five tanks from the Lower Park Tank Farm.” 75 Fed. Reg. at 60634 (emphasis added). Specifically, EPA asserts that Exxon's subcontractor will use “a proprietary chemical (Superall 38), which acts as a chemical agent for treating wastes from oil-related clean-up activities that, when coupled with centrifuging, reduces the volume and toxicity ” of the slop oil tank wastes. Id. (emphasis added).

There is not a scintilla of evidence in the administrative record that Superall 38 effectively treats the slop oil waste to reduce toxicity, or that the product functions in any way other than as a cleaning agent. The record does not contain any information supporting EPA's claim that Superall 38 is a chemical agent for effective treatment of the slop oil waste. Indeed, Superall Products LLP makes no such claims itself in its Web site advertisements for its product. Most importantly, the Superall cleaning agent clearly does not reduce “the volume and toxicity” of the waste to the mandatory treatment levels required by RCRA and the regulations.

Most importantly, the Superall product is mixed with large volumes of water for use as a cleaning agent. The slop oil waste is thereby diluted and hazardous constituents are transferred to the water so that the concentrations are reduced in the solids after centrifuging. This process of dilution and centrifuging is clearly not the mandatory treatment required by the regulations, and is in fact a way of diluting the restricted waste in express violation of the dilution prohibition in 40 CFR 268.3. The analytical data on the slop oil solids on which the entire DRAS modeling was based are useless, since there is no way of determining how much water and cleaning solution was mixed with the slop oil, and there are no restrictions in EPA's delisting on diluting the waste as much as necessary to “pass” the DRAS modeling. All the DRAS modeling proves is that hazardous waste can be diluted with water to reduce constituent concentrations, something that Congress specifically prohibited in the land disposal prohibitions of RCRA. The slop oil waste generated by Exxon in the Beaumont Refinery's Lower Park Tank Farm is listed as F037 and F038 because it contains petroleum refinery oil/water/solids separation sludges that are listed as hazardous wastes due to benzene, benzo(a)pyrene, chrysene, lead and chromium. 40 CFR Part 261, App. VII. In addition, the slop oil waste is listed as K048, K049, K051, K052, K169 and K170 because it contains dissolved air flotation (DAF) float, slop oil emulsion solids, API separator sludge, crude oil storage tank sediment, clarified slurry oil tank sediment and in-line filter separation solids that are listed as hazardous wastes due to hexavalent chromium, lead, benzene, benzo(a)pyrene, dibenz(a,h)anthracene, benzo(a)anthracene, benzo(b)fluoranthene, benzo(k)fluoranthene, 3-methylcholanthrene, and 7,12-dimethylbenz(a)anthracene. Id.

This slop oil waste indisputably meets the criteria for which the ingredient wastes were listed as hazardous wastes. There is no basis whatsoever in the Exxon delisting petition for determining that the slop oil waste is not a hazardous waste, or as generated can legitimately be delisted.

Now that EPA Region 6 has finally provided the administrative record for the Exxon delisting petition, it is apparent that the proposed delisting of the F- and K-listed slop oil tank bottoms would be arbitrary, capricious, and contrary to law. These slop oil wastes meet the criteria for listing as hazardous waste and undoubtedly contain high concentrations of Appendix VIII hazardous constituents, although the record contains scant information or analytical data on the actual waste. Instead, Exxon has applied for delisting of the waste solids after mixing with high volumes of water and centrifuging, which would clearly violate the delisting requirements of RCRA, the land disposal prohibitions, and the dilution prohibition in 40 CFR 268.3.

Response 4. The Delisting Program and the LDR program serve different purposes and because they serve different purposes, different standards of compliance apply. As the commenter states “A waste is eligible for delisting only if that waste as generated at a particular facility does not meet any of the criteria under which the waste was listed as a hazardous waste. In addition, the waste may not contain any other Appendix VIII constituents that would cause the waste to be hazardous. RCRA § 3001(f) and 40 CFR 260.22.”

The derived-from rule states that any solid waste generated from the treatment, storage, or disposal of a listed hazardous waste, including any sludge, spill residue, ash, emission control dust, or leachate, remains a hazardous waste unless and until delisted. (§ 261.3(c)(2)(i)).

EPA's regulations establish two ways of identifying solid wastes as hazardous under RCRA. A waste may be considered hazardous if it exhibits certain hazardous properties (“characteristics”) or if it is included on a specific list of wastes EPA has determined are hazardous (“listing” a waste as hazardous) because we found them to pose substantial present or potential hazards to human health or the environment. EPA's regulations in the Code of Federal Regulations (40 CFR) define four hazardous waste characteristic properties: ignitability, corrosivity, reactivity, or toxicity (see 40 CFR 261.21-261.24).

In order to list wastes EPA conducts a more specific assessment of a particular waste or category of wastes. The Agency will “list” them if they meet criteria set out in 40 CFR 261.11. As described in § 261.11, EPA may list a waste as hazardous if the waste: exhibits any of the characteristics, i.e., ignitability, corrosivity, reactivity, or toxicity (§ 261.11(a)(1)); is “acutely” hazardous ( e.g., if it is fatal to humans or animals at low doses, § 261.11(a)(2)); or it contains any of the toxic constituents listed in 40 CFR part 261, Appendix VIII and, after consideration of various factors described in the regulation, is capable of posing a “substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed” (§ 261.11(a)(3)).

EPA placed a substance on the list of hazardous constituents in Appendix VIII if scientific studies have shown the substance has toxic effects on humans or other life forms.

Generally, listing of wastes are not driven by threshold limits except in the case of the toxicity characteristic (TC) determination. Several of the limits cited by the commenter are the TC limit for the constituents stated. If the waste is characteristic, then it can't be delisted. The delisting limit is bound by the TC limit.

In 1984, Congress created EPA's Land Disposal Restrictions (LDR) program. The LDR program ensures that toxic constituents present in hazardous waste are properly treated before hazardous waste is land disposed. Since then, the LDR team has developed mandatory technology-based treatment standards that must be met before hazardous waste is placed in a landfill. These standards help minimize short and long-term threats to human health and the environment, which directly benefits local communities where hazardous waste landfills are located. The LDR Program does not determine if a waste is hazardous it is how hazardous wastes are to be managed at the time of disposal.

We do believe that the concentrations specified as delisting levels do minimize short term and long term threats to human health and the environment. Whereas, some LDR treatment standards are based on the best demonstrated technology, the delisting exit levels are risk based standards. We have not stated that Beaumont Refinery is not subject to the LDR standards, because the waste was not delisted at the point of generation, Beaumont Refinery may submit a variance to the treatment standards as described in § 268.42(b) or 268.44 in order to ensure compliance with the LDR standards, but the Delisting decision may still be made. However, wastes destined for disposal in Subtitle C landfills are subject to the LDR limits. Therefore, wastes when delisted must comply with all applicable Subtitle D landfill requirements.

The primary function of Superall 38 is to facilitate recovery of as much oil (and associated COCs) as possible for subsequent reintroduction into the refinery process. And after introduction of this cleaning agent and centrifuging there was a reduction in volume of the residuals. The centrifuge solids, the petitioned waste, are separated from the liquid portion of the mixture. The recovered oil is returned to the process, and any remaining liquid portion is treated in the wastewater treatment system to standards which meet the facility's NPDES permit and the centrifuge solids will be disposed of in a Subtitle D Landfill when this exclusion is finalized. ExxonMobil's centrifuge residuals do indicate a reduction of hazardous waste concentrations. Thus, because the remaining liquid portion is taken out of the RCRA jurisdiction and put under Clean Water Act jurisdiction and the remaining RCRA waste is reduced, the EPA does not consider this process to constitute dilution under RCRA regulations. The EPA believes that the delisting concentrations met by this residuals to be delisted fall within the acceptable lifetime risk range of 10-4 to 10-6 and that for the non-carcinogenic constituents that an individual could be exposed to on a daily basis are without appreciable risk of deleterious effects during a lifetime.

Under Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), this rule is not of general applicability and therefore is not a regulatory action subject to review by the Office of Management and Budget (OMB). This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) because it applies to a particular facility only. Because this rule is of particular applicability relating to a particular facility, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202, 204, and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). Because this rule will affect only a particular facility, it will not significantly or uniquely affect small governments, as specified in section 203 of UMRA. Because this rule will affect only a particular facility, this proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, “Federalism,” (64 FR 43255, August 10, 1999). Thus, Executive Order 13132 does not apply to this rule. Similarly, because this rule will affect only a particular facility, this proposed rule does not have Tribal implications, as specified in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). Thus, Executive Order 13175 does not apply to this rule. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant as defined in Executive Order 12866, and because the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. The basis for this belief is that the Agency used the DRAS program, which considers health and safety risks to infants and children, to calculate the maximum allowable concentrations for this rule. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866. This rule does not involve technical standards; thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988, “Civil Justice Reform,” (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report which includes a copy of the rule to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules (1) rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding this action under section 801 because this is a rule of particular applicability.

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

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

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

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

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

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

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

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

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

Accordingly, 44 CFR part 64 is amended as follows:

The final regulation that is the subject of these corrections appears at 46 CFR 506.4(d), in a table setting out adjustments based on inflation for maximum civil monetary penalties within the jurisdiction of the Federal Maritime Commission. These corrections change the third United States Code citation and the civil monetary penalty description, associated with violations of the Shipping Act of 1984, Commission regulations or orders, which are not done knowingly and willfully. The United States Code citation associated with violations of the Shipping Act that are not committed knowingly and willfully is currently incorrectly shown in the table as 46 U.S.C. 41107(b), rather than as 46 U.S.C. 41107(a). In addition, the civil monetary penalty description incorrectly describes the violations as “not knowing or willful,” rather than as “not knowing and willful.” These corrections clarify that the correct United States Code citation is 46 U.S.C. 41107(a), and the correct violation description is “not knowing and willful.”

Accordingly, 46 CFR Part 506 is corrected by making the following correcting amendments:

This is a summary of the Commission's document, Report No. 2936, released November 14, 2011. The full text of this document is available for viewing and copying in Room CY-B402, 445 12th Street SW., Washington, DC or may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI) (1-(800) 378-3160). The Commission will not send a copy of this Notice pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), because this Notice does not have an impact on any rules of particular applicability.

Subject: In the Matter of Preserving the Open Internet, Broadband Industry Practices, published at 76 FR 59192, September 23, 2011, in WC Docket No. 07-52, GN Docket No. 09-191, and published pursuant to 47 CFR 1.429(e). See 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)).

Number of Petitions Filed: 1.

This is a summary of Commission's document, Report No. 2938, released November 21, 2011. The full text of this document is available for viewing and copying in Room CY-B402, 445 12th Street SW., Washington, DC or may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI) (1-(800) 378-3160). The Commission will not send a copy of this Notice pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), because this Notice does not have an impact on any rules of particular applicability.

Subject: In the Matter of Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services, published at 76 FR 26199, May 6, 2011, in WT Docket No. 05-265, and published pursuant to 47 CFR 1.429(e). See 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)).

Number of Petitions Filed: 1.

This is a summary of the Commission's document, Report No. 2937, released November 15, 2011. The full text of this document is available for viewing and copying in Room CY-B402, 445 12th Street SW., Washington, DC or may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI) (1-(800) 378-3160). The Commission will not send a copy of this Notice pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), because this Notice does not have an impact on any rules of particular applicability.

Subject: Amendment of Part 101 of the Commission's Rules to Facilitate the Use of Microwave for Wireless Backhaul and Other Uses and to Provide Additional Flexibility to Broadcast Auxiliary Service and Operational Fixed Microwave Licensees, FCC 11-120, in WT Docket No. 10-153 and published September 27, 2011, pursuant to 47 CFR 1.429(e). See 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)).

Number of Petitions Filed: 4.

The U.S. Department of Agriculture (USDA) highly respects and follows the policies and laws regarding worker labor protections particularly as they pertain to the acquisition process. To support these objectives, this proposed rule adds a subpart and clause entitled Labor Law Violations to the Agriculture Acquisition Regulation (AGAR). The AGAR may be accessed at: http://www.dm.usda.gov/procurement/policy/agar.html. This clause is to be included in all USDA contracts that exceed the simplified acquisition threshold, including all contract options.

USDA certifies that this proposed rule will not have a significant impact on a substantial number of small entities as defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. There is no additional submission required as a result of this action. The rule will not have a significant impact on the small business community or on a substantial number of small businesses. The Department invites comment on its estimates for the potential impact of this rulemaking on small businesses.

The Paperwork Reduction Act does not apply because the proposed rule does not impose any recordkeeping or information collection requirements that require approval by the Office of Management and Budget.

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “Improving Regulation and Regulatory Review,” direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasized the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget (OMB) designated this rule as not significant according to Executive Order 12866 and therefore this rule has not been reviewed by OMB.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not retroactive and does not preempt State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. Before any judicial action may be brought regarding the provisions of this rule, appeal provisions of 7 CFR parts 11 and 780 must be exhausted.

This proposed rule has been reviewed in accordance with Executive Order 13132, Federalism, and does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Provisions of this proposed rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various government levels.

This proposed rule contains no Federal mandates under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), and therefore a written statement is not required.

This proposed rule has been reviewed in accordance with Executive Order 12372, Intergovernmental review of Federal programs, and does not establish federal financial assistance or direct Federal development with State and local governments, and is therefore outside the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials.

This proposed rule has been reviewed in accordance with Executive Order 13175, Consultation and Coordination With Indian Tribal Governments, and does not have tribal implications or impose unfunded mandates with Indian tribes.

USDA is committed to compliance with the E-Government Act, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. This proposed rule requires one letter from requestors which can be sent electronically to USDA. USDA will continue to seek other avenues to increase electronically submitted information.

For the reasons set forth in the preamble, the Department of Agriculture amends 48 CFR part 422, as follows:

NHTSA published in the Federal Register of July 29, 2011 (76 FR 45453), a final rule revising the agency's regulation on vehicle labeling of safety rating information.

As published, the final regulation inadvertently contained several errors.

In the first sentence of section 575.302(b), pickup trucks were incorrectly listed as an example of automobiles that are required by the Automobile Information Disclosure Act (AIDA) to have Monroney labels (price sticker labels). However, AIDA does not require Monroney labels for pickup trucks. 1 That sentence also included a minor typographical error (the first use of the word “are” was extraneous).

In section 575.302(e)(4)(iii), the regulatory text specifying certain language for the label incorrectly indicated that the word “only” is to be in italics, when it should have indicated that the word is to be capitalized. We note that the sample label shown in Figure 2 to section 575.302 correctly shows the word capitalized.

Also, separate from the July 2011 final rule, we identified certain errors in the authority citation, which we are correcting.

Accordingly, 49 CFR part 575 is corrected by making the following correcting amendments:

A final rule for Amendment 11 to the MSB FMP was published in the Federal Register on November 7, 2011 (76 FR 68642). Details regarding the measures in Amendment 11 are in the final rule and are not repeated here. The OMB approval of the collection-of-information requirements for §§ 648.4 and 648.7 (as it relates to mackerel permit holders) had not been received by the date the final rule was submitted to the Office of the Federal Register for publication. OMB approved the collection-of-information requirements in the rule on November 9, 2011. This final rule makes the collection-of-information requirements effective.

NMFS previously solicited public comments on Amendment 11, including this collection of information, through the rulemaking process. NMFS received no comments on the collection of information requirements. Thus, this action merely implements portions of Amendment 11 that were previously proposed and subjected to public comment, but that under the Paperwork Reduction Act (PRA) required OMB approval in order to become effective. OMB has now approved the collection of information provisions. Because the public has already had an opportunity to comment on these provisions, an additional public comment period is unnecessary.

The AA finds good cause to waive the 30-day delayed effective date required by 5 U.S.C. 553 and make this rule effective upon publication. While the requirement to have a limited access mackerel permit is delayed until March 1, 2012, it is important to begin now the underlying administrative process in order to maximize the number of permit applications that can be acted upon by this deadline.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection-of-information requirement subject to the requirements of the PRA, unless that collection-of-information displays a currently valid OMB control number. This final rule contains revisions to collection-of-information requirements subject to the PRA under OMB Control Numbers 0648-0601 and 0648-0212.

The requirements related to the limited access mackerel program have been approved under the MSB Amendment 10 Family of Forms (OMB Control No. 0648-0601). Under the approved limited access program, and pursuant to regulations at 50 CFR 648.4, vessel owners are required to submit to NMFS application materials to demonstrate their eligibility for a limited access permit. The public burden for the application requirement pertaining to the limited access program is estimated to average 45 minutes per application, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information.

Only 410 vessels are expected to qualify and consequently renew their limited access mackerel permits via the renewal application each year. The renewal application is estimated to take 30 minutes on average to complete. Up to 30 applicants are expected to appeal the denial of their permit application. The appeals process is estimated to take an average of 2 hours to complete. Vessels that qualify for a Tier 1 or Tier 2 mackerel permit would be required to submit documentation of hold volume size. The Council estimated that 74 vessels would qualify for either a Tier 1 or Tier 2 limited access mackerel permit. Tier 1 and 2 vessel owners will experience a time burden due to this requirement in the form of travel time to/from a certified marine surveyor. It is not possible to estimate a time burden associated with obtaining a hold volume measurement, as vessels would have to travel varying distances to visit certified marine surveyors. Travel time to a marine surveyor is not an information collection burden, so is not considered a response.

Completing a replacement or upgrade application requires an estimated 3 hours per response. It is estimated that no more than 40 of 410 vessels possessing these permits will request a vessel replacement or upgrade annually. Completion of a CPH application requires an estimated 30 minutes per response. It is estimated that no more than 30 of the 410 vessels possessing these limited access permits will request a CPH annually.

The regulations at 50 CFR 648.7 modify the VTR requirement for Tier 3 mackerel vessels. All mackerel vessels are currently required to submit VTRs on a monthly basis; this requirement is currently approved under the Northeast Region Logbook Family of Forms (OMB Control No. 0648-0212). Amendment 11 will require vessels issued a Tier 3 mackerel permit to submit VTRs on a weekly basis. A change request for this requirement has been approved by OMB. The public burden for the revised VTR requirement is expected to average 5 minutes for each additional VTR submission.

Send comments on these burden estimates or any other aspects of these collections-of-information, including suggestions for reducing the burden, by mail to the Northeast Regional Office (see ADDRESSES ), by email to OIRA_Submission@omb.eop.gov or by fax to (202) 395-7285.

In January 2011, NMFS implemented a trawl rationalization program, a catch share program, for the Pacific coast groundfish fishery's trawl fleet. The program was adopted through Amendment 20 to the FMP and consists of an IFQ program for the shorebased trawl fleet (including whiting and non-whiting fisheries); and cooperative (coop) programs for the at-sea mothership (MS) and catcher/processor (C/P) trawl fleets (whiting only). Allocations to the limited entry trawl fleet for certain species were developed through a parallel process with Amendment 21 to the FMP.

On May 12, 2010 (75 FR 26702), NMFS published a notice of availability of Amendments 20 and 21, and—consistent with requirements of the Magnuson-Stevens Fishery Conservation and Management Act (MSA)—made its decision to partially approve the amendments on August 9, 2010. Because of the complexity of Amendments 20 and 21, NMFS implemented them through multiple rulemakings. Over 2010, NMFS published three rulemakings related to the trawl rationalization program. The first was a final rule to collect ownership information from all potential participants in the program and to notify them of the databases that would be used for initial issuance and the date by which to make any changes to those databases (75 FR 4684, January 29, 2010). The second was a final rule to restructure the Pacific coast groundfish regulations, establish the allocations set forth under Amendment 21, and establish procedures for the initial issuance of permits, endorsements, quota share, and catch history assignments under the IFQ and coop programs (75 FR 60868, October 1, 2010; correction published 75 FR 67032, November 1, 2010). The third was a final rule to establish several of the program components required for implementation of the rationalized trawl fishery in January 2011, including IFQ gear switching provisions, details of observer requirements and first receiver catch monitor programs, first receiver site licenses, equipment requirements, catch weighing requirements, retention requirements in the Shorebased IFQ Program, quota share (QS) accounts, vessel accounts for use of quota pounds, requirements for coop permits and coop agreements, further tracking and monitoring components, and economic data collection requirements (75 FR 78344, December 15, 2010).

The regulations implementing the program became effective January 1, 2011; however, necessary tracking systems to make the program operational did not become active until January 11, 2011, the date fishing began under the new program. Since that time, the Pacific Fishery Management Council (Council) and NMFS have been addressing implementation issues as they arise, some of which are the subject of this rule. This rule also includes items that are further revisions and refinements to the program to further implement Amendments 20 and 21, and corrects errors or old regulatory language that need to be corrected, revised, or made consistent with other sections of the regulations. Additionally, this rule includes some trailing actions for the program that the Council took final action at its June 2011 meeting. The trailing actions include an FMP amendment (Amendment 21-1) stating that Amendment 21 trawl/non-trawl allocations supersede the limited entry and open access allocations originally established in Amendment 6 for species listed in Amendment 21; an FMP amendment (Amendment 21-1) to revise the calculation of the Pacific halibut trawl bycatch mortality limit; a regulatory amendment to provide an exemption from the prohibition on processing groundfish at-sea for qualified participants in the Shorebased IFQ Program; a regulatory amendment for the adaptive management program (AMP) to extend the “pass-through” of non-whiting quota pounds through 2014 or until an AMP quota pound allocation process is established, whichever is earlier; and a regulatory amendment to allow a change in registration of a mothership catcher vessel (MS/CV) endorsement and its associated catch history assignment from one limited entry trawl endorsed permit to another. These trailing actions are discussed in more detail in the preamble to the proposed rule (76 FR 54888, September 2, 2011). Some of the provisions in this rule may affect all sectors of the commercial groundfish fishery (limited entry trawl, limited entry fixed gear, and open access), some provisions apply to several or all of the trawl programs (i.e., Shorebased IFQ Program, MS Coop Program, C/P Coop Program), while other details only affect one program.

NMFS published a notice of availability of Amendments 21-1 on August 15, 2011 (76 FR 50449). Consistent with requirements of the MSA, NMFS made its decision to approve Amendment 21-1 on November 10, 2011.

In addition to this rule, on August 30, 2011, NMFS published a correction to regulations for the trawl program to update erroneous cross references, outdated terms, and duplicate regulatory entries (76 FR 53833).

Additional rulemakings would follow in the future and include other operational components of the catch share program, such as the requirements for new observer provider certification and an adaptive management program. NMFS is also planning a future “cost recovery” rule based on recommendations from the Council and expected to be implemented for January 2013.

NMFS solicited public comment on Amendment 21-1 (76 FR 50449, August 15, 2011) and on the proposed rule (76 FR 54888, September 2, 2011). The comment period for these notices ended October 14, 2011. Because these notices are related, the responses to public comments in this section of the preamble address Amendment 21-1 and the proposed rule.

NMFS received four letters of comments on the proposed rule and amendment submitted by individuals or organizations. The comment period was open during the September 2011 Council meeting. Comments presented to the Council are part of the record and were considered by the Council during its deliberation. In reviewing the proposed rule and amendment, NMFS considered the record as a whole.

Comment 1. NMFS received one comment stating the proposed rule and amendment had been reviewed and they had no comment.

Response. NMFS acknowledges this comment.

Comment 2. NMFS received one comment expressing concern that measures were in place to protect habitat, such as kelp beds where fish lay eggs, from trawl fishing.

Response. While this comment is not within the scope of this action, NMFS notes that it has implemented habitat protection measures in the Pacific coast groundfish fishery. NMFS has implemented several types of closed areas along the west coast that vary by gear type or purpose. Closed areas to protect essential fish habitat for all life stages of groundfish were implemented in 2006. These closed areas are called essential fish habitat conservation areas (EFHCAs). In addition, along the west coast, geographic areas defined by coordinates expressed in degrees latitude and longitude are closed to fishing by certain gear types, including bottom trawl gear. These areas are called groundfish conservation areas (GCAs) and include large coastwide closed areas to protect overfished rockfish, called rockfish conservation areas (RCAs). During the primary whiting season, certain areas are closed to fishing with midwater gear to protect salmon, which is caught as bycatch in the whiting fishery. Other closed areas can be implemented seasonally to slow bycatch in the whiting fishery.

In addition to closed areas to protect habitat from trawl gear, the trawl rationalization program allows limited entry trawl permit holders to switch from trawl to fixed gears to fish their quotas, which, in turn, reduces trawl impacts. It also allows nontrawl vessels to harvest the allocation to the trawl sector if they acquire a trawl permit and quota. These facts lead to the conclusion that potential adverse impacts from trawl gear could be expected to be lower under the trawl rationalization program than under previous management.

Comment 3. One commenter, the International Pacific Halibut Commission (IPHC), noted that there is ambiguity in NMFS's use of terminology describing halibut in the trawl fishery, especially given that it is illegal to retain halibut of any size. The commenter noted that NMFS's use of the terms `legal', `legal-sized', and `sublegal-sized' halibut for the trawl fishery may no longer be appropriate given changes in the use of these terms by the IPHC, the management body that sets the allowable harvest of Pacific halibut. The IPHC recently moved to using more accurate terms such as O32 for halibut over 32 inches in total length, or U26 for halibut under 26 inches in total length. When the IPHC calculates total removals to determine the available yield, it now accounts for all fish greater than 26 inches (all O26). Previously, this calculation was for all O32 fish. Removals and mortality of U26 fish are still accounted for through reductions in the harvest rate on the exploitable stock.

Response. NMFS appreciates the IPHC bringing these changes to NMFS's attention. While NMFS acknowledges that language in Amendment 21-1 and in the implementing regulations could be revised to reflect the terms used by the IPHC, NMFS does not believe it is necessary at this stage in the rulemaking and public process.

NMFS interprets the terms `legal' and `legal-sized' to refer to fish with a total length of 32 inches and above and interprets `sublegal-sized' to refer to fish with a total length under 32 inches, consistent with the description in the environmental assessment for this action. Through NMFS's approval of Amendment 21-1, NMFS requested a footnote be added to the FMP to clarify the use of the terms “legal-sized” and “sublegal-sized” halibut in this context. With this final rule, NMFS has also amended regulations at § 660.55(m) to make the use of the terms “legal sized” and “sublegal sized” halibut more clear by defining as halibut with a total length of 32 inches and above, or O32, and halibut under 32 inches in total length, or U32, respectively. Provided the FMP and regulations are clear that the calculation of the trawl bycatch mortality limit is for legal-sized fish (i.e., 32 inches and above) that are converted to an amount for all sizes of halibut and that the trawl fishery bycatch report provided by NMFS Northwest Fisheries Science Center continues to provide halibut data sufficient to determine the proportion of trawl bycatch mortality that is 32 inches and above total length, NMFS can calculate the halibut trawl bycatch mortality limit. This rule only applies to the calculation of the trawl bycatch mortality limit, and does not affect the IPHC's calculations of available yield.

Comment 4. The IPHC commented that it supports NMFS's process for calculating the carryover of surplus individual bycatch quota (IBQ) pounds for Pacific halibut in a vessel account after the end of the fishing year. The IPHC stated that limiting the potential surplus to a maximum of 10 percent is reasonable. The IPHC stated that it expects the amount of surplus carryover from one year to the next for halibut to be minimal because of incentives to maximize groundfish harvest within available IBQ pounds.

Response. NMFS appreciates the IPHC's support and insights. NMFS notes that the carryover limit amount of 10 percent is not affected by this rule, but was implemented through a previous rulemaking (75 FR 78344, December 15, 2010). NMFS would like to further highlight a description in the preamble to the proposed rule under “QS Permits and Vessel Accounts” (76 FR 54888, 54895; September 2, 2011) regarding end-of-the-year vessel account reconciliation. The proposed rule preamble described and regulations at § 660.140(e)(5)(i) in this final rule implement a process where issuance of carryover of surplus occurs later in the following year after data are available to calculate the amount of carryover surplus (expected in spring of the following year).

Comment 5. Two commenters provided comment on the implications of the carryover of surplus IBQ pounds on the calculation of the trawl bycatch mortality limit. The Council's comment described its understanding of the carryover of surplus pounds for Pacific halibut managed by the IPHC. The IPHC referenced the Council's comment letter and stated that the Council's understanding of the carryover of surplus IBQ pounds is correct.

Response. NMFS appreciates receiving these comments. In the proposed rule (76 FR 54888, 54890; September 2, 2011), NMFS specifically requested comment on the effect the carryover provision in the Shorebased IFQ Program would have on calculation of the trawl bycatch mortality limit in a subsequent year, if any. The Council submitted comments describing its understanding that the surplus carryover provision does not affect calculation of the trawl bycatch mortality limit; the IPHC stated that the Council's understanding is correct. This carryover of surplus pounds for Pacific halibut and the halibut trawl bycatch mortality limit is also mentioned under the section of the preamble titled “Items NMFS Requested Comment on in the Proposed Rule.”

Comment 6. A comment provided by the Council described its understanding of provisions allowing for the carryover of surplus pounds in the Shorebased IFQ Program from one year to the next.

Response. NMFS appreciates the Council's comment regarding the issuance of carryover of surplus pounds for groundfish managed under the MSA. In the proposed rule, NMFS proposed that surplus carryover pounds be issued after NMFS has completed an end-of-the-year account reconciliation process, which would result in surplus carryover pounds being issued later in the year once data are available. As stated in the FMP Appendix E, the carryover provision must be consistent with the conservation requirements of the MSA. The Council comment notes that sector allocations are set such that harvest of all sectors in total would not be expected to exceed annual catch limits (“ACLs”) established in accordance with the MSA. NMFS will continue to work with the Council to assure consistency with ACLs when issuing surplus carryover pounds for the Shorebased IFQ Program. With this final rule and consistent with the language in the FMP regarding the carryover provision, NMFS clarifies that any issuance of surplus carryover pounds will be to the extent allowed by the conservation requirements of the MSA. This provision for the carryover of surplus pounds is also mentioned under the section of the preamble titled “Changes from the Proposed Rule.”

NMFS specifically requested comment on several items in the proposed rule. NMFS received comments on some (e.g., see comments 5 and 6 above in the preamble), but not all of those items. Below, NMFS identifies each issue where NMFS specifically requested public comments, and indicates whether comments were received. In instances where NMFS made changes to the proposed rule as a result of comments on items where comments were specifically requested, NMFS identified these changes in the section entitled “Changes from the Proposed Rule.”

In the proposed rule, NMFS specifically requested comment on the proposed changes to provisions regarding vessels moving between limited entry and open access fisheries and other sections of the regulations which may need further revisions. No comments were received and no changes were made from the proposed rule.

In the proposed rule, NMFS specifically requested comment on the proposed revisions to the crossover provisions and any implications they may have, especially for dual-endorsed limited entry permits. No comments were received and no changes were made from the proposed rule.

In the proposed rule, NMFS specifically requested comment on whether catch monitor providers would have to change their insurance coverage for catch monitors to allow them to maintain coverage of the vessel in lieu of the observer while the vessel is in port. NMFS solicited public comment on whether this change would require catch monitor providers to have the increased insurance coverage provided by Maritime Liability insurance to cover “seamen's” claims under the Merchant Marine Act (Jones Act) and General Maritime Law ($1 million minimum). No comments were received and no changes were made from the proposed rule.

In the proposed rule, NMFS specifically requested comment on regulations to implement a new process for first receivers and catch monitors to address transport away from the offload site. NMFS especially requested public comment on the changes regarding the process and submittal requirements for dock tickets and e-tickets. No comments were received and no changes were made from the proposed rule.

In the proposed rule, NMFS specifically requested comment on two aspects of this exemption: (1) An appropriate cut-off date for qualification for the exemption, and (2) a conversion factor for freezing or glazing non-whiting groundfish species. The cut-off date is described below in the section titled “Changes from the Proposed Rule.” For the conversion factor, the Council's motion from its June 2011 meeting included a statement that “Regulatory language should also include an appropriate conversion factor and/or an appropriate process for calculating a conversion factor for glazed groundfish.” In a letter to the Council (Agenda Item E.6.b, ODFW Letter (excerpt), June 2011), ODFW recommended a weight conversion factor that included a variable weight conversion factor in certain circumstances. When NMFS implemented weight conversion factors for the Shorebased IFQ Program, NMFS stated that the weight conversion factors used on electronic fish tickets (a Federal reporting requirement) must be a consistent coastwide value. In the preamble to the proposed rule published on August 31, 2010 (75 FR 53380), NMFS stated the reasons why a consistent coastwide value was necessary, including providing consistency in catch estimates between states, preventing artificial influences on individual landings choices, and benefiting NMFS's ability to track landings values. NMFS based the Federal weight conversion factors on published values. ODFW's proposed conversion factor did not provide a consistent value by species and, potentially, would not be a consistent value within a species for different size grades or volumes of fish. Because the online IFQ system automatically applies the weight conversion factor depending on the species condition code reported on the electronic fish ticket, a variable conversion factor is not practical. In addition, NMFS is not aware of any published values for glazed groundfish species nor of any consistent coastwide value used by the states for glazed groundfish species. NMFS specifically requested comment on this issue and received none. NMFS did not propose and at this time is not implementing a Federal weight conversion factor for freezing or glazing non-whiting groundfish species. The weight reported on the electronic fish ticket for glazed non-whiting groundfish should be the actual scale weight with no conversion factor applied. The states may continue to have a state weight conversion factor for freezing and glazing on their state fish ticket.

In the proposed rule, NMFS specifically requested comment on a reasonable timeframe between an application for a first receiver site license and NMFS's conduct of a site inspection. To reduce the costs of running the program, NMFS considered whether to adopt a policy of batching site inspections to only conduct inspections in a particular state once a month or within 60 days of receiving an application. NMFS did not receive any public comment on this issue. But, the Council's Groundfish Advisory Subpanel (GAP) did provide comment to the Council on this issue stating that the first receiver should not have to wait beyond 60 days from the date the application was submitted for a site inspection and, if approved, issuance of a first receiver site license. For efficiency, NMFS announces that it will strive to the best of its ability to conduct site inspections in a timely fashion, not to exceed 60 days from the date NMFS received the application for a first receiver site license. This policy is internal guidance only and thus it is not codified in the regulations.

In the proposed rule, NMFS specifically requested comment on an alternate approach to the threshold rules for annual issuance of allocation. NMFS is setting a threshold above which it would not need to continue to run iterations redistributing the allocation for QS permits in the Shorebased IFQ Program or to MS coops or the non-coop fishery in the MS Coop Program. The Council motion on this issue and the proposed rule stated that NMFS' annual allocations must be equal to or greater than 99.99 percent, but not to exceed 100 percent. In the proposed rule, NMFS solicited public comments on an alternate approach as follows, “Rounding rules may affect distribution of the entire shorebased trawl allocation [or allocations to the mothership coop or non-coop fisheries]; NMFS will distribute such allocations to the maximum extent practicable, not to exceed the total allocation.” NMFS suggested this alternative language to account for circumstances where despite NMFS' best efforts, it is unable to distribute allocations equal to or greater than 99.99 percent but no more than 100 percent. Such a circumstance may occur, for instance, for quota pound distributions of IFQ species that have a very small shorebased trawl allocation, especially since quota pound distributions must be made in one pound increments. Under the alternate language, NMFS would still endeavor to distribute as much of the allocation as possible. NMFS received no comment on the alternate language. Accordingly, upon further consideration of the concerns described above and in the absence of any comments objecting to the alternate language, NMFS will implement the alternate language at § 660.140(d)(1)(ii) for the Shorebased IFQ Program and at § 660.150(c)(2) for the MS Coop Program.

In the proposed rule, NMFS specifically requested comment on whether a prohibition against fraudulent use of QS accounts or vessel accounts is needed. NMFS received no comment on this issue. Upon further consideration, NMFS has determined that this prohibition is redundant with other statutory and regulatory provisions and is not necessary, thus NMFS has removed it from § 660.112(b)(1)(xvi).

In the proposed rule, NMFS specifically requested comment on two aspects of this exemption: (1) An appropriate cut-off date for qualification for the exemption, and (2) a conversion factor for freezing or glazing non-whiting groundfish species. The conversion factor is described above in the section titled “Items NMFS Requested Comment on in the Proposed Rule.” The Council recommended the date of July 20, 2010, as the cut-off date for qualification for the exemption on processing groundfish at-sea in the Shorebased IFQ Program to ensure that processing-prohibition exemptions would be provided only to individuals that had been processing at-sea without prior knowledge of the upcoming prohibition. Pursuant to the Council's recommendation, NMFS proposed July 20, 2010 as the cut-off date in the proposed rule. However, NMFS informed the public that it was considering whether to adjust the cut-off date for qualification to August 31, 2010 in light of a proposed rule prohibiting processing at sea for the Shorebased IFQ Program that published in the Federal Register on August 31, 2010 (75 FR 53380). August 31, 2010 is the date the public was put on notice of the prohibition on processing at-sea in the Shorebased IFQ Program. NMFS specifically requested comment on the implications of such a change from the Council motion. No comments were received on this issue. With this final rule, NMFS is implementing August 31, 2010 as the cut-off date for qualification for the exemption because August 31, 2010 is a more transparent and fair date to use as the cut-off date for qualification than July 20, 2010. Accordingly, upon further consideration and in the absence of any comments against such change, in this final rule NMFS is implementing August 31, 2010, as the cut-off date to qualify for the exemption from the prohibition on processing at sea as specified at § 660.25(b)(6)(ii)(A).

NMFS made some minor edits to the regulations to make terminology reflect changes due to Amendment 23 on annual catch limits and to include language from Amendment 20 on the trawl rationalization program. With this final rule, NMFS revised regulations at § 660.140(e)(5)(i) on the carryover of surplus quota pounds for vessel accounts to use the term “ACL” rather than optimum yield (OY), a term no longer applicable for this calculation. NMFS also added language from the FMP to this provision to state that NMFS will issue surplus carryover pounds to the extent allowed by the conservation requirements of the MSA.

In the proposed rule, NMFS specifically requested comment on the carryover provision in the Shorebased IFQ Program and the effect it would have on calculation of the trawl bycatch mortality limit in a subsequent year, if any. Two commenters commented on this issue (see comments 3-6 above in the preamble). The only change from the proposed rule based on these comments was to add clarifying language to regulations at § 660.55(m) to define the terms “legal sized” and “sublegal sized” halibut as halibut with a total length of 32 inches and above, or O32, and halibut under 32 inches in total length, or U32, respectively.

The Administrator, Northwest Region, NMFS, determined that FMP Amendment 21-1, as implemented through this final rule, is necessary for the conservation and management of the Pacific coast groundfish fishery and that it is consistent with the MSA and other applicable laws. To the extent that the regulations in this final rule differ from what was deemed by the Council, NMFS invokes its independent authority under 16 U.S.C. 1855(d).

The Council prepared a final environmental impact statement (EIS) for Amendment 20 and Amendment 21 to the Pacific Coast Groundfish FMP; a notice of availability for each of these final EISs was published on June 25, 2010 (75 FR 36386). A Record of Decision (ROD) for each EIS was signed on August 9, 2010. An environmental assessment (EA) was prepared for the following trailing actions: (1) A revision the calculation of the Pacific halibut trawl bycatch mortality limit, and (2) an exemption from the prohibition on processing at sea for qualified participants in the Shorebased IFQ Program. The Amendment 20 and 21 EISs and the EA are available on the Council's Web site at http://www.pcouncil.org/or on NMFS' Web site at http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/Trawl-Program/index.cfm. The remaining regulatory changes in this rule either required no further analysis under the National Environmental Policy Act (NEPA) or were categorically excluded from the requirement to prepare a NEPA analysis.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The preamble to the proposed rule (76 FR 54888, September 2, 2011) included a detailed summary of the analyses contained in the IRFA. NMFS, pursuant to section 604 of the Regulatory Flexibility Act (RFA), prepared a FRFA in support of this rule. The FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments in response to the IRFA, NMFS's responses to those comments, and a summary of the analyses completed to support the action. A copy of the FRFA is available from NMFS (see ADDRESSES ) and a summary of the FRFA, per the requirements of 5 U.S.C. 604(a), follows:

Under the authority of the Pacific Coast Groundfish FMP and the MSA, this rule implements revisions to the Pacific coast groundfish trawl rationalization program (program), a catch share program. This action includes regulations that affect all commercial sectors of the fishery. These sectors are the limited entry trawl, limited entry fixed gear, and open access fisheries. During the comment period on the proposed rule, NMFS received several letters of comment, but none of the comments received addressed the IRFA.

An initial regulatory flexibility analysis (IRFA) was prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. The IRFA includes a description of the action, why it is being considered, and the legal basis for this action. The IRFA provided the following information.

In January 2011, NMFS and the Council set up a new management program called the trawl rationalization program. This program significantly changes how the shorebased trawl fishery and the mothership whiting fishery work. Shorebased trawlers now fish under their own set of individual species quotas by vessel. In prior years, there were different rules for shore trawlers depending on their target catch. Non-whiting trawlers fished under common trip limits while whiting trawlers fished under a common quota without trip limits. In prior years, the mothership fishery consisted of independent at-sea processors each receiving catch from several trawlers. Now the mothership fishery works as a single coop where catcher-vessels and motherships work together collectively. The catcher-processor fleet continues as a single coop. A specific set of groundfish species and bycatch of Pacific halibut are managed under the trawl rationalization program.

Human observation and electronic reporting tools account for all catch of these species. Computer programs match the catch against individual species quotas (quota pounds or QP) or coop allocations. All vessels must carry observers who watch and measure the harvests and discards of these groundfish. All shore plants must have catch monitors to watch all vessel offloads and record the species and amounts landed. In the shorebased fishery, online accounting programs issue and track quota shares, quota pounds, and catch by species. Computer programs compare fish tickets to catch monitor reports and calculate the quota pounds landed by an individual vessel. Observer reports are used to account for the vessel's discards. An online “banking system” is used to debit landings and discards against the vessel's quota pounds. Quota pounds are deposited to a vessel's account based on a transfer from a quota share account or from another vessel account.

This rule revises the Pacific coast groundfish trawl rationalization program. These revisions affect limited entry trawl fisheries and other fisheries including the limited entry fixed gear and open access fisheries. Some revisions address the movement between limited entry and open access fisheries. Other revisions concern vessels fishing in different management areas within one trip. This rule also revises the rules about permit ownership for clarity, and clarifies the relationship of Amendment 21 to previous amendments concerning how certain species are allocated between the limited entry and open access sectors. As a result, participants in the fishery will find the regulations easier to comply with and easier to understand resulting in less confusion as to how fish are allocated.

This rule establishes new or modified processes concerning how much fish can be allocated and harvested. A new process involving the use of interim allocations should the biennial management and specification process not be completed in a timely way is established based on the processes used by emergency rule making for 2011. As a result, the potential delay in the annual allocation of quota pounds is reduced. The carryover process has been modified so there is no need to close the fishery in December for end-of-the-year account reconciliation. The Adaptive Management pass-through of quota pounds process is being extended through 2014 or the implementation of the Adaptive Management Program details, whichever is earlier. These actions provide benefits as they avoid major shut downs of the fishery and they would facilitate multi-year planning. Offload monitoring procedures are revised.

This rule establishes new procedures associated with electronic fish ticket reporting when trawlers land fish at one site but the fish are trucked to another site for processing. These procedures also apply to instances when the fish ticket is completed at an office location other than the landing site. The electronic fish ticket format is revised to better match the state paper fish ticket requirements. These revised procedures and changes to the fish ticket format and completion process provide benefits by reducing the monitoring burden on fishermen and processors and providing flexibility to first receivers and fish buyers. They also aid adoption of the electronic fish ticket by the states and increase the potential that redundant data collection systems are reduced. Most importantly, they improve the timeliness and accuracy of the data reported.

This rule expands the list of exemptions to the prohibition on processing at sea. Fishermen who can show that they were legally processing non-whiting groundfish prior to the implementation of Amendment 20 are able to apply for an exemption to continue processing at sea. This exemption addresses the Council intent not to negatively impact these operations. Revising the halibut trawl bycatch mortality limit formulas provides benefits to the trawl fishery as they provide slightly higher catch compared to the existing regulations while continuing to provide increased halibut opportunities for non-trawl fisheries. It is recognized that increased halibut mortality by trawlers results in less halibut for other commercial and recreational fisheries. However these revisions move the trawl fishery closer to the Council's original goal of 50 percent reduction of halibut mortality by the trawl fleet.

Under prior rule making, to participate in the mothership fishery, harvesting vessels now must have an endorsed permit. The endorsement has an associated catch history amount, called a catch history assignment. Vessels wishing to sell their catch history to a coop must sell both their limited entry trawl permit and MS/CV endorsement. This rule “severs” the MS/CV endorsement with its catch history assignment from the associated limited entry permit. Under this rule, fishermen can sell or assign their MS/CV endorsements and associated catch history assignments while keeping their permits so they can continue to fish in other limited entry fisheries. This change aids coop formation and may minimize the costs of joining a coop for fishermen.

The following provides some perspective on the economic dimensions of the fisheries. Over the years 2005-2009, the limited entry trawl fishery has averaged annual inflation adjusted revenues of about $57 million and total landings of about 215,000 tons. Pacific whiting ex-vessel revenues have averaged about $25 million. However, differences between years have varied greatly. Whiting trawlers harvested about 216,000 tons of whiting worth about $51 million in ex-vessel revenues in 2008. Revenues were high because of high landings and high prices. Ex-vessel prices of $235 per ton were the highest on record. In comparison, the 2007 fishery harvested about 214,000 tons worth $29 million at an average ex-vessel price of about $137 per ton. The 2009 fishery harvested about 99,000 tons worth about $12 million at a price of $120 per ton. While the Pacific whiting fishery has grown in importance in recent years, harvests in the non-whiting component of the limited entry trawl fishery have declined steadily since the 1980s. Non- whiting trawl ex-vessel revenues in the fishery peaked in the mid-1990s at about $40 million. Following the passage of the Sustainable Fisheries Act (1996) and the listing of several species as overfished, harvests became increasingly restricted and landings and revenues declined steadily until 2002. Over the years 2005 to 2009, non-whiting groundfish ex-vessel revenues have averaged $27 million annually. These revenues have ranged from $24 million (2005) to $32 million (2008). The 2009 fishery earned $30 million in ex-vessel revenues. Total shorebased revenues (whiting and non-whiting) have averaged about $36 million annually over the last five years. (Note: Ex-vessel revenues are just one indicator of “revenue”; they understate the wholesale, export, and retail revenues earned from the fishery. Data on these other indicators is either incomplete or unavailable.)

This rule regulates businesses that harvest groundfish and processors that wish to process limited entry trawl groundfish. Under the RFA the term “small entities” includes small businesses, small organizations, and small governmental jurisdictions. For small businesses, the SBA has established size criteria for all major industry sectors in the U.S., including fish harvesting and fish processing businesses. A business involved in fish harvesting is a small business if it is independently owned and operated and not dominant in its field of operation (including its affiliates) and if it has combined annual receipts not in excess of $4.0 million for all its affiliated operations worldwide. A seafood processor is a small business if it is independently owned and operated, not dominant in its field of operation, and employs 500 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. A business involved in both the harvesting and processing of seafood products is a small business if it meets the $4.0 million criterion for fish harvesting operations. A wholesale business servicing the fishing industry is a small business if it employs 100 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. For marinas and charter/party boats, a small business is one with annual receipts not in excess of $7.0 million. The RFA defines a small organization as any nonprofit enterprise that is independently owned and operated and is not dominant in its field. The RFA defines small governmental jurisdictions as governments of cities, counties, towns, townships, villages, school districts, or special districts with populations of less than 50,000.

NMFS has reviewed analyses of fish ticket data and limited entry permit data, available employment data provided by processors, information on the charterboat and Tribal fleets, and available industry responses to a survey on ownership. NMFS makes the following estimates and conclusions. The non-trawl businesses are the following fleets: Limited entry fixed gear (approximately 150 companies), open access groundfish (1,100), charterboats (465), and the Tribal fleet (four Tribes with 66 vessels). Available information on average revenue per vessel suggests that all the entities in these fleets are small entities. This rule changes requirements associated with catch monitors and observers. The catch monitors and observers are being supplied to the fishery by five companies. Based on analysis done on observer issues by the NMFS Alaska Regional Office, these five companies are also small companies.

For the trawl sector, as of August 2011, there are 176 limited entry trawl permit owners and six mothership processor permits. Nine limited entry trawl permits are attached to catcher-processor vessels and are considered “large” companies. An additional permit is owned by a large catcher processor company but currently has no vessel attached to it for a total of 10 permits that have the endorsement for a catcher-processor. Of the remaining 167 limited entry permits, 25 limited entry trawl permits are either owned or closely associated with a “large” shorebased processing company or with a non-profit organization who considers itself a “large” organization. Nine other permit owners indicated that they were large “companies.” Almost all of these companies are associated with the shorebased and mothership whiting fisheries. The remaining 133 limited entry trawl permits are projected to be held by “small” companies. Three of the six mothership processors are “large” companies. Within the 14 shorebased whiting first receivers/processors, there are four “large” companies. Including the shorebased whiting first receivers, in 2008, there were 75 first receivers that purchased limited entry trawl groundfish. There were 36 small purchasers (less than $150,000); 26 medium purchasers (purchases greater than $150,000 but less than $1,000,000); and 13 large purchasers (purchases greater than $1.0 million).

This action includes regulatory amendments to further implement Amendments 20 and 21 to the FMP and an FMP amendment to further revise Amendment 21 (called Amendment 21-1). This action includes, but is not limited to: revisions to the Pacific halibut trawl mortality bycatch limit, clarification that Amendment 21 supersedes limited entry/open access allocations for certain groundfish species, revisions to the observer coverage requirement while a vessel is in port and before the offload is complete, revisions to the electronic fish ticket reporting requirements, revisions to the first receiver site license requirement, further clarification on moving between limited entry and open access fisheries, a process for end-of-the-year vessel account reconciliation, and an exemption from processing at sea for qualified participants in the Shorebased Individual Fishing Quota (IFQ) Program.

Alternatives are described and discussed in the following documents:

Most of the issues in this rulemaking are changes to the regulations to make the program more efficient or more enforceable. They were either categorically excluded from NEPA or required no further NEPA analysis. However, for the calculation of the halibut trawl bycatch mortality limit and for the exemption from the prohibition on processing at sea, the Council and NMFS did consider alternatives in an environmental assessment for this action (see references in the above paragraph or see ADDRESSES section). The issues in this rulemaking were developed and presented with public input through the Council process. Through the Council process, impacts and ways to reduce those impacts on small entities are often considered. Several of the changes in this rule are implemented to reduce impacts on industry, including small entities. For the exemption on at-sea processing, implementation of this provision will benefit small harvesting entities by increasing the value of their landed product. For the change to the first receiver site license application process, implementation will reduce the burden on industry by requiring less paperwork.

As indicated above, this rule is generally beneficial to the various sectors of the fishery. The only explicit cost impact is the expansion of the requirement that all fish buyers obtain a $50 first receiver site license. Therefore, negative impacts to the industry, if any, appear to be minimal and do not favor large entities over small entities. No Federal rules have been identified that duplicate, overlap, or conflict with the alternatives. Public comment is hereby solicited, identifying such rules.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide (the guide) was prepared. Copies of this final rule are available from the Northwest Regional Office and the guide will be sent to all permit owners for the fishery. The guide and this final rule will also be available on the Northwest Regional Office Web site (see ADDRESSES ) and upon request.

This final rule contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) which have been approved by the Office of Management and Budget (OMB). OMB control number 0648-0611, Rationalization of the Pacific Coast Groundfish Trawl Limited Entry Fishery, was revised to include an application for an exemption from the prohibition on processing non-whiting groundfish at sea in the Shorebased IFQ Program. Public reporting burden for the revised OMB control number 0648-0611 is estimated to average 3 hours per response (543 responses). OMB control number 0648-0619, Northwest Region Groundfish Trawl Fishery Monitoring and Catch Accounting Program, was revised to include the additional reporting requirements for IFQ first receivers on electronic fish tickets, updated hardware and software requirements for electronic fish tickets, and an updated process for first receivers and catch monitors to address offload and trucking issues. Public reporting burden for the revised OMB control number 0648-0619 is estimated to average 30 minutes per response (6,059 responses). OMB control number 0648-0620, Pacific Coast Groundfish Trawl Rationalization Program Permit and License Information Collection, was revised to include a form for changing the registration of MS/CV endorsements and associated catch history assignments from one limited entry trawl permit to another and changes to the first receiver site license application requirements. Public reporting burden for the revised OMB control number 0648-0620 are estimated to average 30 minutes per response (1,955 responses). These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information. No comments were received on the PRA during the proposed rule comment period. Send comments on these or any other aspects of the collection of information to NMFS, Northwest Region, at the ADDRESSES section above; and to OMB by email to OIRA_Submission@omb.eop.gov; or fax to (202) 395-7285.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

NMFS issued Biological Opinions under the ESA on August 10, 1990, November 26, 1991, August 28, 1992, September 27, 1993, May 14, 1996, and December 15, 1999 pertaining to the effects of the Pacific Coast groundfish FMP fisheries on Chinook salmon (Puget Sound, Snake River spring/summer, Snake River fall, upper Columbia River spring, lower Columbia River, upper Willamette River, Sacramento River winter, Central Valley spring, California coastal), coho salmon (Central California coastal, southern Oregon/northern California coastal), chum salmon (Hood Canal summer, Columbia River), sockeye salmon (Snake River, Ozette Lake), and steelhead (upper, middle and lower Columbia River, Snake River Basin, upper Willamette River, central California coast, California Central Valley, south/central California, northern California, southern California). These biological opinions have concluded that implementation of the FMP for the Pacific Coast groundfish fishery was not expected to jeopardize the continued existence of any endangered or threatened species under the jurisdiction of NMFS, or result in the destruction or adverse modification of critical habitat.

NMFS reinitiated a formal section 7 consultation under the ESA in 2005 for both the Pacific whiting midwater trawl fishery and the groundfish bottom trawl fishery. The December 19, 1999, Biological Opinion had defined an 11,000 Chinook incidental take threshold for the Pacific whiting fishery. During the 2005 Pacific whiting season, the 11,000 fish Chinook incidental take threshold was exceeded, triggering reinitiation. Also in 2005, new data from the West Coast Groundfish Observer Program became available, allowing NMFS to complete an analysis of salmon take in the bottom trawl fishery.

NMFS prepared a Supplemental Biological Opinion dated March 11, 2006, which addressed salmon take in both the Pacific whiting midwater trawl and groundfish bottom trawl fisheries. In its 2006 Supplemental Biological Opinion, NMFS concluded that catch rates of salmon in the 2005 whiting fishery were consistent with expectations considered during prior consultations. Chinook bycatch has averaged about 7,300 fish over the last 15 years and has only occasionally exceeded the reinitiation trigger of 11,000 fish.

Since 1999, annual Chinook bycatch has averaged about 8,450 fish. The Chinook ESUs most likely affected by the whiting fishery has generally improved in status since the 1999 section 7 consultation. Although these species remain at risk, as indicated by their ESA listing, NMFS concluded that the higher observed bycatch in 2005 does not require a reconsideration of its prior “no jeopardy” conclusion with respect to the fishery. For the groundfish bottom trawl fishery, NMFS concluded that incidental take in the groundfish fisheries is within the overall limits articulated in the Incidental Take Statement of the 1999 Biological Opinion. The groundfish bottom trawl limit from that opinion was 9,000 fish annually. NMFS will continue to monitor and collect data to analyze take levels. NMFS also reaffirmed its prior determination that implementation of the Groundfish FMP is not likely to jeopardize the continued existence of any of the affected ESUs.

Lower Columbia River coho (70 FR 37160, June 28, 2005) were recently listed and Oregon Coastal coho (73 FR 7816, February 11, 2008) were recently relisted as threatened under the ESA. The 1999 biological opinion concluded that the bycatch of salmonids in the Pacific whiting fishery were almost entirely Chinook salmon, with little or no bycatch of coho, chum, sockeye, and steelhead.

The Southern Distinct Population Segment (DPS) of green sturgeon was listed as threatened under the ESA (71 FR 17757, April 7, 2006). The southern DPS of Pacific eulachon was listed as threatened on March 18, 2010, under the ESA (75 FR 13012). NMFS has reinitiated consultation on the fishery, including impacts on green sturgeon, eulachon, marine mammals, and turtles.

After preliminarily reviewing the available information, NMFS understands that, consistent with Sections 7(a)(2) and 7(d) of the ESA, the action would not jeopardize any listed species, would not adversely modify any designated critical habitat, and would not result in any irreversible or irretrievable commitment of resources that would have the effect of foreclosing the formulation or implementation of any reasonable and prudent alternative measures. NMFS will finalize this conclusion before the decision is made on the FMP amendment.

Amendment 21-1 to the FMP and this final rule were developed after meaningful consultation and collaboration, through the Council process, with the tribal representative on the Council. The FMP Amendment and these regulations have no direct effect on the tribes; these regulations were deemed by the Council as “necessary or appropriate” to implement the FMP as amended.

For the reasons stated in the preamble, 50 CFR Chapter VI is amended as follows:

NMFS established a catch limit of 3,763 metric tons (mt) of bigeye tuna ( Thunnus obesus ) for calendar year 2011 (74 FR 63999, December 7, 2009, and codified at 50 CFR 300.224). The limit was established under Conservation and Management Measure 2008-01 (CMM 2008-01) by the Commission for the Conservation and Management of Highly Migratory Species of the Western and Central Pacific Ocean (Commission). The catch limit applies to the U.S. pelagic longline fishery operating in the area of application of the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (Convention Area). NMFS monitored the retained catches of bigeye tuna using logbook data submitted by vessel captains. NMFS used those data and other available information to determine that the 2011 catch limit was expected to be reached on November 27, 2011. In accordance with § 300.224(d), NMFS issued a temporary rule to close the U.S. pelagic longline fishery for bigeye tuna in the Convention Area on November 27, 2011, through the end of the 2011 calendar year (76 FR 71469, November 18, 2011).

On November 18, 2011, the President signed into law the Consolidated and Further Continuing Appropriations Act, 2012 (Act). Section 113 of the Act authorizes U.S. Participating Territories of the Commission, i.e., American Samoa, Guam, and the Northern Mariana Islands to (among other things) assign catch limits established by the Commission through arrangements with U.S. vessels with permits issued under the Fishery Management (now “Ecosystem”) Plan for Pelagic Fisheries of the Western Pacific Region. Under CMM 2008-01, Participating Territories are generally subject to an annual catch limit of 2,000 mt of bigeye tuna. Under Section 113, the Secretary of Commerce is to attribute to Participating Territories those catches made by vessels operating under arrangements that meet the requirements of that section for the purposes of annual reporting to the Commission.

As of the implementation date of the Act (November 18, 2011), the Hawaii longline Association, which represents U.S. longline vessels that fish in the western and central Pacific, had entered into an arrangement with the Territory of American Samoa. Pursuant to the Act, on November 18, 2011, NMFS began assigning catches by U.S. longline vessels fishing in the western and central Pacific to American Samoa. As a result, NMFS no longer expects that the fishery will reach the 2011 catch limit for U.S. fisheries on the date announced in the temporary rule (76 FR 71469, November 18, 2011), and withdraws that temporary rule.