Background

The 1999 Act was enacted into law on October 22, 1999 (Pub. L. 106-78) as an amendment to the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627, 1635-1638d). The purpose of the 1999 Act was to establish a program of information regarding the marketing of cattle, swine, lambs, and the products of such livestock that provides information that can be readily understood by producers; improves the price and supply reporting services of USDA; and encourages competition in the marketplace for livestock and livestock products. On December 1, 2000, AMS published the final rule to implement the LMR program as required by the 1999 Act (65 FR 75464) with an effective date of January 30, 2001. This effective date was subsequently delayed until April 2, 2001 (66 FR 8151).

The statutory authority for the program lapsed on September 30, 2005. At that time, AMS sent letters to all packers required to report under the 1999 Act requesting they continue to submit information voluntarily. In October 2006, Congress passed the Livestock Mandatory Reporting Reauthorization (2006 Reauthorization Act) (Pub. L. 109-296). The 2006 Reauthorization Act re-established the regulatory authority for the continued operation of the LMR program through September 30, 2010, and separated the reporting requirements for sows and boars from barrows and gilts, among other changes. On May 16, 2008, USDA published the final rule to re-establish and revise the LMR program (73 FR 28606). The rule incorporated the swine reporting changes contained within the 2006 Reauthorization Act, as well as enhanced the program's overall effectiveness and efficiency based on AMS's experience in the administration of the program. The LMR final rule became effective on July 15, 2008.

The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-234) directed the Secretary of Agriculture (Secretary) to conduct a study to determine advantages, drawbacks, and potential implementation issues associated with adopting mandatory wholesale pork reporting. The report from this study concluded that voluntary negotiated wholesale pork price reporting is thin, and becoming thinner. It also found some degree of support for moving to mandatory price reporting at every segment of the industry interviewed, and that the benefits likely would exceed the cost of moving from a voluntary to a mandatory reporting program for wholesale pork. The report was delivered to Congress on March 25, 2010. A copy of the full report is available on the AMS Web site at http://www.ams.usda.gov/AMSv1.0/marketnews by clicking on “Livestock, Meats, Grain, and Hay,” then “Livestock Mandatory Reporting.”

On September 28, 2010, the 2010 Reauthorization Act (Pub. L. 111-239), reauthorized LMR for an additional 5 years and added a provision for mandatory reporting of wholesale pork cuts. The 2010 Reauthorization Act directed the Secretary to engage in negotiated rulemaking to make required regulatory changes for mandatory wholesale pork reporting and establish a negotiated rulemaking committee to develop these changes. The statute required that the committee include representatives from (i) organizations representing swine producers; (ii) organizations representing packers of pork, processors of pork, retailers of pork, and buyers of wholesale pork; (iii) the Department of Agriculture; and (iv) interested parties that participate in swine or pork production.

Further, the 2010 Reauthorization Act stated that any negotiated rulemaking committee established by the Secretary would not be subject to the Federal Advisory Committee Act (5 U.S.C. Appendix 2).

The objective of this rule is to improve the price and supply reporting services of AMS in order to encourage competition in the marketplace for wholesale pork products by increasing the amount of information available to participants. This is accomplished through the establishment of a program of information regarding the marketing of wholesale pork products as specifically directed by the 1999 Act, the 2010 Reauthorization Act, and these proposed regulations, as described in detail in the background section. Further, a mandatory wholesale pork reporting program will address concerns relative to the asymmetric availability of market information. Pork processors are not currently required by law to report wholesale pork cut prices. Rather, AMS collects information on daily sales and price information from pork processors on a voluntary basis. The 2008 Farm Bill directed the Secretary to conduct a study to determine advantages, drawbacks, and potential implementation issues associated with adopting mandatory wholesale pork reporting. The study found that wholesale pork price reporting is thin, and results in frequent missing or unreportable price quotes for subprimals.

This proposal is done in accordance with the Mandatory Price Reporting Act of 2010 (2010 Reauthorization Act) [Pub. L. 111-239], which reauthorized Livestock Mandatory Reporting for 5 years and required the addition of wholesale pork through negotiated rulemaking.

This proposed rule requires packers to report wholesale pork sales to AMS. Specifically, the proposed rule outlines what information packers will be required to submit to AMS, how the information should be submitted, and other program requirements. Packers will be required to submit the price of each sale, quantity, and other characteristics (e.g., type of sale, item description, destination) that AMS will use to produce timely, meaningful market reports.

The benefits of this proposed rule are diffuse and difficult to quantify, therefore, this analysis considers benefits only on a qualitative basis. The qualitative benefits derived from the literature and are:

1. The increased number of firms reporting prices to AMS under the mandatory program will provide a more complete data set, leading to increased price transparency and more efficient price discovery;

2. Allows AMS more opportunity to keep wholesale pork reporting current with industry marketing practices and product offerings; and

3. Provides information to industry participants that cannot afford to purchase data, including small pork processing operations, small wholesalers and retailers, and direct and niche marketing operations.

The major cost of complying with this rule involves the information collection and reporting process. The regulatory objective of this proposed rule is to increase the amount of information available to participants in the marketplace for wholesale pork and pork products by mandating reporting of market information by certain members of the industry. The Committee developed the proposed rule to achieve this objective in the most cost-effective manner possible. To the extent practicable, the Committee drew upon current industry practices and reporting procedures for other commodities covered by LMR in order to minimize the burden to the industry.

Annual industry costs are expected to be $95,770. These represent start-up costs associated with information technology enhancements, recordkeeping, and submission costs. The annual cost for each of the 56 respondents is estimated to be $1,710. Total annual cost to the government is expected to be approximately $300,000. This is largely for salaries and benefits for personnel who will collect, review, assemble, and publish market reports on wholesale pork. Additional costs of approximately $325,000 will be incurred in the first year to accommodate information technology system development. A complete discussion of the cost and benefits can be found under the discussion of Executive Order 12866.

Negotiated rulemaking is a procedure authorized by the Negotiated Rulemaking Act of 1996 (NRA) (5 U.S.C. 561-570) in which a proposed rule is developed by a committee composed of people representing interests that will be significantly affected by the rule, and the rulemaking agency. Experience of various Federal agencies in negotiated rulemaking demonstrated that using a trained neutral party to facilitate the process assists parties during negotiations in identifying their real interests, evaluating their positions, communicating effectively, and reaching consensus where possible. AMS engaged the Federal Conciliation and Mediation Service—a government agency providing mediation, arbitration, negotiation, and related services for government agencies and industry—for this purpose.

On November 24, 2010, AMS published a notice announcing its intent to convene a negotiated rulemaking committee (75 FR 71568). The notice sought public comment on the need for the committee and on its proposed membership, and provided others interested in being committee members the opportunity to submit nominations. AMS proposed a number of organizations for membership on the committee that represented those interests required to be included on such a committee by the 2010 Reauthorization Act.

Additionally, AMS solicited nominations from affected organizations who also wanted to be represented on the committee. In determining membership, AMS considered whether the interest represented by a member will be affected significantly by the final product of the committee and whether that interest was already adequately represented by other members. Under section 562(5) of the NRA, “interest” means “with respect to an issue or matter, multiple parties which have a similar point of view or which are likely to be affected in a similar manner.” In accordance with the NRA, committee membership was limited to a maximum of 25 members.

On January 26, 2011, AMS announced the establishment of the Wholesale Pork Reporting Negotiated Rulemaking Committee (Committee); responded to comments from the November 24, 2010, notice; identified the final list of members; and set forth the dates for the first meeting (76 FR 4554).The Committee members were:

On February 8-10, 2011, the Committee met in St. Louis, Missouri. Notably, during this meeting, the Committee members developed ground rules that addressed general rules of conduct, participation, and reiterated the Committee's purpose. The ground rules also established that all decisions would be made by “consensus,” and defined “consensus” as unanimous concurrence among the Committee members. The Committee held second (76 FR 12887) and third (76 FR 23513) meetings in Arlington, Virginia; March 15-17, 2011, and May 10-11, 2011, respectively.

All meetings were open to the public without advance registration. Members of the public were given opportunities to make statements during the meetings at the discretion of the Committee, and were able to file written statements with the Committee for its consideration. Meeting minutes from all Committee proceedings and supporting materials can be found at www.ams.usda.gov/NegotiatedRulemaking.

As previously discussed, the Committee was tasked with negotiating and developing a proposed rule to implement mandatory reporting of wholesale pork. In doing so, the Committee determined what characteristics describing sales of wholesale pork should be reported to AMS to allow the promulgation of meaningful, timely reports. These requirements are discussed in detail in the sections immediately following and represent the information on price, volume, and related characteristics of wholesale pork sales that packers will be required to submit under LMR.

According to the LMR program (7 CFR part 59), a packer, for purposes of swine and wholesale pork reporting, is defined as any person engaged in the business of buying swine in commerce for the purposes of slaughter, of manufacturing or preparing meats or meat food products from swine for sale or shipment in commerce, or of marketing meats of meat food products from swine in an unmanufactured form acting as a wholesale broker, dealer, or distributor in commerce. For any calendar year, the term “packer” includes only federally inspected swine processing facilities that slaughtered an average of at least 100,000 swine per year during the immediately preceding 5 calendar years and a person that slaughtered an average of at least 200,000 sows, boars, or combination thereof per year during the immediately preceding 5 calendar years. Additionally, in the case of a swine processing plant or person that did not slaughter swine during the immediately preceding 5 calendar years, it shall be considered a packer if the Secretary determines the processing plant or person should be considered a packer under this subpart after considering its capacity.

For the ease of the reader, this section is organized by topic andhighlights discussion for the proposed changes as considered by the Committee.

The term “wholesale pork” presented in this proposed rule reflects only product that the Committee feels adequately represents the wholesale market. The Committee carefully considered the inclusion, or exclusion, of items that would not represent what is widely considered wholesale pork to packers, processors, retailers, and others in the supply chain. For example, it was determined that items with commonly-added ingredients used to extend shelf life, such as a salt or sodium phosphate solution, would be included. However, items that are flavored (e.g., teriyaki pork tenderloins, seasoned ribs, lemon pepper sirloin roasts) would not be considered wholesale pork and would therefore be excluded from LMR reporting requirements. The Committee also discussed whether or not variety meats and offal should be included in the proposed definition of wholesale pork. It was determined that offal (e.g., heart, kidney) would not be considered wholesale pork; whereas processing floor variety meats that are harvested from the chilled carcass—such as neck bones, tails, skins, feet, hocks, jowls, and backfat—would be considered wholesale pork and would be reported. Committee consensus on the definition of wholesale pork requires variety meats to be reported, and refers to a separate new definition for variety meats as proposed herein. Definitions for wholesale pork and variety meats appear in the proposed revisions to section 59.200.

The Committee discussed daily reporting times and reached consensus on twice a day (by 10 a.m. and 2 p.m. Central Time) for barrow and gilt product and once per day (by 2 p.m. Central Time) for sow and boar product. These reporting times are outlined in proposed new section 59.205, and are consistent with reporting times for other commodities covered under LMR. For sow and boar plants, the Committee agreed that reporting once per day was practical. Separation of the reporting requirements for sow and boar product is being proposed to minimize the reporting burden on sow and boar packers where possible and to make the information published for sow and boar products more meaningful to the industry. As a general rule, these plants slaughter fewer animals than their counterparts who primarily slaughter barrows and gilts, and would therefore have a lower number of reportable transactions. Further, publishing sow/boar product information twice daily would provide little benefit in terms of added market transparency, as prices in this sector of the market fluctuate less than in the barrow/gilt market. Many of the plants producing this type of product would be smaller in nature and it would be unnecessarily burdensome to require twice daily reporting. The Committee agreed that reporting this type of product once per day meets the industry's needs.

Over the course of the three meetings, price reporting basis generated significant discussion by the Committee. There was Committee discussion regarding two different reporting methods that could be proposed for pork mandatory reporting: Free-on-Board (F.O.B.) Omaha basis, which was used for the voluntary program, and F.O.B. Plant basis, which is currently used for mandatory reporting of boxed beef and lamb. Committee members who indicated a preference for reporting F.O.B. Plant basis stated that reporting prices on this basis would reflect the actual transaction that occurred within the marketplace without additional adjustments for a centralized reporting location. Further, there was concern expressed that reporting swine purchases on a plant delivered basis (as is currently the case under LMR for swine) and pork on an F.O.B. Omaha basis would make data comparison difficult. Committee members who indicated a preference for reporting prices on an F.O.B. Omaha basis cited the desire for consistency with current practice, among other factors. During the final meeting, the Committee reached consensus that prices would be reported on both an F.O.B. Omaha basis and F.O.B. Plant basis.

The Committee agreed that F.O.B. Omaha basis will be calculated using freight information provided by AMS. While this information is not intended for inclusion in the regulations, AMS is outlining its plan to assist reporting entities. The Committee believed that this requirement for all packers to utilize the same conversion methodology provides greater consistency with these reported prices, and is conducive to the audit process implicit with LMR. As reflected in the draft regulatory language, AMS will develop freight adjustment information for use in developing F.O.B. Omaha prices. AMS considered two options in developing this information to derive F.O.B. Omaha prices—a freight map with concentric zones that reflect different freight adjustments based on a shipping destination's distance from Omaha and a per loaded mile freight rate. A zone map could prove to be difficult for reporting entities to comply with as it would not be practical to display every U.S. city, nor to expect reporting entities to know which cities belong in which zones. AMS believes a simpler option is to establish a per loaded mile freight rate that packers could apply. For example, to determine the F.O.B. Omaha price for a load of pork loins shipped to Phoenix, Arizona, the packer would figure the distance from Omaha to Phoenix and multiply that distance by the per loaded mile rate, which would then be divided by the total hundredweight of the product being shipped. This resulting freight expense would be deducted from the actual delivered price per hundredweight to reflect the FOB Omaha price to be submitted to AMS. AMS also believes this method would be easier for reporting packers to comply with and document for audit purposes. Based on information gathered from various sources on transportation costs, AMS believes that, if the freight rate would be applied today, that per loaded mile rate would be $2.11. Once the final rule is in place, AMS would reevaluate the per loaded mile rate on a quarterly basis.

The Committee considered other price-determining characteristics as they relate to the reporting requirements of LMR. For example, the Committee reached consensus that the price reported to AMS shall include any applicable brokerage fees, but should not include any direct, specific, and identifiable marketing costs (such as point of purchase material, marketing funds, accruals, rebates, and export costs). Removing these types of additional costs provides AMS a more homogeneous price for reporting purposes. Furthermore, the Committee agreed that it would be overly burdensome on reporting entities and provide little utility for market reports to include costs for things such as accruals or rebates as many of these costs are not known at the time of transaction. The requirements for reporting prices of wholesale pork sales are outlined in proposed section 59.205.

The Committee reached consensus on the type of information packers will report to AMS as part of mandatory wholesale pork reporting. These items are discussed below and are outlined in the proposed section 59.205.

Type of Sale. Committee members reached consensus on the types of sales of wholesale pork that must be reported. The Committee identified and defined three types of sale: negotiated, forward, and formula marketing arrangement. When packers report sales of wholesale pork to AMS, they will be identified using one of these three categories. For negotiated sale, the Committee desired to capture the traditional “spot” market, and therefore crafted a proposed definition that sets delivery parameters for both boxed product (within 14 days of the date of agreement) and combo product (within 10 days of the date of agreement). Additionally, there was discussion regarding which day would be considered “Day 1” for reporting purposes. It was agreed by the Committee that the day after the seller-buyer agreement shall be considered “Day 1” for reporting delivery periods to ensure consistency with current industry practices.

For the definition of a forward sale, the Committee desired to establish these types of transactions as occurring outside the traditional negotiated, or spot, window. Therefore, the Committee agreed that the proposed definition for forward sale means an agreement for the sale of pork where the delivery is beyond the timeframe of a negotiated sale and means a sale by a packer selling wholesale pork to a buyer of wholesale pork under which the price is determined by seller-buyer interaction and agreement. The Committee also agreed that the definition proposed for formula marketing arrangement bases the price paid not on seller-buyer interaction and agreement on a given day, but instead is established in reference to publicly-available quoted prices. The proposed definitions for the terms “Type of sale,” “Negotiated sale,” “Forward sale,” and “Formula marketing agreement” appear in proposed section 59.200.

Specifications. The Committee discussed the options for submitting data to AMS on cuts of pork according to Institutional Meat Purchase Specifications (IMPS), as is commonly used with mandatory boxed beef trade. It was decided that IMPS are not widely used in the wholesale pork trade, and therefore, would not be good descriptors of product specifications. Instead, the Committee decided that a description of the specifications of each pork item being transacted (e.g., vacuum-packed 1/4 inch loins) would be submitted to AMS and then the agency would group like products together for the purpose of publishing reports. The item's specification would also contain weight ranges for the product. Characteristics that entities would be required to report are outlined in proposed section 59.205 (a)(1).

The Committee also discussed whether or not to include a provision in the proposed rule that requires packers to submit product yield data to AMS. It was discussed in Committee meetings that this information was needed to calculate the daily pork carcass cutout. The pork carcass cutout is an estimate of the value of a hog carcass based upon current wholesale prices for sub-primal pork cuts reported to AMS. The cutout provides an indication of the overall supply and demand situation of the wholesale pork cuts market. A composite value is calculated each day for the various pork primals and these values are aggregated to reflect a single composite value of a pork carcass. These cuts reflect a standard cutting specification and must be traded on a negotiated basis to deliver within 10 working days of the time of sale for combo items (processing cuts) and 14 working days for boxed items (retail cuts). It was decided by the Committee that packers would provide the necessary product yield information voluntarily to AMS upon request and, therefore, was not included in the Committee's proposed rule.

Product Delivery Period. Under the existing voluntary pork reporting program, the delivery period for negotiated pork trades is measured in working days rather than calendar days. It was decided by the Committee that the product delivery period should be reported in calendar days to be consistent with the requirements for boxed beef and boxed lamb. This reportable characteristic is outlined in proposed section 59.205 (a)(1).

Pork class. The Committee considered the categories of pork class, which describes the type of swine from which the product was derived, and reached consensus that there should be three categories for reporting product: barrow/gilt, sow, and boar. This reportable characteristic is outlined in proposed section 59.205 (a)(1). Further, a proposed definition for “pork class”appears insection 59.200.

Destination. The Committee agreed to add “Destination” as a characteristic of each sale and discussed how to report export product, especially if the report's primary objective is to capture sales within the United States. It was agreed that packers would report products' destination in one of three categories: Domestic, Export overseas, or North American Free Trade Agreement (NAFTA).

Refrigeration. Consensus was reached by the Committee that a product's refrigeration type should be reported to AMS to be used as a means for distinguishing fresh product transactions that may be discounted or priced differently due to age of the product. Splitting the fresh category into two product age groups would provide a means for identifying product that may be discounted due to potential shelf life limitations. The Committee determined that “Day 1” should be considered the day after production. The form contained in Appendix A provides timeframes against which packers should report product refrigeration.

Specialty Pork Products. The Committee included a reporting category for specialty pork products in order to capture trade of wholesale pork that is produced or marketed under any specialty program, such as genetically-selected pork, certified programs, or specialty selection programs for quality or breed characteristics. It was noted by the Committee that AMS publishes similar information reported under the boxed beef program for “branded” programs. It was agreed by the Committee that a trademark brand on a product would not by itself make the product a specialty pork product, as outlined in the proposed definition in section 59.200.

As discussed, the Committee developed proposed changes to 7 CFR part 59, Livestock Mandatory Reporting, to incorporate wholesale pork into LMR. Subpart A of part 59, General Provisions, addresses requirements pertinent to all aspects of mandatory reporting. Some changes are necessary to fully incorporate wholesale pork into Subpart A, and are largely administrative in nature. These conforming changes, as they appear in the proposed regulatory text, were presented by AMS and adopted by the Committee. Some sections in Subpart A remain unchanged, but are discussed here to provide context for the reader.

Section 59.10 details how packers would be required to report information and how reporting will be handled over weekends and holidays. The information will be reported to AMS by electronic means. Electronic reporting involves the transfer of data from a packer's electronic record keeping system to a centrally located AMS electronic database. The packer is required to organize the information in an AMS-approved format before electronically transmitting the information to AMS. Once the required information has been entered into the AMS database, it will be aggregated and processed into various market reports which will be released according to the daily and weekly time schedule set forth in these regulations. Information regarding the specific characteristics of each reported sale must be supplied by lot without aggregation. No changes are proposed for section 59.10 to accommodate the additional requirement of reporting wholesale pork cuts.

This proposed rule requires the reporting of specific market information regarding the sales of wholesale pork products.

Section 59.20 is proposed to be amended by the addition of (f), Reporting Sales of Wholesale Pork. In addition to the aforementioned reporting requirements, packers would be required to maintain a record to indicate the time a unit of wholesale pork cuts was sold, as occurring either before 10 a.m. central time, between 10 a.m. and 2 p.m. central time, or after 2 p.m. central time. To allow packers time to collect, assemble, and submit the information to AMS by the prescribed deadlines, all covered transactions up to within one half hour of the specified reporting times are to be reported.

Further, section 59.20 identifies the recordkeeping requirements imposed by the 1999 Act and regulations on reporting entities. Reporting packers are required to maintain and to make available the original contracts, agreements, receipts, and other records associated with any transaction relating to the purchase, sale, pricing, transportation, delivery, weighing, slaughter, or carcass characteristics of all livestock and livestock products. In addition, they are required to maintain such records or other information as is necessary or appropriate to verify the accuracy of the information required to be reported under these regulations. All of the above mentioned paperwork must be maintained for at least 2 years and must be made available to employees or agents of USDA for routine compliance audits, as well as for investigations involving suspected noncompliance or potential violations. More information regarding compliance and review procedures can be found in the LMR Information section of the Livestock and Grain Market News Web site at http://marketnews.usda.gov/portal/lg.

Lastly, under Subpart A, section 59.30 details the general definitions of terms used throughout the regulations and applicable to all subparts. Where definitions apply to only one reportable commodity, those are included in the appropriate subpart. For example, definitions that pertain only to swine and swine products are contained in Subpart C and are proposed herein accordingly. The majority of definitions in section 59.30 remain unchanged from those that were published in the 2008 final rule. Changes to section 59.30 as a result of the addition of wholesale pork are found in the definitions for the terms “F.O.B.” and “Lot.” The change to F.O.B. is proposed to reflect the Committee's desire to have prices reported on both a plant and Omaha basis. The proposed change to the term “Lot” adds wholesale pork. There is also an administrative change proposed to the definition of IMPS to update a Web site address and phone number.

The 1999 Act set forth the requirements for maintaining confidentiality regarding the packer reporting of proprietary information and list the conditions under which Federal employees can release such information. While none of these provisions were amended by the 2010 Reauthorization Act or were proposed for amendment by the Committee, they are presented here for information. These administrative provisions also establish that the Secretary can make necessary adjustments in the information reported by packers and take action to verify the information reported, and directs the Secretary to report and publish reports by electronic means to the maximum extent practical. The 1999 Act provides for what constitutes violations of that Act, such as failure to report the required information on time or failure to report accurate information.

The section on enforcement establishes a civil penalty of $10,000 for each violation and provides for the Secretary's issuance of cease and desist orders. This section also provides for notice and hearing of violations before the Secretary, judicial review, and issuance of an injunction or restraining order. The fees section directs the Secretary to not charge or assess fees for the submission, reporting, receipt, availability, or access to published reports or information collected through this program. The section on recordkeeping requires each packer to make available to the Secretary on request for 2 years the original contracts, agreements, receipts, and other records associated with any transaction relating to the purchase, sale, pricing, transportation, delivery, weighing, slaughter, or carcass characteristics of all livestock and livestock products, as well as such records or other information that is necessary or appropriate to verify the accuracy of information required to be reported. Also, the 1999 Act provides that reporting entities will not be required to report new or additional information that they do not generally have available or maintain, or the provisions of which would be unduly burdensome.

As noted, the Committee's work focused on developing regulatory text to implement mandatory wholesale pork reporting under the LMR program. The Committee also developed several recommendations that, while outside their statutory purview, warrant discussion here. The Committee recommended that AMS implement a transition period that would continue voluntary reporting methodology until 12 months after the commencement of mandatory reporting; allow for a 12 month beta testing period for the new mandatory system; and release mandatory data publicly each Monday for the previous week. The Committee asserts that this would minimize market disruption.

Based on these recommendations, AMS plans to transition from a voluntary program to a mandatory program by publishing “dual” reports for 6 months. That is, for a period of time, AMS will publish reports reflecting information collected under a voluntary reporting system and reports reflecting information collected under a mandatory reporting system for wholesale pork. If AMS determines that the information collected under a voluntary program becomes of little utility before the 6-month mark or if sufficient AMS resources are not available, it will cease collecting and publishing this information. On the contrary, if at the end of the 6-month period any problems still exist with the collection or publication of data, or if the cessation of dual reports would unnecessarily cause market disruption, AMS will consult with the industry to determine an appropriate course of action. In that instance, AMS would consider extending the dual reporting period until a full 12 month period has occurred. Further, during the transition period, AMS intends to publish reports reflecting information collected under the mandatory program on a delay and will consider the Committee's recommendation regarding the appropriate time to release such reports.

In regards to testing of the information technology systems, AMS understands that affected entities ( i.e., packers) will not effectively be able to make enhancements to their reporting systems until the requirements are known, that is, until then final rule is published. AMS will work with packers to ensure that an appropriate amount of time is allowed for development and testing of systems necessary to submit the required data.

It should also be noted that many of the Committee's recommendations, which can be found at www.ams.usda.gov/negotiatedrulemaking, are contained in the proposed regulatory text.

Subpart E of part 59 covers the OMB control number 0581-0186 assigned pursuant to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Chapter 35) for the information collection requirements listed in Subparts B through D of part 59. All required information must bereported to AMS in a standardized format. The standardized form is embodied in the data collection form that is contained in Appendix A and described in Appendix B at the end of this document.

For reporting wholesale pork information, swine packers will utilize one form (Appendix A). This additional reporting requirement does not impact the reporting requirement that packers may have for other reportable commodities, such as swine.

The final section of this document contains two appendices. These appendices will not appear in the Code of Federal Regulations. Appendix B describes the form that will be used by those required to report information under this program. The actual form is contained in Appendix A.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. Section 259 of the 1999 Act prohibits States or political subdivisions of a State to impose any requirement that is in addition to, or inconsistent with, any requirement of the 1999 Act with respect to the submission or reporting of information, or the publication of such information, on the prices and quantities of livestock or livestock products. In addition, the 2010 Reauthorization Act does not restrict or modify the authority of the Secretary to administer or enforce the Packers and Stockyards Act of 1921 (7 U.S.C. 181-229); administer, enforce, or collect voluntary reports under the 1999 Act, the 2006 Reauthorization Act, or any other law; or access documentary evidence as provided under sections 9 and 10 of the Federal Trade Commission Act (15 U.S.C. 41-58). There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this rule.

AMS has considered the potential civil rights implications of this rule on minorities, women, or persons with disabilities to ensure that no person or group shall be discriminated against on the basis of race, color, national origin, gender, religion, age, disability, sexual orientation, marital or family status, political beliefs, parental status, or protected genetic information. This review included persons that are employees of the entities that are subject to this regulation. This proposed rule does not require affected entities to relocate or alter their operations in ways that could adversely affect such persons or groups. Further, this proposed rule would not deny any persons or groups the benefits of the program or subject any persons or groups to discrimination.

This proposed rule has been reviewed under Executive Order 13132, Federalism. This Order directs agencies to construe, in regulations and otherwise, a Federal statute to preempt State law only when the statute contains an express preemption provision. This rule is required by the 1999 Act. Section 259 of the 1999 Act, federal preemption, states, “In order to achieve the goals, purposes, and objectives of this title on a nationwide basis and to avoid potentially conflicting State laws that could impede the goals, purposes, or objectives of this title, no State or political subdivision of a State may impose a requirement that is in addition to, or inconsistent with, any requirement of this subtitle with respect to the submission or reporting of information, or the publication of such information, on the prices and quantities of livestock or livestock products.”

Prior to the passage of the 1999 Act, several States enacted legislation mandating, to various degrees, the reporting of market information on transactions of cattle, swine, and lambs conducted within that particular State. However, since the nationalLMR program was implemented on April 2, 2001, these State programs are no longer in effect. Therefore, there are no Federalism implications associated with this rulemaking.

This proposed rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

Regulations must be designed in the most cost-effective manner possible to obtain the regulatory objective while imposing the least burden on society. This proposed rule would amend the LMR regulations to implement mandatory wholesale pork reporting and was developed by the Committee, comprising organizations representing pork packers, processors, retailers, and buyers of wholesale pork; swine producers; USDA; and other interested parties.

Alternatives to the proposed language were thoroughly discussed during the course of the negotiated rulemaking meetings, and the consensus language reflects the best efforts of all participating parties to ensure the successful implementation of wholesale pork reporting. These alternatives are reviewed in detail in the “Proposed Requirements” section of this preamble.

Since all of the entities who will be required to report wholesale pork sales already report information under LMR regarding their swine purchases, costs to reporting another commodity are expected to be minimal. A complete analysis of the number of affected entities and the required volume of reporting is discussed under the Paperwork Reduction Act (PRA) section following this section.

Currently, pork processors are not required by law to report wholesale pork cut prices. Rather, AMS collects information on daily sales and price information from pork processors on a voluntary basis. The 2008 Farm Bill directed the Secretary to conduct a study to determine advantages, drawbacks, and potential implementation issues associated with adopting mandatory wholesale pork reporting. The study found that voluntary wholesale pork price reporting is thin, and results in frequent missing or unreportable price quotes for subprimals. The number of missing data has increased over time.

In addition, changes in the way pork is traded in recent years have led to inconsistencies in industry practices and current AMS guidelines for defining reportable trades. The study found that more pork is being: (1) Traded in forms that are either not reported or not reportable (e.g., enhanced product, case ready product, branded product, or frozen product); (2) transacted through intra-firm transfer, through inter-firm transfer, through formula pricing, through forward price contracts well in advance of delivery (beyond 7 or 10 days forward as used by AMS); and (3) destined for export markets which are excluded from AMS pork price reports for the negotiated cash guidelines used by AMS.

As a result of thin pork price reporting, industry participants have raised concerns about potential selective price reporting in the voluntary program. These concerns have reduced the perceived value of published price reports to the industry. The study found support for mandatory price reporting throughout the industry, and concluded that the benefits likely would exceed the cost of moving from a voluntary to a mandatory reporting program for wholesale pork.

The benefits of this proposed rule are diffuse and difficult to quantify, therefore, this analysis considers benefits only on a qualitative basis. A complete discussion of the benefits is found in the summary of benefits section. The major cost of complying with this rule involves the information collection and reporting process. The information collection and reporting process is explained in the Summary of Costs section and is referenced in section 59.10(f), Reporting Methods. A complete discussion of the cost analysis can be found in the summary of costs section.

Summary of Benefits. Government intervention in a market is conducted because the free market has tendencies to fail whenever certain criteria hold. Market failures occur in cases such as public goods, externalities, and asymmetric and/or missing information problems appear. Agricultural markets in particular are subject to information asymmetry, with both large and small operators in every aspect of the value chain, ranging from multinational corporations to part-time operators. Agricultural markets are also characterized by a large degree of uncertainty and missing information.

In 2001, George Akerloff, Michael Spence, and Joseph Stiglitz  1 won the Nobel Prize in Economics for their seminal work on the Economics of Information, establishing it as a field within economics. Their combined works showed that: (1) Even small gaps in information can cause a misallocation of resources; (2) attempts to gather information by market participants generally incur costs that may not be recouped; (3) participants may turn to the use of nonmarket “signaling” to gather information, rather than the price mechanism; (4) attempts to obtain information by the participants may themselves cause sufficient levels of distortion in the markets, even with small information costs; and (5) the existence of other market failures can alter the individual's valuation of the benefits and costs of information. 2 Each of these situations can lead to either a failure to attain an efficient equilibrium, or may lead to multiple equilibriums, both of which reduce economic welfare. Failure to achieve an equilibrium outcome can result in the failure of supply and demand to intersect at an equilibrium point, with persistent surpluses or shortages in the market.

The wholesale pork reporting study mandated by Congress found evidence consistent with Akerloff, et al., and indicates that mandatory price reporting will improve information in the wholesale pork market. Following the results of Akerloff, et al. cited above, this report found that: (1) The wholesale pork reporting information under the voluntary program is thin, getting thinner, and does not properly reflect changes in the pork market in recent years. Mandatory reporting would improve this situation by increasing the number of reporting firms, including sow/boar meat in the reporting, responding to changes in the marketing of pork and pork products, and reducing the number of missing price quotes, particularly for subprimals; (2) Data users will have improved information without incurring additional costs such as private market analyses and data subscriptions, which may be too costly for small producers, small packers, small processors, and other data users; (3) Mandatory price reporting will lead to increased transparency in prices and more efficient price discovery. In addition, price data will be more consistent with current trade practices, providing more clear-cut market information, and less need for “signaling;” (4) Mandatory wholesale pork price reporting will reduce concerns the industry now has about selective price reporting, which can potentially distort market information; and (5) Mandatory wholesale pork price reporting will benefit small market participants to a greater extent than larger participants, who are likely to have more information available to them than the smaller participants, although larger firms with more staff may have greater ability to analyze the data than small firms. The report concluded that mandatory wholesale pork reporting would reduce the inequities in market information and create a more competitive environment.

These findings indicate that mandatory price reporting will be an improvement over the current voluntary program, and that market efficiency as well as overall economic welfare will be increased by implementing the mandatory price reporting program for pork and pork products. Research on existing mandatory livestock price reporting also supports this conclusion.

Early research on problems associated with pricing in livestock markets often considered the distinction between price determination and price discovery, and the resulting issues faced by livestock producers in a particular market. Ward and Schroeder (2009)  3 describe the difference between price determination and price discovery by noting that price determination is the interaction of supply and demand factors in a broad market situation to determine the general price level. Price discovery is the process whereby buyers and sellers interact in a specific market at a specific time to ascertain the value of a commodity in that market at that time. Price discovery involves the consideration of multiple factors, including market structure, futures prices and risk management options. However, the first consideration in price discovery is typically the general market price level, i.e. price determination is the starting point for price discovery.

The importance of price reporting by AMS is that it provides data that gives market participants knowledge of the general price levels of a commodity, as well as insight into the overall conditions in that market. This information assists participants in more effectively discovering prices in their specific market.

Research on livestock mandatory pricing has demonstrated that mandatory pricing does increase transparency and improves the efficiency of the price discovery process. Ward (2004a and b)  4 found that mandatory price reporting increased information, showing mandatory reports significantly improved the amount, type, and timeliness of data related to captive supplies, and increasing transparency. USDA's Economic Research Service (ERS) (Perry, MacDonald, Nelson, Hahn, Arnade and Plato, 2005)  5 extended Ward's work, yielding similar results. ERS also found that prices were twice as volatile under the mandatory system than under the voluntary system. The reason was thought to be the filtering or interpretive role of market reporters under voluntary reporting relative to the reduced filtering role with mandatory reporting.

Koontz (2007)  6 studied the vertical relationship between the national fed cattle price and boxed beef cutout values using a standard price transmission models. He found boxed beef cutout values had both a greater and quicker impact on fed cattle than before the mandatory program. However, he also detected more uncertainty. This supports earlier research indicating both increased transparency and increased volatility associated with mandatory reporting. In addition, Lee, Ward and Brorsen (2011)  7 examined the role of cash prices in price discovery for fed cattle and hogs as cash market share fell over the years of 2001-2010. They found that the cash market remains important for price discovery, although thinning of the cash market has had a negative impact on the process.

As the wholesale pork study indicated, there are some market participants who are likely to benefit more than others. Niche and direct marketing producers are likely to benefit from improved data, as they are less likely to be able to have other means of price determination available to them, primarily due to cost. These producers account for a small but growing segment of U.S. agriculture.

In summary, research on existing livestock mandatory price reporting has demonstrated that it has improved transparency issues in livestock markets, enabling more efficient and effective price discovery in these markets, although there has been increased variability in reported prices, largely due to the change in approach from voluntary to mandatory. This improved transparency and increased efficiency is consistent with economic theory of information. The wholesale pork reporting study mandated by Congress shows evidence that mandatory reporting will have a similar impact on the wholesale pork market.

For the economic analysis of the rule, AMS was unable to determine a quantitative assessment of the benefits due to limitations on existing research and the disparate nature of the benefits to be achieved. The qualitative benefits derived from the literature and are:

4. The increased number of firms reporting prices to AMS under the mandatory program will provide a more complete data set, leading to increased price transparency and more efficient price discovery;

5. Allows AMS more opportunity to keep wholesale pork reporting current with industry marketing practices and product offerings; and

6. Provides information to industry participants that cannot afford to purchase data, including small pork processing operations, small wholesalers and retailers, and direct and niche marketing operations.

Summary of Costs. The regulatory objective of this proposed rule is to increase the amount of information available to participants in the marketplace for wholesale pork and pork products by mandating reporting of market information by certain members of the industry. The Committee developed the proposed rule to achieve this objective in the most cost-effective manner possible. To the extent practicable, the Committee drew upon current industry practices and reporting procedures for other commodities covered by LMR in order to minimize the burden to the industry.

The least cost reporting method to accomplish the objectives of the rule continues to be the transfer of electronic data from the reporting entity to AMS, as is the current practice with mandatory price reporting for other covered commodities. Electronic data transmission of information is accomplished using an interface with an existing electronic record keeping system. Packers will provide for the translation of the information from their existing electronic recordkeeping system into the required AMS standardized format. Once accomplished, the information will be electronically transmitted to AMS where it will be automatically loaded into an AMS database. We estimate that the creation of this interface by in-house computer personnel will require an industry average of 15 hours per respondent. Further, we estimate the cost per hour for labor to average $49.30 (Bureau of Labor Statistics), 8 for a total cost, on average, of $740. Those companies not having in-house computer personnel will incur such costs as are necessary to bring in outside computer programmers to accomplish the task.

Additionally, AMS estimates the annual cost per respondent for the storage of the electronic data files which were submitted to AMS in compliance with the reporting provisions of this rule to be $116.10 (5 hours for recordkeeping at $23.22).

In this rule, information collection requirements include submission of the required information on a daily basis in the standard format provided in the Wholesale Pork Daily Report (LS-89). A copy of this report is included in Appendices at the end of this rule.There are expected to be a total of 56 respondents (34 commodity pork processors, 12 sow and boar meat processors, and 10 processors of all types of meat). Plants that slaughter both commodity pork (from barrows and gilts), and sow/boar meat will file one combined report so that the maximum number of reports per day is two.

By dividing total submission costs of $75,465.00 over the total number of respondents (56) yield an average submission cost of $1,347.59 on an annual basis. This value can be used to estimate the total cost burden to the industry, which is determined to be $95,770.64 per year.

In 2010, federally inspected pork production was 22.274 billion pounds. Assuming this level of production, the cost of this proposed rule to the private sector is $4.30 per million pounds ($95,770.64/22.274 billion pounds).

In addition to these costs to packers for submitting information, AMS will reallocate staff, issue regulations, and set up an electronic database to capture data and develop reports. The 3 staff years required to administer and produce mandatory price reports include reporters and auditors. Salary-related costs in each year are estimated at $271,000. Other costs include approximately $20,000 for travel/transportation, training, and outreach; $5,000 for miscellaneous costs such as printing, training, office supplies, and equipment; and $325,000 in the first year for a computer systems contract to develop the database required to manage the data.

The mandatory price reporting program would cost AMS $621,161 in the first year of implementation, and subsequent year costs are estimated to be $296,161. Therefore, the costs would be roughly $404,500 per year.

Adding the costs to industry together with the costs to government, yields the total cost to society associated with this regulation. Because benefits could not be quantified, comparison of costs with benefits is not possible. However, total costs, shown annually, over the life of the rule, and discounted over the life of the rule have been calculated. These figures show that this rule does not meet the threshold for an economically significant rule ($100 million).

This proposed rule has been reviewed under the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612). The purpose of the RFA is to consider the economic impact of a rule on small business entities. Alternatives, which would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the marketplace, were evaluated by the Committee. Moreover, the requirements contained in this proposed rule were negotiated with members of the industry, some of whom represented small- and mid-size firms.

Regulatory action should be appropriate to the scale of the businesses subject to the action. The collection of information is necessary for the proper performance of the functions of AMS concerning the mandatory reporting of livestock information. The 1999 Act requires AMS to collect and publish livestock market information. The required information is only available directly from those entities required to report under the 1999 Act and by these regulations and exists nowhere else. Therefore, this proposed rule does not duplicate market information reasonably accessible to USDA.

For any calendar year, any federally inspected swine plant which slaughtered an average of 100,000 head of swine a year for the immediately preceding 5 calendar years, and any packing firm that slaughtered at least 200,000 sows and/or boars on average during the preceding 5 years, are required to report information. Additionally, any swine plant that did not slaughter swine during the immediately preceding 5 calendar years is required to report if the Secretary determines that the plant should be considered a packer based on the capacity of the processing plant. This accounts for approximately 56 out of 611 swine plants or 9.2 percent of all federally inspected swine plants. Fully 90.8 percent of all swine plants in the U.S. are exempted by this rule from reporting information.

Accordingly, we also have prepared this initial regulatory flexibility analysis. The RFA compares the size of meat packing plants to the North American Industry Classification System (NAICS) to determine the percentage of small businesses within the meat packing industry. Under these size standards, meat packing companies with 500 or less employees are considered small business entities.

Objectives and Legal Basis. The objective of this rule is to improve the price and supply reporting services of AMS in order to encourage competition in the marketplace for wholesale pork products by increasing the amount of information available to participants. This is accomplished through the establishment of a program of information regarding the marketing of wholesale pork products as specifically directed by the 1999 Act, the 2010 Reauthorization Act, and these proposed regulations, as described in detail in the background section.

Estimated Number of Small Businesses. This rule provides for the mandatory reporting of market information by pork wholesalers who, for any calendar year, have slaughtered 100,000 head of swine during the immediately preceding 5 calendar years, or any packing firm that has slaughtered at least 200,000 sows and/or boars on average during the preceding 5 years. Processing plants that have not slaughtered livestock during the immediately preceding 5 calendar years are also required to report if the Secretary determines that the plants should be considered packers based on their capacity.

The NAICS size standard classifies a small business in the meat packing industry as a company with less than 500 employees. Although it is common in the red meat industry for larger companies to own several plants, some of which may employ less than 500 people, those companies with a total slaughter plant employment at all locations of less than 500 are considered to be small businesses for the purposes of this rule even though individual plants are mandated to report as provided by the 1999 Act, 2010 Reauthorization Act, and these proposed regulations.

Approximately 36 individual pork packing companies representing a total of 56 individual plants are required to report information to AMS. Based on the NAICS size standard, 24 of these 36 pork packing companies are considered small businesses, representing 27 individual plants that are required to report. The figure of 56 plants required to report represents 9.2 percent of the swine plants in the United States. The remaining 90.8 percent of swine plants, nearly all estimated to qualify as small business, are exempt from mandatory reporting.

AMS estimates the total annual burden on each swine packing entity to be, on average, $1,710.19, including $1,347.59 for annual costs associated with electronically submitting data, $246.50 for annual share of initial startup costs of $739.50, and $116.10 for the storage and maintenance of electronic files that were submitted to AMS.

Projected Recordkeeping. Each packer required to report information to the Secretary must maintain such records as are necessary to verify the accuracy of the information provided to AMS. This includes information regarding price, volume, weight, cut, and other factors necessary to adequately describe each transaction. These records are already kept by the industry. Reporting packers are required by these regulations to maintain and to make available the original contracts, agreements, receipts, and other records associated with any transaction relating to the purchase, sale, pricing, transportation, delivery, or weighing of all transactions. Reporting packers are also required to maintain copies of the information provided to AMS. All of the above-mentioned paperwork must be kept for at least 2 years. Packers are not required to report any other new or additional information that they do not generally have available or maintain. Further, they are not required to keep any information that would prove unduly burdensome to maintain. The paperwork burden that is imposed on the packers is further discussed in the section entitled “Paperwork Reduction Act” that follows.In addition, we have not identified any relevant Federal rules that are currently in effect that duplicate, overlap, or conflict with this rule.

Professional skills required for record keeping under this rule are not different than those already employed by the reporting entities. Reporting will be accomplished using computers or similar electronic means. AMS believes the skills needed to maintain such systems are already in place in those small businesses affected by this rule.

This proposed rule as directed by the 2010 Reauthorization Act requires pork packing plants of a certain size to report information to the Secretary at prescribed times throughout the day and week. These regulations already exempt many small businesses by the establishment of daily slaughter and processing capacity thresholds. Based on figures published by the National Agricultural Statistics Service (NASS), there were 611 swine federally inspected slaughter plants operating in the United States at the end of 2010. AMS estimates that approximately 56 swine plants are required to report information, representing 9.2 percent of all federally inspected swine plants. Therefore, fully 90.8 percent of all swine plants are not required to report.

The impact of the costs of the rule to industry was also analyzed by plant capacity, measured in terms of number of head slaughtered.Industry cost by firm size, as measured in number of head slaughtered, is shown in the following table. Firms that slaughter fewer than 100,000 per year are exempt from the rule. These data do not distinguish between barrow/gilt slaughter and sow/boar slaughter, so all firms are assumed to report on barrows/gilts.

The data show that on a per head basis, the costs of this rule range from 0.033 cents per head slaughtered for the largest firms to approximately one cent per head for the smallest plants affected by the rule. On average, the cost burden is 0.084 cents per head slaughtered.Roughly 30 plants, or 4.5 percent of all plants in the industry, have costs that exceed this value.With an average hog carcass price of $87.90 for the year to date, and an average weight of 205 pounds per carcass, the price paid per head is roughly $180. The additional cost of one cent per head, the largest expected cost for plants impacted by the rule, does not appear to represent a significant cost increase.

In the table below, showing data for 2010, 91.2 percent of all plants (or 557 of 611 plants) would not have been expected to incur any reporting costs. All the costs would have been borne by the largest 8.8 percent of plants. Because the data in this table do not differentiate between sow/boar and barrow & gilt plants, these figures are approximates of the actual values, but are illustrative of the expected distributional impacts of the rule.

In summary, the RFA analysis showed that of the 56 firms facilities that are required to report, 27 (just under half) qualify as being owned by small businesses. These 27 facilities are owned by 24 of the 36 companies subject to the rule. However, given the capital intensive nature of the industry, a more appropriate approach to the RFA analysis may be the number of head slaughtered by company. This approach was recognized by Congress in the original LMR legislation, by placing a 100,000 head minimum slaughter requirement on firms which report. Using that standard, fewer than 10 percent of all firms in the industry are affected by this regulation. In addition, the increased cost of the rule represents at most roughly 0.006 percent the current hog carcass value ($0.01/$180.00). Based on this analysis, AMS determined that the proposed rule would not have a significant economic impact on a substantial number of small entities.

In accordance with 5 CFR part 1320, we include the description of the reporting and recordkeeping requirements and an estimate of the annual burden on packers required to report information under this proposed rule. If the proposed rule is finalized, it is the intent of AMS to submit to OMB a request to merge this collection into the currently approved collection, “Livestock Mandatory Reporting Act of 1999”, OMB number 0581-0186.

The information collection and recordkeeping requirements in this regulation are essential to establishing and implementing a mandatory program of livestock and livestock products reporting. Based on the information available, AMS estimates that there are 34 commodity pork packer plants, 12 sow/boar meat packer plants, and 10 packer plants processing both commodity pork and sow/boar meat that are required to report market information under this rule. These companies have similar record keeping systems and business operation practices and conduct their operations in a similar manner. The Committee believes that all of the information required under this proposed rule can be collected from existing materials and systems and that these materials and systems can be adapted to satisfy the new requirements.

The PRA also requires AMS to measure the recordkeeping burden. Under this proposed rule, each packer required to report must maintain and make available upon request for 2 years, such records as are necessary to verify the accuracy of the information required to be reported. These records include original contracts, agreements, receipts, and other records associated with any transaction relating to the purchase, sale, pricing, transportation, delivery, weighing, slaughter, or carcass characteristics of all livestock. Under this proposed rule, the electronic data files which the packers are required to utilize when submitting information to AMS will have to be maintained as these files provide the best record of compliance. Therefore, the recordkeeping burden includes the amount of time needed to store and maintain records. AMS estimates that, since records of original contracts, agreements, receipts, and other records associated with any transaction relating to the purchase, sale, pricing, transportation, delivery, and weighing of wholesale pork products are stored and maintained as a matter of normal business practice by these companies for a period in excess of 2 years, additional annual costs will nominal. AMS estimates the annual cost per respondent for the storage of the electronic data files which were submitted to AMS in compliance with the reporting provisions of this rule to be $116.10. This estimate includes the cost per respondent to maintain such records which is estimated to average 5 hours per year at $23.22 per hour.

In this proposed rule, information collection requirements have been designed to minimize disruption to the normal business practices of the affected entities. The requirements include the submission of the required information on a daily basis in the standard format provided in the form included in the Appendices section. This form requires the minimal amount of information necessary to properly describe each reportable transaction, as required under this proposed rule.

Estimate of Burden: Public reporting burden for collection of information is estimated to be 0.125 hours per electronically submitted response.

Respondents: Packer processing plants required to report information on wholesale pork sales to the Secretary.

Estimated Number of Respondents: 34 commodity pork plants, 12 sow/boar meat plants and 10 combination commodity pork/sow/boar meat plants.

Estimated Number of Responses per Respondent: 520 per year for commodity pork (2 per day for 260 days); 260 per year for sow/boar meat (1 per day for 260 days); and 520 per year (2 per day) for combination commodity pork/sow/boar meat.

Estimated Total Annual Burden on Respondents: 3,250 hours. With 260 reporting days per year, commodity pork processors, and processors which produce a combination of commodity pork/sow/boar meat, will submit a total of 520 responses per year, and sow/boar meat processors will submit a total of 260 responses per year. This includes 5 hours for recordkeeping, annually, for each of the 56 respondents (total recordkeeping hours of 280).

At 0.125 hours per submission, commodity pork/combination processors will require 65.0 hours of reporting time, while sow/boar meat processors will require 32.5 hours of reporting time.

Total annual submission costs for commodity pork and combination pork processors is expected to be $1,509.30 with a clerical cost of $23.22 per hour, including benefits. Annual costs for sow meat processors will equal $754.65.

A total of 44 respondents are expected to report commodity pork/combination wholesale data, while 12 sow/boar meat respondents are anticipated. Ten of the respondents will report on both types of product. In all, 56 different respondents will be reporting, incurring total annual submission costs of about $75,465.00.

Estimated Total Annual Burden on Respondents: $95,770.64 including $75,465.00 for annual costs associated with electronically submitted responses (3,250 annual hours (58.036 annual hours per 56 respondents) @ $23.22 per hour, for a total of $1,347.59 per respondent), initial electronic data transfer setup costs of $13,804.00 ($739.50 prorated over 3 years = $246.50 per 56 respondents), and $6,501.60 ($116.10 per 56 respondents) for the storage and maintenance of electronic files that were submitted to AMS.

A 60-day comment period is also provided for interested persons to comment on the regulatory provisions of this proposed rule. AMS is also inviting comments concerning the information collection and recordkeeping requirements contained in this proposed rule. Comments are specifically invited on: (1) The accuracy of the burden estimate of the proposed collection of information including the validity of the methodology and the assumptions used; (2) ways to minimize the burden of the collection of information on those who would be required to respond, including through the use of appropriate electronic collection methods; (3) whether the proposed collection of information was sufficient or necessary for the proper performance of the functions of the agency as mandated by the 1999 Act and the Reauthorization Act; and (4) ways to enhance the quality, utility, and clarity of the information to be collected. All comments should be submitted at: http://www.regulations.gov, or may be sent to Michael Lynch, Director, Livestock and Grain Market News Division, 1400 Independence Ave. SW., Room 2619-S, Washington, DC 20250-0252, or by fax to (202) 690-3732.

Comments that specifically pertain to the information collection and recordkeeping requirements of this action should also be sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, 725 17th Street NW., Room 725, Washington, DC 20503, and should reference the date and page number of this issue of the Federal Register . All responses to this proposed rule will be summarized and included in the request for OMB approval, and will become a matter of public record. The comment period for the information collection and recordkeeping requirements contained in this proposed rule is also 60 days.

For the reasons set forth in the preamble, it is proposed that Title 7, Chapter I of the Code of Federal Regulations is amended by revising part 59 to read as follows:

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2012-0079; Directorate Identifier 2012-NE-06-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

A PW2000 field event led Pratt & Whitney to re-evaluate the low-cycle fatigue analysis of the PW2000 engine and similar engine models, including the PW4000 engine. Pratt & Whitney's updated analysis indicated that the original grain size requirement specified on the HPT stage 1 front hub design drawing was too large, and may not be sufficient to meet the published life limits. Although we have not received any reports of cracks, parts with the larger grain size may initiate a crack prior to the published life limits. This condition, if not corrected, could result in failure of the HPT stage 1 front hub, which could lead to an uncontained engine failure and damage to the airplane.

We reviewed Pratt & Whitney Service Bulletin (SB) No. PW4ENG 72-795, Revision 2, dated April 5, 2011, and SB No. PW4G-100-72-220, Revision 4, dated September 30, 2011. The SBs list the serial numbers of HPT stage 1 front hubs with part number (P/N) 51L901 that are NOT affected by this AD. However, all serial numbers of HPT stage 1 front hubs with P/N 51L201, P/N 51L201-001, P/N 51L601, and P/N 52L401 are affected.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require removing the affected HPT stage 1 front hubs from service using a drawdown plan.

We estimate that this proposed AD would affect 954 engines installed on airplanes of U.S. registry. About 605 engines use a 20,000 cycles-since new (CSN) life limit for the HPT stage 1 front hub. For these engines, we estimate the lost part life to have a value of about $25,400 per engine. About 349 engines use a 15,000 CSN life limit. For these engines, we estimate the lost life to have a value of about $22,013 per engine. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators is $23,049,537.

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

For the reasons discussed above, I certify this proposed regulation:

(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),

(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 proposes to amend 14 CFR part 39 as follows:

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2012-0324; Directorate Identifier 2012-CE-008-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. We will post all comments we receive, without change, to http://regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No. 2012-0027, dated February 14, 2012 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Grob Aircraft has issued Service Bulletin No. MSB817-58 and Service Bulletin No. MSB 817-060, both dated November 24, 2011, Repair Instruction Doc. No. RI 817-009, issue date November 17, 2011, and Repair Instruction Doc. No. RI 817-010/1, issue date December 20, 2011. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

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

We estimate that this proposed AD will affect 59 products of U.S. registry. We also estimate that it would take about 6 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $424 per product.

Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $55,106, or $934 per product.

In addition, we estimate that any necessary follow-on actions would take about 12 work-hours and require parts costing $243, for a cost of $1,263 per product. We have no way of determining the number of products that may need these actions.

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

For the reasons discussed above, I certify this proposed regulation:

(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),

(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 proposes to amend 14 CFR part 39 as follows:

I. Background

In the Federal Register of October 3, 1974 (39 FR 35697), we announced that copies of all our MOUs transacted with government Agencies and nongovernment organizations were available for public review at our offices during working hours and would be published in the Federal Register . We subsequently codified this policy in the Federal Register of December 24, 1974 (39 FR 44602 at 44651), and recodified it where it currently appears in § 20.108 (21 CFR 20.108) in the Federal Register of March 22, 1977 (42 FR 15616 at 15625).

Consumers, industry, professional groups, associations, educators, and other government Agencies had manifested widespread interest in the texts of these MOUs. The intent of § 20.108 was to promote transparency by providing access to these stakeholders.

This proposed rule would eliminate the requirement in current § 20.108(c) that our agreements and MOUs with other departments, Agencies, and organizations be published in the Federal Register on an individual basis and instead will require that they be posted on our Web site. We increasingly rely on Internet-based communications to ensure and promote transparency in our operations and activities. So it is with this proposed rule, which would merely recognize and codify our already established practice of making our ongoing agreements and MOUs with other departments, Agencies, and organizations publicly available on our Web site. At the time of this writing, each such publicly disclosable agreement and MOU can be accessed at one of the following three Food and Drug Administration (FDA) Web site locations:

Because all publicly disclosable agreements and MOUs are posted on our Web site, it is no longer necessary to require, as does current § 20.108(b), that a permanent file of them be available for public review during working hours in the Agency's Freedom of Information Public Room. Accordingly, the proposed rule would revise current § 20.108(b).

The public's access to an FDA Web site that is regularly updated to include agreements and MOUs as they are completed has already greatly enhanced the speed, ease, and convenience with which stakeholders can obtain and review these documents.

Our proposed technical changes would lessen demands on the time of our staff and reduce the Government paperwork and printing costs associated with Federal Register publication of newly completed agreements and MOUs with other departments, Agencies, and organizations. At the same time, it would continue to ensure, consistent with the underlying intent of § 20.108, the accessibility of records of widespread interest to consumers, industry, professional groups, associations, educators, and other government Agencies.

Currently, § 20.108(c) treats our cooperative work-sharing agreements with State or local government Agencies differently from our agreements and MOUs with other Agencies and organizations. Because these cooperative work-sharing agreements rarely vary significantly from one another, we decided against publishing their full texts in the Federal Register (51 FR 19851, June 3, 1986). Instead, since 1993, we have merely required them to be listed at least once every 2 years in the Federal Register (58 FR 48794, September 20, 1993). This proposed rule would end such disparate treatment. Proposed § 20.108(b) would apply to all of our written agreements and MOUs with other departments, Agencies, and organizations, including cooperative work-sharing agreements with State or local government Agencies, except for signed agreements and MOUs relating to activities of our Office of Criminal Investigations, which are addressed in § 20.108(d), which would be revised and redesignated as § 20.108(c).

This proposed rule would not amend § 20.108(a) (stating that our written agreements and MOUs are available for public disclosure).

This proposed rule is a companion to the direct final rule published elsewhere in this issue of the Federal Register . The direct final rule and this companion proposed rule are substantively identical. This companion proposed rule provides the procedural framework within which the rule may be finalized in the event that any significant adverse comment is received in response to the direct final rule and it is withdrawn. FDA is publishing the direct final rule because we believe the rule is noncontroversial, and we do not anticipate receiving any significant adverse comments. If no significant adverse comment is received in response to the direct final rule, no further action will be taken related to this proposed rule. Instead we will publish a document confirming the effective date within 30 days after the comment period ends, confirming when the direct final rule will go into effect.

If we receive any significant adverse comment regarding the direct final rule, we will withdraw the direct final rule within 30 days after the comment period ends and proceed to respond to all of the comments under this companion proposed rule using usual notice-and-comment rulemaking procedures under the Administrative Procedures Act (APA) (5 U.S.C. 552a et seq. ). The comment period for this companion proposed rule runs concurrently with the comment period for the direct final rule. Any comments received under this companion proposed rule will also be considered as comments regarding the direct final rule, and vice versa. We will not provide additional opportunity for comment. A significant adverse comment is defined as a comment that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. In determining whether an adverse comment is significant and warrants withdrawing a direct final rule, we will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process in accordance with section 553 of the APA (5 U.S.C. 553). Comments that are frivolous, insubstantial, or outside the scope of the rule will not be considered adverse under this procedure. For example, a comment recommending an additional change to the rule will not be considered a significant comment unless the comment states why the rule would be ineffective without the additional change. In addition, if a significant adverse comment applies to part of a rule and that part can be severed from the remainder of the rule, we may adopt as final those parts of the rule that are not the subject of a significant adverse comment.

In the Federal Register of November 21, 1997 (62 FR 62466), we announced the availability of the guidance document entitled “Guidance for FDA and Industry: Direct Final Rule Procedures.” This guidance document may be accessed at http://www.fda.gov/RegulatoryInformation/Guidances/ucm125166.htm.

FDA has examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this proposed rule is not a significant regulatory action under Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed rule would not impose any significant costs, we propose to certify that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. We do not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.

We have concluded that this proposed rule contains no “collections of information. ” Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) is not required.

We have determined under 21 CFR 25.33 that this proposed rule is of a type that would not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that the proposed rule, if finalized, would not contain policies that would have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we tentatively conclude that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

Interested persons may submit to the Division of Dockets Management (see ADDRESSES ) either electronic or written comments regarding this document. It is only necessary to send one set of comments. Identify comments with the docket number found in brackets in the heading of this document and they may be accompanied by a supporting memorandum or brief. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 20 be amended as follows:

In the Federal Register of March 29, 2010 (75 FR 15376), FDA published a proposed rule entitled “Direct-to-Consumer Prescription Drug Advertisements; Presentation of the Major Statement in Television and Radio Advertisements in a Clear, Conspicuous, and Neutral Manner,” to amend its regulations concerning DTC advertisements of prescription drugs. Specifically, the proposed rule would implement a new requirement of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), added by section 901(d)(3)(A) of the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85) (FDAAA). This section requires that the major statement in DTC television or radio advertisements relating to the side effects and contraindications of an advertised prescription drug intended for use by humans be presented in a clear, conspicuous, and neutral manner, and directs FDA to publish regulations establishing the standards for determining whether a major statement meets these requirements. As directed by section 901(d)(3)(B) of FDAAA, the proposed rule described standards that the Agency would consider in determining whether the major statement is clear, conspicuous, and neutral, and it provided a 90-day period for public comment, which closed on June 28, 2010.

On January 27, 2012 (77 FR 4273), FDA reopened the comment period on this rulemaking until February 27, 2012, to allow an opportunity for interested parties to comment on FDA's analyses of the results of its study (see attachment in Docket No. FDA-2009-N-0582-0040) on the impact of distraction on consumer understanding of risk and benefit information in DTC prescription drug television advertisements (72 FR 47051, August 22, 2007) (Distraction Study) as it relates to the proposed standards. The Pharmaceutical Research and Manufacturers of America (PhRMA) submitted a letter dated February 20, 2012, requesting an additional 15 days for interested persons to comment. FDA believes that an additional 15 days to comment on the Distraction Study as it relates to the proposed standards is appropriate.

Interested persons may submit to the Division of Dockets Management (see ADDRESSES ) either electronic or written comments regarding the Distraction Study as it relates to the proposed standards. It is only necessary to send one set of comments. Identify comments with the docket number found in brackets in the heading of this document and label them “ATTN: Distraction Study.” The data and received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided.

If you submit a comment, please include the docket number for this rulemaking (USCG-2012-0073), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online (via http://www.regulations.gov ) or by fax, mail, or hand delivery, but please use only one of these means. If you submit a comment online via http://www.regulations.gov, it will be considered received by the Coast Guard when you successfully transmit the comment. If you fax, hand deliver, or mail your comment, it will be considered as having been received by the Coast Guard when it is received at the Docket Management Facility. We recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, type the docket number (USCG-2012-0073 in the “SEARCH” box and click “SEARCH.” Click on “Submit a Comment” on the line associated with this rulemaking.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change the proposed rule based on your comments.

To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type the docket number USCG-2012-0073 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. We have an agreement with the Department of Transportation to use the Docket Management Facility.

Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the Federal Register (73 FR 3316).

We do not now plan to hold a public meeting. But you may submit a request for one on or before April 13, 2012, using one of the four methods specified under ADDRESSES . Please explain why you believe a public meeting would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

The legal basis for this proposed rule is 33 U.S.C. 1233, which authorizes the Coast Guard to define Special Local Regulations.

These temporary special local regulations are necessary to ensure the safety of vessels and spectators from hazards associated with the Ocean State Tall Ships Festival 2012.

Newport, Rhode Island, will host the Ocean State Tall Ships Festival 2012 from July 6-9, 2012. This visit of Class A, B, and C sailing vessels is part of a recurring series of sail training races, rallies, cruises, and port festivals organized by Tall Ships America in conjunction with host ports in the United States and Canada. The Ocean State Tall Ships Festival 2012, including a Parade of Sail, is akin to similar events held several times in the past in Newport, Rhode Island, the most recent being in 2007.

The Tall Ships visit to Newport, which will occur from July 6-9, 2012, will include a Parade of Sail on July 9, 2012. About 20 Class A, B, and C vessels are expected to participate in the Parade of Sail. These temporary special local regulations will provide for the safety of life and protection of property on the navigable waters of Narragansett Bay and Newport Harbor, Rhode Island, by providing for the organized viewing of Tall Ships at their assigned berths during the festival and by preventing the large number of spectator vessels from interfering with the organized and controlled Parade of Sail. There may be vessels participating in the event from several foreign countries and the high visibility of this event warrants that temporary special local regulations be established to ensure the safety of vessels and spectators from hazards associated with the Ocean State Tall Ships Festival 2012.

The participating vessels will berth at assigned facilities in Newport, Rhode Island, from July 5-9 2012. The festival begins on July 6, 2012, when visitors will be permitted to get a relatively close view of the Tall Ships from recreational vessels in Newport Harbor, and also to board the berthed vessels from shore. On the morning of July 9, 2012, the Tall Ships will depart Newport Harbor and transit up the East Passage, Narragansett Bay, to a turning point just north of Gould Island. The vessels will then transit back down the East Passage, exit Narragansett Bay, and head for sea.

The Coast Guard believes that vessel congestion due to the large number of participating and spectator vessels may pose a significant hazard to navigation. To reduce the risk associated with congested waterways the Coast Guard is proposing to establish regulated areas to restrict vessel movement around the location of the participating Tall Ships while berthed at Newport, Rhode Island, and also while participating in the Parade of Sail in Narragansett Bay. These temporary special local regulations would be in effect at various times in Narragansett Bay beginning on July 6, 2012 through July 9, 2012.

Area “Newport Harbor”: This Area would include all waters of Newport Harbor within an area bounded by Aquidneck Island to the east and south, by the Goat Island Causeway to the north, and by a line extending from the southernmost tip of Goat Island due south to Aquidneck Island. This area is needed to protect the maritime public and participating vessels from hazards to navigation associated with numerous spectator craft approaching participating Tall Ships berthed at various facilities in the Newport area for the Ocean State Tall Ships Festival 2012.

Area “Potter Cove”: In connection with the Parade of Sail on July 9, 2012, this area would be of the same coordinates of the existing Anchorage A in the East Passage, Narragansett Bay, that lies north of the Claiborne Pell/Newport Bridge. This area would be used as a spectator anchoring area limited to excursion and passenger-for-hire vessels greater than 50 feet in length carrying passengers for the viewing of the Parade of Sail.

Vessels other than excursion and passenger-for-hire vessels greater than 50 feet in length would not be permitted to anchor and would be required to transit at reduced speeds staying at least 20 yards away from any vessels authorized to anchor or otherwise remain within Area Potter Cove.

The Coast Guard proposes to establish an area to ensure the safety of spectator vessels and participating Tall Ships during the Ocean State Tall Ships Festival 2012 Parade of Sail on July 9, 2012.

This proposed Area includes all waters of the East Passage, Narragansett Bay, Rhode Island.

This area would be enforced only during the actual Parade of Sail. This area is designed to enhance navigation safety by facilitating the organized and controlled transit of participating vessels through the parade route and minimizing the impact on the maritime community.

Notice of these special local regulations would be provided prior to the event through the Local Notice to Mariners and Broadcast Notice to Mariners. In addition, the sponsoring organization, Ocean State Tall Ships, Inc., is planning to publish information of the event in local newspapers, pamphlets, Internet sites, television, and radio broadcasts.

The specific geographic locations of regulated areas and specific requirements of this rule are contained in the regulatory text.

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

This proposed 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, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

We expect the economic impact of this proposed rule to be minimal. These proposed regulations involve only the southern portion of Narragansett Bay and would close the East Passage to commercial traffic only for several hours during the actual Parade of Sail on July 9, 2012. The West Passage would remain open to vessel traffic at all times. The impact of these proposed regulations will not be significant because the majority of these proposed regulations would be in effect for only a portion of one day centered on the Parade of Sail, and most vessel traffic can pass safely around affected areas of the East Passage by transiting through the West Passage, Narragansett Bay.

Notice of these special local regulations would be provided prior to the event through the Local Notice to Mariners and Broadcast Notice to Mariners. In addition, the sponsoring organization, Ocean State Tall Ships, Inc., is planning to publish information of the event in local newspapers, pamphlets, Internet sites, television, and radio broadcasts.

Mariners will be able to adjust their plans accordingly based on the extensive advance information.

Moreover, the Areas created by these special local regulations have been narrowly tailored to impose the least impact on maritime interests yet provide the level of safety and protection deemed necessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered the impact of this proposed rule on 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 proposed rule will not have a significant economic impact on a substantial number of small entities.

This proposed rule may affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit or anchor in a portion of Narragansett Bay between July 6 and July 9, 2012, particularly during the Parade of Sail on July 9, 2012, when the navigation channel in the East Passage, Narragansett Bay, is closed for a period of time to all traffic except vessels participating in the Parade of Sail.

These proposed regulations would not have a significant economic impact on a substantial number of small entities for the following reasons: the regulations affecting navigation in the East Passage, Narragansett Bay, would be in effect temporarily, and only for those periods of time necessary for the safety of the Ocean State Tall Ships Festival 2012 participants and spectators in boats viewing the Parade of Sail from waters adjacent to the parade route. The East Passage would remain open to all vessel traffic for the entire Festival from July 6-8, 2012, and would only be closed to vessel traffic for several hours during the Parade of Sail on July 9, 2012. While the East Passage is closed, the West Passage would remain open and is capable of being used by all recreational and most commercial vessels.

Notice of these special local regulations would be provided prior to the event by Local Notice to Mariners and Broadcast Notice to Mariners. In addition, the sponsoring organization, Ocean State Tall Ships, Inc., is planning to publish information of the event in local newspapers, pamphlets, Internet sites, television, and radio broadcasts.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed under FOR FURTHER INFORMATION CONTACT . The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

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

A proposed 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 proposed 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 proposed rule will not result in such expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.

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

This proposed 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 proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This proposed 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 proposed 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 proposed 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 proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this proposed 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 made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. A preliminary environmental analysis checklist supporting this determination is available in the docket where indicated under ADDRESSES . It appears that this proposed rule will qualify for Coast Guard categorical exclusion (34)(h), as described in figure 2-1 of the Instruction. This proposed rule establishes temporary special local regulations. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 100 as follows:

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided.

If you submit a comment, please include the docket number for this rulemaking (USCG-2012-0004), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online (via http://www.regulations.gov ) or by fax, mail, or hand delivery, but please use only one of these means. If you submit a comment online via www.regulations.gov, it will be considered received by the Coast Guard when you successfully transmit the comment. If you fax, hand deliver, or mail your comment, it will be considered as having been received by the Coast Guard when it is received at the Docket Management Facility. We recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, type the docket number (USCG-2012-0004) in the “SEARCH” box and click “SEARCH.” Click on “Submit a Comment” on the line associated with this rulemaking.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change the rule based on your comments.

To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type the docket number (USCG-2012-0004) in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the Federal Register (73 FR 3316).

We do not now plan to hold a public meeting. But you may submit a request for one using one of the four methods specified under ADDRESSES . Please explain why you believe a public meeting would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

The legal basis for the proposed SLR is 33 U.S.C. 1233; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define special local regulations.

The proposed temporary SLR is necessary to ensure the safety of spectators and vessels from hazards associated with fireworks displays. Based on the inherent hazards associated with fireworks, the Captain of the Port (COTP) New York has determined that fireworks launches proximate to water crafts pose a significant risk to public safety and property. The combination of increased numbers of recreational vessels, congested waterways, darkness punctuated by bright flashes of light, and debris, especially burning debris falling on passing or spectator vessels has the potential to result in serious injuries or fatalities. The proposed rule will temporarily establish regulated areas designated as spectator vessel viewing areas to restrict and control vessel movement around the location of the fireworks launch platforms to reduce the risk associated with the launch of fireworks.

Macy's is sponsoring their annual Fourth of July Fireworks Display on the waters of the Hudson River in the vicinity of New York, NY. The fireworks display will occur from approximately 9:20 p.m. until 9:50 p.m. on July 4, 2012. In order to coordinate the safe movement of vessels within the area and to ensure that the area is clear of unauthorized persons and vessels before, during, and immediately after the fireworks launch, the proposed regulated areas will be enforced from 7 p.m. until 11 p.m. on July 4, 2012.

If the event is cancelled due to inclement weather, then the proposed regulated areas will be enforced from 7 p.m. until 11 p.m. on July 5, 2012.

The Coast Guard will activate a pre-established safety zone under 33 CFR 165.160 (USCG-2010-1001), around the fireworks launch platforms. The safety zone may be referred to as area CHARLIE, and its location is defined in entry 1.1 of Table 1 to 33 CFR 165.160. Only fireworks launch platforms and assist vessels will be allowed to enter into the safety zone.

To augment the existing safety zone around the fireworks launch barges, the COTP New York will establish four limited access areas within the boundaries of the special local regulation. Access to these areas will be restricted to vessels of a certain size. The four designated areas within the SLR are: (1) A “spectator area” designated ALPHA in which access is limited to vessels less than 20 meters in length (65.6ft); (2) “spectator area” designated BRAVO in which access is limited to vessels greater than 20 meters in length (65.6ft); (3) “spectator area” designated DELTA in which access is limited to vessels greater than 20 meters in length (65.6ft); and (4) a “spectator area” designated ECHO in which access is limited to vessels less than 20 meters in length (65.6ft).

The geographic locations of regulated areas, and specific requirements of this rule are contained in the regulatory text. Public notifications will be made to the local maritime community prior to the event through the Local Notice to Mariners, and Broadcast Notice to Mariners.

We developed this proposed 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 proposed 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, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This determination is based on the limited time that vessels will be restricted from the fireworks display area. The temporary special local regulation will only be in effect for approximately four hours during the evening hours. The Coast Guard does not expect significant adverse impact to mariners from the regulated areas, because the event has been extensively advertised in the public and affected mariners may request authorization from the COTP New York or the designated representative to transit the zone. Advance notification will be made to the maritime community via Broadcast Notice to Mariners and Local Notice to Mariners (LNM).

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed 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 proposed rule would 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 and operators of vessels intending to transit or anchor in a portion of the Hudson River, in the vicinity of New York, NY during the effective period.

The temporary special local regulation will not have significant economic impact on a substantial number of small entities for the following reasons: This rule will be in effect for only four hours on a single day during the late evening for this fireworks event. Although the regulation will apply to the entire width of the river, traffic will be allowed to pass through the area with the permission of the COTP New York or the designated representative. Before the effective period, the Coast Guard will issue maritime advisories widely available to users of the waterway.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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

If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would call 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 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. We have analyzed this rule under that Order and determined that this rule 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 proposed rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

This proposed 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 proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would 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 proposed 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 proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this proposed 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 made a preliminary determination that this action appears to be one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. A preliminary environmental analysis checklist supporting this determination will be available in the docket where indicated under ADDRESSES . This proposed rule involves the establishment of a special local regulation to regulate vessel traffic on a portion of the Hudson River during the launching of fireworks. This rule appears to be categorically excluded, under figure 2-1, paragraphs and (34)(h), of the Commandant Instruction.

We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

Entities potentially affected by this proposed rule include, but are not necessarily limited to, states (typically state air pollution control agencies) that control VOCs, and industries listed in the following table involved in the manufacture or use of fire suppressants and specialized refrigerants in secondary loop refrigeration systems for heat transfer.

This proposed rule is applicable to all manufacturers, distributors, and users of these chemical compounds.

Submitting CBI: Do not submit this information to the EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

To request a public hearing or information pertaining to a public hearing on this document, contact Ms. Pamela S. Long, Air Quality Policy Division, Mail code C504-01, U.S. Environmental Protection Agency, Research Triangle Park, NC 27711, telephone (919) 541-0641, facsimile number (919) 541-5509, electronic email address: long.pam@epa.gov.

The information presented in this preamble is organized as follows:

Tropospheric ozone, commonly known as smog, is formed when VOCs and nitrogen oxides (NO X ) react in the atmosphere in the presence of sunlight. Because of the harmful health effects of ozone, the EPA and state governments limit the amount of VOCs that can be released into the atmosphere. VOCs are those organic compounds of carbon which form ozone through atmospheric photochemical reactions. Different VOCs have different levels of reactivity—that is, they do not react to form ozone at the same speed or do not form ozone to the same extent. Some VOCs react slowly, or form less ozone; therefore, changes in their emissions have limited effects on local or regional ozone pollution episodes. It has been the EPA's policy that organic compounds with a negligible level of reactivity should be excluded from the regulatory definition of VOC so as to focus VOC control efforts on compounds that do significantly increase ozone concentrations. The EPA also believes that exempting such compounds creates an incentive for industry to use negligibly reactive compounds in place of more highly reactive compounds that are regulated as VOCs. The EPA lists these negligibly reactive compounds in its regulations (at 40 CFR 51.100(s)) and excludes them from the definition of VOC.

The CAA requires the regulation of VOCs for various purposes. Section 302(s) of the CAA specifies that the EPA has the authority to define what this term means, and hence what compounds shall be treated as VOCs for regulatory purposes. The policy of excluding negligibly reactive compounds from the VOC definition was first set forth in the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) and was supplemented most recently with the “Interim Guidance on Control of Volatile Organic Compounds in Ozone State Implementation Plans” (Interim Guidance) (70 FR 54046, September 13, 2005). The EPA uses the reactivity of ethane as the threshold for determining whether a compound has negligible reactivity. Compounds that are less reactive than, or equally reactive to, ethane under certain assumed conditions may be deemed negligibly reactive and therefore suitable for exemption from the regulatory definition of VOC. Compounds that are more reactive than ethane continue to be considered VOCs for regulatory purposes and therefore subject to control requirements. The selection of ethane as the threshold compound was based on a series of smog chamber experiments that underlay the 1977 policy.

The EPA has used three different metrics to compare the reactivity of a specific compound to that of ethane: (i) The reaction rate constant (known as k OH ) with the hydroxyl radical (OH); (ii) the maximum incremental reactivities (MIR) of ethane and the compound in question expressed on a reactivity per mass basis; and (iii) the MIR of ethane and the compound in question expressed on a reactivity per mole basis. Differences between these three metrics are discussed below.

The k OH is the reaction rate constant of the compound with the OH radical in the air. This reaction is typically the first step in a series of chemical reactions by which a compound breaks down in the air and participates in the ozone-forming process. If this step is slow, the compound will likely not form ozone at a very fast rate. The k OH values have long been used by the EPA as a measure of photochemical reactivity and ozone-forming activity, and they have been the basis for most of the EPA's previous exclusions of negligibly reactive compounds. The k OH metric is inherently a molar comparison, i.e., it measures the rate at which molecules react.

The MIR values, both by mole and by mass, are a more recently developed measure of photochemical reactivity derived from a computer-based photochemical model. This measurement considers the complete ozone forming activity of a compound, not merely the first reaction step. Further explanation of the MIR metric can be found in: W. P. L. Carter, “Development of Ozone Reactivity Scales for Volatile Organic Compositions,” Journal of the Air & Waste Management Association, Vol. 44, 881-899, July 1994.

The MIR values for compounds are typically expressed as grams of ozone formed per gram of VOC (mass basis), but may also be expressed as grams of ozone formed per mole of VOC (molar basis). For comparing the reactivities of two compounds, using the molar MIR values considers an equal number of molecules of the two compounds. Alternatively, using the mass MIR values compares an equal mass of the two compounds, which will involve different numbers of molecules, depending on the relative molecular weights. The molar MIR comparison is consistent with the original smog chamber experiments that underlie the original selection of ethane as the threshold compound and compared equal molar concentrations of individual VOCs. It is also consistent with previous reactivity determinations based on inherently molar k OH values. By contrast, the mass MIR comparison is more consistent with how MIR values and other reactivity metrics have been applied in reactivity-based emission limits, such as the national VOC emissions standards for aerosol coatings (73 FR 15604). Many other VOC regulations contain limits based upon a weight of VOC per volume of product, such as the EPA's regulations for limiting VOC emissions from architectural and industrial maintenance coatings (65 FR 7736). However, the fact that regulations are structured to measure VOC content by weight for ease of implementation and enforcement does not necessarily control whether VOC exemption decisions should be made on a weight basis as well.

The choice of the molar basis versus the mass basis for the ethane comparison can be significant. Given the relatively low molecular weight of ethane, use of the mass basis tends to result in more VOCs being classified as “negligibly reactive” than in the case of the molar basis. In some cases, a compound might be considered less reactive than ethane and eligible for VOC exemption under the mass basis but not under the molar basis.

In this proposed action, the EPA relies on the k OH metric because of the availability of relevant data. No reported calculations of MIR values on a molar or mass basis were found for these compounds. Thus, the EPA relies on the k OH metric.

The EPA's 2005 Interim Guidance also notes that concerns have sometimes been raised about the potential impact of a VOC exemption on environmental endpoints other than ozone concentrations, including fine particle formation, air toxics exposures, stratospheric ozone depletion, and climate change. The EPA has recognized, however, that there are existing regulatory and non-regulatory programs that are specifically designed to address these issues, and the agency continues to believe that the impacts of VOC exemptions on environmental endpoints other than ozone formation will be adequately addressed by these programs. The VOC exemption policy is intended to facilitate attainment of the ozone NAAQS, and questions have been raised as to whether the agency has authority to use its VOC policy to address concerns that are unrelated to ground-level ozone. Thus, in general, VOC exemption decisions will continue to be based solely on consideration of a compound's contribution to ozone formation. However, if the agency determines that a particular VOC exemption is likely to result in a significant increase in the use of a compound and that the increased use would pose a significant risk to human health or the environment that would not be addressed adequately by existing programs or policies, the EPA reserves the right to exercise its judgment in deciding whether to grant an exemption.

In this case, the agency has examined available information on the risks to human health and the environment and applicability of other regulatory programs; that information for the four compounds considered here is discussed further in Section III.

On February 10, 2005, Solvay Solexis, Incorporated submitted to the EPA a petition requesting that four compounds in the family of products known by the trade name H-Galden be added to the list of compounds that are considered to be negligibly reactive in the definition of VOC at 40 CFR 51.100(s). These four compounds—HCF 2 OCF 2 H (HFE-134), HCF 2 OCF 2 OCF 2 H (HFE-236cal2), HCF 2 OCF 2 CF 2 OCF 2 H (HFE-338pcc13), and HCF 2 OCF 2 OCF 2 CF 2 OCF 2 H (H-Galden 1040X and H-Galden ZT 130 (or 150 or 180))—can be used in some heat transfer applications (as refrigerants) and as fire suppressants.

In both the refrigeration and fire suppressant end uses, these HFPEs would be used as substitutes for ozone-depleting substances (ODS) and thus have either undergone or would need to undergo review by the EPA's Significant New Alternatives Policy (SNAP) Program. The SNAP Program is EPA's program to evaluate and regulate substitutes for the ozone-depleting chemicals that are being phased out under the stratospheric ozone protection provisions of the CAA. In Section 612(c) of the CAA, the agency is authorized to identify and publish lists of acceptable and unacceptable substitutes for class I or class II ozone-depleting substances. 1 The EPA's SNAP program has evaluated the use of H-Galden HFPEs and found acceptable their use as fire suppressants in non-residential applications, in place of Halon 1211 (68 FR 4004, January 27, 2003). However, the SNAP program has not approved H-Galden HFPEs for certain other uses (i.e., solvent, aerosol propellant, foam blowing, and refrigeration). There currently is no submission pending review to list these substances as substitutes in other uses. Thus, at this time, it would be a violation of the CAA and the SNAP program regulations for any person to introduce H-Galden HFPEs into interstate commerce for use in other end uses regulated by the SNAP program. H-Galden HFPEs may be used in non-mechanical heat transfer as a secondary refrigerant in secondary-loop refrigeration systems without approval from SNAP; the EPA does not list, and does not currently require notification for, compounds that are used only as a secondary fluid in secondary-loop refrigeration systems (62 FR 10702; March 10, 1997).

With respect to the photochemical reactivity of the H-Galden compounds, Solvay Solexis, Incorporated provided information on the photochemical reactivity of its chemical compounds as measured by each compound's k OH rate constant. Measurements of the reaction rate of HCF 2 OCF 2 H (HFE-134) with OH have been estimated at 298 K to be 2.9×10 −15 (cm 3 /molecule-sec). This rate constant is highly temperature dependent and decreases at lower temperatures. The calculated reaction rates for the three additional HFPEs submitted by Solvay Solexis are 2.4×10 −15 (cm 3 /molecule-sec) for HFE-236cal2, 4.7×10−15 (cm 3 /molecule-sec) for HFE-338pcc13, and 4.9×10 −15 (cm 3 /molecule-sec) for H-Galden 1040X. The k OH values for these four HFPEs are significantly lower than the reaction rate for ethane which has a k OH value of 2.4×10 −13 (cm 3 /molecule-sec) at 298 K.

The scientific information that the petitioner submitted in support of the petition has been added to the docket for this rulemaking. This docketed information includes journal articles where the rate constant values can be found. Solvay Solexis, Incorporated submitted the following articles in support of its petition: (1) “Tropospheric Degradation Products of Novel Hydrofluoropolyethers,” Tuazon, Environmental Science & Technology, University of California, Riverside, May 1997; (2) “Hydrofluoropolyethers,” Marchionni, Silvani, Fontana, Malinverno, Visca, Journal of Fluorine Chemistry, Ausimont SpA, R & D Centre, 1999; and (3) “Toxicological Profile of Hydrofluoropolyethers,” Malinverno, Colombo, Visca, Regulatory Toxicology and Pharmacology, December, 2004.

Information in the Solvay Solexis, Incorporated petition and its reference material indicates that the four HFPEs have low acute toxicity, no irritation or skin sensitization, and no detectable genotoxic activity in vitro or in vivo. The HFPEs show a similarly low potential for developmental toxicity. This toxicity information has been placed in the docket for this rulemaking.

Consistent with the Interim Guidance, the EPA's proposed response to the petition is based on a consideration of the contribution that each chemical makes to tropospheric ozone formation based on a comparison of reactivity metrics, and our assessment that existing programs or policies already adequately address the possibility that granting the petition would pose a significant risk to human health or the environment. Information on these topics is given below.

Table 1 summarizes the information provided by the petitioner regarding the photochemical reactivity of the compounds under consideration. The data submitted by the petitioner support the contention that the reactivity of these compounds, with respect to reaction with the OH radical in the atmosphere, is lower than that of ethane.

Additionally, we examined and present available information on the likelihood of risk to human health or the environment from increased use of the chemicals considered here. We believe that current regulation of these compounds under other EPA programs adequately protects human health and the environment.

The EPA's SNAP program has reviewed the potential impacts of the H-Galden HFPEs on human health and the environment, including stratospheric ozone depletion and global warming potential (GWP). From a human health standpoint, use of HFPEs as a streaming agent fire suppressant in non-residential applications does not pose a significant risk as compared to other available substitutes with the same end use. Because HFPEs do not contain chlorine or bromine, these compounds do not contribute to the depletion of the ozone layer and have ozone depletion potential values of zero. These HFPEs have significant GWPs, comparable to those for hydrofluorocarbons also used as fire suppressants. The SNAP program listed H-Galden HFPEs as acceptable substitutes for Halon 1211 subject to narrowed use limits (for use only in non-residential applications) because they reduce overall risk to human health and the environment in the listed end use and application (68 FR 4004, January 27, 2003).

Table 2 shows the 20 and 100 year GWPs of these four compounds relative to carbon dioxide (CO 2 ) as reported by the Intergovernmental Panel on Climate Change. These GWP-100 levels are comparable to mid-range levels associated with some chemical compounds that have previously been exempted from the VOC definition, which range from 23 to 12,000. We invite the public to submit comments and additional information relevant to this issue and whether such information should be considered in connection with the decision to grant an exemption from the regulatory definition of VOC.

In summary, for all four compounds, the EPA believes that (a) these chemicals qualify as negligibly reactive with respect to their contribution to tropospheric ozone formation, and (b) any non-tropospheric ozone-related risks associated with potential increased use are adequately addressed by other existing programs and policies. We invite the public to submit comments and additional information relevant to the issue of these compounds' overall risks and benefits to human health and the environment, and on whether such information should be considered in connection with the decision to grant an exemption from the regulatory definition of VOC.

The EPA hereby proposes to amend its definition of VOC at 40 CFR 51.100(s) to exclude a group of four HFPE's identified as HCF 2 OCF 2 H (known as HFE-134), HCF 2 OCF 2 OCF 2 H (known as HFE-236cal2), HCF 2 OCF 2 CF 2 OCF 2 H (known as HFE-338pcc13), and HCF 2 OCF 2 OCF 2 CF 2 OCF 2 H (known as H-Galden 1040X and also H-Galden ZT 130 (or 150 or 180)) as VOCs for ozone SIP and ozone control purposes. If an entity uses or produces any of these four HFPE compounds and is subject to the EPA regulations limiting the use of VOC in a product, limiting the VOC emissions from a facility, or otherwise controlling the use of VOC for purposes related to attaining the ozone NAAQS, then the compound will not be counted as a VOC in determining whether these regulatory obligations have been met. This action may also affect whether any of these four HFPE compounds are considered as VOCs for state regulatory purposes to reduce ozone formation, if a state relies on the EPA's definition of VOC. States are not obligated to exclude from control as a VOC those compounds that the EPA has found to be negligibly reactive. However, if this action is made final, states may not take credit for controlling these compounds in their ozone control strategies.

The EPA is also proposing to make certain technical corrections to the current list of exempt compounds at 40 CFR 51.100(s)(1) by replacing several commas separating individual compounds with semicolons and by removing the erroneous “(1)” notation in “(1) 1,1,1,2,2,3,4,5,5,5-decafluoro-3-methoxy-4-trifluoromethyl-pentane (HFE-7300)” so that it reads “1,1,1,2,2,3,4,5,5,5-decafluoro-3-methoxy-4-trifluoromethyl-pentane (HFE-7300)”.

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action” because it raises novel legal or policy issues arising out of legal mandates. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). It does not contain any recordkeeping or reporting requirement.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this proposed rule on small entities, small entity is defined as: (1) A small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards. ( See 13 CFR 121.); (2) A governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) A small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This proposed rule will not impose any requirements on small entities.

We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. The action imposes no enforceable duty on any state, local or tribal governments or the private sector. Therefore, this action is not subject to the requirements of sections 202 and 205 of the UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed action addresses the exemption of a set of chemical compounds from the VOC definition. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed rule from state and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. In the spirit of Executive Order 13175, and consistent with the EPA policy to promote communications between the EPA and Tribal governments, the EPA specifically solicits additional comment on this proposed rule from tribal officials.

This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866. While this proposed rule is not subject to the Executive Order, the EPA has reason to believe that ozone has a disproportionate effect on active children who play outdoors (62 FR 38856-38859, July 18, 1997). The EPA has not identified any specific studies on whether or to what extent the chemical compound may affect children's health. The EPA has placed the available data regarding the health effects of this chemical compound in Docket No. EPA-HQ-OAR-2007-0089.

The public is invited to submit comments or identify peer-reviewed studies and data, of which the EPA may not be aware, that assess results of early life exposure to the chemical compounds herein.

This proposed rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action proposes to revise the EPA's definition of VOCs for purposes of preparing SIPs to attain the NAAQS for ozone under title I of the CAA.

Section 12(d) of the National Technology Transfer Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d), (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs the EPA to provide Congress, through OMB, with explanations when the agency decides not to use available and applicable voluntary consensus standards.

This proposed rulemaking does not involve technical standards. Therefore, the EPA is not considering the use of any voluntary consensus standards.

Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it will not affect the level of protection provided to human health or the environment.

For reasons set forth in the preamble, part 51 of chapter I of title 40 of the Code of Federal Regulations is proposed to be amended as follows:

Due to requests received from industry to extend the public comment period, the EPA is extending the public comment period for an additional 14 days. Therefore, the public comment period will end on April 13, 2012, rather than March 30, 2012.

The EPA has established the official public docket No. EPA-HQ-OAR-2010-0544. The EPA has also developed a Web site for the proposed rulemaking at the addresses given above.

This action proposes revising a use condition for the refrigerant HFO-1234yf in motor vehicle air conditioning under EPA's Significant New Alternatives Policy (SNAP) program. This action would incorporate by reference an updated edition of a standard from SAE International and clarifying the scope of the use condition. We have published a direct final rule which revises a condition for use of HFO-1234yf in motor vehicle air conditioning in the “Rules and Regulations” section of this Federal Register because we view this as a noncontroversial action and anticipate no adverse comment. We have explained our reasons for this action in the preamble to the direct final rule.

If we receive no adverse comment and no requests for public hearings in response to this action, we will not take further action on this proposed rule. If we receive adverse comment, we will withdraw the direct final rule and it will not take effect. We would address all public comments in any subsequent final rule based on this proposed rule. If a public hearing is requested, EPA will provide notice in the Federal Register as to the location, date, and time.

We do not intend to institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information, please see the information provided in the ADDRESSES section of this document.

This notice of proposed rulemaking (NPRM) would regulate the use of HFO-1234yf (2,3,3,3-tetrafluoroprop-1-ene, Chemical Abstracts Service Registry Number [CAS Reg. No.] 754-12-1) as a refrigerant in new motor vehicle air conditioning (MVAC) systems in new passenger cars and light-duty trucks. Businesses in this end-use that might want to use HFO-1234yf in new MVAC systems in the future include:

EPA is proposing to revise one of the use conditions required for use of hydrofluoroolefin (HFO)-1234yf (2,3,3,3-tetrafluoroprop-1-ene), a substitute for ozone-depleting substances (ODSs) in the motor vehicle air conditioning end-use under EPA's Significant New Alternatives Policy (SNAP) program. In March 2011, EPA listed HFO-1234yf as acceptable, subject to use conditions, for use in motor vehicle air conditioning (MVAC) systems in new passenger cars and light-duty trucks (March 29, 2011; 76 FR 17488). We are revising the use condition that incorporated by reference the February 2011 edition of SAE International's  1 (herein after, SAE) J2844 standard for connections with refrigerant containers. We are revising this use condition to incorporate by reference an updated edition of the standard, and we also are clarifying the scope of that use condition. This action does not place any significant burden on the regulated community and ensures consistency with industry standards. The direct final rule will be effective on May 22, 2012 without further notice unless we receive adverse comment (or a request for a public hearing) by April 23, 2012. If EPA receives adverse comment or a request for a public hearing, we will publish a timely withdrawal in the Federal Register informing the public that all or part of this rule will not take effect. EPA will address all public comments in a subsequent final rule based on this proposed rule. We will not institute a second public comment period on this action. Any parties interested in commenting must do so at this time.

You may claim that information in your comments is confidential business information, as allowed by 40 CFR part 2. If you submit comments and include information that you claim as confidential business information, we request that you submit them directly to Margaret Sheppard in two versions: one clearly marked “Public” to be filed in the public docket, and the other marked “Confidential” to be reviewed by authorized government personnel only.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

This action does not impose any new information collection burden. It contains no new requirements for reporting. However, the Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the existing regulations in subpart G of 40 CFR part 82 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control numbers 2060-0226 (EPA ICR No. 1596.08). This Information Collection Request (ICR) included five types of respondent reporting and recordkeeping activities pursuant to SNAP regulations: submission of a SNAP petition, filing a SNAP/TSCA Addendum, notification for test marketing activity, recordkeeping for substitutes acceptable subject to use restrictions, and recordkeeping for small volume uses. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statutes unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this proposed rule because this rule will not have a significant economic impact on a substantial number of small entities. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; for NAICS code 336111 (Automobile manufacturing), a small business has <1000 employees; and for NAICS code 811111 (General Automotive Repair), a small business has annual receipts of less than $7.0 million; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. This rule will not impose any requirements on small entities beyond current industry practices. Today's action effectively ensures consistency with current industry practices and standards, whereas without these revisions, small businesses would need to reconcile differences between EPA regulations and industry standards.

It is not clear that there would be any cost differential between these new unique fittings, those used with the current automotive refrigerant, HFC-134a, or other fittings that the automotive industry could adopt instead. It is possible that the fittings required in the revised use condition will be less expensive because they are a standard shape and size easily produced in a metal-working shop. Thus, cost impacts of this proposed rule on small entities are expected to be small. This proposed rule is expected to relieve burden for some small entities, such as automotive repair shops, by avoiding confusion over which fittings to use and by using a more robust fitting that allows quick detection of any leaks from the valve.

Although this proposed rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small entities. EPA has worked together with SAE International and with groups representing professional service technicians such as the Mobile Air Conditioning Society Worldwide, which conducts regular outreach with technicians and owners of small businesses such as retail refrigerant suppliers and automobile repair shops.

This rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. This final rule will not impose any requirements beyond current industry practices, and thus, compliance costs are expected to be small. Thus, this rule is not subject to the requirements of sections 202 or 205 of UMRA.

This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The requirements of this rule apply to the servicing of motor vehicle air conditioning systems. The requirements of this rule for unique fittings are expected to be comparable in cost to those of current fittings. Requirements would be the same as those imposed on any other entity performing servicing on motor vehicle air conditioning systems.

This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This regulation applies directly to facilities that use these substances and not to governmental entities. Thus, Executive Order 13132 does not apply to this rule.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed action from State and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It does not significantly or uniquely affect the communities of Indian tribal governments, because this regulation applies directly to facilities that use these substances and not to governmental entities. Thus, Executive Order 13175 does not apply to this action.

EPA specifically solicits additional comment on this proposed action from tribal officials.

Executive Order 13045: “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This proposed rule is not economically significant as defined in Executive Order 12866, and the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action concerns only use of a specific fitting that may reduce technician's exposure in the course of professional servicing of MVAC systems. Therefore, we did not conduct further health or risk assessments beyond those in the original rulemaking (March 29, 2011; 76 FR 17488). This rule is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866 and because the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.

The public is invited to submit comments or identify peer-reviewed studies and data that assess effects of early life exposure to HFO-1234yf.

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

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) directs EPA to use voluntary consensus standards in regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This rulemaking involves technical standards. EPA proposes to use SAE International's most recent version of the SAE J2844 standard, “R-1234yf (HFO-1234yf) New Refrigerant Purity and Container Requirements for Use in Mobile Air-Conditioning Systems.” This standard can be obtained from http://www.sae.org/technical/standards /. This standard addresses, among other things, appropriate fittings and other requirements for refrigerant containers for use for professional servicing of MVAC systems using the alternative refrigerant HFO-1234yf.

EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This final rule requires specific use conditions for unique fittings for use with refrigerant containers for professional servicing of MVAC systems, for those servicing MVAC systems using this low global warming potential refrigerant alternative. It does not directly affect the amount of exposure to or emissions of HFO-1234yf expected.

Section 25(a)(2)(B) of FIFRA, 7 U.S.C. 136w, requires EPA to provide the Secretary of USDA with a copy of any draft final rule at least 30 days before signing it in final form for publication in the Federal Register . The draft final rules are not available to the public until after they have been signed by EPA. If the Secretary of USDA comments in writing regarding the draft final rules within 15 days after receiving them, EPA shall include the comments of the Secretary of USDA, if requested by the Secretary of USDA, and EPA's response to those comments with the final rule that publishes in the Federal Register . If the Secretary of USDA does not comment in writing within 15 days after receiving the draft final rules, the EPA Administrator may sign the final rules for publication in the Federal Register any time after the 15-day period.

No. This document is merely a notification of submissions to the Secretary of USDA. As such, none of the regulatory assessment requirements apply to this document.

The snapper-grouper fishery of the South Atlantic is managed under the FMP. The FMP was prepared by the Council and is implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

The Magnuson-Stevens Act requires NMFS and regional fishery management councils to prevent overfishing and achieve, on a continuing basis, the optimum yield (OY) for federally managed fish stocks. These mandates are intended to ensure fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems. To further this goal, the Magnuson-Stevens Act requires fishery managers to end overfishing of stocks while achieving OY from the fishery, and to minimize bycatch and bycatch mortality to the extent practicable.

The black sea bass segment of the snapper-grouper fishery in the South Atlantic is managed through a variety of measures to achieve OY. These measures include restrictions on the total harvest, recreational and commercial allocations, recreational and commercial annual catch limits (ACLs), and accountability measures (AMs). A new stock assessment for black sea bass was completed in October 2011, and indicates the stock is no longer overfished but is not yet fully rebuilt. As overfishing ends for black sea bass, and biomass increases, the sector specific ACLs are likely to be met earlier each fishing season as a result of the increased availability of the stock for harvest. This can increase the likelihood of derby-style harvesting, which is undesirable from economic, vessel safety, and social perspectives. Derby-style harvesting, also termed “the race for fish,” consists of a short duration of increased effort where harvest is maximized prior to reaching an ACL. Additionally, effort shifting into the black sea bass segment of the snapper-grouper fishery increased as more stringent restrictions were placed on other snapper-grouper species. This resulted in sector ACLs being reached relatively early in their fishing seasons. During the June 2009 to May 2010 fishing year, the commercial quota was met in December 2009. During the June 2010 to May 2011 fishing year, the commercial quota was met in October 2010, and during the June 2011 to May 2012 fishing year, the commercial quota was met in July 2011.

Currently, the black sea bass rebuilding plan specifies a constant catch rebuilding strategy as the stock rebuilds, which also contributes to increased rates of harvest and early in-season closures as fish become more available through rebuilding efforts. In an effort to extend fishing opportunities for black sea bass further into the fishing year, and to improve fisheries data reporting in the for-hire sector of the snapper-grouper fishery, the Council voted to approve Amendment 18A at its December 2011 meeting.

This rule would modify the black sea bass rebuilding strategy, acceptable biological catch (ABC), and ACL; limit participation in the black sea bass pot segment of the snapper-grouper fishery through an endorsement program; establish an appeals process for fishermen excluded from the black sea bass pot endorsement program; limit the number of pot tags issued to participants in the black sea bass pot segment of the snapper-grouper fishery; implement measures to reduce black sea bass bycatch; modify AMs for black sea bass; establish a commercial trip limit for black sea bass; modify the current commercial and recreational size limits; and improve data reporting in the for-hire sector of the snapper-grouper fishery.

In October 2011, a new benchmark stock assessment (SEDAR 25) was completed for black sea bass. Results of the new stock assessment indicate that the stock is no longer overfished but is not yet rebuilt. The biomass of the stock is above the minimum stock size threshold (MSST), which is the level that triggers an overfished determination. However, stock size of black sea bass is below the biomass level at which the stock is considered to be rebuilt (B MSY ). Furthermore, the stock is undergoing overfishing to a minor degree based on 2009 and 2010 data.

The Council's Scientific and Statistical Committee (SSC) met in November 2011 to review SEDAR 25. The SSC determined that the assessment represented the best scientific information available.

Information provided to the SSC indicated the commercial ACL for 2011 of 309,000 lb (140,200 kg), gutted weight; 364,620 lb (165,389 kg), round weight; had been exceeded by about 5 percent, and the recreational ACL for 2011 had been exceeded by at least 10 percent. However, because 2 months of recreational data from 2011 were not available, the SSC supported an ABC which assumes 150 percent of the allowable catch will be met in the 2011/2012 fishing year. Furthermore, the SSC stated that the ABC should be specified for only the 2012/2013 and 2013/2014 fishing seasons. The SSC indicated that an assessment update should be conducted before any adjustments are made to the ACL after the 2013/2014 fishing season.

Based on the SSC's recommendations, the Council chose, and NMFS proposes, to modify the current constant catch rebuilding strategy to a rebuilding strategy that holds catch constant at the ABC in fishing years 2012/2013 and 2013/2014, and then changes to F rebuild in 2014/2015. F rebuild is defined as a constant fishing mortality strategy that maintains a 66-percent probability of recovery rate throughout the remaining fishing seasons of the rebuilding timeframe. After the 2014/2015 fishing season the fishing mortality rate would be held constant until modified. Switching to a constant fishing mortality strategy would allow the ABC and ACL to increase over time. However, if the combined ACL is exceeded in a year when there is no assessment, the combined ACL would not automatically increase the following year.

This rule proposes a new ACL definition for black sea bass. ACL = ABC = OY. The combined ACL would be 847,000 lb (384,192 kg), round weight; 718,000 lb (325,680 kg), gutted weight; which would be divided into sector ACLs based on the current allocation formula implemented through the final rule for Amendment 13C to the FMP (71 FR 55096, September 21, 2006). The commercial allocation is 43 percent of the combined ACL and the recreational allocation is 57 percent of the combined ACL. Therefore, the commercial ACL would be set at 309,000 lb (140,160 kg), gutted weight; 364,620 lb (165,389 kg), round weight; and the recreational ACL would be set at 409,000 lb (185,520 kg), gutted weight; 482,620 lb (218,913 kg), round weight; for the 2012/2013 and 2013/2014 fishing years. Thereafter, a stock assessment update would be completed to determine if an increase in the ACL is appropriate for the following fishing year.

The Council is concerned increased restrictions imposed through Amendments 13C, 16, 17A, and 17B to the FMP, including a commercial quota for black sea bass, commercial quota for vermilion snapper, and seasonal closure for shallow-water groupers, could serve as an incentive for a greater number of fishermen with Federal snapper-grouper commercial permits to fish for black sea bass with pots. Currently, tags for black sea bass pots can be issued to any fisherman who possesses an Unlimited or 225-lb (102-kg) trip-limited Snapper-Grouper Permit. An increase in the number of individuals who fish black sea bass pots could increase the rate at which the quota is met and decrease profits for current participants in that black sea bass pot segment of the snapper-grouper fishery. Any increase in participation in the black sea bass pot segment of the fishery could also lead to earlier closures of black sea bass.

This rule includes a provision to limit participation in the black sea bass pot segment of the snapper-grouper fishery through the establishment of an endorsement program. In order to qualify for an endorsement, an entity must hold a valid South Atlantic Unlimited Snapper-Grouper Permit on the effective date of the final rule implementing Amendment 18A, if approved by the Secretary of Commerce. In addition to this requirement, qualifying permit holders must have average_annual_black sea bass landings of at least 2,500 lb (1,134 kg), round weight, using black sea bass pot gear between January 1, 1999 and December 31, 2010. Those permit holders with no reported commercial landings of black sea bass using black sea bass pot gear between January 1, 2008, and December 31, 2010, would be excluded from the endorsement program. The number of South Atlantic Unlimited Snapper-Grouper Permit holders that would be expected to meet these criteria is 31, if Amendment 18A is approved by the Secretary of Commerce. Only those vessels associated with a valid endorsement could legally fish for black sea bass in the South Atlantic using black sea bass pot gear.

The black sea bass fishing year begins June 1 and ends May 31, unless the quota is reached before that time. If approved, this action, combined with other management measures in this rule, would result in the commercial sector for black sea bass remaining open until July-September during the 2012/2013 fishing year, and until about the same time during the 2013/2014 fishing year. Thus, limiting effort is not likely to result in black sea bass pot fishing during the right whale calving season (November 1 through April 30).

If approved for implementation, the rule would place a 30-day freeze on transfers for qualifying South Atlantic Unlimited Snapper-Grouper Permits upon publication of the final rule in the Federal Register . This freeze on transfers is necessary to establish a stable universe of qualified permit holders to which black sea bass pot endorsements would be issued.

Individuals who believe they were incorrectly excluded from the black sea bass pot endorsement program would be given the opportunity to appeal their landings data during a 90-day appeals process to begin on the effective date of the final rule, if approved. The Regional Administrator (RA) would review, evaluate, and render final decisions on appeals. Hardship arguments would not be considered. The RA would determine the outcome of appeals based on NMFS logbooks. If NMFS logbooks are not available, the RA may use state landings records. Appellants would be required to submit documentation to support their appeal.

To further reduce the rate of harvest in the black sea bass pot segment of the snapper-grouper fishery, this rule also contains a provision to limit the number of black sea bass tags issued to each endorsement holder to 35 per vessel per permit year. NMFS would issue new trap identification tags each permit year that would replace the tags from the previous fishing year.

Currently, the only restriction for removing black sea bass pots from the water is reaching the commercial quota. Therefore, pots are left in the water for multiple days, which can result in unintended black sea bass catch, also called “ghost fishing.” Leaving pots in the water for multiple days also increases the chance that pots can be lost and that vertical lines (i.e., buoy lines) can entangle protected species. The longer the pots are left in the water, the greater the opportunity for lost pots, ghost fishing, and entanglement with protected species.

This rule contains a provision to require that all black sea bass pots be brought back to shore at the conclusion of each trip. The pots may remain on the vessel, but the vessel must be returned to a dock, berth, beach, seawall or ramp. Increasing harvest over time through the selected rebuilding strategy could result in longer commercial seasons. Reductions in the amount of time vertical lines remain in the water, especially during right whale calving season, from November 1-April 30, is likely to reduce the risk of whale entanglements with black sea bass pots.

The final rule for Amendment 17B to the FMP implemented commercial and recreational AMs for black sea bass (75 FR 82280, December 30, 2010). Subsequent to the implementation of Amendment 17B, the Council determined the system of AMs under Amendment 17B may not be the most appropriate way to constrain harvest at or below the sector ACLs. Therefore, at its June 2011 meeting, the Council requested that AMs for black sea bass be re-examined in Amendment 18A.

The current recreational AMs would close the recreational sector only if black sea bass are overfished and the recreational ACL is projected to be met. This rule would modify these AMs to state that the recreational sector would close regardless of the overfished status of black sea bass when the recreational ACL is projected to be met. This rule would also modify the commercial sector AMs for black sea bass to match the recreational sector AMs by giving the RA the authority to payback commercial ACL overages, regardless of stock status, by publishing a notification in the Federal Register to reduce the commercial ACL in the following season by the amount of the overage. However, for both the recreational and commercial sectors, ACL paybacks are not required when new projections are adopted that incorporate ACL overages and the ACLs are adjusted in accordance with those projections.

Additionally, the current recreational black sea bass AMs use a 3-year running average of landings to determine ACL overages in the recreational sector. This rule would remove the use of the 3-year running average of landings from the recreational AMs for black sea bass and base the ACL overage on a single year of landings only.

The black sea bass commercial quota was met early in the 2009, 2010, and 2011 fishing years. The increase in landings during recent fishing years appears to be the result of increased effort and increased catch per trip. There was also an increase in the number of trips that caught black sea bass with other gear types (predominantly hook-and-line). In an effort to slow the rate of commercial harvest of black sea bass and extend fishing opportunities further into the fishing year, this rule would limit commercial harvest to 1,000 lb (454 kg), gutted weight; 1,180 lb (535 kg), round weight; per vessel per day. This action, combined with the proposed endorsement program and other management measures in this rule, should result in the commercial fishing season remaining open until sometime between July and September.

In order to decrease harvest of black sea bass in the commercial and recreational sectors, this rule would increase the recreational minimum size limit from 12 inches (30 cm), total length (TL), to 13 inches (33 cm), TL, and increase the commercial size limit from 10 inches (25 cm), TL, to 11 inches (28 cm), TL. NMFS expects that these modifications would result in a 21-23 percent decrease in harvest in the for-hire sector, a 19-20 percent decrease in harvest in the private recreational sector, and a 9.3 percent reduction in harvest in the commercial sector. Though increasing the minimum size limit would result in increased regulatory discards, bycatch mortality in the black sea bass segment of the snapper-grouper fishery is very low, and regulatory discards are unlikely to contribute to overfishing or jeopardize rebuilding efforts.

Currently, charter vessels and headboats with a South Atlantic Charter/Headboat Permit for Snapper-Grouper must report landings information, if selected to report by the NMFS Science and Research Director (SRD), and most do so via paper logbooks. However, charter vessels and headboats, who are selected to report by the SRD, must participate in the NMFS-sponsored electronic logbook and/or video monitoring reporting program as directed by the SRD. Some charter vessels have been selected to report landings information; however, none have been selected to report electronically thus far. On the other hand, all headboats are currently reporting landings information, and some of these headboats are reporting electronically. Headboats are required to report on a monthly basis and charter vessels are required to report on a weekly basis. The reporting frequency and lag between the time paper logbooks are completed and mailed to the NMFS Southeast Fisheries Science Center (SEFSC), and the time SEFSC staff receives and processes the data, makes real-time/in-season fishery management difficult. Electronic logbooks have the potential to automatically collect information on date, time, location, and fishing times. Information (e.g. species, length, and disposition) of released species can be entered into the system at the end of a fishing event. If the electronic format prompts a fisherman to record data as bycatch occurs, an electronic logbook may provide better estimates of bycatch than a paper logbook. This rule would require vessels holding Federal South Atlantic Charter/Headboat Permits for Snapper-Grouper to report electronic logbook information on a weekly or daily basis.

In addition to the provisions included in this rule, Amendment 18A defines overfishing criteria for black sea bass. For black sea bass, overfishing would be determined on an annual basis by the maximum fishing mortality threshold (MFMT) and the overfishing limit (OFL). The estimate of F MSY (MFMT) for black sea bass from the most recent stock assessment (SEDAR 25) is 0.698, while the corresponding OFL values increase as the stock rebuilds through the 2016 fishing year. If either the MFMT (during an assessment year) or the OFL method (during a non-assessment year) is exceeded, the stock would be considered to be undergoing overfishing.

Amendment 18A also contains an action to establish an annual catch target (ACT) for the recreational sector for black sea bass. The ACT would equal the recreational ACL*(1-PSE) or recreational ACL*0.5, whichever is greater. The recreational ACT would be 357,548 lb (162,180 kg) gutted weight; 421,907 lb (191,400 kg), round weight; for the 2012/2013 and 2013/2014 fishing seasons. After that time, a stock assessment update would be completed to determine if the recreational ACT should be modified. The recreational ACT would not be associated with preventative or corrective management measures. Rather it would be used as a management reference point used to measure the efficiency of existing and new management measures for black sea bass.

Amendment 18A contains an action to allow for the transfer of black sea bass endorsements. However, NMFS is unable to propose implementing this action at this time. The document identifies the wrong preferred alternative selected for this action, and there are discrepancies in the record regarding the Council's discussion of the alternatives and the text describing and analyzing this alternative in Amendment 18A. The decision not to propose implementation of the transferability action was made to reduce public confusion and to provide the Council the opportunity to clarify its intent. The Council may decide how to proceed with transfers of black sea bass endorsements in a future action.

This rule also proposes to revise codified text in § 622.4, regarding the naming of rock shrimp permits, which was inadvertently not revised in a previous final rule. The final rule for South Atlantic Shrimp Amendment 7 (74 FR 50699, October 1, 2009) implemented two permits for South Atlantic rock shrimp, namely a Commercial Vessel Permit for Rock Shrimp (Carolinas Zone) and a Commercial Vessel Permit for Rock Shrimp (South Atlantic EEZ). These two permits replaced the commercial vessel permit for rock shrimp and the limited access endorsement for South Atlantic rock shrimp. However, references to a “commercial vessel permit for rock shrimp” occur twice in the regulations, namely, in § 622.4(a)(5)(i)(A) and (g)(1). This rule revises those paragraphs with the updated permit language.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMP, Amendment 18A, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

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

NMFS prepared an IRFA, as required by section 603 of the Regulatory Flexibility Act, 5 U.S.C. 603, for this rule. The IRFA describes the economic impact that this proposed rule, if adopted, would have on small entities. A description of the proposed rule, why it is being considered, and the objectives of, and legal basis for the rule are contained at the beginning of this section in the preamble and in the SUMMARY section of the preamble. A copy of the full analysis is available from the NMFS (see ADDRESSES ). A summary of the IRFA follows.

The proposed rule would modify the black sea bass rebuilding strategy, ABC, and ACL; limit participation in the black sea bass pot segment of the snapper-grouper fishery through an endorsement program; establish an appeals process for fishermen excluded from the black sea bass pot endorsement program; limit the number of pot tags issued to participants in the black sea bass pot segment of the snapper-grouper fishery; implement measures to reduce black sea bass bycatch; modify AMs for black sea bass; establish a commercial trip limit for black sea bass; modify the current commercial and recreational size limits; and improve data reporting in the for-hire sector of the snapper-grouper fishery.

The Magnuson-Stevens Act provides the statutory basis for this rule.

No duplicative, overlapping, or conflicting Federal rules have been identified.

The proposed rule would introduce certain changes to current reporting, record-keeping, and other compliance requirements. In particular, a sample of the 1,985 vessels with for-hire snapper-grouper permits would be required to electronically report their harvest. To the extent that all headboats are currently subject to logbook reporting, the incremental professional skill needed under the new requirement would be relatively small. The incremental professional skill required of charterboats would be relatively higher since only a few selected by the SRD are required to submit trip information. About 10 percent of charter captains are now currently contacted on a weekly basis to collect trip level information.

NMFS expects the proposed rule to directly affect commercial fishers and for-hire operators. The Small Business Administration established size criteria for all major industry sectors in the U.S. including fish harvesters and for-hire operations. A business involved in fish harvesting is classified as a small business if independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts are not in excess of $4.0 million (NAICS code 114111, finfish fishing) for all of its affiliated operations worldwide. For for-hire vessels, other qualifiers apply and the annual receipts threshold is $7.0 million (NAICS code 713990, recreational industries).

From 2005-2010, an annual average of 247 vessels with valid permits to operate in the commercial snapper-grouper fishery landed black sea bass, generating dockside revenues of approximately $1.103 million (2010 dollars). Each vessel, therefore, generated an average of approximately $4,465 in gross revenues from black sea bass. Vessels that operate in the black sea bass segment of the snapper-grouper fishery may also operate in other snapper-grouper fisheries, the revenues of which are not reflected in these totals.

Based on revenue information, all commercial vessels affected by the proposed action can be considered small entities.

From 2005-2010, an annual average of 1,985 vessels had valid permits to operate in the snapper-grouper for-hire fishery, of which 85 are estimated to have operated as headboats. The for-hire fleet consists of charterboats, which charge a fee on a vessel basis, and headboats, which charge a fee on an individual angler (head) basis. The charterboat annual average gross revenue (2010 dollars) is estimated to range from approximately $62,000-$84,000 for Florida vessels, $73,000-$89,000 for North Carolina vessels, $68,000-$83,000 for Georgia vessels, and $32,000-$39,000 for South Carolina vessels. For headboats, the corresponding estimates are $170,000-$362,000 for Florida vessels, and $149,000-$317,000 for vessels in the other states.

Based on these average revenue figures, all for-hire operations that would be affected by the proposed action can be considered small entities.

Some fleet activity, i.e., multiple vessels owned by a single entity, may exist in both the commercial and for-hire snapper-grouper sectors to an unknown extent, and NMFS treats all vessels as independent entities in this analysis.

NMFS expects the proposed rule to directly affect all federally permitted commercial vessels harvesting black sea bass and for-hire vessels that operate in the South Atlantic snapper-grouper fishery. All directly affected entities have been determined, for the purpose of this analysis, to be small entities. Therefore, NMFS determines that the proposed action would affect a substantial number of small entities.

NMFS considers all entities expected to be affected by the proposed rule as small entities, so the issue of disproportional effects on small versus large entities does not arise in the present case.

Modifying the rebuilding strategy and setting the ABC for black sea bass would retain the current economic status of small entities for the next 2 years of the rebuilding period. Thereafter, profits to small entities may increase with a shift from a constant catch strategy to a constant fishing mortality strategy that would allow the ABC to increase over time as long as the combined ACL (commercial and recreational) is not exceeded in the previous year.

Setting the ACL, ABC, and OY equal to one another would provide an economic environment that would allow small entities to maintain or increase their profits by way of maximizing their use of the black sea bass resource.

Establishing a black sea bass pot endorsement program would likely result in profit increases to those who would qualify and profit decreases to those who would not. Out of the 50 to 60 individuals that currently fish for black sea bass using pots, approximately 31 would qualify for the endorsement. Although those who would not qualify could still fish for black sea bass using other gear types, their harvest performance could suffer. Because a limited number of individuals could fish for black sea bass using pots under the endorsement program, the fishing season for the commercial sector would likely remain open longer than it has in the last few years. This could result in overall industry profits to increase or at least not deteriorate as it would without the endorsement program.

Establishing an appeals process for fishermen initially excluded from the black sea bass pot endorsement program would provide opportunities for those qualified to receive their endorsement. Given the narrow basis for appeals, only a limited number of appeals would likely be successful.

Limiting the number of pots per vessel would likely decrease the short-run profits of small entities. The proposed maximum number of 35 pots allowed per vessel is much lower than the current average of 45 pots per vessel fished, and would affect about 48 percent of the trips. Vessels would generate lower revenues per trip or higher overall fishing costs to maintain the same overall revenues. To the extent, however, that the endorsement program would limit the number of participants in the black sea bass pot segment of the snapper-grouper fishery, the overall industry profits may not substantially decrease as a result of the restrictions on the number of pot tags per vessel.

Requiring that black sea bass pots be brought back to shore at the conclusion of each trip as a means to reduce bycatch may restrict the fishing operations of some vessels. Its effects on profits are relatively unknown, but NMFS notes that in approximately 65 percent of trips, pots are brought back to shore. If vessels undertake longer trips to allow their pots to fish longer, costs could rise because no restriction exists on the length of each trip. If this practice mainly results in maintaining the same revenues per trip, vessel profits could decrease. If, however, this requirement could effectively result in less ghost fishing and less interaction with protected species, future restrictions imposed on the fishery may also lessen, such that long-term profits of small entities would remain sustainable.

The recreational AMs, consisting of the in-season harvest and possession restriction if the recreational ACL is met or projected to be met and the post-season reduction in the sector's ACL if the recreational ACL is exceeded in the current year, would likely reduce the short-term profits of for-hire vessels. Similarly, the commercial AMs consisting of the in-season prohibition on the purchase and sale of black sea bass and the post-season reduction in the sector's ACL, would likely result in profit reductions to the commercial vessels. To the extent that this provision allows the rebuilding target to be reached within the rebuilding period, long-term profits to for-hire and commercial fishing operations would increase. In addition, the projected increases in the aggregate (commercial and recreational) ACL under the rebuilding strategy, as long as the prior year's combined ACL remains unexceeded, would tend to negate some or all of the adverse profit effects of the post-season AM applied on either the commercial or recreational sector. If either sector, but not both, exceeds its ACL in the current year, a post-season AM would apply to that sector. The combined commercial and recreational ACL, and therefore the sector ACLs, would still increase so long as the combined ACL remains unexceeded in the prior year.

Establishing a commercial vessel trip limit of 1,000 lb (454 kg), gutted weight; 1,180 lb (535 kg), whole weight; would tend to adversely affect the catch and revenue per trip of vessels that generally land over this limit. Based on the 2010-2011 fishing season data, this alternative would adversely affect approximately 8.4 percent of trips accounting for a total of about 83,000 lb (37,648 kg), valued at about $203,000. NMFS notes, though, that this trip limit could lengthen the fishing season, allowing opportunities for some vessels to recoup some of their revenue losses for the year. At any rate, NMFS expects that some of these revenue reductions would filter into the bottom line of some vessels and potentially the bottom line of the entire industry. The actual extent of industry profit reduction cannot be estimated based on available information.

Increasing the recreational minimum size limit from 12 inches (30 cm), TL, to 13 inches (33 cm), TL, will potentially reduce the black sea bass harvests of headboats in the range of 20.9 percent to 22.6 percent and black sea bass harvests of other fishing modes from 18.8 percent to 20.3 percent. These harvest reductions could lead to trip cancellations as the quality of fishing experience would decrease; on the other hand, these harvest reductions could happen only early in the fishing season but be recouped through additional trips with a lengthened season. The actual effects on for-hire vessel profits depend on whether there would be trip cancellations, which is uncertain based on available information.

Increasing the commercial size limit from 10 inches (25 cm), TL, to 11 inches (28 cm), TL, will potentially reduce the black sea bass harvests of commercial vessels by slightly over 9 percent. Actual reductions in harvest would partly depend on whether vessels take additional or longer trips to recoup potential harvest losses. Although additional or longer trips would maintain total revenues, either by maintaining the same harvest or by generating more revenue per fish since a bigger black sea bass generally commands a higher price, costs would also increase. The net effects on per vessel and industry profits cannot be determined with available information.

Requiring selected for-hire vessels to report electronically would affect some of the 1,985 vessels with for-hire snapper-grouper permits. This requirement would add costs to these vessels' operations. The incremental costs to selected headboats would not likely be as much as for charterboats because headboats are currently subject to logbook reporting. The incremental cost to selected charterboats would be higher as they are not currently subject to logbook reporting although NMFS now routinely contacts some charter captains to collect trip level information. The resulting effects to for-hire vessel profits are indeterminable.

Amendment 18A contains other provisions that could eventually have effects on the operations of small entities. First, as part of modifying the rebuilding strategy, overfishing for black sea bass will be determined on an annual basis using MFMT and OFL. This provision alone would not affect the profits of small entities. Second, an ACT for the recreational sector would account for management uncertainty in the recreational sector, related in part to the timely accounting of this sector's harvests. Currently, this ACT does not trigger application of AMs, so short-term profits to small entities would remain unaffected. If the Council decides in the future to use the ACT as the trigger for application of AMs, profits to small entities may be adversely affected. However, because this measure is designed to help ensure that the rebuilding strategy stays on track, long-term profitability would be sustainable.

In summary, the proposed rule would have both negative and positive effects on the profits of small entities, but its net effects on industry profits are indeterminable, as is a determination whether this rule would have a significant impact on the profits of small entities. Therefore, NMFS encourages commenters to provide input regarding the magnitude of effects on the profits of small entities.

Five alternatives, including the preferred alternative, were considered for modifying the rebuilding strategy and ABC. The first alternative, the no action alternative, would maintain the constant catch rebuilding strategy and current ABC throughout the rebuilding timeframe. This alternative would provide for a lower ABC over time, implying lower economic benefits than the preferred alternative. The second alternative would establish a new constant catch rebuilding strategy with a higher (than current) ABC throughout the remaining years of the rebuilding timeframe. Relative to the preferred alternative, the second alternative would provide for a higher ABC for 2 years but a lower ABC thereafter. The sum of economic benefits over the rebuilding timeframe under this alternative would be lower than that of the preferred alternative, primarily because the sum of annual ABCs under this alternative would be lower. In addition, a constant catch strategy, in general, would likely lead to the ACL being met sooner as the fish stock rebuilds, resulting in applications of in-season and post-season AMs. The third alternative, with two sub-alternatives, would establish a constant fishing mortality rebuilding strategy throughout the remaining years of the rebuilding timeframe. Under the first sub-alternative, the fishing mortality rate would be 75 percent of the fishing mortality at MSY (75-percent F MSY ), and under the second sub-alternative, the fishing mortality rate that would rebuild the stock by 2016 (F REBUILD by 2016). These two sub-alternatives would provide for lower ABCs than the preferred alternative, and thus, lower economic benefits over time. The fourth alternative would maintain the current constant catch strategy and ABC for the next 2 years of the rebuilding timeframe and switch to a constant fishing mortality strategy at F REBUILD throughout the remainder of the rebuilding timeframe. This alternative would provide for the same ABC as the preferred alternative, but relates to a lower probability of rebuilding the stock to biomass at MSY.

Four alternatives, including the preferred alternative, were considered for modifying the ACL for black sea bass. The first alternative, the no action alternative, would maintain the existing ACL equal to ABC and OY equal to 75 percent of the fishing mortality at MSY. This alternative is more restrictive in setting OY as the underlying goal of managing the black sea bass stock. The second alternative would set the ACL equal to 90 percent of the ABC and the latter equal to OY. The third alternative would set the ACL equal to 80 percent of the ABC and the latter equal to OY. These other alternatives would provide for a lower ACL than the preferred alternative, and thus lower economic benefits as well.

Three alternatives, including the preferred alternative, were considered for establishing an endorsement program for the black sea bass pot segment of the snapper-grouper fishery. The first alternative, the no action alternative, would not establish an endorsement program. This alternative would continue to allow anyone with an Unlimited or 225-lb Limited Snapper-Grouper Permit to engage in the black sea bass pot segment of the snapper-grouper fishery. This would increase the likelihood of the derby-style fishing conditions, potentially dampening industry profitability. The second alternative includes seven sub-alternatives, of which one is the preferred sub-alternative that would set the minimum landings at 2,500 lb (1,134 kg), round weight, for eligibility in the endorsement program. The first sub-alternative would set the minimum landings at 500 lb (227 kg), round weight; the second sub-alternative, at 1,000 lb (454 kg), round weight; the third sub-alternative, at 2,000 lb (907 kg), round weight; the fourth, at 3,500 lb (1,588 kg), round weight; the fifth, at 5,000 lb (2,268 kg), round weight; and, the sixth, at 10,000 lb (4,536 kg), round weight. These sub-alternatives would allow varying numbers of individuals/entities to qualify for the endorsement: higher landings requirements would result in fewer qualifiers. The Council's choice of preferred alternative was based on the assessment that about 30 individuals/entities can be profitably sustained by the black sea bass pot segment of the snapper-grouper fishery. In this case, sub-alternatives requiring less than 2,500 lb (1,134 kg), round weight, of landings for endorsement eligibility would likely result in unsustainable profits. On the other end, sub-alternatives requiring higher than 2,500 lb (1,134 kg), round weight, of landings would severely restrict participation in the fishery although industry profitability would be more sustainable. In addition, a highly restrictive endorsement qualification criterion, such as 10,000 lb (4,536 kg), round weight, would tend to eliminate small scale operations that have historically characterized the black sea bass pot segment of the snapper-grouper fishery. The third alternative, with two sub-alternatives, would require that no South Atlantic state shall have fewer than two entities qualifying for the endorsement. The first sub-alternative would set a minimum landings requirement of 1,000 lb (454 kg), round weight, and the second, 2,000 lb (907 kg), round weight. This alternative, with the sub-alternatives, was intended to allow participation by all South Atlantic states in the endorsement program. Since the minimum number of qualifiers from each state would be the same under this alternative and the preferred alternative, the Council deemed this third alternative unnecessary.

Three alternatives, including the preferred alternative, were considered for establishing an appeals process for fishermen initially excluded from the endorsement program. The first alternative, the no action alternative, would not establish an appeals process. This alternative has the potential to unduly penalize participants if they were incorrectly excluded from the endorsement program. The second alternative is the same as the preferred alternative, except that it would establish a special board, composed of state directors and designees, that would review, evaluate, and make individual recommendations to the RA. This alternative would mainly introduce an additional administrative burden that may not improve the appeals process, considering that the only issues subject to appeal are eligibility and landings.

Five alternatives, including the preferred alternative, were considered for limiting effort in the black sea bass pot segment of the snapper-grouper fishery. The first alternative, the no action alternative, would not limit the number of black sea bass pots deployed or pot tags issued to holders of snapper-grouper commercial permits. Among the alternatives, this is potentially the best alternative for efficient operations in the black sea bass pot segment of the snapper-grouper fishery. But with no limit on the number of pots, a high likelihood arises that many pots (left in the water for a longer time due, for example, to vessel or weather problems) may be lost and “ghost fish” for black sea bass or other species. In addition, many pots would employ many vertical lines that would increase the probability of interaction with certain protected species. Such occurrences are likely to hinder the rebuilding of black sea bass or other species and to require the implementation of more restrictive measures that would impinge on the profits of commercial vessels. The second alternative would limit black sea bass pot tags to 100 per vessel per year; the second alternative, to 50 per vessel per year; and, the third alternative, to 25 per vessel per year. These other alternatives differ from the preferred alternative only in the maximum number of pots deployed or pot tags issued per vessel, with the higher numbers providing better opportunities for higher profits per vessel trip. But as noted above, the higher number of pots, the higher would be the probability of ghost fishing and interaction with protected species.

Three alternatives, including the preferred alternative, were considered for reducing bycatch in black sea bass pots. The first alternative, the no action alternative, would not implement additional measures for when pots must be removed from the water. This alternative would not help in reducing bycatch in the black sea bass pot segment of the snapper-grouper fishery. The second alternative would allow fishermen to leave pots in the water for no more than 72 hours. This alternative would have about the same effects as the preferred alternative on pot fishing operations, because most fishing trips for black sea bass using pots last for less than 3 days. However, it would present a higher probability for ghost fishing because pots may be left in the water on short vessel trips or not retrieved during inclement weather.

Three alternatives, including the preferred alternative, were considered for modifying the AMs for black sea bass. The first alternative, the no action alternative, would maintain the current commercial and recreational AMs. The Council deemed this alternative to be relatively deficient in constraining harvest at or below the sector ACLs. The second alternative is similar to the preferred alternative for the recreational sector, except that it would trigger in-season AMs only if the black sea bass stock is overfished. This alternative could lead to larger post-season adjustment of the recreational ACL and thus larger adverse effects on for-hire profits, particularly if the aggregate ACL is exceeded, in order to keep the rebuilding trajectory on track. Moreover, if overages in the recreational harvest lead to exceeding the aggregate ACL, the aggregate ACL would not automatically increase the following year so that both the commercial and recreational sectors would be adversely affected.

Nine alternatives, including the preferred alternative, were considered for establishing a commercial trip limit. The first alternative, the no action alternative, would not establish a commercial trip limit. In principle, this alternative would likely provide the most short-term profitability among commercial vessels on a per trip basis, because commercial vessel operations would remain unaffected. However, this alternative could possibly lead to lower industry profitability as a result of a shortened fishing season that would occur without effectively controlling the harvest rate. The second alternative would establish a trip limit of 500 lb (227 kg), gutted weight; the third alternative, 750 lb (340 kg), gutted weight; the fourth alternative, 1,250 lb (567 kg), gutted weight; the fifth alternative, 1,000 lb (454 kg), gutted weight, and reduced to 500 lb (227 kg), gutted weight, when 75 percent of the commercial ACL is met; the sixth alternative, 2,000 lb (907 kg), gutted weight; the seventh, 2,500 lb (1,134 kg), gutted weight; and, the eighth alternative, 250 lb (113 kg), gutted weight. NMFS expects that trip limits lower than the preferred alternative of 1,000 lb (454 kg), gutted weight, would lead to larger adverse effects on per trip profitability; the opposite would occur with higher trip limits. Based on the Council's assessment, the preferred alternative would provide the best balance between per trip losses in profits and higher industry profits from a longer fishing season.

Three alternatives, including two preferred alternatives, were considered for modifying the commercial and recreational minimum size limit. The first alternative, the no action alternative, would not change the commercial or recreational size limit. In principle, this alternative would provide the best economic environment for both the commercial and recreational sectors, because their operations would remain relatively unaffected. However, this alternative would not help in constraining the rate of harvest which has been increasing in recent years, leading to early closures of both the commercial and recreational sectors of the black sea bass segment of the snapper-grouper fishery. The second alternative includes three sub-alternatives, one of which is the preferred sub-alternative. The second sub-alternative would increase the commercial size limit from 10 inches (25 cm), TL, to 12 inches (30 cm), TL. This sub-alternative would lead to relatively larger adverse effects on the profits of commercial vessels but would also tend to allow a longer fishing season. However, the Council concluded that this sub-alternative would not provide the best balance between short-term profit reductions and profit increases from a longer season. The third sub-alternative would increase the commercial size limit from 10 inches (25 cm), TL, to 11 inches (28 cm), TL, in the first year and to 12 inches (30 cm), TL, thereafter. This sub-alternative would eventually lead to larger adverse effects on the profits of commercial vessels but would also tend to allow a longer fishing season. However, the Council concluded that this sub-alternative would not provide the best balance between short-term profit reductions and profit increases from a longer season.

Four alternatives, including the preferred alternative, were considered for improving for-hire data reporting. The first alternative (the no action alternative) would retain the existing data reporting systems for the for-hire sector. However, the Council deemed modifications to existing recreational data collection necessary to the extent that they would not be too burdensome on for-hire vessel operations. The second alternative would require vessels operating with a Federal for-hire permit to maintain a logbook for discard characteristics (e.g., size and reason for discarding), if selected. This alternative would provide better information regarding discards, but would increase costs for for-hire vessel operations. The third alternative would require that for-hire landings and catch/effort data are submitted in accordance with the Atlantic States Cooperative Statistics Program (ACCSP) standards, using the South Atlantic Fisheries Information System (SAFIS). Although this alternative has the potential to improve recreational data collection, it would be costly to for-hire vessels. Therefore, the Council decided to wait until the new Marine Recreational Information Program (MRIP) has been in place for some time to determine whether it would be sufficient for reporting for-hire landings data.

Four alternatives, including the preferred alternative, were considered for setting the recreational ACT. The first alternative, the no action alternative, would not set a recreational ACT, and thus, would not meet the mentioned objective. The second alternative would set the recreational ACT equal to 85 percent of the recreational ACL. The third alternative would set the recreational ACT equal to 75 percent of the recreational ACL. NMFS estimates that these two alternatives would result in lower ACTs than the preferred alternative, so that if an ACT triggers management actions, these two alternatives would result in larger adverse effects on the profits of for-hire vessels.

In Amendment 18A, the Council considered several actions for which the no-action alternative was the preferred alternative.

Three alternatives, including the preferred alternative (no action alternative), were considered for setting the commercial ACT. The first alternative would set the commercial ACT equal to 90 percent of the commercial ACL. The second alternative would set the commercial ACT equal to 80 percent of the commercial ACL. Because NMFS closely tracks the commercial landings in-season through a quota monitoring system, the Council deemed the need to provide for a commercial ACT as a monitoring tool unnecessary.

Five alternatives, including the preferred alternative (no action alternative), were considered for implementing a spawning season closure. The first alternative would implement a March 1-April 30 spawning season closure; the second alternative, an April 1-May 31 spawning season closure; the third alternative, a March 1-May 31 spawning season closure; and, the fourth alternative, a May 1-May 31 spawning season closure. These alternatives would result in short-term profit reductions to commercial and for-hire vessels. Black sea bass do not form large spawning aggregations and the peak spawning period occurs at different times of the year across the South Atlantic. Therefore, short-term profit reductions could persist in the future as the benefits from a spawning season closure are not well established.

Four alternatives, including the preferred alternative (no action alternative), were considered for improving commercial data reporting. The first alternative would require all vessels with Federal snapper-grouper commercial permits to have an electronic logbook tied to the vessel's Global Position System onboard the vessel. The second alternative would provide the option for fishermen to submit their logbook entries electronically via an electronic version of the logbook made available online. The third alternative would require submission of commercial landings and catch and effort data in accordance with the ACCSP standards, using the SAFIS. These alternatives would introduce additional cost to commercial fishing operations. The Council decided to address this issue in the future through a comprehensive amendment for improving data collection.

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

This proposed rule contains collection-of-information requirements subject to the PRA. NMFS estimates the requirement for the for-hire sector of the snapper-grouper fishery to submit logbook information electronically, if selected to do so, to average 30 minutes per electronic logbook installation and 1 minute per weekly download of the weekly logbook information. NMFS estimates the requirement for South Atlantic Unlimited Snapper-Grouper Permit holders to submit their logbook information if they are appealing their landings data for a black sea bass pot endorsement to average 2 hours per response. NMFS estimates the requirement to check boxes on the Federal Permit Application Form for a new endorsement or renewal of the black sea bass pot endorsement to average 1 minute per response. Finally, NMFS estimates the requirement to check boxes on the Federal Permit Application Form for black sea bass pot tags (Floy tags) for the endorsement program to average 1 minute per response. These estimates of the public reporting burden include the time for reviewing instructions, gathering and maintaining the data needed, and completing and reviewing the collection-of-information.

These requirements have been submitted to OMB for approval. NMFS seeks public comment regarding: Whether this proposed collection-of-information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection-of-information, including through the use of automated collection techniques or other forms of information technology. Send comments regarding the burden estimate or any other aspect of the collection-of-information requirement, including suggestions for reducing the burden, to NMFS and to OMB (see ADDRESSES ).

For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows: