Table of Contents I. Background and Authority II. Summary of the Final Rule III. Discussion A. Products Covered by the Final Rule B. Compliance Dates for the Amended Test Procedures C. Test Procedure Amendments Incorporated in This Final Rule 1. Default Values for CT L and CT M 2. Modification of Long-Time and Variable Defrost Test Method To Fully Capture Energy Use for Temperature Recovery D. Other Issues 1. Anti-Circumvention Language 2. Refrigeration Products Designed for Sale With or Without Icemakers 3. Wine Storage and Combination Wine Storage Products 4. Multiple Compressor Systems 5. Triangulation E. Compliance With Other EPCA Requirements 1. Test Burden 2. Changes in Measured Energy Use IV. Procedural Requirements A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act of 1995 D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under Section 32 of the Federal Energy Administration Act of 1974 M. Congressional Notification V. Approval of the Office of the Secretary I. Background and Authority

Title III of the Energy Policy and Conservation Act (42 U.S.C. 6291, et seq.; “EPCA” or, “the Act”) sets forth a variety of provisions designed to improve energy efficiency. (All references to EPCA refer to the statute as amended through the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140 (Dec. 19, 2007)). Part B of title III (42 U.S.C. 6291-6309), which was subsequently redesignated as Part A for editorial reasons, establishes the “Energy Conservation Program for Consumer Products Other Than Automobiles.” Refrigerators, refrigerator-freezers, and freezers (collectively referred to below as “refrigeration products”) are all treated as “covered products” under this Part. (42 U.S.C. 6291(1)-(2) and 6292(a)(1)) Under the Act, this program consists essentially of three parts: (1) Testing, (2) labeling, and (3) Federal energy conservation standards. The testing requirements consist of test procedures that manufacturers of covered products must use (1) as the basis for certifying to the U.S. Department of Energy (DOE) that their products comply with the applicable energy conservation standards adopted under EPCA, and (2) for making representations about the efficiency of those products. Similarly, DOE must use these test requirements to determine whether the products comply with any relevant standards promulgated under EPCA.

By way of background, the National Appliance Energy Conservation Act of 1987 (NAECA), Public Law 100-12, amended EPCA by including, among other things, performance standards for refrigeration products. (42 U.S.C. 6295(b)) On November 17, 1989, DOE amended these performance standards for products manufactured on or after January 1, 1993. 54 FR 47916. DOE subsequently published a correction to revise these new standards for three product classes. 55 FR 42845 (October 24, 1990). DOE again updated the performance standards for refrigeration products on April 28, 1997, for products manufactured on or after July 1, 2001. 62 FR 23102.

EISA 2007 amended EPCA by requiring DOE to publish a final rule determining whether to amend the energy conservation standards for refrigeration products manufactured starting in 2014. (42 U.S.C. 6295(b)(4)) Consistent with this requirement, DOE issued on September 18, 2008, a framework document that outlined a series of issues related to its examination of potential amendments to the standards for refrigeration products. 73 FR 54089. On September 29, 2008, DOE held a public workshop to discuss the framework document and the issues it raised. The framework document identified several test procedure issues, including: (1) Compartment temperature changes; (2) modified volume calculation methods; (3) products that deactivate energy-using features during energy testing; (4) variable anti-sweat heaters; (5) references to the updated AHAM Standard HRF-1-2008, (“HRF-1-2008”), “Energy and Internal Volume of Refrigerating Appliances (2008),” developed by the Association of Home Appliance Manufacturers (AHAM), including the “Errata to Energy and Internal Volume of Refrigerating Appliances, Correction Sheet” issued on November 17, 2009; (6) convertible compartments; and (7) harmonization with international test procedures. (“Energy Conservation Standards Rulemaking Framework Document for Residential Refrigerators, Refrigerator-Freezers, and Freezers,” RIN 1904-AB79, Docket No. EERE-2008-BT-STD-0012). DOE conducted analyses and developed new energy conservation standards for refrigeration products that led to the eventual publication of the final rule adopting new energy conservation standards for refrigeration products manufactured starting September 15, 2014. See 76 FR 59516 (Sept. 15, 2011) (“standards final rule”) and 76 FR 70865 (Nov. 16, 2011) (date correction notice).

DOE initiated the test procedure rulemaking in part to address the issues identified in the framework document, and published a notice of proposed rulemaking on May 27, 2010, hereafter referred to as “the NOPR.” 75 FR 29824. In response to issue (3) above, as applied to automatic icemakers, DOE separately published a guidance document addressing various aspects related to the icemaker, including the proper manner in which to render an icemaker inoperative for the energy consumption test. See 75 FR 2122 (Jan. 14, 2010). DOE held a public meeting to discuss the NOPR proposals on June 22, 2010 and subsequently published the combined final/interim-final rule on December 16, 2010. 75 FR 78810. The final rule (or “December 2010 final rule”) implemented test procedure amendments applicable to products manufactured before the effective date of the new energy conservation standards that DOE had been considering, and the interim final rule (or “interim final rule”) implemented on an interim basis test procedure amendments applicable to products subject to the new energy conservation standards— i.e., those products manufactured starting September 15, 2014. Id. DOE adopted this split approach in response to industry requests to provide an additional opportunity to comment on final aspects related to the interim final rule. Id. at 78845.

Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered products. EPCA provides in relevant part that “[a]ny test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use * * * or estimated annual operating cost of a covered product during a representative average use cycle or period of use, as determined by the Secretary [of Energy], and shall not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3))

In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments. (42 U.S.C. 6293(b)(2)) When considering amending a test procedure, DOE must determine “to what extent, if any, the proposed test procedure would alter the * * * measured energy use * * * of any covered product as determined under the existing test procedure.” (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured energy use of a covered product, DOE must also amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

With respect to today's rulemaking, DOE has determined that none of the amendments adopted in this final rule notice is likely to significantly change the measured energy use of refrigeration products when compared to the test procedure set forth in the interim final rule. In such situations, EPCA does not require a standards rulemaking to address such changes in measured energy efficiency. (42 U.S.C. 6293(e)(2)).

Today's rule also fulfills DOE's obligation to periodically review its test procedures under 42 U.S.C. 6293(b)(1)(A). DOE anticipates that its next evaluation of this test procedure will occur in a manner consistent with the timeline set out in this provision.

DOE's test procedures for refrigerators and refrigerator-freezers are found at 10 CFR part 430, subpart B, appendices A1 (currently in effect) and A (required for rating of products starting September 15, 2014). DOE initially established its test procedures for refrigerators and refrigerator-freezers in a final rule published in the Federal Register on September 14, 1977. 42 FR 46140. Industry representatives viewed these test procedures as too complex and eventually developed alternative test procedures in conjunction with AHAM that were incorporated into the 1979 version of HRF-1, “Household Refrigerators, Combination Refrigerator-Freezers, and Household Freezers” (HRF-1-1979). Using this industry-created test procedure, DOE revised its test procedures on August 10, 1982. 47 FR 34517. On August 31, 1989, DOE published a final rule establishing test procedures for variable defrost control (a control type in which the time interval between successive defrost cycles is determined by operating conditions indicating the need for defrost rather than by compressor run time), dual compressor refrigerator-freezers, and freezers equipped with “quick-freeze” (a manually-initiated feature that bypasses the thermostat and runs the compressor continuously until terminated). 54 FR 36238. DOE amended the test procedures again on March 7, 2003, by modifying the test period used for products equipped with long-time automatic defrost (a control type in which defrost cycles are separated by 14 hours or more of compressor run time) or variable defrost. 68 FR 10957. The test procedures include provisions for determining the annual energy use in kilowatt-hours (kWh) and the accompanying annual operating costs.

DOE further amended the test procedures on December 16, 2010. 75 FR 78810. These amendments helped clarify how to test products for compliance with the applicable standards. The amendments clarified certain elements in Appendix A1 to ensure that regulated entities fully understand how to apply and implement the test procedure. These changes included clarifying how refrigeration products equipped with special compartments and/or more than one fresh food compartment or more than one freezer compartment should be tested. The amendments also accounted for the various waivers granted by DOE, specifically with regard to variable anti-sweat heater controls. The final rule also modified the regulatory definition of “electric refrigerator-freezer” to require that storage temperatures in the fresh food compartment be at a level that would effectively exclude coverage of combination wine storage-freezer products. See 10 CFR 430.2. The definition for “electric refrigerator” was also changed to clarify the characteristics that distinguish it from related products such as wine storage products. DOE is considering modifying its product definitions to address wine storage products in a separate future rulemaking.

In that same notice, DOE also established a new Appendix A, via an interim final rule. The new Appendix A included a number of comprehensive changes to help improve the measurement of energy consumption of refrigerators and refrigerator-freezers. These changes included, among other things: (1) New compartment temperatures and volume adjustment factors, (2) new methods for measuring compartment volumes, (3) a modification of the long-time automatic defrost test procedure to ensure that the test procedure measures all energy use associated with the defrost function, and (4) test procedures for products with a single compressor and multiple evaporators with separate active defrost cycles. DOE noted that the compartment temperature changes introduced by Appendix A would significantly impact the measured energy use and affect the calculated adjusted volume and energy factor ( i.e. adjusted volume divided by energy use) values. Lastly, the interim final rule also addressed icemaking energy use by including a fixed value for manufacturers to add when calculating the energy consumption of those products equipped with an automatic icemaker. DOE may consider revising this approach once a more appropriate means of accounting for this feature's energy consumption is developed.

DOE's test procedures for freezers are found at 10 CFR part 430, subpart B, appendices B1 (currently in effect) and B (required for the rating of products starting in 2014). DOE established its test procedures for freezers in a final rule published in the Federal Register on September 14, 1977. 42 FR 46140. As with DOE's test procedures for refrigerators and refrigerator-freezers, industry representatives viewed the freezer test procedures as too complex and worked with AHAM to develop alternative test procedures, which were incorporated into the 1979 version of HRF-1. DOE revised its test procedures for freezers based on this AHAM standard on August 10, 1982. 47 FR 34517. The subsequent August 31, 1989 final rule established test procedures for freezers with variable defrost control and freezers with the quick-freeze feature. 54 FR 36238. A subsequent amendment occurred to correct that rule's effective date. 54 FR 38788 (Sept. 20, 1989). The current test procedures include provisions for determining the annual energy use in kWh and annual electrical operating costs for freezers.

The December 16, 2010 notice also clarified compliance testing requirements for freezers under Appendix B1 and created a new Appendix B, the latter of which would apply in 2014. That new procedure changed a number of aspects to the procedure detailed in Appendix B1, including, among other things: (1) The freezer volume adjustment factor, (2) methods for measuring compartment volumes, and (3) the long-time automatic defrost test procedure. In addition, Appendix B also addresses icemaking energy use by implementing the same procedure as for refrigerator-freezers in which a fixed energy use value is applied when calculating the energy consumption of freezers with automatic icemakers.

The interim final rule established comprehensive changes to the manner in which the test procedures are conducted by creating new Appendices A and B. In addition to the changes discussed above, these appendices incorporate the recent changes made to Appendices A1 and B1. These new appendices also incorporate the modifications to Appendices A1 and B1 that were finalized and adopted on December 16, 2010.

DOE had provided an initial comment period on the interim final rule that ended on February 14, 2011. DOE subsequently reopened the comment period on September 15, 2011 (76 FR 57612) to allow further public feedback in response to the promulgation of the final energy conservation standards that were published on the same day. 76 FR 57516. DOE reopened the comment period to permit interested parties to comment on the interplay between the test procedure and the energy conservation standards in order to permit DOE to make any final changes that may be needed to the final test procedure for products that will be manufactured starting in 2014. 76 FR 57612-57613 (Sept. 15, 2011). The comment period ended on October 17, 2011.

Three stakeholders submitted comments in response to both supplemental comment periods that DOE provided for additional feedback—the Association of Home Appliance Manufacturers (AHAM), Sub Zero-Wolf, Inc. (Sub Zero), and Whirlpool Corporation (Whirlpool). Table I.1 below identifies these commenters and their affiliation. No other comments were received.

DOE also considered comments related to a petition for a test procedure waiver (RF-018, Samsung) that had a direct bearing on elements of the test procedures used in Appendix A. See 76 FR 16760 (March 25, 2011).

Today's rulemaking finalizes the test procedures that manufacturers must follow when certifying basic models as compliant with the new energy conservation standards starting in 2014. In finalizing these procedures, DOE made minor changes to the procedure laid out in the December 2010 interim final rule to account for comments from interested parties. The changes will not result in a significant change in measured energy use when compared to the procedure detailed in the interim final rule. The December 2010 amendments for Appendices A1 and B1 are unchanged by today's rulemaking and continue to apply to products manufactured through September 14, 2014. (Those aspects of the December 2010 notice were not reopened for comment as they were not part of the interim final rule. 75 FR at 78813-78815 (Dec. 16, 2010).) In addition, other amendments made in the December 2010 final rule, including modified definitions, anti-circumvention language, applying the anti-sweat heater switch credit to energy use measurements, and rounding off energy test results also were not part of the interim final rule and were not reopened for comment. Accordingly, these aspects of the December 2010 notice remain unchanged.

Today's rulemaking makes a series of changes that include (a) modifying the default values of CT L and CT M , parameters, which represent the minimum and maximum compressor run time between defrosts, for products with variable defrost that do not have values for these parameters specified in their control algorithms, and (b) modifying the test period for products with cycling compressors and long-time or variable defrost to ensure the procedure accurately captures energy use associated with temperature recovery after defrost. The rulemaking also makes changes to clarify how to apply the second part of the test for products with long-time or variable defrost.

The following section discusses in further detail the various issues addressed by today's rulemaking. These issues center chiefly on issues raised in commenter submissions. Section A identifies the products covered by the rule; section B specifies the compliance dates for the test procedure amendments made; section C discusses the test procedure amendments; and section D discusses stakeholder comments not associated with new amendments.

Today's amendments cover those products that meet the definitions for refrigerator, refrigerator-freezer, and freezer, as codified in 10 CFR 430.2. The definitions for refrigerator and refrigerator-freezer were amended in the December 2010 final rule on December 16, 2010. 75 FR 78810, 78817.

Today's rulemaking does not change any of the definitions for refrigeration products that DOE amended as part of the December 2010 final rule. While DOE appreciates the concerns raised by commenters, these particular issues were not completely vetted through the rulemaking process. DOE may, however, revisit and more closely examine these issues as part of a future rulemaking activity. Section D.3 discusses the comments related to wine storage and wine storage combination products, including the amended definitions for refrigerator and refrigerator-freezer.

Manufacturers will need to use new Appendices A and B to rate refrigeration products once they are required to comply with the amended energy conservation standards— i.e. September 15, 2014. Likewise, Appendices A and B will be mandatory for representations regarding energy use or operating cost of these products starting on that date.

Today's rulemaking finalizes Appendices A and B, with some amendments. These amendments are described in greater detail below.

Refrigeration products with variable defrost vary the frequency of defrost by reducing this frequency to save energy when the frost accumulation rate on the evaporator drops—such as when the number of door openings is reduced or when ambient humidity is low. Defrost frequency is characterized by the compressor run time between defrosts, CT, which is expressed in the test procedure in hours rounded to the nearest tenth of an hour. Variable defrost control algorithms vary CT as the defrost need changes. These algorithms may specify a minimum CT value (CT L ) and a maximum CT value (CT M ), consistent with the minimum and maximum defrost frequencies required for specific products to provide reliable defrost performance while minimizing energy use. The DOE test procedure calculates the energy use of variable defrost products using a weighted average of the algorithm's CT L and CT M . See 75 FR at 78857, 78865 (Dec. 16, 2010) (detailing requirements of section 5.2.1.3 of new Appendix A and existing Appendix A1, respectively). To address those products that may have control algorithms that do not use specific maximum and minimum values for the compressor run time between defrost cycles, the test procedure specifies a CT L value of 12 hours and a CT M value of 84 hours. See id. These values remained the same for both Appendix A1 (final rule) and Appendix A (interim final rule).

AHAM argued that the default CT L and CT M values for the variable defrost control algorithm should be changed to 6 and 96 hours in order to maintain consistency with HRF-1-2008. (AHAM, No. 39 at p. 5) AHAM did not provide any supporting data to show that these values would be more representative of the operation of refrigeration products with variable defrost control algorithms without specific CT values, nor did it provide any justification for the change other than to maintain consistency with HRF-1-2008.

In light of AHAM's comments, DOE reviewed the certification data submitted by refrigeration product manufacturers in August 2011 and specifically examined the submissions of those products with variable defrost to determine the prevalence of different values for CT L and CT M . DOE also investigated whether the certification data showed any evidence of products without specified CT values, since these would be the products whose energy use measurement would be affected by the change suggested by AHAM. Of 2,674 records in the database, 1,397 products were identified as having variable defrost. None of the records for these products included undeclared values for CT L and CT M . Table III.1 below shows the default CT L and CT M values of the current test procedure and of HRF-1-2008. It also shows the average, mean, and most prevalent values for CT L and CT M gleaned from available certification records. For each of these CT L and CT M combinations, the calculated CT value is also presented. The summary table shows that neither the 12 and 84 default values nor the AHAM-suggested values of 6 and 96 provide an exact representation of the products in the database. However, the data below also suggest that using 6 and 96 as default values more closely approximates the recorded values of those refrigeration products from the database than 12 and 84.

Further, the use of the default CT L and CT M values is prescribed for those products that do not have specific values for these parameters in the product's control algorithm. Since the algorithm for such a product presumably does not explicitly set a minimum value for this time period, it is conceivable that the compressor run time between defrosts could at times be lower than the 6 hours specified in the test procedure as a minimum for CT L (see section 5.2.1.3 of Appendix A1 or A). When operating in this mode, such a product would be using more energy for defrost than would a product with an algorithm-defined CT L of 6 hours, due to the higher defrost frequency. Hence, DOE concludes that to ensure that the test procedure provides a conservative estimate of energy use associated with defrost ( i.e. at least as high as the actual energy use), it is reasonable to require use of a lower default CT L value when calculating energy use for products that do not have algorithm-specified CT L values. For this reason, because the HRF-1-2008 default values are more representative of the refrigeration products in the database than the current default values, and in order to maintain consistency with this industry standard, DOE is changing the default values to 6 and 96 in this final rule. This change is being made for refrigerators, refrigerator-freezers, and freezers in both Appendices A and B.

The interim final rule amended the test procedure for products with long-time and variable defrost by modifying the second part of the test to better capture energy use associated with precooling and temperature recovery. 75 FR 78810, 78832-78836 (Dec. 16, 2010). A test procedure waiver petition submitted by Samsung (see 76 FR 17670 (March 25, 2011)) has raised the question of whether DOE should consider further changes to the second part of the test procedure for these products.

As described in DOE's December 2010 notice, precooling involves cooling the compartment(s) of a refrigerator-freezer to temperatures significantly lower than the user-selected temperature settings prior to an automatic defrost cycle. Id. at 78832. The document also noted that the two-part test served as a means to reduce the burden on testing long-time and variable defrost products. Id. These products initiate defrost cycles after significantly longer periods of compressor run time than conventional automatic defrost products. Long-time defrost products initiate defrost after more than 14 hours of compressor run time, and variable defrost products adjust defrost frequency based on whether defrost is needed, potentially delaying the next defrost up to 96 hours of compressor run time. The second part of the test measures the energy use consumed during a defrost cycle.

The two-part test and procedures for the second part of the test were initially established in 1982. 47 FR 34521-34522 (Aug. 10, 1982). Since that time, more sophisticated controls have replaced the mechanical defrost timers that were generally used. 68 FR 10958 (March 7, 2003). Consequently, the initial procedures for the second part of the test did not fully capture or consider the high level of sophistication that is now possible and made available with the use of modern electronic control systems. The defrost controls in use when the second part of the test was first established consisted of a mechanical defrost timer energized to advance when the compressor is energized. The initial two-part test specified that the second part starts when the heater energizes, which is coincident with the time the compressor turns off in a product using a mechanical timer control. 68 FR 10957-10958 (March 7, 2003). The first adjustment of the test procedure considering the potential for more sophisticated control was made on March 7, 2003. This amendment of the test procedure revised the second part of the test to allow it to start when the compressor turns off prior to activation of the defrost heater, which is typical of an approach enabled by more sophisticated electronic controls. Id.

The interim final rule made additional amendments to the second part of the test to address precooling, another defrost control feature requiring more sophisticated control than a mechanical timer. 75 FR 78832-78836 (Dec. 16, 2010). The amendments also addressed partial temperature recovery, which refers to a case in which the compartment temperatures of a refrigerator partially recover, but do not reach, their steady-state operating temperatures. For the purposes of testing, a product is considered to reach a state of partial temperature recovery when compartment temperatures do not reach the steady-state operating temperature by the end of the second part of the test (as previously specified in the test procedure) after the rise in compartment temperature associated with defrost. The amendments require, for a system with a cycling compressor, that the average compartment temperatures for the compressor cycles occurring immediately before and after the test period for the second part of the test be within 0.5 °F of the compartment temperature measured for the first part of the test. Under the interim final rule's procedure, the modified test period would start at the end of a compressor “on” cycle and end at the start of a compressor “on” cycle. Id. at 73885

After publication of the interim final rule, an additional issue associated with the two-part test was raised during the agency's review of a test procedure waiver petition submitted by Samsung Electronics America, Inc. (Samsung). That petition sought a waiver from the current test requirements for the company's products that use dual evaporators. 76 FR 16760 (March 25, 2011). 1 These products use a variable defrost strategy that employs multiple defrost cycle types, which the interim final rule's procedure addresses for products starting in 2014. 75 FR at 78836-78838 (Dec. 16, 2010). DOE explained in the December 2010 notice that Appendices A1 and B1 do not address such products and manufacturers seeking to certify these types of products as compliant prior to 2014 must first obtain a test procedure waiver to enable them to test these products. Id. at 78838. Samsung sought a waiver to permit the company to use the Appendix A procedures for products with multiple defrost cycle types when rating current products. 76 FR at 16763 (March 25, 2011).

Whirlpool commented in response to Samsung's waiver petition that applying the second part of the test to the fresh food defrost of one of these products results in an energy credit. (Whirlpool, Samsung Petition for Test Procedure Waiver, Case No. RF-018, Docket No. EERE-2011-BT-WAV-0017, No. 4 at p. 3)  2 Whirlpool's waiver comments discuss the data from testing performed by the Canadian Standards Association that examined the energy consumption of a Samsung model that uses multiple defrost cycles—Samsung model No. RFG297AAPN. Whirlpool asserts that the test results are illogical because the energy use contribution of the fresh food compartment defrost is negative ( i.e. an energy credit), and adds that the energy use contribution of the freezer compartment defrost is underestimated. ( Id. at p. 4) Whirlpool recommended that the test period for the second (defrost) part of the test for the fresh food defrost should end at the end of the second compressor “on” cycle after defrost, and that such a change to the test procedure only for the fresh food defrost would increase the measured energy use of the product by 1.6 percent. (Id. at pp. 5-6)

Samsung's response to Whirlpool's comment pointed out that the potential energy credit issue had been raised by DOE in its test procedure NOPR public meeting on June 22, 2010. (Samsung, Samsung Petition for Test Procedure Waiver, Case No. RF-018, Docket No. EERE-2011-BT-WAV-0017, No. 5 at p. 2) In its view, this issue had been presented by DOE for discussion and consideration by all interested parties—including Whirlpool. The company pointed out that the test procedure DOE ultimately selected had received the support of Whirlpool. Id. See also Whirlpool, No. 13 at p. 6.

As indicated by Samsung, DOE raised this issue of Appendix A1's potential inability to capture all energy usage during defrost cycles when using the second (defrost) part of the test. (NOPR Public Meeting Presentation, No. 9 at p. 53) DOE recognized this possibility during its evaluation of the energy use associated with the fresh food compartment defrost of a Samsung product similar to the products addressed in the company's test procedure waiver request. That evaluation indicated that the calculated energy use contribution from the fresh food defrost was often negative, which resulted in an energy use “credit”. DOE evaluated alternative test periods and concluded that more reasonable results are obtained when the test period ends at the end of a compressor cycle after the defrost cycle. ( Id. ) DOE sought comment during its public meeting to seek additional information on the issues associated with the long-time defrost test method that were presented. ( Id. at p. 55)

DOE's presentation also indicated that it projected that the impact on measured energy use of the test procedure change would be an increase of approximately 3 percent, if applied to both defrosts of the Samsung product that was the focus of the discussion. ( Id. at p. 53) This 3 percent impact was determined based on moving the end of the test period for the second part of the test from the second compressor start after defrost to the second compressor stop. DOE again reviewed the same data and concluded that the test procedure change associated with this final rule would reduce this measured energy use differential by half ( i.e. 1.5 percent). (“Summary of Energy Use Measurements for a Refrigerator-Freezer with two Defrost Cycle Types”, No. 46) The interim final rule test procedure applied to this product does not allow the second part of the test to end at the second compressor start after defrost, due to the requirement that the average temperature for the compressor cycle immediately following the test period be within 0.5 °F of the average temperature measured for the first part of the test. ( See Appendix A, section 4.2.1.1) Hence, the impact on energy use measurement associated with test procedure changes to address the observed negative energy use measurement associated with fresh-food-only defrost cycles depends on details of the compared test periods.

Stakeholders generally supported the test procedure approach as proposed in the Notice of Proposed Rulemaking (NOPR)—and as adopted in the interim final rule—and none suggested that the test period of the second part of the test should be changed to address the anomaly presented, i.e. that measurements for a specific product showed a negative energy use contribution associated with the fresh food defrost. Hence, DOE concluded that the anomaly was associated with an insignificant number of products and thus not generally significant to the test procedure for products tested using the two-part test. Consequently, in the interim final rule, DOE did not amend the end of the test period for the second part of the test to coincide with the end of a compressor “on” cycle (rather than the start of that cycle).

After considering Whirlpool's waiver petition comments suggesting that DOE modify the second part of the test, DOE specifically requested comment on this topic when it reopened the interim final rule comment period. 76 FR 57613-57614 (Sept. 15, 2011). DOE received one comment on this topic, from Whirlpool, which suggested that the end of the second part of the test be moved so that it coincides with the end of a compressor “on” cycle. (Whirlpool, No. 44 at pp. 1-2) Whirlpool asserted that this change should be made for all defrosts, whether they are for fresh food compartments or freezer compartments.

Whirlpool indicated that, for at least one product, the impact of this test procedure change on the measured energy use for a product having a separate defrost for the fresh food compartment would be an increase of approximately 3 percent. Although Whirlpool did not identify the manufacturer of that product, it mentioned that its concerns are an extension of those concerns it raised earlier in response to a waiver request made by a competitor— i.e. Samsung. The 3 percent impact cited by Whirlpool matches the CSA data presented in Whirlpool's comments regarding the Samsung waiver petition: the waiver comments indicate that the tested product's energy use increases from 572.5 kWh to 592.1 kWh per year (an increase of 3.4 percent) with the modified test procedure, i.e. when ending the second part of the test at the end rather than the start of the second compressor “on” cycle after the defrost. (Whirlpool, Samsung Petition for Test Procedure Waiver, Case No. RF-018, Docket No. EERE-2011-BT-WAV-0017, No. 4 at p. 5) This projected impact on the measured energy use is consistent with DOE's own conclusions regarding Samsung products with multiple defrosts. See NOPR Public Meeting Presentation, No. 9 at p. 53. However, as discussed above, it overestimates the measurement impact associated with the amendments made in this final rule.

Whirlpool's interim final rule comments provided little or no explanation of how and why the suggested test period will result in more accurate test results. Instead, the comments indicate that the “underlying principle when measuring the energy consumption of any product which operates in cycles is to measure from the same point in one cycle to the same point in a successor cycle,” and assert that the test procedure of Appendix A measures from a compressor stop to a compressor start for products with cycling compressors. However, Whirlpool did not provide any explanation supporting the concept of measuring from a point in one cycle to the same point in a successor cycle. (Whirlpool, No. 44 at pp. 1-2) Nevertheless, Whirlpool's waiver comments note the unintended consequences associated with the negative energy use contribution measured for the fresh food defrost of the Samsung product when using the interim final rule's version of the Appendix A test period as demonstrating that the test period contained in the interim final rule is inappropriate. (Whirlpool, Samsung Petition for Test Procedure Waiver, Case No. RF-018, Docket No. EERE-2011-BT-WAV-0017, No. 4 at p. 5)

DOE had provided data in its NOPR public meeting presentation supporting the use of the modified test period, ending when the compressor stops. This situation was illustrated both for the fresh food defrost contribution alone and for the total defrost energy use contribution, including both fresh food and freezer compartment defrosts. The data showed that a test period that both starts and ends when the compressor stops matched the energy expended by the defrost heater during a fresh food defrost—and provided a closer match of energy use measured from one initiation of the combined defrost cycle (the defrost cycle involving both the fresh food and freezer compartments) to the next initiation of the combined defrost cycle than the Appendix A1 procedure. (NOPR Public Meeting Presentation, No. 9 at p. 53) More recently, DOE prepared an assessment demonstrating that a test period for the second part of the test both starting and ending at the end of a compressor “on” cycle is consistent with the full-cycle measurement specified for testing non-variable automatic defrost products. See (“Refrigerator Test Procedure: Adjustments to Second Part of Test”, No. 47) This document shows mathematically that a calculation of energy use using the “section 4.2” test period (“full test period”) matches the two-part calculation only when the second part of the test ends at the end of a compressor “on” cycle.

Part of the justification for modifying the test procedure in the manner suggested by Whirlpool is based on the observation that when using the test period prescribed by the interim final rule, the average compartment temperature would be warmer at the end of the test period than at its start for a system with a cycling compressor. The interim final rule test procedure includes a provision to verify that the product does not employ partial recovery. Using this provision requires examining the full compressor cycle immediately after the test period to ensure that it is a regular compressor cycle, i.e. a compressor cycle associated with steady state operation. However, the test does not account for the additional temperature recovery associated with a regular compressor “on” cycle. The December 2010 notice indicates that the test period T2 starts when the compartment is at its typical minimum temperature associated with steady state cycling operation. This minimum temperature is represented by the lower horizontal line of the temperature plot in Figure 1 of Appendix A. 75 FR at 78855 (Dec. 16, 2010) ( see temperature plot of Figure 1, “Long-time Automatic Defrost Diagram for Cycling Compressors”).

On the other hand, the compartment temperature is at its typical steady-state cycling maximum (the higher horizontal line of the temperature plot) when test period T2 ends. Hence, while the compartment temperature has recovered to the range within which it varies during steady state operation, it has not recovered to the temperature state associated with the start of the test period— i.e. the temperature is warmer than at the start of the test period. In order to allow recovery to the start-of-test-period temperature, the test period would have to continue till the end of the compressor “on” cycle. These arguments illustrate that the test period prescribed by the interim final rule for the second part of the test is unlikely to fully account for energy use associated with temperature recovery.

DOE concludes that the test period for the second part of the test that is specified in the interim final rule for products with cycling compressors and long-time or variable defrost may not accurately represent energy use associated with defrost, which necessitates a change to enhance the accuracy of the measurement. DOE received no other comments on this topic. Hence, in light of this new information, and its own review, DOE is adopting the approach suggested by Whirlpool to help ensure the procedure in Appendix A provides a greater level of accuracy.

DOE also considered whether to retain the four-hour time limit that the current test imposes on the second part of the test. This limit applies to the elapsed time after the defrost heater is energized. 3 (See Appendix A section 4.2.1.1 or Figure 1) The four-hour limit terminates the test period when recovery from defrost and return to steady-state cycling operation takes an unusually long time. During its review of the test period for the second part of the test, DOE noticed that for some products, the extension of the test period associated with the test period revision recommended by Whirlpool led to a test period invoking the four-hour limit ( i.e. the desired end of the test period was more than four hours later than activation of the defrost heater).

DOE notes that modern data collection is performed almost exclusively using automated data acquisition systems. This approach to recording data significantly reduces the test burden that could potentially be associated with extending the test beyond the four-hour limit, allowing a product to fully complete its temperature recovery after defrost during testing. Test technicians do not need to observe product behavior during the test from minute to minute to ensure that data are recorded. Instead, technicians are more likely to periodically check the status of a given test once or twice a day to determine whether a defrost has occurred and whether the test period has been completed. With modern variable-defrost products, a full refrigerator test can take a week to complete because of the duration of the time intervals between defrosts. The compressor run time between defrosts can last as long as 96 hours for variable defrost products (see Appendix A, section 5.2.1.3 regarding the maximum allowable duration for CT M , the maximum compressor run time between defrosts). At a typical compressor on-time of 50 percent, the time involved in waiting for a defrost cycle can be days. With the use of automated data acquisition equipment by test labs necessitating only periodic status checks, the need for 24-hour staffing for data recording has been effectively eliminated. 4

Further, the continued application of the four-hour limit is likely to reduce measurement accuracy, since the limit could cause a significant portion of the compressor “on” cycle to be dropped from the measurement. 5 In light of the more advanced capabilities of testing labs and the operation of modern refrigeration products, DOE believes that the four-hour time limit of the second part of the test is obsolete as a means to limit test burden and may in fact prevent the accurate measurement of energy consumption of these products. Because of the impact of the four-hour time limit on test measurement accuracy, and because it is no longer needed to reduce test burden, DOE is eliminating this provision of the test procedure for Appendices A and B in this notice. Making this change will also fully address the potential problem identified by Whirlpool by eliminating any incentives by some manufacturers to exploit potential limitations presented by a procedure that artificially limits the overall testing duration without fully capturing that product's energy consumption.

The interim final rule requirements for confirming that the second part of the test does not include events associated with precooling and temperature recovery provide a means to compare the temperatures of “the compartment” measured during the first part of the test with the average temperatures of “the compartment” for compressor cycles preceding and following the second part of the test. ( See Appendix A, section 4.2.1.1) The language does not specify which compartment must be evaluated in this fashion. In order to assure that the test procedure properly accounts for energy use associated with precooling and temperature recovery of the entire product, the language of section 4 of Appendix A is modified to clarify that these requirements apply to both compartments ( i.e. the freezer compartment and the fresh food compartment), regardless of which compartment's evaporator undergoes defrost. DOE is making this clarification to assure testing accuracy.

The interim final rule includes a figure for both Appendices A and B that illustrates the second part of the test for products with non-cycling compressors. That figure, Figure 2, includes two horizontal lines in the temperature plot that have no meaning. In this final rule, these lines of Figure 2 have been removed. DOE is making this change to avoid confusion and to ensure the accuracy of the measured test results. This amendment represents no change to the specified test procedure.

While reviewing the modified new sections 4.2.1.1 and 4.2.1.2 incorporating the changes discussed above, DOE concluded that some minor adjustments to the language would be needed to clarify the test procedure and to ensure the overall consistency of the procedure. These adjustments include the following:

• In the first and second lines of both sections, changing “* * * the second part starts * * *” to “* * * the second part of the test starts * * *”.

• In section 4.2.1.1, changing “* * * first part's temperature * * *” to “* * * average temperature for the first part of the test * * *”

These changes are made in parallel sections to both Appendices A and B.

Whirlpool estimated that modifying the test procedure to address the observed negative energy use associated with fresh food compartment defrosts would increase the measured energy use of a tested competitor's product by 3 percent. (Whirlpool, No. 44 at p. 2) These results are consistent with the results DOE observed, as reported in the NOPR public meeting. (NOPR Public Meeting Presentation, No. 9 at p. 53). However, as discussed above, DOE has re-examined the available data and now projects that the increase in energy use for such a product is only 1.5 percent applying the amended procedure made in this final rule. This latter estimate more accurately reflects the differences in the test period of the second part of the tests as represented by the interim final rule and today's final rule. (“Summary of Energy Use Measurements for a Refrigerator-Freezer with two Defrost Cycle Types”, No. 46) In addition, as discussed further below, DOE has determined that the impact of the test procedure change on energy use measurement for most affected products is near 1 percent. DOE also notes that the energy use impact of this change would apply only for those variable defrost products that use cycling compressors.

To assess the potential impact on the measured energy use associated with the test procedure change suggested by Whirlpool, DOE reviewed the data it collected to support the test procedure's development and data collected as part of its compliance efforts. The analysis DOE conducted drew from two separate sets of test reports. The first set included tests conducted using the current test procedures of Appendix A1. For this set of tests, the applicable temperature settings did not permit one to calculate a weighted-average energy use at the Appendix A standardized compartment temperatures of 0 °F for the freezer compartment, and 39 °F for the fresh food compartment, because the measured compartment temperatures for the two tests conducted at different temperature control settings ( i.e. median setting and either warmest or coldest settings prescribed in the temperature control setting requirements of Appendix A1, section 3) did not generally bound these standardized temperatures. The second set of tests, in contrast, included measurements at temperature settings allowing calculation of results consistent with the Appendix A standardized compartment temperatures. These tests involved the use of temperature control settings suitable for the Appendix A standardized temperatures.

For the first set of tests, DOE evaluated the impact of the test procedure change only for the coldest compartment temperature setting used in the test, which was typically the median setting. The compartment temperatures of these tests fell within 3°F of the Appendix A standardized temperatures. While this difference represents a deviation from the Appendix A test requirements, DOE still considers these results to be a good predictor of the expected operation of these products under standardized compartment temperature conditions for two reasons—(1) the small size of the temperature deviations and (2) the measured data demonstrate that the influence of compartment temperature on the estimated impact of the test procedure change was negligible.

The analysis focused on four key refrigerator-freezer product classes: class 3 (refrigerator-freezers—automatic defrost with top-mounted freezer without through-the-door ice service), class 5 products without exception relief (refrigerator-freezers—automatic defrost with bottom-mounted freezer without through-the-door ice service), class 5 with exception relief to account for through-the-door ice service (for the purposes of this discussion, designated product class 5A under the recently promulgated standards for 2014), and class 7 (refrigerator-freezers—automatic defrost with side-mounted freezer with through-the-door ice service). These product classes were chosen because they represent significant market share, have automatic defrost, and are the most likely products to have variable defrost, thus indicating that they would be more likely candidates to be tested using the two-part test. The assessment focused solely on products with cycling compressors and variable defrost, since the test procedure change does not affect energy use measurement for other products.

DOE re-evaluated the test results for both sets of data using the modified test period for the second part of the test as described in this section, including both shifting the end of the test period to a compressor stop (rather than a compressor start) and removing the four-hour time limit. Table III.2 summarizes the results of this assessment for both sets of data and does not include any data covering Samsung products. The average measurement impact for these 25 products is under 1 percent.

DOE also separately evaluated data for six Samsung products falling into classes 5A and 7, for which the overall average measured impact was 1.55 percent. DOE believes that the reason for the greater sensitivity of Samsung products to this test procedure change as compared with other products is that these products have two defrosts (one combined defrost of both the freezer and fresh food compartment evaporators and one defrost of only the fresh food evaporator) occurring in the same amount of time that other products use one defrost.

DOE developed estimates of shipment-weighted impacts on the measured energy use of the test procedure change for the four product classes highlighted in Table III.2. The test procedure amendments apply only to variable defrost products with cycling compressors. Table III.3 summarizes the percentage of models with variable defrost for the evaluated refrigerator-freezer product classes as reported to DOE in August 2011 as part of the annual certification data submission. DOE used these percentages of basic models as a proxy for shipment-weighted average percentages. Because the certification data do not distinguish between cycling and non-cycling compressor systems, these percentages include both types and for that reason provide a conservative ( i.e. larger) estimate regarding the market share of affected products. (As discussed above, only products with variable defrost and cycling compressors will be affected by the test procedure change.) The table also shows the market share of Samsung products by product class based on sales data purchased from the NPD Group 6 for the years 2007 and 2008. DOE calculated the shipment-weighted average impact of the test procedure change as follows.

In this equation, S S is the Samsung market share and S V is the variable defrost market share. DOE assumed that the Samsung products all have variable defrost. Table III.3 shows the results of this calculation of weighted average energy use impact for the four product classes. The percentage impact varies from less than 0.5 percent to just above 1 percent. From these projections, DOE concludes that the level of change in the measurement does not necessitate a change in the energy conservation standards, as discussed in section III.E.2.

This section discusses comments made by stakeholders regarding items for which DOE has not made corresponding changes in the test procedure.

In the December 2010 final rule, DOE added anti-circumvention language to 10 CFR 430.23, in section (a)(10) addressing refrigerators and refrigerator-freezers and in section (b)(7) addressing freezers. 75 FR 78818-78820 (Dec. 16, 2010). AHAM commented that the anti-circumvention language has significant differences as compared with the language of HRF-1-2008 and that the exact language of HRF-1-2008 should be adopted. (AHAM, No. 39 at p. 4) The language identified by AHAM appears in a section that provides general guidance for manufacturers to consider with respect to potential anti-circumvention issues. The specific language changes AHAM recommended include the following:

1. “Energy saving features that are designed to be activated by a lack of door openings shall not be functional during the energy test.” should read “Energy saving features that are designed to operate when there are no door openings for long periods of time shall not be functional during the energy test.”

2. “The defrost heater should not either function or turn off differently during the energy test than it would when operating in typical room conditions.” should read “The defrost heater shall not either function or turn off differently during the energy test than it would when operating in typical room conditions. Also, the product shall not recover differently during the defrost recovery period than it would in typical room conditions.”

3. In “Electric heaters that would normally operate at typical room conditions with door openings should also operate during the energy test.” the “should” should be replaced with “shall.”

As noted earlier, amendments to 10 CFR 430.23 as part of the December 16, 2010 notice were made as part of the December 2010 final rule. These issues were not fully vetted as part of the re-opening notice, which focused on issues related to Appendices A and B. DOE notes, however, that it developed this limited guidance in reliance on the 2007 version of HRF-1. (Compare section HRF-1-2007, section 1.2 with HRF-1-2008, section 1.2). Should DOE need to clarify the application of these conditions, it may do so in the future.

In the standards final rule, DOE discussed issues raised by AHAM regarding refrigeration products designed for sale with or without icemakers (“kitable models”). Such products may leave the factory with an icemaker installed, but could also leave the factory without an icemaker and instead have an icemaker installed downstream in the distribution chain, by the retailer, or even by a customer after purchase of the product. 76 FR at 57538 (Sept. 15, 2011). Icemakers can also be produced by third-party manufacturers separate from the refrigeration products' manufacturers. (For example, the third party brand Aquafresh is advertised as a replacement for all major icemaker brands. See “Aquafresh RIM900 Ice Maker Information,” No. 48 at p. 1) AHAM commented in response to the energy standards NOPR that kitable models should be treated as if they have the icemaker installed. (AHAM, Refrigeration Products Energy Conservation Standard Rulemaking, Docket Number EE-2008-BT-STD-0012, No. 73 at p. 6) DOE responded to these claims by noting that such products could be purchased either with or without the icemaker, that the field energy use for products without an icemaker would be less by the amount of energy use associated with icemaking (which is represented by a fixed value of 84 kWh in the interim final rule test procedure) and that better consistency with the test procedure would be established if such products were required to be certified both with and without the icemaker. 76 FR at 57538-57539 (Sept. 15, 2011).

AHAM strongly opposed the DOE approach and its comments to DOE stressed that the approach would create unnecessary burden and cost with no public benefit. AHAM cited the following reasons in support of its position:

• As far as AHAM is aware, manufacturers typically assign kitable models a single model number regardless of whether the icemaker is installed when the product leaves the factory. Requiring certification of the model with and without the icemaker might require establishing a second model number for each such product, which would represent a great cost to manufacturers.

• The approach is overly burdensome because it requires twice the test burden and twice as much reporting.

• Consumers that install an icemaker after purchase of a refrigerator would not be aware of the additional energy use associated with icemaking.

• If manufacturers maintain a single model number for the product with and without the icemaker, there might be confusion if consumers see two different energy use values indicated for the same model ( i.e. one for the unit with the icemaker and one for the unit without the icemaker).

• The manufacturer may not have any control over whether an icemaker is installed in the unit after it leaves the factory, making it difficult to ensure that the correct energy label is included with the unit.

AHAM's approach would be to treat kitable models as if they have an icemaker. Such an approach would ensure that a purchaser of a kitable model would receive a product that would have energy use no more than the rated value. This approach would also mean that there would be only one energy use value associated with each model number, and would avoid multiple testing and reporting. (AHAM, No. 43 at pp. 6-7)

DOE is declining to adopt AHAM's approach within the context of today's notice.

DOE acknowledges, however, that manufacturers may have no control of events occurring after a product leaves their factory, and, hence, may not know which label to ship with a product, if the label were required to accurately reflect whether the product has an icemaker installed. Further, although AHAM claims that this approach is burdensome, its claim that such products would have to be tested twice is incorrect—a single test would indicate product performance with and without the icemaker, because it would include a measurement of the product without an icemaker. Calculating the energy use for an icemaker-equipped product would be a matter of adding a fixed value to calculate this value, as specified by the Appendix A test procedure (see section 6.2.2.2). Additionally, AHAM did not quantify the burden involved. Without such quantification, or a meaningful explanation as to why a second set of tests would be needed, DOE has little information with which to judge the merits of AHAM's recommendations or its claims. DOE also notes that product labeling is the jurisdiction of the FTC and that any contents of those labels lie primarily within the province of that agency's rulemaking authority.

Further, DOE notes that any approach eventually adopted for kitable models must ensure that both versions of the kitable model ( i.e. sold either with or without the icemaker) meet their respective energy standards. DOE notes that this goal would automatically be achieved with the new standards and the new test procedures as represented by the September 2011 standards final rule and this test procedure final rule notice, since both the test procedure and the standards apply a fixed value of 84 kWh (to represent icemaker energy consumption) to the measured energy use of a product when configured without an icemaker—this new value represents the energy use of an icemaker-equipped version of that product. This situation will likely change once a laboratory-based procedure is implemented for measuring icemaking energy use, as is contemplated in a future rulemaking. Consideration of an approach to address kitable models would, in all likelihood, be more appropriately addressed as part of a future rulemaking to decide whether to incorporate such a laboratory-based icemaking energy use measurement. DOE adds that the full rulemaking process would allow the issues associated with kitable models to be thoroughly considered and reviewed by stakeholders, thus ensuring that the adopted approach is vetted and acceptable to all affected parties. Accordingly, DOE is declining to adopt AHAM's suggestion.

This section addresses issues associated with wine storage products and combination wine storage products. The latter are refrigeration products combining wine storage with fresh food and/or freezer compartments.

DOE amended the definitions for refrigerator and refrigerator-freezer as part of the final rule published in the December 16, 2010 notice. See 75 FR at 78817. The modified definitions did two things that the previous definitions did not. First, they clarified that products that combine freezer compartments with compartments not designed to be capable of 39 °F storage temperature (but include no other types of compartments) are not refrigerator-freezers. Second, the definitions clarified the requirements for fresh food compartments of refrigerators and refrigerator-freezers. Regarding this second item, the revised definitions clarified that a product is not necessarily disqualified from status as a refrigerator or refrigerator-freezer if its fresh food compartments can maintain average temperatures above 39 °F for some temperature control settings. Id.

The amendments did not include language specifying that products incorporating wine storage compartments—for the purpose of this discussion, compartments that are not designed to be capable of maintaining storage temperatures below 39 °F—in products that would otherwise be refrigerators or refrigerator-freezers under the definition would be treated as something other than these covered products. Id. at 78817. Wine chillers are typically designed to operate between 50 °F and 60 °F to ensure the proper storage temperature for bottled wine. DOE subsequently posted on its Web site a guidance document explaining its interpretation of the amended definitions. (“Guidance on Scope of Coverage for Hybrid (Wine Storage) Refrigeration Products Issued Feb. 10, 2011”, No. 49). The Guidance clarified DOE's interpretation of the definitions and explained that adding a wine storage compartment to a refrigerator or a refrigerator-freezer does not change its status as a refrigerator or refrigerator-freezer under the regulations.

AHAM objected to this interpretation of the test procedure final rule definitions. (AHAM, No. 43 at pp. 4-5). It argued that DOE's interpretation is inequitable because it treats freezers differently than refrigerators and refrigerator-freezers. AHAM also argued that the Guidance was, in its view, inconsistent with the separate rulemaking approach that DOE had indicated it was considering applying to wine chillers. AHAM argued further that establishing coverage through interpretation, which it believed was performed by the Guidance, was inappropriate, and stated that such steps should be taken only through the established rulemaking process.

At the outset, DOE notes that these definitions were established as part of the December 2010 final rule. Because of the limited nature of the re-opening of the comment period, which focused on those issues related to the conduct of the test procedures detailed in Appendices A and B, these particular issues were not completely vetted through the rulemaking process. Hence, DOE may revisit and reconsider these issues as part of a future rulemaking activity.

DOE further notes that AHAM does not contest the validity of the text of the definitions themselves but only how DOE may choose to apply these definitions to a small group of products that have yet to comprise any significant share of the overall refrigeration product market. DOE's research was able to identify only seven distinct products that are clearly part of this product group. (“Wine Storage Combination Products”, No. 50).

With respect to the definitions, the coverage of refrigeration products has been clarified through guidance to help explain that products that meet a specific set of performance criteria would be treated as covered products. Any product meeting these criteria are subject to the regulations covering these products. These criteria were established through a lengthy notice and comment process associated with this test procedure rulemaking that began in May 2010 and on which manufacturers had ample opportunity to comment. DOE adds that, consistent with its prior statements, it fully intends to initiate a wine-chiller-specific rulemaking to address potential standards for these products.

DOE also notes that there are some key technical differences between freezers and refrigerators/refrigerator-freezers. These differences require that different approaches be considered when deciding how to treat those refrigeration products that include a wine storage compartment. In particular, the standardized temperature for a freezer is 0 °F, while the standardized temperature for the fresh food compartment of a refrigerator-freezer is 45 °F under current test procedures and 39 °F under test procedures that manufacturers will need to use for compliance purposes in 2014. A wine storage compartment can be expected to approach a 45 °F temperature during testing, but approaching 0 °F would be extremely unlikely given the nature of the product—specifically, the technical requirements for designing a compartment of a product to achieve a 0 °F temperature differs significantly from those required to achieve the much higher temperature (39 °F) needed for the safe storage of fresh food—or the even higher standardized temperature (45 °F) required by the current test procedure during the testing of these products. These differences not only require different design considerations, but they also result in very different energy consumption characteristics.

Moreover, the definitions for these three products (refrigerator, refrigerator-freezer, and freezer), which DOE adopted with full input from the public, including manufacturers, contain clear differences with respect to the inclusion of separate compartments. Both the refrigerator and refrigerator-freezer definitions explicitly contemplate the inclusion of compartments with more than one temperature range, while the freezer definition does not. See 10 CFR 430.2. As a result, a freezer-wine chiller combination product does not fall squarely into any of these definitions. In contrast, a wine chiller combined with either a refrigerator or refrigerator-freezer would fall within the definitions for those two products. Treating these three products in the exact same manner as suggested by AHAM— i.e. , to exclude them from any coverage—would ignore these differences as well as the technical differences noted above. Accordingly, because of these differences, a freezer-wine chiller product should not be treated in the same manner as a refrigerator-wine chiller or refrigerator-freezer-wine chiller products.

DOE recognizes, however, that some combination wine storage products may have characteristics that would make attempts at testing them with the wine storage compartment approaching 45 °F provide non-representative results. For such products, manufacturers may still market such items by first petitioning DOE for an appropriate test procedure waiver. DOE highlighted this option when it issued its February 2011 Guidance. Also, in the case of those products that may be unable to comply with the applicable standards, manufacturers have the option of applying for exception relief with the Office of Hearings and Appeals. See 42 U.S.C. 7194 and 10 CFR part 1003.

In the energy conservation standards NOPR (“standards NOPR”), and again in the standards final rule, DOE explained its interpretation that wine chillers are not covered products under the definition for electric refrigerator, and thus are not covered by the energy conservation standards for refrigeration products. 75 FR 59470, 59486 (Sept. 27, 2010) and 76 FR 57516, 57534 (Sept. 15, 2011). As noted in the standards final rule, several stakeholders submitted comments favoring the regulation of wine chiller products. DOE noted that it may consider initiating a rulemaking to establish coverage and energy standards for these products. Id.

In its comments on the interim final rule, AHAM reiterated its support for a rulemaking to regulate wine storage products, and indicated that such a rulemaking should include products in which wine storage compartments are combined with fresh food and/or freezer compartments. (AHAM, No. 43 at p. 4). Sub Zero requested that DOE conduct a comprehensive analysis, with full stakeholder input, leading to a Federal efficiency standard for all wine storage products and combination/hybrid that include wine chillers. (Sub Zero, No. 42 at p. 2).

Consistent with earlier statements, DOE will consider conducting rulemakings addressing coverage, test procedures, and energy conservation standards for wine chiller and related products. DOE has already taken an initial step in this process by publishing a coverage determination proposal to establish coverage for refrigeration products that do not have compressors and condensers integrated with their cabinets—many of which include wine chillers. 76 FR 69147 (Nov. 8, 2011). Such products cannot be immediately covered under the authority granted to DOE by EPCA to regulate conventional refrigeration products, which necessitates a separate coverage determination to address these non-condenser/compressor products. (42 U.S.C. 6292(a)(1)).

In the test procedure NOPR, DOE proposed to address certain inconsistencies in the test procedure for dual compressor systems. 75 FR at 29841 (May 27, 2010). These systems have separate refrigeration systems serving the fresh food and freezer compartments. AHAM commented that DOE should simplify this test procedure and suggested an alternative test procedure addressing such products. (AHAM, No. 16 at p. 7). DOE explained that it could not adopt the AHAM proposal in the interim final rule because the AHAM procedure represents a significant departure from the proposal that was presented in the NOPR, and that stakeholders were not provided an adequate opportunity to comment on the procedure to allow its adoption. 75 FR at 78831 (Dec. 16, 2010). DOE noted, however, that it may consider this approach in a future rulemaking that would more fully revise the test procedure. See id.

AHAM raised this issue in all three of its written comments submitted in response to the interim final rule. (AHAM, No. 39 at p. 4; AHAM, No. 40 at pp. 1-2; AHAM, No. 43 at pp. 2-3). AHAM's recommendations regarding how this test procedure should measure the energy consumption of multiple compressor-based systems has changed each time it has provided specific test procedure recommendations. See AHAM, No. 16 at p. 7 (Aug. 10, 2010), AHAM, No. 40 at pp. 1-2 (March 4, 2011), and AHAM, No. 43 at pp. 2-3 (Oct. 17, 2011). In spite of its continually evolving position, AHAM urged DOE to modify the dual compressor test procedure because, in its view, the DOE test procedure contains specific problems that relate to its requirement that a manufacturer separately measure the energy use of the two separate systems. 7 The group made two assertions in support of its view. First, AHAM argued that this requirement posed a significant test burden. Second, AHAM asserted that many dual compressor products do not work in the manner that the test procedure assumes they do— i.e. as separate independent systems. Instead, AHAM argued that many of these products use shared systems. (AHAM, No. 40 at p. 2). Sub-Zero supported the alternative approach incorporated in AHAM's October 17, 2011 comments and asserted that it provided a practical, accurate, and repeatable test procedure that should be incorporated into the final rule. 8 (Sub Zero, No. 42 at pp. 1-2).

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on March 14, 2011 (76 FR 13541). That NPRM proposed to require modifying the door latch fittings and witness mark placards of the off-wing escape slide systems; and for certain airplanes, replacing the bearings and lockbase retainer in the door latch assembly, relocating and adjusting the sensor target and the sensor proximity switch, and testing to ensure positive door locking and corrective action if necessary. For certain airplanes, that NPRM also proposed to require installing a bumper assembly and placards.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal and the FAA's response to each comment.

American Airlines (American) stated it agrees with the intent of the NPRM (76 FR 13541, March 14, 2011). Continental Airlines (Continental) stated that it has no objection to paragraphs (g) and (h) of the NPRM.

American, Boeing, and an anonymous commenter requested the NPRM (76 FR 13541, March 14, 2011) be updated to refer to Boeing Special Attention Service Bulletin 757-25-0298, Revision 1, dated April 12, 2011, which was released during the NPRM comment period.

We agree. Since the NPRM (76 FR 13541, March 14, 2011) was issued, Boeing has issued Special Attention Service Bulletin 757-25-0298, Revision 1, dated April 12, 2011, which clarifies door latch engagement information, clarifies kit availability, and adds existing part numbers. We have changed paragraphs (c) and (g) of the AD to refer to Boeing Special Attention Service Bulletin 757-25-0298, Revision 1, dated April 12, 2011; added paragraph (k) of the AD to give credit for actions already accomplished in accordance with Boeing Special Attention Service Bulletin 757-25-0298, dated October 16, 2008; and revised subsequent paragraph lettering.

Continental requested we delay publication of the final rule until Revision 3 to Boeing Service Bulletin 757-25-0182 is published. Continental justified its request by stating that it noticed some discrepancies in Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001, and would prefer that Revision 3 of this service bulletin be issued prior to the issuance of the final rule.

We partially agree. We agree that discrepancies exist in Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001. We have reviewed Continental's comments with Boeing to obtain technical clarification. Boeing agrees with some of the discrepancies and has noted them for consideration for the next scheduled revision of this service bulletin. We disagree with delaying the issuance of the final rule because these minor discrepancies do not affect the operators' ability to accomplish the tasks specified in Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001. We have not changed the AD in this regard.

American requested we change the NPRM (76 FR 13541, March 14, 2011) to identify the steps in Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001, that would be required to comply with paragraph (h)(2) of the NPRM. American justified its request by stating that identifying the specific steps will eliminate ambiguity and provide clear interpretation of the proposed AD.

We agree. Clarifying the required steps will assist operators in accomplishing the required tests and modifications and will not expand the scope of the AD. We have added the steps to paragraph (h)(2) of the AD.

American requested we change paragraph (h)(2) of the NPRM (76 FR 13541, March 14, 2011) to allow replacement of the target and remount of the switch on the new bracket in accordance with the Accomplishment Instructions of Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001, as an alternative to performing the door open/door close test of the equipment compartment door. American justified its request by stating it accomplished the door open/door closed test of the compartment door as described in Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001, in 2002 and 2003, and later experienced multiple off-wing slide deployments in 2006 and 2007.

We agree that replacing the target and remounting the switch on the new bracket is an alternative to performing the door open/door close test of the equipment compartment door. We have added a statement to paragraph (h)(2) of this AD indicating that replacing the target and remounting the switch on the new bracket terminates the testing requirement in that paragraph.

American requested that all AMOCs previously approved for AD 99-17-20, Amendment 39-11266 (64 FR 45436, August 20, 1999), be applicable to the pertinent paragraphs of the NPRM (76 FR 13541, March 14, 2011). American justified its request by stating that since these AMOCs have previously demonstrated they provide the necessary equivalent level of safety to the original rule, transferring the applicability will prevent duplication of efforts already undertaken by both operators and the FAA.

We agree. AMOCs previously evaluated and approved as providing the necessary level of safety for AD 99-17-20, Amendment 39-11266 (64 FR 45436, August 20, 1999), would also provide the necessary level of safety for the corresponding requirements of this AD. We have added paragraph (l)(3) to the AD, which specifies that AMOCs approved previously in accordance with AD 99-17-20, Amendment 39-11266, are approved as AMOCs for the corresponding provisions of paragraph (h) of this AD.

American requested we change the NPRM (76 FR 13541, March 14, 2011) to allow replacement of kept parts with new parts of the same part number. American justified its request by stating that during the course of modification, parts may become damaged or lost, therefore rendering the kept hardware unserviceable or unavailable for installation.

We agree with using new parts where the service information calls for installation of kept parts because a part having the identical part number is acceptable for use whether it is kept or new. We have added new paragraph (h)(5) to this final rule to allow using new parts.

American requested we change the NPRM (76 FR 13541, March 14, 2011) to allow operators to use substitutes of common hardware (e.g., washers, nuts, bolts, and adhesives) that have been determined to be equivalent in accordance with the operator's parts management system to comply with hardware specified in Boeing Special Attention Service Bulletin 757-25-0298, Revision 1, dated April 12, 2011, Boeing Service Bulletin 757-25-0182, Revision 2, dated January 11, 2001, Boeing Service Bulletin 757-25-0200, Revision 1, dated August 3, 2000, and Boeing Special Attention Service Bulletin 757-25-0219, dated August 3, 2000.

We disagree. Parts management is an operator-specific process and needs to be evaluated on an individual basis. We will consider requests for approval of an AMOC under the provisions of paragraph (l) of this AD. Sufficient data must be submitted to substantiate that the operator's use of substitutes of common hardware would provide an acceptable level of safety. We have not changed the AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD will affect 451 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacements that would be required based on the results of the test. We have no way of determining the number of aircraft that might need these replacements.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on October 5, 2011 (76 FR 61638). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 61638, October 5, 2011) or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (76 FR 61638, October 5, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (76 FR 61638, October 5, 2011).

We estimate that this AD will affect 63 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $5,355, or $85 per product.

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

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

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

For the reasons discussed above, I certify this AD:

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

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

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (76 FR 61638, October 5, 2011), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM published in the Federal Register on November 2, 2011 (76 FR 67631). That NPRM proposed to require inspection and modification of the air box flange welds and slots and installation of induction system air box seals as applicable.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 67631, November 2, 2011) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (76 FR 67631, November 2, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We estimate that this AD affects 67 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

According to the manufacturer, all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM published in the Federal Register on October 11, 2011 (76 FR 62661). That NPRM was proposed to require installing cargo bulkhead supports, ceiling supports, a secondary dam support, drainage tubing, and ceiling panels to the forward lower lobe in the forward cargo compartment.

We gave the public the opportunity to participate in developing this AD. We have considered the comment received. Boeing supports the NPRM (76 FR 62661, October 11, 2011).

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting the AD as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (76 FR 62661, October 11, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (76 FR 62661, October 11, 2011).

We estimate that this proposed AD affects 1 airplane of U.S. registry.

We estimate the following costs to comply with this proposed AD:

According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

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

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

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

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

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

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

History

The FAA has determined that the low altitude Alaskan compulsory reporting point CLAMS, in the vicinity of Homer, and SKILA, in the vicinity of Kenai, require their published descriptions be revised to match updated position information contained in the FAA's aeronautical database and align with their actual locations. In addition to improved measurement accuracies for describing both low altitude compulsory reporting points, SKILA is also affected by the Anchorage VHF Omnidirectional Range (VOR) navigation aid relocation from Fire Island, AK, onto the Ted Stevens International Airport, AK, property. There are no changes to routing or air traffic control procedures resulting from this action. Accordingly, since this is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, notice and public procedures under Title 5 U.S.C. 553(b) are unnecessary.

The FAA amends Title 14 Code of Federal Regulations (14 CFR) part 71 by revising the low altitude Alaskan compulsory reporting point CLAMS and SKILA descriptions to match updated position information contained in the FAA aeronautical database and more accurately reflect the actual locations of compulsory reporting points.

Alaskan Low Altitude Reporting Points are listed in paragraph 7004 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The compulsory reporting points listed in this document will be revised subsequently in the Order.

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 Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of 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 amends low altitude compulsory reporting points in Alaska.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with 311a, FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures.” This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

In the final rule, FR Doc. 2012-00792, on page 2613 in the issue of Thursday, January 11, 2012, the following corrections are made:

I. Introduction

In 1996, Congress amended Section 18 of the Securities Act to exempt from state registration requirements securities listed, or authorized for listing, on the New York Stock Exchange LLC (“NYSE”), the American Stock Exchange LLC (“Amex”) (now known as NYSE Amex LLC), 1 or the National Market System of The NASDAQ Stock Market LLC (“Nasdaq/NGM”)  2 (collectively, the “Named Markets”), or any national securities exchange designated by the Commission to have substantially similar listing standards to those of the Named Markets. 3 More specifically, Section 18(a) of the Securities Act provides that “no law, rule, regulation, or order, or other administrative action of any State * * * requiring, or with respect to, registration or qualification of securities * * * shall directly or indirectly apply to a security that—(A) is a covered security.”  4 Covered securities are defined in Section 18(b)(1) of the Securities Act to include those securities listed, or authorized for listing, on the Named Markets, or securities listed, or authorized for listing, on a national securities exchange (or tier or segment thereof) that has listing standards that the Commission determines by rule are “substantially similar” to those of the Named Markets (“Covered Securities”). 5

Pursuant to Section 18(b)(1)(B) of the Securities Act, the Commission adopted Rule 146. 6 Rule 146(b) lists those national securities exchanges, or segments or tiers thereof, that the Commission has determined to have listing standards substantially similar to those of the Named Markets and thus securities listed on such exchanges are deemed Covered Securities. 7 BATS has petitioned the Commission to amend Rule 146(b) to designate certain securities listed on BATS  8 as Covered Securities for the purpose of Section 18 of the Securities Act. 9

On August 8, 2011, the Commission issued a release proposing to amend Rule 146(b) to designate certain securities listed, or authorized for listing, on BATS as covered securities for purposes of Section 18(a) of the Securities Act. 10 The Commission also proposed to update certain references in the rule. The Commission received one comment letter, 11 which favored amending Rule 146(b) to reflect the name change of Phlx, as proposed by the Commission. In connection with its petition, BATS filed a proposed rule change to establish standards for the listing of securities on BATS. 12 On August 30, 2011, the Commission approved this proposed rule change. 13

Based on the approved BATS listing standards and after careful comparison, the Commission has determined that BATS' listing standards for Tier I and Tier II securities are substantially similar to the listing standards of the Named Markets. Accordingly, the Commission today is amending Rule 146(b) to designate securities listed, or authorized for listing, on Tier I and Tier II of BATS as Covered Securities under Section 18(b)(1) of the Securities Act. 14 Amending Rule 146(b) to include these securities as Covered Securities will exempt those securities from state registration requirements as set forth under Section 18(a) of the Securities Act. 15 The Commission also is adopting, as proposed, updated references in the rule.

The Commission notes that the proposed rule text would have designated any security listed, or authorized for listing, on BATS as a Covered Security. In light of BATS recent rule amendment defining “Tier I” and “Tier I securities” to include ETPs, 16 the Commission is refining the rule text adopted today to designate those securities listed on Tier I and Tier II of the Exchange as Covered Securities. This designation is substantively identical to the proposed rule text, as the same securities that the Commission proposed to be designated as Covered Securities in the Proposing Release will be so designated.

Under Section 18(b)(1)(B) of the Securities Act, 17 the Commission has the authority to determine that the listing standards of an exchange, or tier or segment thereof, are substantially similar with those of the NYSE, NYSE Amex, or Nasdaq/NGM. The Commission initially compared BATS' listing standards for Tier I and Tier II securities with those of one of the Named Markets. If the listing standards in a particular category were not substantially similar to the standards of that market, the Commission compared BATS' standards to one of the other two markets. 18 In addition, as it has done previously, the Commission interpreted the “substantially similar” standard to require listing standards at least as comprehensive as those of the Named Markets. 19 If BATS' listing standards were higher than those of the Named Markets, then the Commission still determined that BATS' listing standards are substantially similar to those of the Named Markets. 20 Finally, the Commission notes that differences in language or approach would not necessarily lead to a determination that BATS' listing standards are not substantially similar to those of any Named Market. 21

The Commission has reviewed BATS' listing standards for securities to be listed and traded on BATS and, for the reasons discussed below, has determined that the standards are substantially similar to those of a Named Market. 22 Accordingly, the Commission is amending Rule 146(b) to include securities listed, or authorized for listing, on Tier I and Tier II of BATS. Because the Commission has determined BATS' qualitative listing standards for BATS' Tier I and Tier II securities, Tier I quantitative listing standards are substantively identical to the listing standards for Nasdaq/NGM securities (and, therefore, are “substantially similar” to a Named Market as required by Section 18(b)(1)(B)), 23 the discussion below focuses on BATS' Tier II quantitative listing standards. The Commission included in the Proposing Release its preliminary view that the Tier I and Tier II qualitative listing standards and Tier I quantitative listing standards were substantively identical to the listing standards for Nasdaq/NGM securities and received no comments on that view. 24

As discussed in the Proposing Release, the Commission preliminarily believed that BATS' initial listing standards for primary equity securities listed on Tier II of the Exchange were substantially similar to those of NYSE Amex's common stock listing standards. 25 The Commission has determined that BATS' initial listing standards for primary equity securities are substantially similar to those of NYSE Amex. BATS' requirements relating to bid price, 26 round lot holders, 27 shares held by the public, 28 and required number of registered and active market makers  29 are substantially similar to NYSE Amex requirements. Additionally, BATS' proposed equity, 30 market value, 31 and net income  32 standards are substantially similar to NYSE Amex standards.

In addition to the above initial listing requirements, BATS requires that American Depositary Receipts (“ADRs”) comply with an additional criterion. Specifically, BATS requires there be at least 400,000 ADRs issued for such securities to be initially listed on BATS. 33 However, NYSE Amex does not have specific requirements for ADRs in addition to its initial listing standards for primary equity securities. 34 As noted above, the Commission may still determine that the petitioner's listing standards are substantially similar to those of the Named Markets if BATS' listing standards are higher than the Named Markets. 35 Further, as noted above, differences in language or approach of listing standards are not dispositive. 36 The Commission has determined that the quantitative initial listing standards for primary equity securities on Tier II of the Exchange are substantially similar to those of NYSE Amex.

The Commission has determined that the continued listing requirements for primary equity securities listed on Tier II of the Exchange, while not identical, are substantially similar to those of NYSE Amex. 37 NYSE Amex's delisting criteria are triggered by poor financial conditions or operating results of the issuer. 38 Specifically, NYSE Amex will consider delisting an equity issue if: (i) Stockholders' equity is less than $2 million and such issuer has sustained losses from continuing operations and/or net losses in two of its three most recent fiscal years; (ii) stockholders' equity is less than $4 million and such issuer has sustained losses from continuing operations and/or net losses in three of its four most recent fiscal years; (iii) stockholders' equity is less than $6 million if such issuer has sustained losses from continuing operations and/or net losses in its five most recent fiscal years; or (iv) the issuer has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the exchange, as to whether such company will be able to continue operations and/or meet its obligations as they mature. 39

Although BATS does not have the same continued listing provisions for Tier II, BATS also looks at the financial condition and operating results of the issuer in order to determine whether to delist an issuer. BATS' continued listing standards for Tier II securities require compliance with either a (1) shareholder equity, (2) market value of listed securities or (3) net income standard. Specifically, for continued listing, BATS requires shareholder's equity of at least $2.5 million, market value of listed securities of at least $35 million, or net income of $500,000 from continuing operations in the past fiscal year or two out of three past fiscal years. 40 Further, BATS requires an issuer to have (i) a minimum bid price for continued listing of $1 per share, 41 (ii) at least two registered and active market makers, (iii) 300 public holders, and (iv) a minimum number of publicly held shares of at least 500,000 shares with a market value of at least $1 million. 42 The Commission has determined that the differences in the maintenance criteria for primary equity securities on BATS for Tier II Securities and common stock listed on NYSE Amex are not significant and that, taken as a whole, the criteria are substantially similar. 43

The Commission compared the listing standards of preferred stock and secondary classes  44 of common stock on Tier II of the Exchange to the Nasdaq/NGM standards. As discussed in the Proposing Release, 45 the Commission preliminarily believed that BATS' standards were substantially similar to those of Nasdaq/NGM. BATS' initial and continued listing standards with respect to the number of round lot holders, 46 bid price, 47 number of publicly held shares, 48 market value of publicly held shares, 49 and number of market makers  50 are substantially similar to the Nasdaq/NGM standards. 51 As such, the Commission has determined that BATS' quantitative listing standards for preferred stock and secondary classes of common stock are substantially similar to those of Nasdaq/NGM.

Sparhawk Laboratories, Inc., 12340 Santa Fe Trail Dr., Lenexa, KS 66215, filed ANADA 200-416 that provides for veterinary prescription use of Gentamicin Topical Spray (gentamicin sulfate and betamethasone valerate) in dogs. Sparhawk Laboratories, Inc.'s Gentamicin Topical Spray is approved as a generic copy of Intervet, Inc.'s GENTOCIN Topical Spray, approved under NADA 132-338. The ANADA is approved as of November 10, 2011, and the regulations are amended in 21 CFR 524.1044f to reflect the approval and revised terminology in the indication.

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.

The Agency has determined under 21 CFR 25.33 that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

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 524 is amended as follows:

On October 8, 2010, at 75 FR 62335, HUD published for public comment a proposed rule to update and enhance the Federal Housing Administration (FHA) Lender Insurance Process. FHA-insured single family mortgages are originated and underwritten through the Direct Endorsement process. A majority of FHA-insured mortgages that are originated and underwritten under the Direct Endorsement process are endorsed for insurance by mortgagees through the Lender Insurance process. Under Direct Endorsement, the mortgagee first determines that the proposed mortgage is eligible for insurance under applicable regulations, and then submits the required documents to FHA for a pre-endorsement review. Direct Endorsement mortgagees that meet the requirements may be approved for Lender Insurance. The Lender Insurance process enables mortgagees approved for the Direct Endorsement process to insure single family mortgages originated and underwritten through the Direct Endorsement process without first submitting documents to FHA. Under the Lender Insurance process, a mortgagee conducts its own pre-insurance review and insures the mortgage without a pre-endorsement review by FHA. In order to be eligible to participate in the FHA single family programs as a Lender Insurance mortgagee, a mortgagee must be an unconditionally approved Direct Endorsement mortgagee that is high performing. The Lender Insurance process is authorized under section 256 of the National Housing Act (12 U.S.C. 1715z-21). The HUD regulations that presently govern the Direct Endorsement and Lender Insurance processes are codified at 24 CFR part 203 (entitled Single Family Mortgage Insurance).

The October 8, 2010, proposed rule furthered HUD efforts to improve and expand the risk management activities of the FHA. The proposed regulatory changes were designed to update and enhances the Lender Insurance process, through which the majority of FHA-insured mortgages are endorsed for insurance. Most significantly, the proposed rule provided additional guidance on HUD's regulations implementing the statutory requirements regarding mortgagee indemnification to HUD of insurance claims in the case of fraud, misrepresentation, or noncompliance with applicable loan origination requirements. Other proposed regulatory changes addressed the frequency and methodology of HUD's review of mortgagee Lender Insurance performance, and the approval process for Lender Insurance mortgagees that have undergone a corporate restructuring. The Department also took the opportunity afforded by the proposed rule to solicit public comment on whether FHA mortgagees should be required to submit mortgage loan case binders to HUD electronically. Interested readers should refer to the preamble to the October 8, 2010, proposed rule for additional information on the proposed regulatory changes to the Lender Insurance process.

This final rule follows publication of the October 8, 2010, proposed rule and takes into consideration the public comments received on it. The public comment period on the proposed rule closed on December 7, 2010, and HUD received a total of 13 public comments. Comments were submitted by mortgagees, mortgage lending associations, and private citizens. Most of the public comments pertained to the provisions of the proposed rule concerning indemnification.

After careful consideration of the issues raised by the commenters, HUD has decided to adopt an amended version of the proposed rule. Specifically, HUD has made the following changes to the October 8, 2010, proposed rule:

1. Frequency of HUD review. This final rule clarifies that, consistent with reviews of mortgagee performance under the Credit Watch Termination Initiative, HUD will review Lender Insurance mortgagee performance on an ongoing (as opposed to “continual” basis).

2. Scope of termination. The final rule clarifies that the automatic termination of a mortgagee's Lender Insurance authority under § 203.4(d)(3) is limited to actions taken at the institution level of the mortgagee, as opposed to its branches.

3. Knowing standard for indemnification in the case of fraud or misrepresentation. The final rule provides that a mortgagee shall indemnify HUD for an insurance claim if the mortgagee “knew or should have known” that fraud or misrepresentation was involved.

4. Reinstatement process. The final rule provides that mortgagees whose Lender Insurance authority has been terminated may apply for reinstatement in accordance with procedures closely modeled on the existing procedures for a mortgagee seeking reinstatement following termination of its origination approval agreement or Direct Endorsement authority.

As already noted, the October 8, 2010, proposed rule invited public comment on whether FHA mortgagees should be required to submit mortgage loan case binders to HUD electronically. This final rule does not revise the FHA recordkeeping and reporting requirements, but HUD will consider the comments received on this issue on any future rulemaking addressing the electronic submission of case binders.

The following section of the preamble presents a summary of the significant issues raised by the public comments in response to the October 8, 2010, proposed rule, and HUD's responses to these issues.

Comment: A 5-year indemnification period starting with insurance endorsement is too long for indemnifications demanded for serious and material violations of FHA origination requirements. Several commenters wrote that the proposed 5-year period for indemnification should be shortened. Commenters wrote that problems occurring more than 2 or 3 years after origination are most commonly due to life events such as loss of employment, divorce, or death, rather than decisions made at origination. The majority of commenters who proposed a shortened time frame suggested a period of 2-to-3 years after insurance endorsement. Commenters wrote that based on their experience, the 2-year time frame would be sufficient to identify serious or material issues occurring in the origination of mortgage loans, to identify defects stemming from the underwriting of mortgage loans, and to determine whether lender error occurred. One commenter wrote that HUD's origination guidelines in Handbook 4155.1 instruct lenders to establish income analysis on continuance for 3 years. The commenter wrote that lenders should not be held culpable beyond HUD's own established credit policy.

HUD Response. HUD has not amended the rule based on these comments. Indemnification for 5 years from the date of insurance endorsement is the current standard practice for indemnification in connection with other serious mortgagee program violations, and the adoption of a lesser standard for Lender Insurance would be inconsistent with proper risk management practices. HUD continues to believe that the 5-year period is consistent with the twin policy objectives of providing HUD sufficient opportunity to determine whether there was a serious and material noncompliance issue that rendered the loan ineligible for insurance, while at the same time ensuring that mortgagees are not burdened with the possibility of indemnification due to noncompliance for a mortgage loan endorsed more than 5 years ago.

Comment: Indemnification should be limited to those cases where origination deficiencies caused default. Several commenters wrote that HUD should seek indemnification only in circumstances where an origination deficiency directly caused the default. Commenters expressed concern that FHA may seek indemnification due to small or irrelevant deficiencies in origination if a clear causation standard is not in place. Commenters wrote that a civil money penalty would be a more appropriate penalty than indemnification for loan origination deficiencies not directly related to the mortgage default.

HUD Response. HUD has not amended the rule based on these comments. Current standard practice for indemnification requests is not based on causation connection between the violation and the default, and the adoption of a lesser standard for Lender Insurance would be inconsistent with proper risk management practices. Furthermore, HUD has made it clear that indemnification will be demanded only in cases of serious and material violations of HUD requirements. HUD intends to demand indemnification for loans where fraud, misrepresentation, or serious and material noncompliance are such that the loans were ineligible for insurance. Creating a causation standard (connecting the default to the violation) is unnecessary since FHA should not have incurred the insurance obligation in the first place.

Comment: Proposed bases for indemnification are overly broad. Several commenters wrote that the bases by which HUD may seek indemnification described by the proposed rule are overly broad. The commenters wrote that the proposed bases are subjective and may deter mortgagees from participating in the FHA program or may increase the costs and fees to consumers, because mortgagees absorb the potential for future increased liability. Commenters requested that HUD provide more specific examples illustrating the scenarios under which indemnification may be sought.

HUD Response. HUD has not amended the rule based on these comments. HUD believes that the regulatory language is clear, consistent with current standard practice, and covers the types of violations that are considered serious and material (i.e., ones where the mortgage never should have been endorsed by the lender because FHA would not have insured the mortgage under the Direct Endorsement process). HUD will issue additional guidance regarding the bases for indemnification should it determine such clarification is necessary.

Comment: An indemnification appeals process is necessary. Several commenters wrote that mortgagees should be provided an opportunity to appeal HUD demands for indemnification. Commenters wrote that mortgagees should be afforded the opportunity to present to HUD information and clarifications that may not have been available at the time for indemnification was issued.

HUD Response. HUD has not amended the rule in response to these comments. HUD notes that the means by which fraud or misrepresentation, or serious and material violations of FHA requirements for purposes of the new regulatory indemnification requirements will be identified in accordance with current standard practice; namely, post endorsement technical reviews, quality assurance monitoring reviews, lender self-reports, Office of Inspector General audits, and investigations, etc. These processes afford mortgagees ample opportunities for meaningful discussion and the submission of additional information.

Comment: HUD should clarify the rule's effect on purchasers and servicers of FHA loans. One commenter requested that HUD provide additional clarification of the term “origination,” by assuring that purchasers or servicers of FHA-insured loans will not be impacted by the proposed indemnification changes. The commenter also requested that HUD make clear the effective date of the indemnification provisions.

HUD Response. Purchasers or servicers of FHA-insured loans will not be impacted by the indemnification changes. As with existing standard practice for indemnification agreements, FHA will pay insurance benefits to the servicer or holder of the mortgage, as long as they are not the same entity that was named in the indemnification agreement. The indemnification provisions will apply to all demands for indemnification issued on or after the effective date of this final rule.

Comment: Causation and materiality standards for indemnification based on fraud and misrepresentation may be unequal. Several commenters wrote that mortgagees should not be held to a higher standard for fraud or misrepresentation than for serious and material origination violations. These commenters urged HUD to limit the indemnification requirement regarding fraud or misrepresentation to instances where the mortgagee knew, or should have known, of the fraud or misrepresentation. The commenters also suggested that HUD limit the indemnification requirement to those instances involving “material” misrepresentation.

HUD Response: HUD has amended the rule based on this comment, and to conform to HUD's existing practice regarding indemnification agreements. As with existing standard practice, the final rule reflects that HUD will demand indemnification for cases where the mortgagee knew or should have known of the fraud or misrepresentation.

Comment: FHA mortgage loans receiving an Accept/Approve recommendation from FHA's TOTAL Scorecard should not be subject to indemnification. Several commenters wrote that loans receiving an Accept/Approve recommendation from FHA's TOTAL Scorecard should be excluded from the indemnification provisions. These commenters wrote that, in the case of loans approved by this system, the mortgagee is responsible only for data integrity and not for the creditworthiness of the mortgage loan.

HUD Response. HUD has not amended this rule based on this comment. HUD's current regulations provide that mortgagees are responsible for verifying a borrower's creditworthiness, irrespective of the results derived from the use of TOTAL. Specifically, CFR 203.254(t) provides that “TOTAL is a tool to assist the mortgagee in managing its workflow and expediting the endorsement process, and is not a substitute for the mortgagee's reasonable consideration of risk and credit worthiness. Direct Endorsement mortgagees using TOTAL remain solely responsible for the underwriting decision” (emphasis added). The indemnification provisions of this final rule merely emphasize a lender's existing responsibility for verifying a borrower's creditworthiness. In particular, § 203.255(g)(3)(i) of this final rule (adopted without change from the proposed rule) provides that it is a serious and material violation for a lender to fail to verify the creditworthiness, income, and/or employment of the mortgagor in accordance with FHA requirements.

Receiving an Approve/Accept risk recommendation from TOTAL does not absolve mortgagees of their responsibility to consider information beyond that considered by TOTAL, as well as their responsibility for the decisions to approve and close loans or to endorse loans through the Lender Insurance process. Regardless of the risk assessment provided, the mortgagee remains accountable for compliance with FHA regulations, guidelines, and eligibility requirements, as well as for any credit, capacity, and documentation requirements described in the current version of HUD Handbook 4155.1, Mortgage Credit Analysis, and applicable mortgagee letters and other policy directives.

Comment: Clarify the impact of the methodology of claim and default rate for national lenders and those operating in multiple states. Several commenters requested that HUD address the impact of the revision to the methodology used to determine Lender Insurance eligibility on mortgagees operating on a nationwide basis. Specifically, the commenters requested clarification as to whether the claim and default rate of national mortgagees would be judged solely against those of other national mortgagees and if a nationwide mortgagee's claim and default rate in a particular geographic region or state would be compared to the claim and default rates of other mortgagees in that region or state. The commenters recommended that a national mortgagee be eligible for Lender Insurance authority if it maintains a claim and default rate at or below 150 percent of the FHA national program average.

Other commenters requested that HUD address how the claim and default rate of a mortgagee operating in more than one state, but not nationwide, will be compared. Commenters requested that HUD describe whether the rate will be compared on a state-by-state basis or using a weighted average. Several commenters suggested that HUD use a state-by-state comparison, which would consider only those states where the mortgagee has originated a meaningful number of loans in the past 2 years in proportion to the mortgagee's total number of originations. Such a process, they wrote, would prevent an unfair denial or loss of Lender Insurance approval based on a small number of loans and defaults originated in one state. Commenters further suggested that HUD eliminate from consideration any state in which the total number of originations made in the past 2 years is equal to, or less than, 5 percent of the mortgagee's total originations.

HUD Response. HUD has not amended the rule based on these comments. To be eligible to participate in the Lender Insurance program, a mortgagee must have a claim and default rate at or below 150 percent of the average rate for all of the states in which it does business. In determining eligibility for Lender Insurance, HUD will compare the percentage of all claims and defaults on loans underwritten by that mortgagee to the percentage of claims and defaults for all loans underwritten in the states in which that mortgagee does business.

Comment: Request for clarification regarding applicable comparison ratios. One commenter requested clarification that the comparison ratio used will be the 2-year default and claim ratio, rather than the one-year ratio. The commenter requested further clarification as to which ratio, among those available through the Neighborhood Watch system, will be utilized in the comparison.

HUD Response. HUD is using the 2-year period for determining the claim and default compare ratio, which is the standard used for determining ongoing eligibility to participate in FHA programs. As in the current process, HUD will consider those endorsed loans underwritten by the lender with a beginning amortization date within the 2-year period of analysis. Further, HUD will also analyze these loans to determine claims and defaulted loans from the total number of loans underwritten.

Comment: Concerns regarding maintaining acceptable claim and default rates for Lender Insurance mortgagees. Several commenters expressed concern regarding the proposed requirement that mortgagees maintain the initial claim and default rate necessary for Lender Insurance approval to retain eligibility for Lender Insurance. Commenters wrote that the proposed standard fails to recognize the current volatility of the housing market, and could negatively impact mortgagees approved during periods of exceptional economic and industry performance. Commenters requested that HUD consider several different proposals. These commenter suggestions included a proposal that national mortgagees remain eligible for Lender Insurance if they maintain claim and default rates at or below 150 percent of the FHA national program averages. Another proposal would establish default rate goals rather than comparison ratios. Other commenters suggested that HUD establish separate standards based on borrower or loan characteristics that would enable mortgagees to responsibly lend to all segments of the population. One commenter wrote that Lender Insurance status should not be jeopardized by a short period of noncompliance that could result from a statistical anomaly.

HUD Response. HUD has not amended the rule based on these comments. HUD believes that mortgagees should maintain the claim and default rate needed for eligibility and that setting a more lenient standard for retaining Lender Insurance authority is not acceptable from a risk management perspective. HUD also believes that comparing each mortgagee's claim and default rate only to that of those states where it does business will prevent the kind of statistical anomalies of concern to the commenters. Currently, the option to obtain the compare ratio for all states in which a mortgagee does business is available in Neighborhood Watch. Mortgagees are able to compare their claim and default rate for all states in which they do business to the overall claim and default rate for those same states. HUD's Lender Insurance Guide will be updated to provide further clarification and to describe any enhancements to Neighborhood Watch necessary to accomplish this comparison. The Lender Insurance Guide is available for download at http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12648.pdf.

Comment: Requested clarification of “continual” HUD review of acceptable claim and default rates. Several commenters wrote that HUD's proposed “continual” review standard is vague due to the failure to describe the time period of review. One commenter noted that data is refreshed on a monthly basis, and asked if this implies that HUD would evaluate mortgagee claim and default rates on a monthly basis. Commenters also wrote that the proposed standard does not provide mortgagees with the opportunity to make self-imposed corrections to rectify problems identified by their own monitoring systems, or provide them with a cure period to correct deficiencies identified by HUD. Some commenters recommended that FHA maintain its current policy of yearly review. Many commenters requested that HUD define “continual” to enable mortgagees to plan appropriately for any resulting additional costs and staffing requirements.

HUD Response. HUD has not revised the substance of this provision in response to the comments. HUD reserves the right to monitor the performance of Lender Insurance mortgagees on a continual basis. HUD must be able to respond quickly to poor mortgagee performance in order to fulfill its statutory obligation to safeguard the FHA mortgage insurance funds. Moreover, such ongoing review is consistent with the wording of the Department's regulations for the monitoring of mortgagee performance under the FHA Credit Watch Termination Initiative (see 24 CFR 202.3(c)(2), which states that HUD will review the performance of mortgagees “on an ongoing basis”). That said, this final rule makes one minor change to the wording of this provision for the sake of consistency with the Credit Watch Termination Initiative. It adopts the language used in § 202.3(c) by referring to monitoring on an “ongoing basis.”

Comment: Concerns regarding termination of Lender Insurance authority. Several commenters expressed concern about the proposed regulatory changes pertaining to the termination of Lender Insurance authority. The commenters requested that HUD provide specific grounds that would trigger termination, and clarify that FHA will repeal a mortgagee's Lender Insurance authority only for material adverse actions. The commenters requested that HUD remove the word “any” when describing the specific grounds for terminations. Commenters wrote that use of the word “any” could imply that a lender's authority could be terminated for a minor or trivial action. Commenters also suggested that mortgagees be provided an opportunity for an informal conference prior to issuance of a termination notice. Commenters further wrote that mortgagees be provided a cure period for offenses that could jeopardize a mortgagee's Lender Insurance authority.

HUD Response. HUD agrees with the commenters that examples and guidance can be particularly helpful in regard to the policies and procedures affecting the termination and reinstatement of Lender Insurance authority. To that end, HUD has issued its Lender Insurance Guide to assist lenders, HUD staff, and contractors who participate in the pre-insurance review, post endorsement technical review, and appraisal review processes. The Lender Insurance Guide, which is available for download at http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12648.pdf , also provides examples of actions that will trigger termination.

Moreover, and as noted above in this preamble, this final rule brings additional clarity to the Lender Insurance process by codifying a process for the reinstatement of mortgagees who have had their Lender Insurance process terminated. The reinstatement procedures are closely modeled on the existing reinstatement process for a mortgagee seeking reinstatement following termination of its origination approval agreement or Direct Endorsement authority codified at 24 CFR 202.3(e). The use of the existing process has the benefit of already being familiar to lenders and HUD staff, and obviates the need for meeting new paperwork and other regulatory requirements.

Consistent with the current reinstatement process at 24 CFR 202.3(e)(1)(i), this final rule provides that a mortgagee whose Lender Insurance authority is terminated must wait at least 6 months following termination to apply for reinstatement. In addition to addressing the criteria for Lender Insurance approval specified in § 203.4, the application for reinstatement must be accompanied by a corrective action plan addressing the issues resulting in the termination of the mortgagee's Lender Insurance authority, along with evidence that the mortgagee has implemented the corrective action plan. The requirement for a corrective action plan tracks the similar requirement for reinstatement of Direct Endorsement and origination approval at 24 CFR 202.3(e)(2)(iii). HUD may grant the mortgagee's application for reinstatement if the mortgagee's application is complete and HUD determines that the underlying causes for the termination have been satisfactorily remedied. Mortgagees are reminded that the Lender Insurance Program is a process for endorsing loans for insurance only. Termination of this authority does not impact a mortgagee's ability to seek insurance for a loan originated in accordance with FHA guidelines.

Comment: Procedures governing Lender Insurance approval in instances of merger, acquisition, or restructuring. Commenters welcomed the proposed provisions regarding merged, acquired, or restructured mortgagees. Several commenters also requested that HUD reconsider regulatory waivers as a means to address situations where a newly reorganized corporate entity may merit Lender Insurance approval but not meet the proposed regulatory standards.

HUD Response. HUD appreciates the support of commenters on this issue. HUD notes that the phrase “merger, acquisition, or reorganization” would include changes among parent companies and their subsidiaries. As noted in the preamble to the proposed rule, HUD's goal in crafting the regulatory language is to limit the need for regulatory waivers.

Comment: Use of mandatory electronic submission of case binders. Several commenters supported the electronic submission of case binders, writing that the proposed requirement will make the FHA insurance process more efficient. Commenters, however, wrote that electronic submission of case files should include only those files selected for technical review at HUD's request rather than for all files related to FHA-insured loans. The commenters wrote that requiring submission of all loan files would be costly and would provide FHA with more information than it could substantively review. Some of the commenters were particularly concerned about the impact on smaller mortgage banks and correspondents. These commenters wrote that HUD should consider the readiness of the industry to implement the requirement prior to setting a specific implementation date.

HUD Response. While HUD appreciates the comments received on this issue, this final rule does not revise the FHA recordkeeping and submission requirements. HUD is further considering the issue of electronic submission of case binders, including the concerns expressed by the commenters. As noted earlier, these comments will be addressed in any future rulemaking regarding electronic case binder submission.

The Office of Management and Budget (OMB) reviewed this rule under Executive Order 12866 (entitled “Regulatory Planning and Review”). OMB determined that this rule is a “significant regulatory action,” as defined in section 3(f) of the Order (although not an economically significant regulatory action, as provided under section 3(f)(1) of the Order). This final rule modifies 3 existing areas affecting FHA-approved lenders. First, this rule imposes indemnification provisions on all approved mortgagees with Lender Insurance authority. Second, this rule amends the methodology and requirements for determining an acceptable claim and default rate. Lastly, this final rule amends the 2-year historical performance requirement for mortgagees resulting from merger, acquisition, or reorganization. Other provisions of this rule describe clarifying or technical changes that would not produce an economic impact. HUD's analysis indicates that these regulatory amendments will not have an economic effect of greater than $100 million and thus do not require a regulatory impact analysis. The findings of HUD's analysis are summarized below:

1. Indemnification requirements. With regard to indemnification, this final rule contains much of the existing practice and should not result in a dramatic change in underwriting practices and the quality of FHA loans, assuming that all of FHA's direct endorsement lenders currently conduct due diligence in extending FHA-insured loans. There will be marginal change for those lenders with ineffective risk management practices and those lenders that have refused to execute an indemnification agreement; such lenders may elect instead to attempt to negotiate a settlement with HUD's Mortgagee Review Board.

The primary change is that all direct endorsement lenders with lender insurance authority will be subject to indemnification procedures and will not be able to negotiate the settlement as is the current practice. This facet of the rule could lead to an efficiency: The initial process by a lender of deciding whether to indemnify FHA will be eliminated, along with eliminating the length and cost of negotiations. Time and effort may be saved because the costs of a lengthy preparation for both FHA and the lender in coming before the Mortgage Review Board are reduced by this final rule. On the other hand, the elimination of the lender's option to challenge the indemnification before the Mortgage Review Board could lead to greater expenses for those cases that would have been dismissed under the current practice.

The average over the last 7 years is 1,282 indemnification agreements annually. Refusals to execute an indemnification agreement are rare. If the average negotiation costs are 2 percent of loan amount for both FHA and lender (approximately $140,000 is the average FHA-insured mortgage amount), then the transaction costs to avoid or delay the indemnification would be $2,800 per loan. Over an average of 1,300 indemnifications, and assuming that 5 percent initially refuse to indemnify, the aggregate transaction costs saved by this rule would be $182,000.

2. Acceptable Claim and Default Rate. The final rule makes two changes regarding acceptable claim and default rates for Lender Insurance mortgagees. First, the rule more accurately evaluate a mortgagee's performance record by basing the claim and default-rate comparison on the mortgagee's actual area of operations. The rule also clarifies that, in order to retain their Lender Insurance authority, mortgagees must maintain the acceptable claim and default rate required of them when they were initially delegated such authority.

These regulatory changes will accurately evaluate a mortgagee's performance record by basing the claim and default rate comparison on the mortgagee's actual area of operations. This will likely lead to an increase in opportunity for some lenders but may lead to a decrease for others. It is difficult to know what the net effect of these regulatory changes on lenders will be. Some will be excluded and others will be included, depending upon where they operate. To simulate the regulatory changes, we turn to data on active direct endorsement lenders.

Using active Direct Endorsement lenders as a base, 18 are included through this provision. The change in the performance analysis requirement (maintaining an acceptable default and claim rate) appears to reduce the number of direct endorsement lenders that meet the requirement (113 active direct endorsement lenders). The combined effect of the two changes in eligibility is to exclude direct endorsement lenders currently participating in lender insurance (a reduction of 54).

In the short run, this effect can be thought of as a transfer between lenders of different regions. In the long run, HUD expects the impact of this rule to be geographically neutral. Lenders will not be permanently reduced as a result of this rule; rather, HUD expects that lenders that can meet the eligibility criteria will eventually assume the business of those that could not meet the new eligibility criteria. The benefits of a clearer and fairer methodology are expected to endure.

3. Lender Insurance Approval in the Case of Corporate Restructuring. The proposed rule would facilitate the compliance of new lending institutions resulting from a merger, acquisition, or reorganization with the statutory requirements for Lender Insurance approval. The proposed rule would thus make changes designed to provide additional regulatory flexibility and better reflect existing market conditions. The regulatory 2-year performance history requirement may impose a burden on lenders whose compliance with FHA requirements was not affected by the business reorganization. Although HUD has in the past granted regulatory waivers to address this problem, the proposed rule will codify a solution that is less administratively burdensome than the regulatory waiver process.

The full economic analysis is available for review at www.regulations.gov. The docket file for this rule is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at (202) 402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the toll-free Federal Relay Service at (800) 877-8339.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.

As more fully discussed in the “Regulatory Flexibility Act” section of the preamble to the October 8, 2010, proposed rule, the amendments made by this final rule do not add any new regulatory burdens on FHA-approved mortgagees. Rather, the final rule codifies much of existing practice regarding indemnification. HUD is also revising the methodology for determining acceptable claim and default rates, and making several other changes designed to provide additional flexibility and to better reflect changing market conditions. These changes will have an overall beneficial economic impact on small business mortgagees. To the extent that the changes have any negative impact, it will be as a consequence of the mortgagee's inability to maintain acceptable risk management practices, and not as a result of a HUD regulatory mandate. Interested readers are referred to the analysis provided in the “Regulatory Flexibility Act” section of the preamble to the proposed rule, commencing at 75 FR 62340.

For the above reasons, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities.

A Finding of No Significant Impact (FONSI) with respect to the environment was made at the proposed rule stage, in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact remains applicable to this final rule and is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street SW., Room 10276, Washington, DC 20410. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the FONSI by calling the Regulations Division at (202) 708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at (800) 877-8339.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This final rule does not impose any Federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of UMRA.

The information collection requirements for this final rule have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0059. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.

The Catalogue of Federal Domestic Assistance Number for the principal FHA single family mortgage insurance program is 14.117.

Accordingly, for the reasons discussed in the preamble, HUD amends 24 CFR part 203 to read as follows:

The final regulations that are the subject of these corrections are under section 482 of the Internal Revenue Code.

As published, final regulations (TD 9568), contains errors which may prove to be misleading and are in need of clarification.

Accordingly, the publication of the final regulations, (TD 9568), which were the subject of FR Doc. 2011-32458, is corrected as follows:

1. On page 80082, column one, in the preamble, under the caption DATES , lines 4 and 5, the language “1.482-8(c), 1.482-9(n), and 1.301-7701-1(f)” is corrected to read as “1.482-8(c), 1.482-9(n), and 301.7701-1(f).”

2. On page 80082, column one, in the preamble, under the caption, Paperwork Reduction Act, line one, the language “The collection of information” is corrected to read “The collections of information”.

3. On page 80086, column three, in the preamble, paragraph d. introductory text, the language “Contractual CWI Provisions—§ 1.482-1(d)(3)(ii)(C), Examples 3 through 7” is corrected to read “Contractual CWI Provisions—§ 1.482-7(h)(2)(iii)(C), Examples 3 through 7.”.

The final regulations that are the subject of these corrections are under section 482 of the Internal Revenue Code.

As published, final regulations (TD 9568), contains errors which may prove to be misleading and are in need of clarification.

Accordingly, 26 CFR Parts 1 and 301 are corrected by making the following correcting amendments:

Burlington Northern Santa Fe (BNSF) Railway has requested to not open the BNSF Railroad Lift Bridge for vessels to facilitate track maintenance. The bridge, also known as the St Johns RR Bridge, crosses the Willamette River at mile 6.9 and provides 54 feet of vertical clearance above Columbia River Datum 0.0, while in the closed position. Vessels which do not require a bridge opening may continue to transit beneath the bridge during this closure period. Under normal operations this bridge opens on signal as required by 33 CFR 117.5. The deviation period is from 9 a.m. on January 30, 2012 through 3 p.m. February 1, 2012. This deviation allows the lift span of the BNSF Railway Bridge across the Willamette River, mile 6.9, to remain in the closed position and need not open for maritime traffic from 9 a.m. through 3 p.m. daily from January 30, 2012 through February 1, 2012. The bridge shall operate in accordance to 33 CFR 117.5 at all other times. Waterway usage on this stretch of the Willamette River includes vessels ranging from commercial tug and barge to small pleasure craft. Mariners have been notified and will be kept informed of the bridge's operational status via the Coast Guard Notice to Mariners publication and Broadcast Notice to Mariners as appropriate. Due to the nature of work being performed the draw span will be unable to open for maritime traffic during this maintenance period.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The U.S. Army Rock Island Arsenal requested a temporary deviation for the Rock Island Railroad and Highway Drawbridge, across the Upper Mississippi River, mile 482.9, at Rock Island, Illinois to remain in the closed-to-navigation position for a two-hour period from 9 a.m. to 11 a.m., May 19, 2012, while a walk is held between the cities of Davenport, IA and Rock Island, IL. The Rock Island Railroad and Highway Drawbridge currently operates in accordance with 33 CFR 117.5, which states the general requirement that drawbridges shall open promptly and fully for the passage of vessels when a request to open is given in accordance with the subpart.

There are no alternate routes for vessels transiting this section of the Upper Mississippi River.

The Rock Island Railroad and Highway Drawbridge, in the closed-to-navigation position, provides a vertical clearance of 23.8 feet above normal pool. Navigation on the waterway consists primarily of commercial tows and recreational watercraft. This temporary deviation has been coordinated with waterway users. No objections were received.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Louisiana Department of Transportation and Development has requested a temporary deviation from the operating schedule for the swing span bridge across Boudreaux Canal, mile 0.1, at Chauvin, Terrebonne Parish, Louisiana. The swing span bridge has a vertical clearance of 5 feet above high water, elevation 3 feet Mean Sea Level in the closed-to-navigation position and unlimited in the open-to-navigation position.

In accordance with 33 CFR 117.5, the bridge currently opens on signal for the passage of vessels. This deviation allows the swing span of the bridge to remain closed-to-navigation Monday through Saturday during the times and dates as follows: From 6 a.m. through 6 p.m. from Monday, March 5, 2012 through Saturday, March 10, 2012; and from 7 a.m. through 7 p.m. from Monday, March 12, 2012 through Wednesday, April 4, 2012. During the deviation period, the swing span of the bridge will open for the passage of vessels from 12 noon to 1 p.m. each work day.

The closures are necessary in order to remove broken and deteriorated bottom lateral cross braces and install I-beam stringers on the bridge deck, as well as to remove and replace splice plate bolts which fasten the two sections of main span girders along the two longitudinal sides of the bridge deck. This maintenance is essential for the continued operation of the bridge. Notices will be published in the Eighth Coast Guard District Local Notice to Mariners and will be broadcast via the Coast Guard Broadcast Notice to Mariners System.

Navigation on the waterway consists of tugs with tows, fishing vessels and recreational craft. The bridge will be able to open for emergencies, if necessary. There are no alternate waterway routes available. Based on experience and coordination with waterway users, it has been determined that these closures will not have a significant effect on vessels that use the waterway.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. The Coast Guard received notice of the timeline for this project on December 2, 2011. This floodwall construction and repair project is necessary for flood protections; therefore, the Coast Guard determined that immediate action is needed to protect the personnel, general public, vessel and tows, and mariners from hazards associated with the floodwall repair and construction process. Publishing a NPRM would unnecessarily delay the effective date for this rule which would be contrary to the public interest. Delaying this project for the NPRM process would also interfere with the contractually imposed timeline for repair of the floodwall.

Under 5 U.S.C. 553(d)(3), good cause exists for not providing 30 days notice for this rulemaking. The Coast Guard received notice of the timeline for this project on December 2, 2011. Based on the necessity of this floodwall repair and construction project and the repair and construction timeline presented to the Coast Guard, immediate action is required. Delaying the effective date would be contrary to public interest. Delaying or rescheduling the construction and repair to provide 30 days notice also is impracticable because of the dates the construction barges may be deployed to the project site. By making the rule effective immediately upon publication and enforceable with actual notice on December 12, 2011, the construction and repair of the floodwall can continue under the applicable contract.

The US Army Corps of Engineers contracted installation of a new sheetpile floodwall on the waterward side of the existing Larose Floodwall and construction of a new rip-rap barge impact barrier on the waterward side of the new floodwall that will extend approximately 20-45 feet from the existing wall into the Gulf Intracoastal Waterway, Mile Markers 35.2-35.5, west of Harvey Locks.

The Coast Guard is establishing a temporary Safety Zone in the Gulf Intracoastal Waterway, Mile Marker 35.2-35.5, bank to bank, West of Harvey locks, Larose, Lafourche Parish, Louisiana. The temporary safety zone will continue through June 30, 2012. Vessels and tows shall transit at slowest safe speed to minimize wake and, after leaving the slowest safe speed zone, proceed with caution to minimize interference with construction activities. All work on the project is scheduled to be complete by June 30, 2012.

Beginning December 12, 2011 thru June 30, 2012 two barges will be staged on the south side of the waterway at all times but will remain clear of the main channel limit. Notices to Mariners, regarding channel restrictions and closures, will be updated as the project progresses and as the information becomes available. Mariners can contact the contractor via VHF-FM channel 69. Mariners shall transit at their slowest safe speed to minimize wake and proceed with caution while passing through the construction area.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under that those Orders.

This rule creates a safety zone implementing slowest safe speed to minimize wake. Vessels will be allowed to enter and transit through the area. Advance notifications to the marine community regarding this safety zone and any restrictions or closures related to the floodwall repair and construction project will be made through Broadcast Notice to Mariners and Local Notice to Mariners. The impacts on routine navigation are expected to be minimal.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit through the Safety Zone through June 30, 2012. This Safety Zone will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for only a short period of time.

If you are a small business entity and are significantly affected by this regulation, please contact ENS Nicholas Jones, Marine Safety Unit Houma, at (985) 857-8507 ext. 232.

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

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

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

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

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule will be in effect until June 30, 2012, but is not expected to result in any significant adverse environmental impact as described in NEPA.

An environmental analysis checklist and a categorical exclusion determination will be provided and made available at the docket as indicated in the ADDRESSES section.

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

Table of Contents I. Background II. EPA's Analysis of North Carolina's Submittals III. Final Action IV. Statutory and Executive Order Reviews I. Background

In accordance with the CAA, the Triad Area was designated nonattainment for the 1-hour ozone NAAQS on November 6, 1991. See 56 FR 56694. The designation for the Triad Area was effective on January 6, 1992. See 60 FR 7124.

On November 13, 1992, the State of North Carolina, through NCDENR, submitted a request to redesignate the Triad Area to attainment for the 1-hour ozone NAAQS. Included with the 1-hour ozone redesignation request, North Carolina submitted the required 1-hour ozone monitoring data and maintenance plan ensuring the Area would remain in attainment for the 1-hour ozone NAAQS for at least a period of 10 years (consistent with CAA 175A(a)). The maintenance plan submitted by North Carolina followed EPA guidance for maintenance areas, subject to section 175A of the CAA.

On September 9, 1993, EPA approved North Carolina's request to redesignate the Triad Area (58 FR 4731) to attainment for the 1-hour ozone NAAQS. The maintenance plan for the Triad Area became effective on November 8, 1993. North Carolina provided an update to the Triad Area maintenance plan on April 4, 2004, in accordance with section 175(A)(b), to extend the maintenance plan to cover additional years such that the entire maintenance period was for at least 20 years after the initial redesignation of this Area to attainment. EPA approved North Carolina's update to the Triad Area's maintenance plan on September 20, 2004. See 69 FR 56163.

On April 30, 2004, EPA designated and classified areas for the 1997 8-hour ozone NAAQS (69 FR 23858), and published the final Phase 1 Rule for implementation of the 1997 8-hour ozone NAAQS (69 FR 23951) (Phase 1 Rule). In the April 30, 2004, rulemaking entitled “Air Quality Designations and Classifications for the 8-Hour Ozone National Ambient Air Quality Standards; Early Action Compact Areas with Deferred Effective Dates” (69 FR 23858), EPA designated every county in the United States unclassifiable/attainment or nonattainment for the new 8-hour ozone NAAQS. Counties in and around the Triad Area (also known as the Greensboro-Winston Salem-High Point Area) were designated as nonattainment with a deferred effective date as part of the Early Action Compact (EAC) program. (For more information on the EAC  1 Program, see, http://www.epa.gov/ttn/naaqs/ozone/eac/index.htm. ) The Greensboro-Winston Salem-High Point nonattainment-deferred EAC Area  2 for the 1997 8-hour ozone NAAQS (which includes the entire Triad Area) is comprised of Alamance, Caswell, Davidson, Davie, Forsyth, Guilford, Randolph, and Rockingham counties. One year after the effective date of EPA's designations for the 1997 8-hour ozone NAAQS ( i.e., June 15, 2005), the 1-hour ozone NAAQS was revoked for most areas. However, the 1-hour ozone NAAQS was not revoked for previous 1-hour ozone nonattainment areas that were currently 8-hour nonattainment-deferred EAC areas, such as the Greensboro-Winston Salem-High Point EAC Area.

The Greensboro-Winston Salem-High Point EAC Area attained the 1997 8-hour ozone NAAQS with a design value of 0.083 parts per million (ppm) using three years of quality assured data for the years of 2005-2007. On February 6, 2008, EPA proposed that 13 nonattainment areas with deferred effective dates, including the Greensboro-Winston Salem-High Point Area, be designated attainment for the 1997 8-hour ozone NAAQS. See 73 FR 6863. These areas met all of the milestones of the EAC program and demonstrated that they were in attainment of the 1997 8-hour ozone NAAQS as of December 31, 2007. In the same rulemaking, EPA also proposed that one year after the effective date of these designations, the 1-hour ozone NAAQS be revoked in these areas and the transportation conformity requirements for the 1-hour ozone NAAQS no longer remain in effect in these areas after the revocation. This rulemaking was finalized on April 2, 2008. See 73 FR 17897. Effective April 15, 2008, the Greensboro-Winston Salem-High Point EAC Area was designated as attainment for the 1997 8-hour ozone NAAQS.

In accordance with section 110(a)(1) of the CAA and the Phase 1 Rule, 3 North Carolina was required to submit a 10-year maintenance plan for the portion of the Greensboro-Winston Salem-High Point EAC Area that comprised the Triad Area (as a former 1-hour ozone maintenance area) within three years of the effective date ( i.e., April 15, 2011) of the Area being designated attainment for the 1997 8-hour ozone NAAQS. On May 20, 2005, EPA issued guidance providing information on how a state might fulfill the maintenance plan obligation established by the CAA and the Phase 1 Rule (Memorandum from Lydia N. Wegman to Air Division Directors, Maintenance Plan Guidance Document for Certain 8-hour Ozone Areas Under Section 110(a)(1) of Clean Air Act, May 20, 2005—hereafter referred to as the “Wegman Memorandum”). On April 13, 2011, with supplemental information submitted on May 18, 2011, North Carolina provided revisions to EPA to meet the requirements for the 110(a)(1) maintenance plan for the Triad Area.

As mentioned above, on April 13, 2011, the State of North Carolina, through NCDENR submitted a SIP revision, with supplemental information submitted on May 18, 2011, containing the 1997 8-hour ozone maintenance plan for the Triad Area as required by section 110(a)(1) of the CAA and the provisions of EPA's Phase 1 Rule. See 40 CFR 51.905(a)(4). The purpose of the April 13, 2011, submission is to ensure continued attainment and maintenance of the 1997 8-hour ozone NAAQS until 2018 for this attainment area. The May 18, 2011, supplemental information contained Appendix C SESARM reference document, and Appendix D the Public Notice Report, which were both inadvertently left out of the original submittal.

As required, North Carolina's plan provides data showing continued attainment and maintenance of the 1997 8-hour ozone NAAQS in the Triad Area for at least 10 years from the effective date of this Area's designation as attainment for the 1997 8-hour ozone NAAQS. The plan also includes components illustrating how the Area will continue attainment of the 1997 8-hour ozone NAAQS and provides contingency measures. The section 110(a)(1) maintenance plan components for the Triad Area are discussed below.

(a) Attainment Inventory. In order to demonstrate maintenance in the aforementioned area, North Carolina developed comprehensive inventories of volatile organic compounds (VOC) and nitrogen oxides (NO X ) emissions from area, point, on-road mobile, non-road mobile (including aircraft, locomotive and marine (ALM)), 4 and manmade emission sources using 2007 as the base year. According to the May 20, 2005, Maintenance Plan Guidance Document for Certain 8-Hour Ozone Areas Under Section 110(a)(1) of the Clean Air Act, a state may use one of the three years for which the 1997 8-hour attainment designation was based (2001, 2002 and 2003) as their attainment inventory base year. However, due to the fact that the Triad Area was an EAC area, the effective date of designation was deferred to April 15, 2008, and therefore consideration of a later base year of 2005, 2006, or 2007 was required for the purpose of an emissions inventory. See 69 FR 23857. For the purpose of this maintenance plan, North Carolina chose 2007 as the attainment level emissions base year for the Triad Area. The State's submittal contains the detailed inventory data and summaries by source category for the Triad Area.

In accordance with USEPA's Air Emissions Reporting Rule requirements, North Carolina compiles a statewide emissions inventory for point sources on an annual basis. Area source emissions are estimated by multiplying an emission factor by a known indicator like number of employess or population. On-road mobile emissions of VOC and NO X were estimated using the MOVES2010a mobile model. Non-road mobile emissions data were derived using the U.S. EPA's NONROAD 2008 model with the exception of railroad locomotives and aircraft engines that are estimated by using an emission factor.

In projecting data for the maintenance year 2018 emissions inventories, North Carolina used several methods to project data from the base year 2007 to the interim years 2011, and 2018. These projected inventories were developed using EPA-approved technologies and methodologies including the Southeastern Emissions Modeling, Analysis, and Planning methodology. Projected point, area, and non-road mobile source inventories were developed using the 2007 base year inventories and economic growth factors from EPA's Economic Growth and Analysis System.

The following tables provide VOC and NO X emissions data for the 2007 base attainment year inventories, as well as projected VOC and NO X emissions inventory data for 2010, 2014, and 2018. The Phase 1 Rule provides that the 10-year maintenance period begin as of the effective date of designation for the 1997 8-hour NAAQS for the Area. The designations for the 13 EAC attainment areas (of which the Greensboro-Winston Salem- High Point Area (inclusive of the Triad Area) was one) were effective in April 2008 so the maintenance period must end no earlier than 2018.

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-0968 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before March 26, 2012. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-0968, by one of the following methods:

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

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

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

In the Federal Register of February 25, 2011 (76 FR 10584) (FRL-8863-3), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 0F7783) by Valent USA Corporation, 1600 Riviera Avenue, Suite 200, Walnut Creek, CA 94596. The petition requested that 40 CFR 180.593 be amended by establishing tolerances for residues of the miticide/ovicide etoxazole, 2-(2,6-difluorophenyl)-4-[4- (1,1-dimethylethyl)-2-ethoxyphenyl]-4,5-dihydrooxazole, in or on corn, field, grain at 0.01 parts per million (ppm); corn, field, forage at 0.6 ppm; corn, field, stover at 2.5 ppm; corn, field, refined oil at 0.03 ppm; corn, pop, grain at 0.01 ppm; corn, pop, stover at 2.5 ppm; poultry, fat at 0.01 ppm; and poultry, liver at 0.02 ppm. That notice referenced a summary of the petition prepared by Valent, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the levels at which some of the tolerances are being set and determined tolerances are not needed for poultry. The reasons for these changes are explained in Unit IV.D.

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

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

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

Etoxazole possesses low acute toxicity via all routes of exposure. It is not an eye or dermal irritant or a dermal sensitizer. No toxicity was seen at the limit dose in a 28-day dermal toxicity study in rats.

The liver is the main target organ in mice, rats and dogs. In a 90-day toxicity study in dogs, increased liver weights and centrilobular hepatocellular swelling in the liver were observed. Similar effects were observed in a chronic toxicity study in dogs at similar doses, indicating that systemic effects (mainly liver effects) occur at similar dose levels following short- through long-term exposure without increasing in severity. In a 90-day toxicity study in mice, hepatotoxicity (increased relative liver weight, liver enlargement, and centrilobular hepatocellular swelling) was observed at high doses. Similar effects were observed at the high dose in a mouse carcinogenicity study. Subchronic and chronic toxicity studies in rats produced similar effects (increased liver weights, centrilobular hepatocellular swelling, etc.) to those seen in mice and dogs. In addition, slight increases in thyroid weights and incisors were observed in subchronic and chronic toxicity studies in rats at high doses and at terminal stages of the study. Toxicity was not observed at the highest dose tested (HDT) in another carcinogenicity study in mice. There is no evidence of immunotoxicity or neurotoxicity in any of the submitted studies.

Two studies in mice showed no evidence of carcinogenicity up to the HDT. In a rat carcinogenicity study, which was deemed unacceptable due to inadequate dosing, benign interstitial cell tumors (testis) and pancreas benign islet cell adenomas were observed (in females) at the high dose. These effects were not observed in an acceptable carcinogenicity study in rats at higher doses. In special mechanistic male rat studies there were no observable changes in serum hormone levels (estradiol, luteinizing hormone (LH), prolactin and testosterone) or reproductive effects (interstitial cell proliferation or spermatogenesis) noted. EPA classified etoxazole as “not likely to be carcinogenic to humans.” Etoxazole is not mutagenic.

The toxicology data for etoxazole provides no indication of increased susceptibility, as compared to adults, of rat and rabbit fetuses to in utero exposure in developmental studies. The rabbit developmental toxicity study included maternal toxic effects (liver enlargement, decreased weight gain, and decreased food consumption) at the same dose as developmental effects (increased incidences of 27 presacral vertebrae and 27 presacral vertebrae with 13th ribs). In the 2-generation reproduction study conducted with rats, offspring toxicity was more severe (pup mortality) than parental toxicity (increased liver and adrenal weights) at the same dose, indicating increased qualitative susceptibility.

Specific information on the studies received and the nature of the adverse effects caused by etoxazole as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document titled “Etoxazole. Human Health Risk Assessment for Proposed Uses in/on Field Corn and Pop Corn,” pp. 24-27 in docket ID number EPA-HQ-OPP-2010-0968.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for etoxazole used for human risk assessment is discussed in Unit III.B., in the Table of the final rule published in the Federal Register of April 13, 2011 (76 FR 20537) (FRL-8867-5) ( http://www.gpo.gov/fdsys/pkg/FR-2011-04-13/pdf/2011-8550.pdf. )

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to etoxazole, EPA considered exposure under the petitioned-for tolerances as well as all existing etoxazole tolerances in 40 CFR 180.593. EPA assessed dietary exposures from etoxazole in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

No such effects were identified in the toxicological studies for etoxazole; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the United States Department of Agriculture (USDA) 1994-1996 and 1998 Continuing Surveys for Food Intake by Individuals (CSFII). As to residue levels in food, an unrefined, chronic dietary exposure assessment was performed for the general U.S. population and various population subgroups using tolerance-level residues for all agricultural commodities and 100 percent crop treated (PCT) information.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that etoxazole does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and PCT information. EPA did not use anticipated residue and/or PCT information in the dietary assessment for etoxazole. Tolerance level residues and/or 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for etoxazole in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of etoxazole. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

Based on the First Index Reservoir Screening Tool (FIRST), and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of etoxazole for chronic exposures for non-cancer assessments are estimated to be 4.761 parts per billion (ppb) for surface water and 0.746 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 4.761 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Etoxazole is not registered for any specific use patterns that would result in residential exposure.

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

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

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

2. Prenatal and postnatal sensitivity. The toxicology data for etoxazole provides no indication of increased susceptibility, as compared to adults, of rat and rabbit fetuses to in utero exposure in developmental studies. In a rat reproduction study, offspring toxicity was more severe (pup mortality) than parental toxicity (increased liver and adrenal weights) at the same dose; thereby indicating increased qualitative susceptibility. Based on the concerns in this unit, a Degree of Concern Analysis was performed by EPA, which concluded that concern is low since:

i. The effects in pups are well-characterized with a clear NOAEL;

ii. The pup effects occur at the same dose as parental toxicity; and

iii. The doses selected for various risk assessment scenarios are lower (~3000-fold lower) than the doses that caused offspring toxicity in the rat 2-generation reproduction study. Therefore, the endpoints selected for risk assessment are protective of the effects seen in the rat reproduction study.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

i. The toxicity database for etoxazole is complete except for acute and subchronic neurotoxicity and immunotoxicity studies. Changes to 40 CFR 180.158 make acute and subchronic neurotoxicity testing (OPPTS Guideline 870.6200), and immunotoxicity testing (OPPTS Guideline 870.7800) required for pesticide registration. Although these studies are not yet available for etoxazole, the available data do not show any evidence of treatment-related effects on the immune system. Further, there is no evidence of neurotoxicity in any study in the toxicity database for etoxazole. Therefore, the EPA does not believe that conducting neurotoxicity and immunotoxicity studies will result in a NOAEL lower than the NOAEL of 4.62 milligrams/kilograms/day (mg/kg/day) already established for etoxazole. Consequently, an additional database uncertainty factor does not need to be applied.

ii. There is no indication that etoxazole is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. Although there is qualitative evidence of increased susceptibility of offspring (pup mortality) compared to less severe parental effects (increased liver and adrenal weights) at the same dose in the rat multi-generation reproduction study, the Agency did not identify any residual uncertainties after establishing toxicity endpoints and traditional UFs (10X for interspecies variation and 10X for intraspecies variation) to be used in the risk assessment. Therefore, there are no residual concerns regarding developmental effects in the young.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to etoxazole in drinking water. These assessments will not underestimate the exposure and risks posed by etoxazole.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, etoxazole is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to etoxazole from food and water will utilize 11% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. There are no residential uses for etoxazole.

3. Short and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

A short- and/or intermediate-term adverse effect was identified; however, etoxazole is not registered for any use patterns that would result in short- and/or intermediate-term residential exposure. Short- and/or intermediate-term risk is assessed based on short- and/or intermediate term residential exposure plus chronic dietary exposure. Because there is no short- and/or intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short- and/or intermediate-term risk), no further assessment of short- and/or intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and/or intermediate-term risk for etoxazole.

4. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, etoxazole is not expected to pose a cancer risk to humans.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to etoxazole residues.

Adequate enforcement methodology (gas chromatography/nitrogen-phosphorus detection (GC/NPD) and gas chromatography/mass selective detection (GC/MSD) methods) are available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

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

The Codex has not established a MRL for etoxazole for the commodities discussed in this document.

Based upon analysis of the data supporting the petition using the Organization for Economic Cooperation and Development tolerance calculation procedures, the EPA revised the tolerance levels for corn, field, forage from 0.6 ppm to 0.80 ppm; corn, field, stover from 2.5 ppm, to 4.0 ppm and corn, pop, stover from 2.5 ppm to 4.0 ppm.

There is no reasonable expectation of finding quantifiable residues of etoxazole in poultry commodities based on the calculated maximum reasonable dietary burden (MRDB) for poultry (0.0077 ppm) and the results from the poultry metabolism study. Therefore, tolerances for residues of etoxazole in poultry, fat and poultry, liver were not required for this petition.

Therefore, tolerances are established for residues of etoxazole in or on corn, field, grain at 0.01 ppm; corn, field, forage at 0.80 ppm; corn, field, stover at 4.0 ppm; corn, field, refined oil at 0.03 ppm; corn, pop, grain at 0.01 ppm; corn, pop, stover at 4.0 ppm.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-1017 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before March 26, 2012. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-1017, by one of the following methods:

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

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

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

In the Federal Register of February 25, 2011 (76 FR 10584) (FRL-8863-3), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 0E7809) by IR-4, Rutgers, The State University of New Jersey, 500 College Rd. East, Suite 201W., Princeton, NJ 08540. The petition requested that 40 CFR 180.478 be amended by establishing tolerances for residues of the herbicide rimsulfuron, N -((4,6-dimethoxypyrimidin-2-yl)aminocarbonyl)-3-(ethylsulfonyl)-2-pyridinesulfonamide, including its metabolites and degradates, in or on caneberry, subgroup 13-07A at 0.01parts per million (ppm) and bushberry, subgroup 13-07B at 0.01 ppm. That notice referenced a summary of the petition prepared by DuPont, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

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

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

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

Rimsulfuron has low acute toxicity by oral, dermal, and inhalation routes of exposure. It is a moderate eye irritant and is not a dermal sensitizer. In subchronic and chronic toxicity studies in rats, toxic effects included decreased body weight, decreased body weight gain, increased relative liver and absolute kidney weights, and diuresis. In the subchronic study in mice, increased red blood cell (RBC) and hemoglobin, and decreased body weight gain and food efficiency were observed. In the chronic study in mice, decreased body weight, increased incidences of dilation and cysts in the glandular stomach, and degeneration of the testicular artery and tunica albuginea were observed. In the subchronic study in dogs, diuresis was indicated by urinary volume, platelet concentration and kidney weights accompanied by decreased urinary osmolality. In the chronic study in dogs, increased absolute liver and kidney weights, increased seminiferous tubule degeneration, and increased number of spermatid giant cells present in epididymides in males were observed.

In the developmental toxicity study in rats, no toxicity was seen at the highest dose tested (HDT). In the developmental toxicity study in rabbits, and in the 2-generation reproduction toxicity study in rats, developmental/offspring toxicity was seen in the presence of maternal/systemic toxicity and at similar dose levels. There is no quantitative or qualitative evidence of increased susceptibility following pre- and/or postnatal exposures, and there are no concerns or residual uncertainties.

Rimsulfuron was classified by EPA as “not likely to be carcinogenic to humans” based on the absence of tumors in carcinogenicity studies conducted in rats and mice.

Specific information on the studies received and the nature of the adverse effects caused by rimsulfuron as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “Rimsulfuron. Human Health Risk Assessment for Proposed Section 3 Uses on Caneberry and Bushberry,” pp. 31-33 in docket ID number EPA-HQ-OPP-2010-1017.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which the NOAEL and the LOAEL are identified. Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for rimsulfuron used for human risk assessment is shown in the Table of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to rimsulfuron, EPA considered exposure under the petitioned-for tolerances as well as all existing rimsulfuron tolerances in 40 CFR 180.478. EPA assessed dietary exposures from rimsulfuron in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

No such effects were identified in the toxicological studies for rimsulfuron; therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA 1994-1996 and 1998 Continuing Surveys of Food by Individuals (CSFII). As to residue levels in food, EPA assumed that rimsulfuron residues were present at tolerance levels in all commodities for which tolerances have been established, and that 100% of those crops were treated with rimsulfuron.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that rimsulfuron does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue and/or PCT information in the dietary assessment for rimsulfuron. Tolerance level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for rimsulfuron in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of rimsulfuron. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm .

Based on the First Index Reservoir Screening Tool (FIRST) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of rimsulfuron for acute exposures are estimated to be 5.596 parts per billion (ppb) for surface water and 0.016 ppb for ground water and for chronic exposures for non-cancer assessments are estimated to be 0.120 ppb for surface water and 0.016 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the chronic dietary risk assessment, the water concentration of value 0.120 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Rimsulfuron is not registered for any specific use patterns that would result in residential exposure.

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

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

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

2. Prenatal and postnatal sensitivity. In the developmental toxicity study in rats, no developmental toxicity was seen at the HDT. In the developmental toxicity study in rabbits and in the 2-generation study in rats, developmental and offspring toxicity were seen in the presence of maternal/systemic toxicity. Consequently, there is no evidence of quantitative or qualitative increased susceptibility following in utero or postnatal exposures. Therefore, there are no concerns, nor residual uncertainties for pre- and/or postnatal toxicity after exposure to rimsulfuron.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

i. The toxicity database for rimsulfuron is complete with the exception of the acute and subchronic neurotoxicity and the immunotoxicity studies which are required by the new part 158 guidelines. Despite the requirement for these studies, there is no evidence that rimsulfuron either causes neurotoxic effects or directly targets the immune system, and therefore an additional uncertainty factor is not needed to account for the lack of these studies.

ii. A developmental neurotoxicity study is not required because neither the subchronic or chronic toxicity studies in rats and dogs, the developmental toxicity studies in rats and rabbits, nor the 2-generation reproduction study indicated that the nervous system was specifically affected by treatment with rimsulfuron.

iii. There is no evidence that rimsulfuron results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to rimsulfuron in drinking water. These assessments will not underestimate the exposure and risks posed by rimsulfuron.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the aPAD and cPAD. For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, rimsulfuron is not expected to pose an acute risk.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to rimsulfuron from food and water will utilize < 1% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. There are no residential uses for rimsulfuron.

3. Short- and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Short- and intermediate-term adverse effects were identified; however, rimsulfuron is not registered for any use patterns that would result in short- and/or intermediate-term residential exposure. Short- and intermediate-term risk is assessed based on short- and intermediate-term residential exposure plus chronic dietary exposure. Because there is no short- and/or intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short- and intermediate-term risk), no further assessment of short- and intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for rimsulfuron.

4. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, rimsulfuron is not expected to pose a cancer risk to humans.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to rimsulfuron residues.

Adequate enforcement methodology (liquid chromatography with tandem mass spectroscopy (LC/MS/MS)) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd. Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov .

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

The Codex has not established a MRL for rimsulfuron.

Therefore, tolerances are established for residues of rimsulfuron, N -((4,6-dimethoxypyrimidin-2-yl)aminocarbonyl)-3-(ethylsulfonyl)-2-pyridinesulfonamide, including its metabolites and degradates, in or on caneberry, subgroup 13-07A at 0.01 ppm; and bushberry, subgroup 13-07B at 0.01 ppm.

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

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

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

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

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

The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Federal Insurance and Mitigation Administrator has resolved any appeals resulting from this notification.

This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community. The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

National Environmental Policy Act. This final rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

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

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

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

Accordingly, 44 CFR part 67 is amended as follows:

This is a summary of Commission's document, Report No. 2945, released January 12, 2012. The full text of this document is available for viewing and copying in Room CY-B402, 445 12th Street SW., Washington, DC or may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI) (1-(800) 378-3160). The Commission will not send a copy of this Notice pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), because this Notice does not have an impact on any rules of particular applicability.

Subject: Connect America Fund: A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates for Local Exchange Carriers; High-Cost Universal Service Support et al., published at 76 FR 73830, November 29, 2011 in WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC Docket Nos. 01-92, 96-45; WT Docket No. 10-208; FCC 11-161, and published pursuant to 47 CFR 1.429(e). See 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)).

Number of Petitions Filed: 24.

DoD, GSA, and NASA have adopted as final, with changes, the interim rule amending the Federal Acquisition Regulation (FAR) to implement the Office of Management and Budget memoranda on brand-name specifications, FAR Case 2005-037, Brand-Name Specifications, which published in the Federal Register at 77 FR 189 on January 3, 2012.

In the final rule document appearing at 77 FR 189 on January 3, 2012, on page 194, first column, amendatory instruction 9.b., for FAR section 16.505, is corrected to read as follows:

“b. Redesignating paragraphs (a)(4) through (a)(11) as paragraphs (a)(5) through (a)(12), respectively; and”

The fishery for coastal migratory pelagic fish (king mackerel, Spanish mackerel, and cobia) is managed under the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by the Gulf of Mexico and South Atlantic Fishery Management Councils (Councils) and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

On April 27, 2000, NMFS implemented the final rule (65 FR 16336, March 28, 2000) that divided the Florida west coast subzone of the eastern zone into northern and southern subzones, and established their separate quotas. Based on the Councils' recommended total allowable catch and the allocation ratios in the FMP, on April 30, 2001 (66 FR 17368, March 30, 2001), NMFS implemented a commercial quota of 2.25 million lb (1.02 million kg) for the eastern zone (Florida) of the Gulf migratory group of king mackerel. That quota is further divided into separate quotas for the Florida east coast subzone and the northern and southern Florida west coast subzones. The quota implemented for the southern Florida west coast subzone is 1,040,625 lb (472,020 kg). That quota is further divided into two equal quotas of 520,312 lb (236,010 kg) for vessels in each of two groups fishing with run-around gillnets and hook-and-line gear (50 CFR 622.42(c)(1)(i)(A)( 2 )( i )).

The southern subzone is that part of the Florida west coast subzone, which from November 1 through March 31, extends south and east from 26°19.8″ N. lat. (a line directly west from the Lee/Collier County, FL, boundary) to 25°20.4″ N. lat. (a line directly east from the Monroe/Miami-Dade County, FL, boundary), i.e., the area off Collier and Monroe Counties. From April 1 through October 31, the southern subzone is that part of the Florida west coast subzone which is between 26°19.8″ N. lat. (a line directly west from the Lee/Collier County, FL, boundary) and 25°48′ N. lat. (a line directly west from the Collier/Monroe County, FL, boundary), i.e., the area off Collier County (50 CFR 622.42(c)(1)(i)(A)( 3 )).

Under 50 CFR 622.43(a)(3), NMFS is required to close any segment of the king mackerel commercial sector when its quota has been reached, or is projected to be reached, by filing a notification at the Office of the Federal Register. NMFS has determined that the commercial quota of 520,312 lb (236,010 kg) for Gulf group king mackerel for vessels using run-around gillnet gear in the southern Florida west coast subzone will be reached on January 20, 2012. Accordingly, commercial fishing for such vessels in the southern Florida west coast subzone is closed at 6 a.m., local time, January 21, 2012, through 6 a.m., local time, January 21, 2013, the beginning of the next fishing season, i.e., the day after the 2013 Martin Luther King Jr. Federal holiday.

This action responds to the best available information recently obtained from the fisheries. The Assistant Administrator for Fisheries, NOAA (AA), finds that the need to immediately implement this action to close the fishery constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B). Such procedures would be unnecessary because the rule implementing the quota and the associated requirement for closure of the commercial harvest when the quota is reached or projected to be reached has already been subject to notice and comment, and all that remains is to notify the public of the closure.

Providing prior notice and opportunity for public comment on this action would be contrary to the public interest because any delay in the closure of the commercial harvest could result in the commercial quota being exceeded. There is a need to immediately implement this action to protect the king mackerel resource because the capacity of the fishing fleet allows for rapid harvest of the quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in effectiveness under 5 U.S.C. 553(d)(3).

This action is taken under 50 CFR 622.43(a) and is exempt from review under Executive Order 12866.

Regulations implemented under the authority of the Atlantic Tunas Convention Act (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, consistent with the allocations established in the 2006 Consolidated Atlantic Highly Migratory Species Fishery Management Plan (Consolidated HMS FMP) (71 FR 58058, October 2, 2006) and subsequent rulemaking.

NMFS is required, under § 635.28(a)(1), to file a closure notice with the Office of the Federal Register for publication when a BFT quota is reached or is projected to be reached. On and after the effective date and time of such notification, for the remainder of the fishing year, or for a specified period as indicated in the notification, fishing for, retaining, possessing, or landing BFT under that quota category is prohibited until the opening of the subsequent quota period or until such date as specified in the notice.

The current General category baseline quota is 435.1 mt, with 23.1 mt allocated for the January time period. On November 30, 2011, NMFS published a final rule to address adjustments to the General and Harpoon category regulations. Among other actions, this final rule allowed the General category BFT season to remain open until the January subquota is reached or March 31 (whichever happens first).

Based on the best available BFT landings information for the General category BFT fishery (i.e., 17 mt of the available 23.1 mt landed as of January 17, 2012), NMFS has determined that the General category January subquota will be reached by January 22, 2012. Therefore, through May 31, 2012, fishing for, retaining, possessing, or landing large medium or giant BFT by persons aboard vessels permitted in the Atlantic Tunas General and HMS Charter/Headboat categories (while fishing commercially) must cease at 11:30 p.m. local time on January 22, 2012. The General category will reopen automatically on June 1, 2012, for the June through August subperiod. This action is taken consistent with the regulations at §§ 635.27(a)(1)(iii) and 635.28(a)(1). The intent of this closure is to prevent overharvest of the General category January BFT subquota.

Limited catch and release fishing may continue subject to the requirements of the catch-and-release and tag-and-release programs. Fishermen may catch and release (or tag and release) BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. Fishermen are also reminded that all BFT that are released must be handled in a manner that will maximize survivability, and without removing the fish from the water, consistent with requirements at § 635.21(a)(1). For additional information on safe handling, see the Careful Catch and Release brochure available at www.nmfs.noaa.gov/sfa/hms/ .

If needed, subsequent General category adjustments 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.

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. The closure of the General category January BFT fishery is necessary to prevent overharvest of the General category January BFT subquota. NMFS provides notification of closures by publishing the notice in the Federal Register , emailing individuals who have subscribed to the Atlantic HMS News electronic newsletter, and updating the information posted on the Atlantic Tunas Information Line and on www.hmspermits.gov .

These fisheries are currently underway and delaying this action would be contrary to the public interest as it could result in excessive BFT landings that may result in future potential quota reductions for the General category. NMFS must close the General category January BFT fishery before landings of large medium and giant BFT exceed the available subquota. 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 all of the above 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 §§ 635.27(a)(1)(iii) and 635.28(a)(1), and is exempt from review under Executive Order 12866.

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

The A season allowance of the 2012 total allowable catch (TAC) of pollock in Statistical Area 630 of the GOA is 5,787 metric tons (mt) as established by the final 2011 and 2012 harvest specifications for groundfish of the GOA (76 FR 11111, March 1, 2011) and inseason adjustment (77 FR 438, January 5, 2012).

In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the A season allowance of the 2012 TAC of pollock in Statistical Area 630 of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 5,537 mt and is setting aside the remaining 250 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 630 of the GOA.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of pollock in Statistical Area 630 of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of January 19, 2012.

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.

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

The A season apportionment of the 2012 Pacific cod TAC allocated as a directed fishing allowance to pot catcher/processors in the BSAI is 1,777 metric tons as established by the final 2011 and 2012 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011) and inseason adjustment (76 FR 81875, December 29, 2011).

In accordance with § 679.20(d)(1)(iii), the Administrator, Alaska Region, NMFS, has determined that the A season apportionment of the 2012 Pacific cod TAC allocated as a directed fishing allowance to pot catcher/processors in the BSAI has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by pot catcher/processors in the BSAI.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) and § 679.25(c)(1)(ii) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of Pacific cod by pot catch processors in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of January 19, 2012.

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.