The Government Accountability Office Personnel Appeals Board is authorized by Congress, pursuant to 31 U.S.C. 751-755, to hear and decide cases brought by GAO employees concerning various personnel matters including adverse or performance-based actions, claims of discrimination, alleged prohibited personnel practices, and labor-management relations. The Board also exercises oversight authority over equal employment opportunity at the agency. The Board's procedural regulations applicable to GAO appear at 4 CFR parts 27 and 28. The Board is revising one section of these regulations to ensure consistency with current law.

The Board published section 28.2(c)(2) on November 23, 1993, effective January 1, 1994 (58 FR 61998, Nov. 23, 1993). The Board's regulation mirrored that of the Merit Systems Protection Board (MSPB) and conformed with 5 U.S.C. 7121. The regulations provided that bargaining unit employees could pursue prohibited personnel practice (PPP) claims at the Board or the MSPB, respectively, only if those claims involved discrimination, performance-based reduction in grade or removal, or an adverse action as defined in 5 U.S.C. 7512; an employee could choose either the administrative appeal route or the negotiated grievance procedure but not both. An individual with PPP claims beyond those specified in the PAB regulation or the earlier MSPB regulation did not have a choice of forum.

In 1994, Congress amended 5 U.S.C. 7121 by requiring that bargaining unit employees could elect to raise any PPP claim within the MSPB's jurisdiction either to the MSPB or through the parties' negotiated grievance procedures. Public Law 103-424, sec. 9(b), 108 Stat. 4361, 4365 (Oct. 29, 1994). The PAB now amends its regulations to ensure that GAO employees' rights are consistent with the statute. The amendment provides that a GAO employee who seeks to bring a PPP claim that is covered by a negotiated grievance procedure may elect either the negotiated grievance procedure or the procedure under PAB regulations. The special rule for such claims that involve allegations of discrimination remains unchanged.

The Board is making this amendment effective immediately upon publication, on an interim basis, to conform the regulation with the statutory requirement of 5 U.S.C. 7121. See GAO Employee Organization, IFPTE Local 1921 v. GAO, PAB Docket No. LMR 2001-02 (Aug. 24, 2011). At the same time, however, the Board is soliciting comments on the amendment. These comments will be considered fully before the final regulation is adopted.

On September 19, 2011, GAO issued revised Order 2351.1 regarding “Reduction in Force Procedures for the Government Accountability Office.” This Order was previously titled “Workforce Restructuring Procedures for the Government Accountability Office.” However, as stated in the revised Order, instead of “GAO-specific terms,” the Order is now adopting “governmentwide reduction-in-force terminology— i.e., reduction in force (RIF) is used rather than workforce restructuring.” In order to conform with GAO's revised Order, the Board is substituting “Reduction in Force” for the term “Workforce Restructuring Action,” in the definition section 28.3. It also is substituting Reduction in Force throughout part 28.

The Board is also making two additional nonsubstantive corrections to the regulations in the Table of Contents for part 28 and in section 28.113.

For the reasons set forth in the preamble, 4 CFR part 28 is amended as follows:

The supplemental information of this final rule is composed of four sections. Section I provides a background of the rulemaking. Section II provides a summary of provisions not being finalized by this action. Section III provides a summary of provisions being finalized. Section IV provides a summary of the comments received on the proposed rule and at the relevant USDA/Department of Justice (DOJ) Joint Competition workshops that occurred during the comment period and describes how sections of the proposed rule have been modified based on these comments. Section V provides the revised impact analyses including those required by Executive Orders 12866 and 13563, the Regulatory Flexibility Act, and the Paperwork Reduction Act.

The P&S Act was enacted in 1921 “to comprehensively regulate packers, stockyards, marketing agents and dealers.” 1 The P&S Act provides that “[t]he Secretary may make such rules, regulations, and orders as may be necessary to carry out the provisions of this chapter.”  2 The P&S Act also sets forth procedures for administratively adjudicating certain enforcement actions. 3 Title XI of the 2008 Farm Bill requires the Secretary of Agriculture to issue a number of regulations under the P&S Act, 1921, as amended. Among these instructions, the 2008 Farm Bill directed the Secretary to identify criteria to be considered in determining:

• Whether an undue or unreasonable preference or advantage has occurred in violation of the Act;

• Whether a live poultry dealer has provided reasonable notice to poultry growers of any suspension of the delivery of birds under a poultry growing arrangement;

• When a requirement of additional capital investments over the life of a poultry growing arrangement or swine production contract constitutes a violation of the Act;

• If a live poultry dealer or swine contractor has provided a reasonable period of time for a poultry grower or a swine production contract grower to remedy a breach of contract that could lead to termination of the poultry growing arrangement or swine production contract; and

• Whether the arbitration process provided in a contract provides a meaningful opportunity for the grower or producer to participate fully in the arbitration process.

In addition to developing criteria, the 2008 Farm Bill provided that livestock and poultry contracts must specifically disclose the right of the contract producer or grower to decline the requirement to use arbitration to resolve any controversy that may arise under the livestock or poultry contract.

On June 22, 2010, GIPSA published a Notice of Proposed Rulemaking in the Federal Register that proposed language for implementing both the Farm Bill provisions described above and a number of discretionary provisions, including a ban on packer-to-packer livestock sales, a requirement that dealers disclose their contracts, and more. Some of these provisions proved to be controversial, and the rule attracted more than 61,000 comments from the public (discussed below). As a result of information obtained from the public, GIPSA has reconsidered each of its proposed provisions. GIPSA has opted not to finalize some of those provisions at this time; others are finalized with changes. We will discuss in detail which provisions are finalized by this action, which are not, and the input we received from the public.

The proposed rule included several provisions related to the potential use of price premiums and related types of contracts such as marketing agreements in a manner that are potential violations of the P&S Act. However, comments identified a number of concerns raised by the proposed regulations related to price premiums and defining certain production arrangements. Specifically, many felt that, taken together, the proposed regulations would increase the potential for litigation thereby jeopardizing the continued use of these agreements. The rapid growth of value-added segments of the livestock industry based on alternative marketing agreements ( e.g. breed certifications, source verification, production method certification) has been beneficial for many producers and supported by consumer demand. GIPSA did not intend to limit the use of such arrangements and we determined this final rule would not include sections relating to price premiums and marketing agreements. This includes subsection 201.211(b) of the proposed rule. Related definitions in the proposed rule ( i.e., “Forward Contract,” “Marketing Agreement,” and “Production Contract,” proposed in sections 201.2(q), (r) and (s)) are also not being finalized at this time as the sections with which the definitions were associated are not included in this final rule.

Section 201.94(b) of the proposed rule that would have required packers, swine contractors and live poultry dealers to retain records justifying differential pricing decisions is not included in this final rule. As with sections related to price premiums, many comments suggested this requirement would contribute to a potential unintended consequence of eliminating or reducing the practice of offering price premiums.

While many comments indicated this requirement would have required the creation of new records, this was not the intention of the proposed rule. While this final rule does not contain the proposed changes regarding recordkeeping, this does not change the existing recordkeeping requirements. We expect covered entities to continue to comply with the existing requirements of 7 U.S.C. 221.

Section 201.212 related to packer-to-packer sales and packer relationships with dealers will not be finalized. Although some comments supported inclusion of these provisions, many comments raised serious concerns about potential adverse effects on the marketplace, such as encouraging further vertical integration and reducing the number of dealers and other buyers. While this section will not be finalized, we expect covered packers and dealers to continue to comply with the related portions of the Act (7 U.S.C. 192c-g) and existing regulations (9 CFR 201.69-70).

While section 201.217 of the proposed rule establishing specific requirements related to capital investments is not included in this final rule, the criteria required by the 2008 Farm Bill are being finalized, in modified form. Considering the variation that exists with respect to capital investments and payment terms in contracts, we believe stating criteria that the Secretary may use to determine whether certain terms in arrangements and contracts are in violation of the P&S Act is more appropriate. The associated definition of “Capital Investment” (proposed section 201.2(n)) will also not be included in this final rule.

Sections 201.2(t) and (u) of the proposed rule provided definitions for “competitive injury” and “likelihood of competitive injury” in an attempt to provide more clarity on the meaning of these terms. These definitions are not necessary for the purposes of this final rule and therefore are not included.

We believe this paragraph is unnecessary considering the sections related to price premiums and discounts are not included in the final rule. To avoid confusion over whether GIPSA regulations cover transactions between non-subject entities, we are deleting this paragraph from this final rule.

Comments were sharply divided with respect to proposed provision 201.3(c) with respect to harm to competition. Those supporting the proposal pointed out it would provide legal relief for farmers and ranchers who suffer because of unfair actions, such as false weighing and retaliatory behavior, without having to show competitive harm. Opposing comments relied heavily on the fact that several of the United States Courts of Appeals have ruled that harm to competition (or the likelihood of harm to competition) is a required element of a violation of sections 202(a) and (b)  4 of the P&S Act.

Section 201.210 of the proposed rule listed examples of conduct GIPSA considers to be unfair, unjustly discriminatory or deceptive practices or devices, in violation of section 202(a) of the P&S Act.

Section 201.211 established criteria the Secretary may consider in determining if conduct would violate section 202(b) of the P&S Act. While many commenters provided examples of similarly situated poultry growers and livestock producers receiving different treatment, several comments asked for additional clarification about the language proposed and were concerned about the impacts of the provision on marketing arrangements and other beneficial contractual agreements.

Section 201.213 of the proposed rule required the submission and potential publication of sample contracts. Most supporting comments stated that implementation of this rule would assure fairness and market transparency which would allow farmers and ranchers the opportunity to make informed decisions, it would promote fair competition, and it would allow efficient and evenhanded enforcement of the P&S Act. Some comments expressed concern with the lack of clarity and the ambiguity of this section of the proposed rule.

Section 201.214 of the proposed rule required live poultry dealers that pay poultry growers on a tournament system to pay all poultry growers raising and caring for the same type of poultry the same base pay, and that would prohibit paying poultry growers less than the base pay amount. The proposed provision also required that poultry growers be ranked in settlement groups with other poultry growers that raise and care for poultry in the same type of houses. Several comments were received indicating that the proposed provision needs to be revised.

The majority of the sections of the proposed rule that were required by the 2008 Farm Bill are being finalized with modifications. These sections include criteria regarding suspension of the delivery of birds (§ 201.215 of the proposal), additional capital investment (§ 201.216 of the proposal), breach of contract (§ 201.218 of the proposal), and arbitration (§ 201.219 of the proposal).

This section indicates the various criteria the Secretary may consider when determining whether a live poultry dealer has provided reasonable notice to poultry growers of any suspension of the delivery of birds under a poultry growing arrangement. These criteria include, but are not limited to, a written notice at least 90 days prior to suspension, written notice of the reason for the suspension of delivery, the length of the suspension of delivery, and the anticipated date the delivery of birds will resume.

This section indicates the various criteria the Secretary may consider when determining whether a requirement of additional capital investments over the life of a poultry growing arrangement or swine production contract constitutes a violation of the P&S Act.

This section indicates the various criteria the Secretary may consider when determining if a packer, swine contractor, or live poultry dealer has provided a reasonable period of time for a poultry/swine grower to remedy a breach of contract that could lead to termination of a production contract. These criteria include, but are not limited to, the form and substance of the notice following the discovery of a breach of contract.

This section requires production contracts that require the use of arbitration to include language on the signature page that allows the producer or grower to decline arbitration. This section also includes the criteria the Secretary may consider when determining if the arbitration process provided in a contract provides a meaningful opportunity for the poultry growers, swine production contract growers, or livestock producers to participate fully in the arbitration process. To implement this provision, it is necessary to clearly identify the applicability of the regulations to live poultry dealers.

The proposed rule published on June 22, 2010, (75 FR 35338) provided a 60-day comment period to end on August 23, 2010. In response to requests for an extension of time to file comments, on July 28, 2010, GIPSA extended the comment period to end on November 22, 2010 (75 FR 44163). GIPSA considered all comments postmarked or electronically submitted by November 22, 2010. Over 61,000 comments were received. The following discussion addresses written comments as well as comments received at two public meetings, on June 25, 2010, and August 27, 2010, that were conducted jointly by USDA and DOJ. Because two of these “Workshops on Competition in Agriculture” were held during the comment period for the proposed rule, the Secretary announced that any comments made in those forums would be considered comments on the rule. Only a portion of the sections of the proposed rule are being finalized at this time. The majority of the sections of the proposed rule that were required by the 2008 Farm Bill are being finalized with modifications. These sections include criteria regarding suspension of the delivery of birds (§ 201.215 of the proposal), additional capital investment (§ 201.216 of the proposal), breach of contract (§ 201.218 of the proposal), and arbitration (§ 201.219 of the proposal).

Summary of Comments: GIPSA received a few comments on this term suggesting some clarification be added. For example, commenters suggested that “principal part of performance” should be redefined to say “the forum for contentious proceedings ( i.e., arbitration or litigation) cannot be other than where the majority of the poultry or livestock are located.” An additional suggestion stated that this definition should be revised to specifically apply to swine marketing agreements, swine producers, and packers. Commenters recommended the definition be divided into sections by contract type and species.

Agency Response: This term references the services provided under livestock and poultry contracts and are used in conjunction with the location where those services are rendered. These services involve the raising and caring for livestock or poultry and would be provided in the location where the livestock or poultry is located. Any “contentious proceedings,” however, concern the quantity or quality of the services provided by the poultry grower or livestock producer and not the location of the livestock or poultry. We determined no changes to the definition were needed to address the location related comments. Given the diverse and dynamic nature of the livestock industry, we are not limiting the definition to swine marketing agreements, swine producers, and packers, as suggested by the commenter.

Summary of Comments: Many comments suggested the definition for “additional capital investment” should specify how additional capital investment would be calculated. Some comments also suggested the threshold was set too low if applied to the total operation. Comments stated that if “combined” is meant to be a cumulative figure over years, then that should be explained. In addition, they stated the word “combined” should be redefined to specify “additional capital investment means $25,000 or more * * * beyond the initial investment * * *”. Another comment suggested “additional capital investment” should provide for a percentage of the initial capital investment such as 10%, instead of a set amount of $25,000.

Agency Response: With respect to the comments requesting more clarity, we have reduced the dollar amount from $25,000 to $12,500 and added the phrase “per structure.” These changes were included to make the definition more applicable across a range of sizes of operations since those investments could vary depending on the number of houses a poultry or swine production contract grower operates. Specifically, we reduced the dollar amount so it would be more in relation to additional investments on a per structure basis. We have also modified the definition to clarify that the dollar amount relates to the total aggregate investment “over the life of the poultry growing arrangements or the swine production contracts.” With respect to the comment on defining additional capital investment as a percentage of the initial investment, we did not adopt this suggestion. We believe the dollar amount of the additional capital investment should stand alone and not be tied to the amount of the initial capital investment.

Summary of Comments: We received only a few comments on this definition. They presented some disagreement with the idea that a flock should be delivered before the next payment date. The comments expressed the belief that this was not practical, citing an example where a flock was picked up on a Thursday and under the terms of the contract, payment was due the next Thursday. In this example the commenter argued it would be highly unusual for the next flock to be delivered before that following Thursday and suggested some dealers might have to lengthen the payment period for the current flock.

Agency Response: Because the definition bases the payment date on section 410 of the P&S Act, which specifies a payment due date under poultry growing arrangements as the fifteenth day after the week in which the poultry was slaughtered, the example described by the commenter would not have required a notice of suspension of bird delivery under this rule. We made no changes to this definition based on the comments received.

Summary of Comments: Almost all of the comments related to the proposal to extend the regulations to all stages of a live poultry dealer's production, including the hatcheries, were favorable. They felt that pullet and breeder growers needed the same protections as those growing broiler chickens. Opponents said the USDA had no legal authority to subject eggs to the P&S Act. Other comments also indicated the term “laying hen” was not typically used in the broiler or turkey industry and the term “pullets” usually referred to birds that would become broiler breeders.

Agency Response: Commenters are correct that the P&S Act provides USDA no authority over eggs. It is for this reason we specifically excluded hens that only produce table eggs from this provision. The proposal does not include table eggs but rather those poultry classes involved in producing birds for slaughter. In response to comments on pullets, we are clarifying the exclusion by using the phrase “excluding egg-type pullets, hens that only produce table eggs, and breeder flocks for the egg industry.”

Summary of Comments: In a comment to the rulemaking proposal one party noted the “Effective Dates” was “very curiously drafted” as it would leave open a comparison between a spot market transaction after the effective date of the final regulations with a sale transaction based upon a pre-effective date marketing agreement. That commenter also asked whether a packer must “justify” a price differential in such a case.

Agency Response: The final regulations will require no such justification. A spot market transaction negotiated today will be inherently different in form and substance from a marketing agreement transaction consummated today based on terms negotiated when the market agreement was signed and made effective. This will be true with or without this rulemaking. The effective dates listed in this final rule would not necessitate documentation for price differences between spot market- and marketing agreement-based transactions. We made no changes to the wording of this paragraph.

Summary of Comments: GIPSA received several comments in favor of this provision. The comments generally said that growers were struggling financially because there was too much time between flocks and too few flocks. One comment stated that growers need 90 days to make financial arrangements to mitigate the effects of a reduction in cash flow caused by a suspension of deliveries. This time could be used to adjust loan payments with banks or to arrange to grow poultry for another poultry company. In addition, many growers agreed this would cause a reduction in the use of extended layouts as a form of retaliation, usually with no notice, for arbitrary reasons or to force upgrades.

There were a few opposing comments from live poultry dealers, stating that forcing them to work with a terminated grower for 90 days would put their birds at risk. They argued that suspended growers have no incentive to do a good job with their last flock and may even abandon their operation putting the birds at risk. Also, growers who are suspended because of poor flock management would put the birds at risk and cause the live poultry dealer to receive inferior product. An additional concern was for the safety of the live poultry dealer's employees from physical threats following the suspension of deliveries.

Other comments opposed the rule saying it did not give live poultry dealers the flexibility they needed to adjust to market conditions. For example, live poultry dealers may need to suspend the delivery of birds when the demand for product suddenly falls. There are times when a business forecaster cannot know 90 days ahead of time that the company will need to curtail production. Certain grower-specific reasons would make it practically impossible to give 90 days' suspension notice, they said.

One comment suggested the exact date of re-delivery following suspension may be impossible to determine. They said GIPSA should change the requirements for suspension of delivery notices to say the notices did not have to state the date deliveries would resume.

A commenter suggested bankruptcy be added to the list of emergency situations for which live poultry dealers might see a waiver of the notice requirement in subsection (c) of the proposed rule.

Agency Response: While those in general support of and in opposition to this provision spoke of bird delivery suspensions in the same context as grower contract terminations, this section applies only to extended layouts and not to terminations. Growers receiving a written suspension of delivery notice would still have a growing arrangement with the live poultry dealer and would expect to receive additional flocks. Additionally, this section is a list of criteria the Secretary may consider in determining whether reasonable notice of suspension of birds has been given; not a list of prohibitions.

With respect to concerns that providing a notice of suspension while the grower was in the midst of raising a flock would risk grower neglect or nonperformance, we feel poultry growing arrangements generally have other terms related to animal welfare or neglect that could be exercised to address this concern. Therefore, we decided not to adjust the section based on this comment. Similarly, threats against live poultry dealer employees can be addressed through other contract terms or reporting such actions to local law enforcement.

Some commenters suggested live poultry dealers could not plan 90 days in advance because of changes in the market. Considering the fact live poultry dealers coordinate the production process from the hatchery to slaughter, we believe planning is generally possible under the 90-day timeframe. Within this timeframe, live poultry dealers would usually know with some certainty what their production needs were for the current flock under production. A 90-day notice period would obligate a live poultry dealer to place at most one additional flock after the current flock. Finally, the rule provides a criterion to consider in determining whether a live poultry dealer's ability to provide notice has been impacted by a variety of unforeseen emergency situations.

While we agree the exact date that flock deliveries will resume may not be known, this final rule only establishes some criteria to be considered, and does not impose a specific requirement. Additionally, the rule discusses the “anticipated date,” which implies some level of uncertainty and adjustment if conditions change. We generally feel providing an idea about the length of the suspension is an important part of these criteria and included this in this final rule. With respect to bankruptcies as emergencies, there have been bankruptcies of live poultry dealers in recent years and we agree these events do create emergency situations. We included bankruptcy among the list of unforeseen emergency situations that the Secretary may consider when determining whether or not reasonable notice has been given for suspension of delivery of birds.

We made additional minor and non-substantive changes to the wording and ordering of some words within paragraphs in this section for clarity.

Summary of Comments: The comments on this section were mixed between support for the criteria and opposition. Supporters generally felt capital investment burdens were almost exclusively borne by the producers and growers and at the same time, they had little choice about whether or not to make the investments. These commenters felt the criteria provided a framework for establishing a more equitable balance. Comments opposed to this section generally expressed concern the criteria could result in not being able to terminate long-term contracts with poor producers or growers. Some comments also indicated the need to differentiate between capital investments that are required to repair or maintain a facility, which should be considered as capital investments, and those that are an upgrade or to implement new technology.

GIPSA also received some comments on specific criteria within the section. The first criterion involved consideration of whether growers had discretion in deciding against making capital investments. Comments in support of this provision believed it would provide growers and producers the ability to negotiate reasonable contract terms for animal production including the ability not to be forced to upgrade or change equipment without having input. Supportive comments also claimed this was necessary because upgrades were usually required by the companies although the grower or producer is the one who paid for them. Comments opposed to this criterion argued it would hinder growers or producers from making necessary improvements such as insurance requirements or mandatory capital investments. Comments also noted typical production contracts include insurance requirements and require insurance be used to reconstruct and repair facilities in the event of a fire or tornado or other natural damage. Under the proposal, these standard provisions may be unfair practices because the grower or producer cannot elect to keep the insurance proceeds.

Comments related to the paragraph on retaliation or coercion were only supportive. The comments said this rule was necessary to protect growers and producers from forced upgrades, retaliation or fear of losing their production contracts or poultry growing arrangements. Several commenters stated they had been or knew growers or producers who were being threatened with reduced placements, pay reductions, or contract revocation if they did not make upgrades. There were a few comments related to the criteria about capital investments required within 12 months of a planned significant reduction or end of operations that stated the proposed rule confused swine contractors with packers. Many comments from producers and growers supported this section because they made expensive upgrades only to see a decrease in the size of placements or to see the processing facility shut down. One grower stated he was required to retrofit his houses to grow bigger birds. The live poultry dealer declared bankruptcy a short time later and the grower did not get chickens for several months.

Two comments questioned the need for a waiver for natural disasters. They said such events should not give packers, swine contractors or live poultry dealers opportunity to require upgrades that go beyond necessary repairs. The comments also questioned why the waiver would only apply to live poultry dealers.

A comment in support of the criteria related to whether some growers or producers are required to make capital investments that other similarly situated growers or producers do not have to make claimed a particular firm required some growers to make more new capital investments to their facilities than was required of others. A few comments were against this criteria stating the phrase “similarly situated” was not defined. Another comment said that to require all poultry growers or swine production contract growers to make the same additional capital investment is not always possible. There will be circumstances that support requiring additional capital investments of only some growers or producers but not all, even if the growers or producers are otherwise similarly situated.

We received numerous comments in support of the criteria related to the age of prior upgrades or capital investments and whether recent upgrades had been completed. Comments from growers and producers expressed concern with having to make frequent upgrades, receiving no additional compensation for upgrades, and being given no choice about making the upgrades or not. Some expressed the belief that the criteria would discourage packers, swine contractors and live poultry dealers from demanding often unnecessary upgrades which tended to keep poultry growers and livestock producers in debt. One comment recounted being required to make changes to their poultry houses only a short time after the houses had been built according to company specifications. Two comments argued the provision was unintelligible and it provided no standards for determining whether additional capital investments constituted an unfair practice.

Almost every comment received concerning the criteria related to whether a grower or producer can be expected to recoup a required capital investment was favorable. Comments by growers and producers argued that any added compensation or enhanced efficiencies that might result from additional capital investments did not cover the cost of the investments. One comment stated that the wording regarding recouping the investment was vague and would invite litigation. Another comment said this criterion should be deleted because it was redundant or in conflict with a paragraph in the proposed Capital Investment Prohibitions (proposed section 201.217).

We received a small number of comments on the criterion which would have the Secretary examine the amount of time a grower was given to make a required capital investment. All of the comments supported this criterion. Those commenting said that when the same capital investment was required of all growers, resources and equipment would be in short supply and expensive due to the increased demand. Growers therefore need a reasonable amount of time to make the required capital investment.

Agency Response: With regard to comments that the criteria could eliminate the ability to terminate poor growers or producers, we note that the section consists of criteria and not specific requirements. Additionally, other terms within poultry growing arrangements and swine production contracts provide for ways to terminate based on non-performance and provide incentives to improve performance. We decided to include this section in this final rule with some modifications.

Some commenters suggest that the criterion addressing the provision of discretion to growers or producers would prevent any requirement for additional capital investments or even contract terms that require insurance proceeds to be used to rebuild. We believe these comments ignore the fact that this section provides criteria and not prohibitions. In the 2008 Farm Bill, Congress directed the Secretary to establish criteria and not specific prohibitions. This criterion is only a factor the Secretary may consider to evaluate whether a firm's investment requirement practices violate the P&S Act. With regard to comments that capital investments should not include maintenance and repair costs, we note that this distinction was made as part of the definition of “additional capital investment.”

With respect to the comments regarding a waiver due to natural disasters, we replaced the waiver provision with criterion and thereafter merged it with the criterion related to significantly reducing or ending operations. This will allow the Secretary to take into account whether a packer, swine contractor or live poultry dealer proffered justification, such as a catastrophic or natural disaster, or other emergency, when a poultry grower or swine production contract grower was required to make additional capital investments over the life of the production contracts or growing arrangements. We also added bankruptcy as a possible justification to be considered. A related comment questioned why a waiver would only apply to live poultry dealers. In the modified section, these justifications would not be limited to live poultry dealers.

With respect to the comment on the meaning of the phrase “similarly situated,” we believe the meaning is plain and does not require a definition within regulation. In determining whether two or more growers are “similarly situated,” the Secretary will consider whether poultry raised is of the same type, facilities are similar, and if the houses are in the same geographic area, among other factors.

With respect to comments on the criterion related to the age of and whether recent upgrades had been made, which felt the criteria was too vague to identify what practices were prohibited, we disagree. Since the criteria only provide factors that the Secretary may consider, these are not meant to be bright-line prohibitions. The Secretary will determine on a case-by-case basis whether the facts related to any applicable criterion are a violation of the P&S Act. The only change made to the wording of this criterion as a result of comments was to include the phrase “the number of” before the phrase “recent upgrades or capital investments.”

With respect to the comment suggesting that criterion related to recouping a capital investment was redundant with part of the proposed section 201.217, we note section 201.217 was not included in this final rule. Therefore this criterion was not removed. In addition to the above modifications to proposed paragraphs in this section, this final rule includes an additional criterion as a new paragraph (h) on whether required equipment changes were for previously approved and functioning equipment. This criterion is based on section 201.217(c) of the proposed rule that we felt was better included in this section as a criterion. The proposed paragraph required packers, swine contractors and live poultry dealers to provide adequate compensation incentives to poultry growers and swine production contract growers when requiring equipment changes on previously approved equipment, provided that equipment was in good working order.

Several comments on proposed section 201.217(c) said that GIPSA failed to define what constituted “adequate compensation incentives” and “good working order.” The comments said that this would cause disputes between the parties to poultry growing arrangements and livestock production contracts. It was also argued that the paragraph would preclude even necessary upgrades if a company could not afford to provide funding. Some said that discouraging technological advances would put the United States at a comparative disadvantage with other competing countries by decreasing efficiency and providing disincentives for innovation, including those that could improve food safety. Although there were many comments received in favor of this paragraph, many of them requested GIPSA define adequate compensation as the full cost of the upgrade at the time the upgrade was required.

Regarding the discussion of adequate compensation incentives, we feel this would place too large a financial burden on packers, swine contractors and live poultry dealers. By moving this paragraph from § 201.217 to § 201.216, we changed this provision from a requirement to that of a criterion the Secretary would consider to determine whether, in a particular instance, requiring a grower to make additional capital investments is a violation of the P&S Act. Based on the comments received, we feel this is the appropriate function for this provision. With regard to the capital investment criteria (§ 201.216 in the proposed rule), we feel using these criteria to determine whether certain arrangements are a violation of the P&S Act is more appropriate given the variation that exists with respect to capital investments and payment terms in contracts.

We made non-substantive wording changes to the introductory paragraph for this section to emphasize there were several criteria listed.

Summary of Comments: The 2008 Farm Bill required the Secretary to establish criteria the Secretary would use to determine if a reasonable period of time has been afforded to remedy a breach of contract that could lead to termination of a growing relationship. The majority of the comments supported the proposed section and felt that the list of criteria was reasonable. Several parties commented that the regulation did not allow processors to immediately terminate a growing agreement if the grower failed to comply with the processor's internal food safety or animal welfare requirements. Processors could be at risk for product liability suits, recalls, adverse press and damage to reputations if required to allow a grower to operate following a breach involving food safety or animal welfare standards.

We received many comments on the paragraph related to providing reasonable time to rebut an allegation that there was a breach of contract. Many of the comments argued against allowing growers time to provide rebuttals to significant breaches. Typical examples of significant breaches included those affecting animal welfare, abuse or food safety. Several comments said describing a sufficient amount of time for rebuttal as being “generally 14 days” was too vague and should be eliminated or explained further.

There were a few comments that stated certain paragraphs were vague or unclear and that the section should be rewritten so it would be more precise and less confusing.

Agency Response: With regard to the comments on animal welfare and food safety, we agree with the concerns raised by these comments. As a result, we added a sentence to the introductory paragraph which allows the terms of a livestock contract or poultry growing arrangement to control the actions of a packer, swine contractor or live poultry dealer when food safety or welfare of animals is at stake.

With respect to the commenter that felt the term “generally 14 days” in proposed section 201.218(d) needed revision, we agree and changed the wording to “adequate time” for rebuttal from the date of the breach notice. Since this section is criteria and not specific requirements, setting an exact time also did not seem appropriate.

With respect to the general comments regarding the need for better clarity and suggested revisions to make the paragraphs more precise, we agree. We made a number of changes to wording within criteria to make their meaning more clear. Additionally, several criteria either seemed redundant ( e.g. the criterion related to arbitration) or duplicative of other criteria ( e.g. criteria regarding notice within 90 days of breach) were not included in this final rule.

Summary of Comments: Almost all the comments on this section were supportive. Comments from growers and producers felt this was an important provision to protect their rights. Two comments expressed concern that live poultry dealers may terminate their relationship with growers that opted-out of arbitration when the live poultry dealers need to decrease production. Several comments expressed general opposition to the entire section and that anyone who did not like the arbitration terms in a contract should simply not enter into the contract instead of having a right to opt-out. One commenter identified the criterion related to whether arbitration procedures comply with the terms of the Federal Arbitration Act as an unnecessary addition to the rule. There were several comments on the provision that said failure to sign either the arbitration acceptance or declination statement voided the contract. Comments from two parties recommended that in the alternative, the rule should state failure to sign one of the elections meant the grower was opting-out of arbitration without voiding the contract. One other party suggested that if neither election is made the required arbitration clause portion of the contract was void.

Agency Response: With regard to comments concerning growers or producers being subject to retaliation for exercising their right to opt-out, we agree with this concern. We also point out that terminating relationships with growers because they exercised their right to opt-out of required arbitration under § 201.219 would be an unlawful practice. With regard to general comments against the right to opt-out of arbitration, we point out this provision was included in the 2008 Farm Bill. This provision implements section 210 of the P&S Act added by the 2008 Farm Bill. We have not included the criterion related to the Federal Arbitration Act in this final rule. We have concluded that if terms in a contract violate the Federal Arbitration Act, the remedies provided under that statute are better suited to address the issue than the P&S Act. With regard to the comments on failure to select the option to decline or to be bound by the arbitration terms, we tended to agree with the comments that voiding the entire contract was not necessary. We have modified the provision to say a failure to sign either of the “Right to Decline Arbitration” statements will be treated as if the contract producer or grower declined to accept the required arbitration clause in the contract.

While the comments generally did not focus on the specific arbitration criteria, we made a few changes to improve clarity. For example, one criterion said GIPSA would examine the extent to which impartial and unbiased neutrals would be used as arbitrators in deciding if contract producers and growers were allowed to participate fully in the arbitration process. In practice it is often the case that each party to the dispute names a non-neutral arbitrator to serve on an arbitration panel to hear and decide the dispute. Often, use of non-neutral arbitrators is necessary so that the arbitrators are qualified and have appropriate foundational knowledge of the industry to understand the facts of the case so a proper ruling can be made. The naming of a non-neutral arbitrator by a party to the arbitration process does not necessarily restrict a contract producer or grower from participating fully in the process. For these reasons, we removed this criterion. As another example, we combined the provision about the cost of arbitration with that of whether there are reasonable time limits in the arbitration process.

Summary of Comments: Thirty-seven comments were received on GIPSA's compliance with the analytical requirements of Executive Order 12866. Many of the comments favoring the proposed changes pointed to what they viewed as the deleterious effects of increased concentration on competition. For example, a number of commenters referred to declining farm prices and the declining farm share of the retail value of meat and poultry as indications that increased concentration had adversely affected producers. However, few comments provided numerical estimates of the economic benefits of the proposal.

Three comments, consisting of over 1,000 pages, expressed concern that the economic impacts of the proposed rule would be economically significant and submitted evidence that the proposed provisions might have costs of more than $1 billion per year. Comments also suggested the rule would hurt innovation and food safety and increase costs and prices to consumers. Commenters noted that for the cattle and hog industries adjustment costs would be related to the shifting away from the use of marketing arrangement forms of procurement and contracts in favor of the spot market and for poultry would entail overall losses of production efficiency in the conversion of factor inputs to product output. In the study prepared for the National Meat Association by Informa Economics, 75 percent of the economic costs associated with the proposed rule were associated with, in their view, relieving plaintiffs from the burden of proving competitive injury. 5

The Informa study estimated the aggregate impact of the June 22, 2010, proposed GIPSA rule for the U.S. meat and poultry industry at $1.64 billion (Table 1). The Informa study further estimated the value of lost production based on their estimated on-going and adjustment costs. The value of lost production totaled almost $1.1 billion or about 66 percent of the total estimated costs. The estimates differ because the total on-going and adjustment costs represent the cost to each industry before markets adjust to the changes in output. The value of lost industry production represents the cost to each industry after markets adjust to changes in output.

Agency Response: This final rule contains several significant changes based on the comments received during the comment period for the June 22, 2010 proposed rule. Many of the proposed provisions identified by commenters and in the Informa analysis as having the largest effect in the market are not included in this final rule.

We have considered all the analyses and information provided in comments as we completed the analysis for this final rule, but in some cases it was of limited use and refinement of estimates was difficult. For example, though the Informa study provided some insight into understanding the costs and benefits associated with many of the major proposed rule changes, it also has limitations. As detailed in the Informa study, “* * * it is important to recognize that it was impossible to structure the interview process in a way that provided a pure random sample and thus the information gleaned from the surveys should not be used to make statistical inferences about industry populations in a strict sense.”  6

It is also not clear whether those responding to the Informa survey based their input on the estimated cost associated with the proposed rule or a “worst case” scenario. As discussed by Gresenz et al., without a history of claims on which to base a prediction, it is difficult to accurately estimate the potential threat. 7 Gresenz et al. further notes that individuals are likely to over-estimate the likelihood that plaintiffs will win cases and decision makers may over-react to the small possibility of having to pay large penalties. To the extent this tendency to over-react to the small possibility of having to pay large penalties is reflected in the Informa study estimates, the Informa study costs over-estimate the costs associated with the proposed rule. Similarly, the estimates of the economic costs provided by Elam  [3] are potentially an over-estimate of the true costs because of the significant changes to the proposed rule.

Executive Orders 13563 and 12866 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, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget.

As discussed previously, Title XI of the 2008 Farm Bill requires the Secretary of Agriculture to issue a number of regulations under the P&S Act, 1921, as amended. Among these instructions, the 2008 Farm Bill directed the Secretary to identify criteria to be considered in determining:

• Whether an undue or unreasonable preference or advantage has occurred in violation of the Act;

• Whether a live poultry dealer has provided reasonable notice to poultry growers of any suspension of the delivery of birds under a poultry growing arrangement;

• When a requirement of additional capital investments over the life of a poultry growing arrangement or swine production contract constitutes a violation of the Act;

• If a live poultry dealer or swine contractor has provided a reasonable period of time for a poultry grower or a swine production contract grower to remedy a breach of contract that could lead to termination of the poultry growing arrangement or swine production contract; and

• Whether the arbitration process provided in a contract provides a meaningful opportunity for the grower or producer to participate fully in the arbitration process.

In addition to developing criteria, the 2008 Farm Bill provided that livestock and poultry contracts must specifically disclose the right of the contract producer or grower to decline the requirement to use arbitration to resolve any controversy that may arise under the livestock or poultry contract.

This rulemaking is necessary to fulfill statutory requirements.

Formal contractual arrangements cover a considerable share of U.S. poultry and livestock production. Contracting can minimize transaction costs, induce firms to make optimal investments in relationship specific asset and create production efficiency gains. Agricultural contracts can also lead to improvements in efficiency throughout the supply chain for products by providing farmers with incentives to deliver products consumers want and produce products in ways that reduce processing costs and, ultimately, retail prices. 8

In general, contracts are used more widely in pork and poultry production compared to cattle production. For example, in 2008 contracts covered 29 percent of cattle production. In comparison, contracts covered about 90 percent of poultry production and about 68 percent of hog production. While both hog and poultry operations use contracts extensively, there are important distinctions between the two industries. As discussed by MacDonald and Korb  9 (2011), hog contract enterprises are usually part of larger, diversified farming businesses, with the hog segment providing a relatively small share of the farm income. The farmers typically have a range of alternative outlets for contract hog production, and farm diversification provides a range of alternative uses for their own time. Farm households that engage in contract hog production have relatively high incomes compared with other households—both farm and nonfarm.

In contrast, contract broiler enterprises are likely to be part of smaller and less diversified farm businesses, and many broiler operations have only a single live poultry dealer in their area. As a result, their farm businesses are much more dependent on contract production, and their income from contract production is much more dependent on a single live poultry dealer. Operators of broiler farms have lower household incomes, on average, than operators of hog farms, and they depend far more on off-farm employment and income.

GIPSA maintains data on cattle, hogs, and sheep (collectively referred to as `livestock') slaughterers and live poultry dealers from the annual reports these firms file with GIPSA. Currently, there are 140 live poultry dealers (all but 16 are also poultry slaughterers and would be considered poultry integrators) that would be subject to the final rule. The Census of Agriculture (Census) indicates there are 727 swine contractors. An important factor in determining the economic effect of the regulations is the number of contracts held by a firm. Poultry/swine growers enter into a contract with one live poultry dealer/swine contractor, whereas a live poultry dealer/swine contractor may have a number of contracts with many growers. GIPSA records for 2007 indicated there were 20,637 poultry growing arrangements (contracts) of which 13,216, or 64 percent, were held by the largest 6 live poultry dealers, and 95 percent (19,605) were held by the largest 21 live poultry dealers. By comparison, there were 8,995 contract swine producers. Although there is a significant amount of concentration in the poultry and livestock industries (Table 3), the literature has typically not shown that buyers are able to exercise significant amounts of market power against sellers nationally. As shown in Table 3, the concentration of the four largest hog slaughterers rose from 34 percent in 1980 to a high of 64 percent in 2003 and has remained relatively stable since then.

On December 29, 2010, FSIS published the final rule, “Nutrition Labeling of Single-Ingredient Products and Ground or Chopped Meat and Poultry Products” in the Federal Register (75 FR 82148) that, among other things, amended the Federal meat and poultry products inspection regulations to require nutrition labeling of the major cuts of single-ingredient, raw meat and poultry products identified in §§ 317.344 and 381.444 that are not ground or chopped, except for certain exemptions. For these products, the final rule requires that nutrition information be provided on the label or at point-of-purchase (POP) ( e.g., by sign or brochure), unless an exemption applies. The final rule also amended FSIS's regulations to require nutrition labels on all ground or chopped meat and poultry products, with or without added seasonings, unless an exemption applies. In addition, the final rule provided that when a ground or chopped product does not meet the regulatory criteria to be labeled “low fat,” a lean percentage statement may be included on the label or in labeling as long as a statement of the fat percentage that meets the specified criteria also is displayed on the label or in labeling. The required statement of fat percentage must be contiguous to, in lettering of the same color, size, and type as, and on the same color background as, the statement of lean percentage. The final rule also provided several exemptions from the nutrition labeling requirements.

Outreach: In the preamble to the final rule, FSIS stated that it would conduct meetings and webinars on the final rule and would provide additional information and guidance as needed. FSIS also stated its intention to make nutrition labeling materials that can be used at the POP of the major cuts and additional examples of acceptable labels for ground products available on the Agency's Web site six months prior to the effective date. Since the final rule was published, FSIS has posted on its Web site the final POP materials and examples of nutrition facts panels for ground or chopped products and has conducted webinars on the final rule. In addition, the Agency has conducted many other education and outreach activities to assist retailers and Federal establishments in complying with the requirements of the final rule, such as posting a PowerPoint presentation on its Web site that gives an overview of the requirements of the final rule, presenting information and answering questions on the requirements of the final rule at numerous meetings, posting questions and answers on its Web site, and responding to numerous questions from stakeholders about the regulations through askFSIS at http://askfsis.custhelp.com/ .

FSIS received a letter dated August 12, 2011 from eight trade associations (the American Lamb Board, the American Meat Institute, the Food Marketing Institute, the National Cattlemen's Beef Association, the National Chicken Council, the National Grocer's Association, the National Pork Board, and the National Turkey Federation), which requested that FSIS exercise enforcement discretion for a six month period following the January 1, 2012, effective date of the final rule. The letter cited the Agency's 1-2 month delay in making POP and nutrition facts panel materials available on FSIS's Web site and in conducting the FSIS webinars as the basis for the enforcement discretion. As a result of FSIS's delay in providing this information to retailers, the trade associations stated that it would be difficult for retailers to have systems in place ( e.g., tens of thousands of scales across the industry will have to be replaced or updated with new software) and training of tens of thousands of employees completed by the January 1, 2012, effective date. The trade associations also stated that it would be difficult for Federal establishments to redesign thousands of labels and have them approved by FSIS by the January 1, 2012, effective date.

Because of the 1-2 month delay in making the FSIS POP materials and nutrition facts panel examples available on FSIS's Web site and in beginning the FSIS webinars, FSIS has decided to delay the effective date of the final rule until March 1, 2012. The 2 month delay will ensure that industry has sufficient time to comply with the final rule and be in full compliance with the final rule on March 1, 2012.

FSIS determined that a 6 month delay in the effective date is not warranted. The request did not provide any support to justify a 6 month delay in the effective date. Even if, as the letter stated, a delay in FSIS label approval exists, a 2 month delay in the effective date would allow the Agency enough time to approve the new or redesigned nutrition labels submitted by official establishments by March 1, 2012, provided the labels are submitted by January 1, 2012. As described above under “Outreach,” since the final rule was published, FSIS has conducted many education and outreach activities to assist retailers and Federal establishments in complying with the requirements of the final rule. FSIS will continue to conduct these education and outreach activities to assist compliance by March 1, 2012.

FSIS is making a correction to amendment 17f on page 82167 of the final regulations published on Wednesday, December 29, 2010, to clarify that language is being added to the end of the first sentence in § 381.500(d)(1), not at the end of the second sentence.

FSIS will announce this notice online through the FSIS Web page located at http://www.fsis.usda.gov/regulations_&_policies/Federal_Register_Notices/index.asp .

FSIS will also make copies of this Federal Register publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to constituents and stakeholders. The Update is communicated via Listserv, a free electronic mail subscription service for industry, trade groups, consumer interest groups, health professionals, and other individuals who have asked to be included. The Update is also available on the FSIS Web page. Through the Listserv and Web page, FSIS is able to provide information to a much broader and more diverse audience. In addition, FSIS offers an electronic mail subscription service which provides automatic and customized access to selected food safety news and information. This service is available at http://www.fsis.usda.gov/News_&_Events/Email_Subscription/ . Options range from recalls to export information to regulations, directives and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's Target Center at (202) 720-2600 (voice and TTY).

To file a written complaint of discrimination, write USDA, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW., Washington, DC 20250-9410 or call (202) 720-5964 (voice and TTY). USDA is an equal opportunity provider and employer.

In FR Doc. 2010-32485 appearing on page 82148 in the Federal Register of Wednesday, December 29, 2010, the following corrections are made:

Background

Federal Register Document FAA-2011-0010, Airspace Docket No. 11-AAL-1, published on April 28, 2011 (76 FR 23687), amends all Federal airways affected by the relocation of the Anchorage VOR navigation aid effective June 30, 2011. Due to a failed flight inspection, the FAA subsequently published in the Federal Register of June 16, 2011 a rule delaying the effective date from June 30, 2011, until further notice (76 FR 35097). Upon further inspection, the FAA removed two Federal airways in an amendment published in the Federal Register of October 20, (76 FR 65106). Two Federal airways were removed to be reworked as a separate rulemaking action. Satisfactory flight inspection results for the remaining Federal airways contained in the rule, as delayed and amended, have been accomplished the effective date is now established.

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

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

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies federal airways in Alaska.

Background

In Executive Order 12938 of November 14, 1994 (59 FR 59099, 3 CFR, 1994 Comp., p. 950), the President declared a national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy and economy of the United States posed by the proliferation of nuclear, biological and chemical weapons and the means of delivering such weapons. That emergency has been continued in effect through successive annual presidential notices. The authority for parts 730, 734, 736, 742, 744 and 745 of the EAR (15 CFR parts 730, 734, 736, 742, 744 and 745) rests in part on E.O. 12938, as amended, and on the successive annual notices continuing the emergency. This rule revises the authority citations in those parts of the CFR to cite the notice of November 9, 2011, which is the most recent such annual Presidential notice, and to remove the citation to the notice of November 4, 2010 on the same topic.

BIS is making these revisions so that title 15 of the CFR will cite the current authority for the parts mentioned above. This rule is purely procedural, and makes no changes other than to revise CFR authority citations paragraphs. It does not change the text of any section of the EAR, nor does it alter any right, obligation or prohibition that applies to any person under the EAR.

1. Executive Orders 13563 and 12866 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). This rule does not impose any regulatory burden on the public and is consistent with the goals of Executive Order 13563. This rule has been determined not to be a significant rule for purposes of Executive Order 12866.

2. 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 of 1995 (PRA), 44 U.S.C. 3501 et seq., unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule does not involve any collection of information.

3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

4. The Department finds that there is good cause under 5 U.S.C. 553(b)(3)(B) to waive the provisions of the Administrative Procedure Act requiring prior notice and the opportunity for public comment because they are unnecessary. This rule only updates legal authority citations and is nondiscretionary. This rule does not alter any right, obligation or prohibition that applies to any person under the EAR. Because these revisions are not substantive changes, it is unnecessary to provide notice and opportunity for public comment. In addition, the 30-day delay in effectiveness required by 5 U.S.C. 553(d) is not applicable because this rule is not a substantive rule. Because neither the Administrative Procedure Act nor any other law requires that notice of proposed rulemaking and an opportunity for public comment be given for this rule, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable.

Accordingly, the EAR (15 CFR parts 730-774) is amended as follows:

Elanco Animal Health, a division of Eli Lilly & Co., Lilly Corporate Center, Indianapolis, IN 46285, filed a supplement to NADA 141-064 for PULMOTIL 90 (tilmicosin phosphate) Type A medicated article. The supplemental NADA provides for the use of tilmicosin Type C medicated feeds by veterinary feed directive for the control of bovine respiratory disease (BRD) associated with Mannheimia haemolytica, Pasteurella multocida, and Histophilus somni in groups of beef and nonlactating dairy cattle where active BRD has been diagnosed in at least 10 percent of the animals in the group. The supplemental NADA is approved as of August 19, 2011, and 21 CFR 558.4 and 558.618 are amended to reflect the approval.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

Under section 512(c)(2)(F)(iii) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360b(c)(2)(F)(iii)), this supplemental approval qualifies for 3 years of marketing exclusivity beginning on the date of approval.

The Agency has carefully considered the potential environmental impact of this action and has concluded that the action will not have a significant impact on the human environment and that an environmental impact statement is not required. FDA's finding of no significant impact and the evidence supporting that finding, contained in an environmental assessment, may be seen in the Division of Dockets Management (address above) between 9 a.m. and 4 p.m., Monday through Friday.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 558 is amended as follows:

On August 10, 1995, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) published final regulations under Treas. Reg. § 1.881-3 relating to conduit financing arrangements pursuant to the authority granted by section 7701(l) of the Internal Revenue Code (the conduit financing regulations). See TD 8611 (1995-37 IRB 20; 60 FR 40997). On December 22, 2008, the Treasury Department and the IRS published in the Federal Register (73 FR 246) a notice of proposed rulemaking (REG-113462-08) that proposed amending § 1.881-3(a)(2)(i)(C) of the conduit financing regulations to treat an entity disregarded as an entity separate from its owner for U.S. tax purposes as a person for purposes of determining whether a conduit financing arrangement exists. The proposed regulations were proposed to be effective as of the date final regulations are published in the Federal Register . In addition, the preamble to the proposed regulations requested comments on whether “hybrid instruments” (instruments treated as debt for foreign law purposes and equity for U.S. purposes) should constitute per se “financing transactions” under § 1.881-3(a)(2)(ii)(A) and part of a “financing arrangement” within the meaning of § 1.881-3(a)(2)(i)(A), or whether, at a minimum, certain hybrid instruments should be so treated, depending on specific factors or criteria.

Only one comment letter responding to the notice of proposed rulemaking was received. No public hearing was requested or held. After consideration of the comment, this Treasury decision adopts the proposed regulations with minor edits to Example 3 and to clarify that the effective date of the final regulations also applies to new Example 3.

The comment supported the proposed regulations and their interpretation of the term “person” to include a business entity that is disregarded as an entity separate from its single member owner under § 301.7701-1 through § 301.7701-3. The comment stated that to disregard an entity that is “regarded” for purposes of claiming treaty benefits would be inconsistent with the policy and purpose of the anti-conduit financing regulations.

As relates to hybrid instruments, the comment did not support either approach raised in the preamble to the proposed regulations, expressing both policy and administrative concerns with each. The comment stated that any specific abuses that the Treasury Department and the IRS were concerned about could be better addressed by a more targeted rule that described the specific transactions and limited the application of the regulations to those transactions. In light of the wide array of considerations raised, the Treasury Department and the IRS have decided to continue to study the area and not to provide any specific rules on hybrid instruments as part of this regulation package. Accordingly, these regulations are finalized without change, except to clarify that the effective date of the final regulations also applies to new Example 3 and to make minor edits to Example 3. The Treasury Department and the IRS continue to solicit comments on the treatment of hybrid instruments in financing transactions.

No inference should be drawn from any provision of these final regulations as to the treatment of financing transactions entered into with disregarded entities before the effective date of these final regulations or involving hybrid instruments.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Quyen P. Huynh of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

On September 1, 2011, we published a notice of proposed rulemaking (NPRM) entitled “International Anti-fouling System Certificate” in the Federal Register (76 FR 54419). We did not receive any comments on the NPRM. No public meeting was requested and none was held.

The Coast Guard is amending 46 CFR 8.320(b) by adding the International Anti-fouling System (IAFS) Certificate to the current list of international convention certificates included in that paragraph. Adding the IAFS Certificate to § 8.320(b) will allow the Coast Guard to authorize recognized classification societies to issue IAFS Certificates. Authorization will be based on the Coast Guard's review of applicable class rules and applicable classification society procedures. See 46 CFR 8.320(a). For successful applicants, the Coast Guard will then enter into a written agreement with a recognized classification society authorized to issue international convention certificates. The agreement will define the scope, terms, conditions, and requirements of that delegation. See 46 CFR 8.320(c).

The Coast Guard Authorization Act of 2010 at Title X, Public Law 111-281, 124 Stat. 3023, 33 U.S.C. 3801 to 3857 (Oct. 15, 2010), directs the Secretary of Homeland Security to administer and enforce the International Convention on the Control of Harmful Anti-fouling Systems on Ships, 2001 (Convention). The Secretary has delegated to the Commandant of the Coast Guard her authority under 33 U.S.C. 3803, 3805, 3821-3823, 3842(a), 3852(a)-(e), and 3855 to implement, administer, and enforce the Convention. Section 1021 of Title X (33 U.S.C. 3821) and Regulation 2 of Annex 4 of the Convention call for U.S. Government officials, or an organization identified by the United States, to issue IAFS Certificates to ships whose anti-fouling systems fully comply with the Convention.

Under the Convention, an “anti-fouling system” is defined as a coating, paint, surface treatment, surface, or device that is used on a ship to control or prevent attachment of unwanted organisms. The Convention is currently focused on reducing pollution caused by organotin compounds used in anti-fouling systems.

Since the mid-1990s, under authority of 46 U.S.C. 3103, 3306, 3316 and 3703, and regulations in 46 CFR part 8, the Coast Guard has authorized recognized classification societies to issue international certificates to vessels. The United States currently recognizes six classification societies for purposes of issuing international certificates: the American Bureau of Shipping (ABS, United States), Det Norske Veritas (DNV, Norway), Lloyd's Register (LR, Great Britain), Germanischer Lloyd (GL, Germany), Bureau Veritas (BV, France), and RINA, S.p.A. (RINA, Italy).

The list of international certificates the Coast Guard may authorize a recognized classification society to issue appears in 46 CFR 8.320. That list currently includes 12 certificates, but does not include the IAFS Certificate.

We received no comments on the NPRM and we made no changes in the regulatory text in going from the proposed rule to this final rule.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 14 of these statutes or executive orders.

Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the 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 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has not been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, this final rule has not been reviewed by the Office of Management and Budget. A regulatory assessment follows:

Under the authority of 46 U.S.C. 3103, 3306, 3316, and 3703, the Coast Guard amends 46 CFR 8.320, to enable the Coast Guard to delegate the activity of issuing IAFS Certificates to a recognized classification society which would act on behalf of the Coast Guard. The intent of this final rule is only to allow for the delegation of IAFS Certification to recognized class societies; it does not impose mandatory actions on the U.S. maritime industry.

We received no comments and found no additional information or data that would cause us to change our regulatory assessment in the “Regulatory Planning and Review” section of the NPRM. We, therefore, have adopted the regulatory assessment of the NPRM as final.

This final rule initiates the process that will allow recognized classification societies to issue IAFS Certificates on behalf of the Coast Guard. Any recognized classification society that wishes to issue IAFS Certificates on the Coast Guard's behalf will be required to request a delegation of authority from the Coast Guard pursuant to the procedures in 46 CFR part 8. In response, the Coast Guard will evaluate the application, and review the applicant's applicable class rules and applicable classification society procedures, before deciding whether to issue a delegation of authority to the applicant.

Although requesting the delegation of authority to conduct IAFS surveys, inspections, and certifications is voluntary, classification societies will incur minor costs associated with this process. The Coast Guard will also incur costs associated with the evaluation of these requests and the issuance of delegations of authority to recognized classification societies.

The Coast Guard expects that this final rule will potentially affect six classification societies which may request a delegation of authority to issue IAFS Certificates. The Coast Guard used OMB-approved collections of information (1625-0101, 1625-0095, 1625-0093, and 1625-0041) to estimate the costs and burden.

The Coast Guard anticipates that each classification society will take about 5.25 hours to review the rulemaking requirements and prepare the delegation request. The total one-time cost for all six classification societies is expected to be $2,800 (rounded).

In addition, the Coast Guard will incur a one-time cost to review and approve the requests for delegation from each of the classification societies. Based on the OMB-approved collections of information discussed above, the Coast Guard will take about 5 hours to review, approve, and issue an order to delegate authority. The Coast Guard will incur a total one-time cost of $2,200 (rounded) based on OMB-approved collection of information estimates.

The total one-time cost of this rule is expected to be $5,000 (non-discounted) for classification societies and the Government combined.

This final rule will result in several benefits to the U.S. maritime industry. First, it will result in a reduction of potential wait time for IAFS Certificates. In the absence of delegation of authority to classification societies, vessel owners and operators would experience delays while the Coast Guard processes and issues IAFS Certificates. Combined with the Coast Guard's other activities and responsibilities, such a process would result in an unnecessary and burdensome wait for vessels. By issuing delegation of authority to classification societies, the Coast Guard will not have to redirect resources that would be used for other missions, resulting in a more efficient use of Government resources. Finally, this final rule will mitigate potential consequences to U.S.-flagged vessels due to non-compliance with the Convention, including costly vessel detentions in foreign ports.

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

Classification societies affected by this rule are classified under one of the following North American Industry Classification System (NAICS) 6-digit codes for water transportation: 488330—Navigation Services to Shipping, 488390—Other Support Activities for Water Transportation, or 541611—Administrative Management and General Management Consulting Services.

The Coast Guard did not find any classification societies directly affected by this rule that are small businesses or governments with populations of less than 50,000. The predominant U.S. classification society is the American Bureau of Shipping (ABS). ABS is a privately owned non-profit organization that is dominant in its field (Source: 2011 Hoovers, http://www.hoovers.com/company/American_Bureau_of_Shipping_Inc/rfsksji-1.html ). Based on publicly available information, ABS has more than 3,000 employees and an annual revenue of more than $800 million (Source: 2011 Bloomberg, http://investing.businessweek.com/research/stocks/private/person.asp?personId=28915205&privcapId=4217113&previousCapId=764755&previousTitle=ABS%20Group%20of%20Companies,%20Inc ). We do not consider ABS to be a small entity under the Regulatory Flexibility Act. The other classification societies affected by this rule are foreign owned and operated.

The Coast Guard expects that this final rule will not have a significant economic impact on a substantial number of small entities. As described in section VI.A. of this preamble, “Regulatory Planning and Review,” the anticipated cost of this rule, per class society, is less than $500. This rule is not mandatory, and classification societies, regardless of size, will choose to participate only if the benefits are greater than the costs.

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult CDR Ryan Allain, Environmental Standards Division, Coast Guard, telephone (202) 372-1430 or email ryan.d.allain@uscg.mil . The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This final rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) because the Coast Guard expects that the number of applications will be less than 10 in any given year.

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled, now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels) are within the field foreclosed from regulation by the States. (See the decision of the Supreme Court in the consolidated cases of United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 120 S. Ct. 1135 (March 6, 2000).). We have evaluated this rule under E.O. 13132 and have determined that it is preemptive of state law or regulation since Congress intended the Coast Guard to regulate the issuance of international certificates that demonstrate compliance with international conventions requiring antifouling systems aboard U.S. flagged vessels certificated for international voyages, including certificates issued by recognized classification societies. Because States may not promulgate rules within this category, preemption is not an issue under Executive Order 13132.

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

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

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

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

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

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 13211 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2-1, paragraphs (34)(b) and (d), of the Instruction, and under section 6(b) of the “Appendix to National Environmental Policy Act: Coast Guard Procedures for Categorical Exclusions, Notice of Final Agency Policy” (67 FR 48243, July 23, 2002). This rule involves the delegation of authority, the inspection and documentation of vessels, and congressionally-mandated regulations designed to improve or protect the environment. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 8 as follows:

DoD, GSA, and NASA published a final rule, FAR Case 2011-014, Successor Entities to the Netherlands Antilles, in the Federal Register of Wednesday, November 2, 2011 (76 FR 68039). The rule amended the Federal Acquisition Regulation (FAR) by revising the definitions of “Caribbean Basin country” and “designated country” due to the change in status of the islands that comprised the Netherlands Antilles.

As published, the regulations contain technical errors in the promulgated rule.

Accordingly, 48 CFR part 52 is corrected by making the following correcting amendments:

Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27 subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) among the various domestic fishing categories, per the allocations established in the 2006 Consolidated HMS Fishery Management Plan (2006 Consolidated HMS FMP) (71 FR 58058, October 2, 2006) and subsequent rulemakings.

The 2012 BFT fishing year, which is managed on a calendar year basis and subject to an annual calendar year quota, begins January 1, 2012. Starting on January 1, 2012, the General category daily retention limit (§ 635.23(a)(2)) reverts back to the default retention limit of one large medium or giant BFT (measuring 73 inches (185 cm) CFL) or greater per vessel per day/trip under the regulations unless otherwise provided. This default retention limit applies to General category permitted vessels and HMS Charter/Headboat category permitted vessels (when fishing commercially for BFT).

Each of the General category time periods (January, June-August, September, October-November, and December) is allocated a portion of the annual General category quota, thereby ensuring extended fishing opportunities throughout the fishing season, particularly in years when catch rates are high. For the 2011 fishing year to date, NMFS adjusted the General category limit from the default level of one large medium or giant BFT as follows: Two large medium or giant BFT for January (75 FR 79309, December 20, 2010); three large medium or giant BFT for June through August (76 FR 32086, June 3, 2011); three large medium or giant BFT for September through November 5, 2011 (76 FR 52886, August 24, 2011); and two large medium or giant BFT for November 6 through December 31, 2011 (76 FR 69137, November 8, 2011). The November 6, 2011, adjustment to a limit of two large medium or giant BFT was in conjunction with an inseason quota transfer of 50 mt from the Reserve category to the General category.

The 2010 ICCAT recommendation regarding western BFT management resulted in baseline U.S. quotas for both 2011 and 2012 of 923.7 mt (not including a 25-mt allocation that the United States uses to account for bycatch of BFT in pelagic longline fisheries in the Northeast Distant Gear Restricted Area (NED)). Consistent with the allocation scheme established in the Consolidated HMS FMP, the baseline 2012 General category share would be 435.1 mt, and the baseline 2012 January General category subquota would be 23.1 mt.

In order to implement the ICCAT recommendation for 2012, NMFS is planning to publish proposed quota specifications in the beginning of 2012 to set BFT quotas for each of the established domestic fishing categories. Until the 2012 quota specifications are finalized (most likely in the spring of 2012), the January General category baseline quota of 23.1 mt (established for 2011) remains in effect. In the meantime, the General category BFT fishery remains active into the winter, with landings reported in November and December.

Under current regulations (50 CFR 635.23(a)(4)), NMFS may increase or decrease the daily retention limit of large medium and giant BFT over a range of zero to a maximum of five per vessel based on consideration of the criteria provided under § 635.27(a)(8), which include: The usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock; the catches of the particular category quota to date and the likelihood of closure of that segment of the fishery if no adjustment is made; the projected ability of the vessels fishing under the particular category quota to harvest the additional amount of BFT before the end of the fishing year; the estimated amounts by which quotas for other gear categories of the fishery might be exceeded; effects of the adjustment on BFT rebuilding and overfishing; effects of the adjustment on accomplishing the objectives of the fishery management plan; variations in seasonal distribution, abundance, or migration patterns of BFT; effects of catch rates in one area precluding vessels in another area from having a reasonable opportunity to harvest a portion of the category's quota; and a review of dealer reports, daily landing trends, and the availability of the BFT on the fishing grounds. A recent regulatory amendment (76 FR 74003, November 30, 2011), increased the maximum possible daily retention limit to 5 fish. Although the default end of the January subquota period is January 31, 2012, the regulatory amendment also extends the allowable duration of the January subquota period until the January subquota has been harvested or March 31, 2012, whichever comes first.

NMFS has considered the set of criteria cited above and their applicability to the General category BFT retention limit for the January 2012 General category fishery. A principal consideration is the objective of providing opportunities to harvest the full January subquota, without exceeding it based upon the Consolidated HMS FMP goal: “Consistent with other objectives of this FMP, to manage Atlantic HMS fisheries for continuing optimum yield so as to provide the greatest overall benefit to the Nation, particularly with respect to food production, providing recreational opportunities, preserving traditional fisheries, and taking into account the protection of marine ecosystems”. The January subquota has been underharvested in recent years. Under the two fish limit that applied during January 2011, January landings were 34 percent of the subquota (7.9 mt out of the baseline January subquota of 23.1 mt). Similarly, during the 2010 January subquota period, under a two fish limit, 11 percent of the baseline January subquota was harvested (2.7 mt out of the baseline January subquota of 23.8 mt). Based upon the ICCAT recommended quota, the baseline 2012 General category January subquota would also be 23.1 mt. Therefore, based on these criteria, NMFS has determined that the General category retention limit should be increased from the one fish default limit. Accordingly, NMFS increases the General category retention limit to two large medium or giant BFT, measuring 73 inches CFL or greater, per vessel per day/trip, effective January 1, 2012, through March 31, 2012, or until the January subquota is harvested, whichever comes first.

Although NMFS has the authority to set the daily retention limit higher than two BFT, under a relatively high limit (and fish availability), the rate of harvest of the January subquota could be accelerated and result in a relatively short fishing season. A short fishing season may preclude or reduce fishing opportunities for some individuals or geographic areas. Therefore, in order to maintain an equitable distribution of fishing opportunities, a retention limit closer to the low end of the allowable range of retention limits (i.e., two fish) is warranted. A potential ancillary benefit from a subquota period that is open for an extended duration is that any scientific information (including biological samples) collected from BFT may be from fish collected over a broader temporal and geographic range than currently sampled. Lastly, fishery participants have supported this retention limit in prior seasons.

This General category retention limit is effective in all areas, except for the Gulf of Mexico, and applies to those vessels permitted in the General category as well as to those HMS Charter/Headboat permitted vessels fishing commercially for BFT. Regardless of the duration of a fishing trip, the daily retention limit applies upon landing. For example, whether a vessel fishing under the General category limit takes a two-day trip or makes two trips in one day, the daily limit of two fish may not be exceeded upon landing.

This adjustment is intended to provide a reasonable opportunity to harvest the U.S. quota of BFT without exceeding it, while maintaining an equitable distribution of fishing opportunities, to help achieve optimum yield in the General category BFT fishery, to collect a broad range of data for stock monitoring purposes, and to be consistent with the objectives of the Consolidated HMS FMP.

NMFS selected the daily retention limit for January 2012 after examining an array of data as it pertains to the determination criteria. These data included, but were not limited to, current and previous catch and effort rates, quota availability, previous public comments on inseason management measures, and stock status. NMFS will continue to monitor the BFT fishery closely through the mandatory dealer landing reports, which NMFS requires to be submitted within 24 hours of a dealer receiving BFT. Depending on the level of fishing effort and catch rates of BFT, NMFS may determine that future adjustments to the retention limit are necessary to ensure available quota is not exceeded or to enhance scientific data collection from, and fishing opportunities in, all geographic areas.

Closure of the General category or subsequent adjustments to the daily retention limit, if any, will be published in the Federal Register . In addition, fishermen may call the Atlantic Tunas Information Line at (888) 872-8862 or (978) 281-9260, or access www.hmspermits.gov, for updates on quota monitoring and retention limit adjustments.

The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

The regulations implementing the Consolidated HMS FMP provide for inseason retention limit adjustments to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Affording prior notice and opportunity for public comment to implement these retention limits is impracticable as it would preclude NMFS from acting promptly to allow harvest of BFT that are available on the fishing grounds. Analysis of available data shows that the General category BFT retention limits may be increased with minimal risks of exceeding the ICCAT-allocated quota.

Delays in increasing these retention limits would adversely affect those General and Charter/Headboat category vessels that would otherwise have an opportunity to harvest more than the default retention limit of one BFT per day and may exacerbate the problem of low catch rates and quota rollovers. Limited opportunities to harvest the respective quotas may have negative social and economic impacts for U.S. fishermen that depend upon catching the available quota within the time periods designated in the Consolidated HMS FMP. Adjustment of the retention limit needs to be effective January 1, 2012, to minimize any unnecessary disruption in fishing patterns and for the impacted sectors to benefit from the adjustments so as to not preclude fishing opportunities for fishermen who have access to the fishery only during this time period. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For these reasons, there is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

This action is being taken under 50 CFR 635.23(a)(4) and is exempt from review under Executive Order 12866.

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

The 2011 initial total allowable catch (ITAC) of sculpins in the Bering Sea subarea was established as 4,420 metric tons (mt) by the final 2011 and 2012 harvest specifications for groundfish of the BSAI (76 FR 11139, March 1, 2011). In accordance with § 679.20(a)(3) the Regional Administrator, Alaska Region, NMFS, has reviewed the most current available data and finds that the ITAC for sculpins in the Bering Sea subarea needs to be supplemented from the non-specified reserve in order to promote efficiency in the utilization of fishery resources in the BSAI and allow fishing operations to continue.

Therefore, in accordance with § 679.20(b)(3), NMFS apportions from the non-specified reserve of groundfish 780 mt to the sculpins ITAC in the Bering Sea subarea. This apportionment is consistent with § 679.20(b)(1)(i) and does not result in overfishing of a target species because the revised ITAC is equal to or less than the specifications of the acceptable biological catch in the final 2011 and 2012 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011).

The harvest specification for the 2011 sculpins ITAC included in the harvest specifications for groundfish in the BSAI is revised as follows: 5,200 mt for sculpins in the Bering Sea subarea.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA) finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) and § 679.20(b)(3)(iii)(A) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the apportionment of the non-specified reserves of groundfish to the sculpins fishery in the Bering Sea subarea. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery, to allow the industry to plan for the fishing season, and to avoid potential disruption to the fishing fleet and processors. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of November 30, 2011.

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

Under § 679.20(b)(3)(iii), interested persons are invited to submit written comments on this action (see ADDRESSES ) until December 21, 2011.

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

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

The C season apportionment of the 2011 Pacific cod TAC specified for vessels using trawl gear in the BSAI is 5,458 metric tons (mt) for the period 1200 hrs, A.l.t., June 10, 2011, through 1200 hrs, A.l.t., November 1, 2011, as established by the final 2011 and 2012 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011) and subsequent reallocation (76 FR 54137, August 31, 2011).

The Administrator, Alaska Region, NMFS (Regional Administrator) has determined that trawl catcher vessels will not be able to harvest 2,500 mt of the C season apportionment of the 2011 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)( 9 ). The Regional Administrator has determined that the projected unharvested amount is unlikely to be harvested by any of the other sectors described in § 679.20(a)(7)(iii)(A). On October 24, 2011, NMFS prohibited directed fishing for Pacific cod by vessels using pot gear in the BSAI to limit incidental catch of octopus (76 FR 66655, October 27, 2011). Therefore, in accordance with § 679.20(a)(7)(iii)(A), NMFS apportions from the C season trawl catcher vessel apportionment 1,750 mt of Pacific cod to the B season apportionment for AFA trawl catcher/processors apportionment and 750 mt to the B season apportionment for catcher/processors using hook-and-line gear.

The C season apportionment of the 2011 Pacific cod TAC specified for jig gear in the BSAI is 570 mt for the period 1200 hrs, A.l.t., August 31, 2011, through 1200 hrs, A.l.t., December 31, 2011, as established by the final 2011 and 2012 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011).

The Regional Administrator has determined that the jig gear sector will not be able to harvest 370 mt of the C season apportionment of the 2011 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)( 1 ). The Regional Administrator has determined that the projected unharvested amount is unlikely to be harvested by any of the other sectors described in § 679.20(a)(7)(iii)(A). Therefore, in accordance with § 679.20(a)(7)(iii)(A), NMFS apportions from the C season jig gear apportionment 370 mt of Pacific cod to the B season apportionment for catcher/processors using hook-and-line gear.

The harvest specifications for Pacific cod included in the final 2011 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011) are revised as follows: 2,958 mt for catcher vessels using trawl gear and 200 mt for jig gear to the C season apportionments and 2,920 mt for AFA trawl catcher/processors and 49,499 mt for catcher/processors using hook-and-line gear to the B season apportionments.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the reallocation of Pacific cod specified from trawl catcher vessels and jig gear to AFA trawl catcher/processors and catcher/processors using hook-and-line gear. Since fisheries are currently open, it is important to immediately inform the industry as to the revised allocations. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery, to allow the industry to plan for the fishing season, and to avoid potential disruption to the fishing fleet as well as processors. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 1, 2011.

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

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