On January 28, 2008, the President signed into law the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181), which created the Special Inspector General for Afghanistan Reconstruction (SIGAR). In order to establish procedures to facilitate public interaction with SIGAR, the agency is issuing final regulations under the FOIA and the Privacy Act.

This final rule establishes procedures for SIGAR necessary to implement the FOIA (5 U.S.C. 552) and the Privacy Act (5 U.S.C. 552a). The provisions of this subpart shall apply to all components of SIGAR.

The FOIA provides for the disclosure of agency records and information to the public, unless that information is exempted under delineated statutory exemptions under the FOIA. The Privacy Act serves to safeguard public interest in informational privacy by delineating the duties and responsibilities of federal agencies that collect, store, and disseminate personal information about individuals. The procedures established here are intended to ensure that SIGAR fully satisfies its responsibility to the public to disclose agency information while simultaneously safeguarding individual privacy.

The Privacy Act serves to balance the Government's need to maintain information about individuals with the rights of individuals to be protected against unwarranted invasions of their privacy stemming from federal agencies' collection, maintenance, use, and disclosure of personal information about them. Agencies are required to issue regulations outlining the agency's rules and procedures for implementation of the Privacy Act and its provisions within the agency. This includes procedures on how individuals may request access to information about themselves, request amendment or correction of those records, and request an accounting of disclosures of their records by SIGAR.

These regulations establish procedures under the FOIA and the Privacy Act to facilitate the interaction of the public with SIGAR. SIGAR's policy of disclosure follows the Presidential Memorandum of January 21, 2009, “Transparency and Openness,” 74 FR 4685, and the Attorney General's March 19, 2009 FOIA policy guidance, advising Federal agencies to apply a presumption of disclosure in FOIA decision making. This Final Rule parallels the procedures currently used by other agencies to implement the FOIA and the Privacy Act. SIGAR has determined that good cause exists to publish these regulations as a final rule. These rules establish procedures to facilitate SIGAR's interactions with the public and the public's right to gain access to information about SIGAR and about themselves that SIGAR maintains. The absence of Privacy Act regulations could impair the confidentiality and privacy rights of those who submit sensitive information to SIGAR as well as the ability of SIGAR to use that information to carry out its statutory mission. SIGAR has determined that this rule should be issued without a delayed effective date pursuant to 5 U.S.C. 553(d)(3).

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. Chapter 6) do not apply. It has been determined that this rulemaking is not a significant regulatory action for the purposes of Executive Order 12866. Accordingly, a regulatory impact analysis is not required.

SIGAR received two comment letters in response to the Interim final rule for SIGAR's FOIA and Privacy Act Regulations (77 FR 15555, March 16, 2012), one from the federal FOIA ombudsman, and one from a nonprofit research and advocacy organization. The commenters raised several issues regarding the interim final rule, generally seeking clarification of procedures and the expansion of online disclosures.

Regarding section 9301.1, the federal FOIA ombudsman requested SIGAR add language clarifying the intersection between FOIA and the Privacy Act. SIGAR believes this clarification is useful to the public and SIGAR will adopt the suggested language proposed by the ombudsman.

Regarding section 9301.4, the federal FOIA ombudsman requested SIGAR clarify language regarding types of information withheld in response to a FOIA request, suggesting SIGAR provide a description of its records rather than track the statutory language of the FOIA exemptions. SIGAR will eliminate the sentence describing types of information withheld to eliminate confusion. Regarding Attorney General Holder's FOIA Memorandum, SIGAR's regulations reflect the essence of the memo to make discretionary releases under FOIA. SIGAR is mindful of its obligation under the memorandum.

Regarding section 9301.6(b), the federal FOIA ombudsman suggested that the FOIA does not require requesters to indicate that his or her request is a “FOIA Request” or a “Request for Records.” SIGAR agrees this is not included in the statue, however indicating the type of request, but labeling the request “FOIA request,” moves the request through SIGAR's mail system expeditiously. Moreover, the use of “should” indicates that the language is directory, not mandatory. Accordingly, SIGAR does not concur with the comments for subsection (b).

Regarding section 9301.6(c)(i), the federal FOIA ombudsman requested SIGAR clarifying that when SIGAR grants a request and provides appeal rights, the requester may appeal the adequacy of the search. SIGAR will add the language “to grant the request, either in-full or in-part” to clarify.

Regarding section 9301.6(c)(ii), the federal FOIA ombudsman requested SIGAR provide the requester with a brief description of the information SIGAR is withholding if it is possible without revealing exempt information. They also suggest SIGAR specifically address the new requirements in 5 U.S.C. 552 (b) that agencies shall (1) indicate, if technically feasible, the amount of information deleted and the exemption under which the deletion is made at the place in the record where the deletion is made, and (2) indicate the exemption under which a deletion is made on the released portion of the record, unless including that indication would harm an interest protected by the exemption.

SIGAR agrees with the recommendation and will include the language in this section a requirement for providing brief description of withheld information when possible. SIGAR will also include the language above in subsection c(ii).

They also suggest SIGAR includes that in its acknowledgment letters, SIGAR will provide an individualized tracking number and an estimated date of completion. That suggestion is accordance with FOIA, 5 U.S.C. 552(a)(7)(A) and (B)(ii). They also suggest including a brief description of the subject of the request in the acknowledgment letter. This would help requesters as well as the agency keep track of multiple pending requests. SIGAR agrees with this comment and will add language regarding tracking numbers, estimated dates of completion, and descriptions of records to 9301.6c.

They also suggest adding a new subpart to this section to address SIGAR's referral and consultation procedures. In regard to referrals, SIGAR include in its procedures that it will notify requesters in writing of a referral, including the name of the agency to which the request has been referred and the part of the request that has been referred, and provide the requester with a point of contact within the receiving agency to whom the requester can speak regarding the referral. SIGAR will add a new subsection c(iii) to address SIGAR's referral and consultation procedures.

Regarding section 9301.6(d)(1), the federal FOIA ombudsman requested that SIGAR use the word “should” instead of “shall” in the last sentence of this section. SIGAR agrees with the suggested change.

Regarding section 9301.6(d)(2), the federal FOIA ombudsman requested SIGAR revise the first sentence of this section by deleting the word “ordinarily.” SIGAR agrees and will remove.

They also suggests that SIGAR add a new subpart to this section to include language in accordance with the 2007 amendments to FOIA (5 U.S.C. 552 (h)(3)) that SIGAR will work with the Office of Government Information Services (OGIS) to resolve disputes between FOIA requesters and SIGAR as a non-exclusive alternative to litigation. OGIS suggests that SIGAR, in its final appeal determinations, alert FOIA requesters to OGIS's services, as recommended by the Department of Justice's Office of Information Policy. Specifically, they suggest the following language:

The nonprofit research and advocacy organization also requested that SIGAR's regulations include notifying requests of the services offered by the Office of Government Information Services (OGIS, including mediation as an alternative to litigation. SIGAR agrees with the suggested section and proposed language. SIGAR will amend its regulations and add subpart 9301.6c(3) for Mediation.

Regarding section 9301.7, the federal FOIA ombudsman requested adding several terms, including fee category and fee waiver, to the list of definitions.

SIGAR agrees with the suggested additions. Regarding section 9301.8, the federal FOIA ombudsman requested SIGAR rework the language to reflect statutory language found in 5 U.S.C. 552(a)(6)(A)(I) to describe the tolling process for agencies. SIGAR will remove the unclear language, but the intent of the language in this section was not to incorporate 5 U.S.C. 552 (a)(6)(A)(ii)(I).

They also suggested SIGAR provide requesters with an estimated amount of fees, including a breakdown of the fees for search, review and/or duplication. SIGAR will add language reflecting the concerns above.

Regarding section 9301.10, the federal FOIA ombudsman requested SIGAR insert a time frame associated with deciding if multiple requests should be aggregated. SIGAR will include language regarding time frames.

Regarding section 9301.11, the federal FOIA ombudsman requested SIGAR add a new subpart to this section to include the waiver of fees generally “as a matter of administrative discretion.” SIGAR will include the language suggested.

The nonprofit research and advocacy organization requested that SIGAR adopt a policy to (a) proactively disclose information to the greatest extent possible and (b) post online responses to all FOIA requests, excluding those made jointly under the Privacy Act.

SIGAR agrees and will add language to 9301.4 to include proactive disclosure. SIGAR is currently researching how the agency can implement more online posting of FOIA responses.

Accordingly, the interim rule amending 5 CFR Chapter LXXXIII part 9301 which was published at 77 FR 15555 on March 16, 2012, is adopted as a final rule with the following change:

This final rule has been determined to not be significant under Executive Order 12866 and will not be reviewed by the Office of Management and Budget.

The Regulatory Flexibility Act is not applicable to this final rule because this action will not have a significant economic impact on small entities.

The environmental impacts of this final rule have been considered in accordance with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., and NRCS has concluded that promulgation of this final rule is categorically excluded from NEPA's requirement from an environmental impact analysis under USDA regulations, 7 CFR 1b.3(a)(1). Actions implemented under this final rule fall in the category of policy development, planning, and implementation which relates to routine activities and similar administrative functions, and no circumstances exist that would require preparation of an environmental assessment or environmental impact statement.

A review of the NRCS Appeal Procedures final rule has been directed towards the identification of actual or potential civil rights issues. The review reveals no factors indicating the NRCS Appeal Procedures would have a disproportionate adverse civil rights impact for producers who are minorities, women, or persons with disabilities.

Outreach and communication strategies are in place to ensure all program participants will be provided the same information to allow them to make informed decisions regarding the use of their lands that will affect their participation in USDA programs. The NRCS Appeal Procedures provisions apply to all persons equally regardless of race, color, religion, sex, age, national origin, marital status, familial status, sexual orientation, or disability, or because all or part of an individual's income is derived from any public assistance program.

This final rule does not contain reporting or recordkeeping requirements subject to the Paperwork Act.

This final rule has been reviewed in accordance with the requirements of Executive Order 13132, Federalism. NRCS has determined this final rule conforms with the Federalism principles set forth in the Executive Order; would not impose any compliance costs on the States; and would not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities on the various levels of government.

Executive Order 13175 requires agencies to consult and collaborate with Indian Tribes if policies or actions have substantial direct effects on Tribes. NRCS has determined that this regulation does not have a substantial direct effect on Indian Tribes since these regulatory provisions do not impose unreimbursed compliance costs or preempt Tribal law. As a result, consultation is not required.

This action does not compel the expenditure of $100 million or more in any one year (adjusted for inflation) by any State, local, or Tribal governments, or anyone in the private sector. Therefore, a statement under section 202 of the Unfunded Mandates Reform Act of 1995 is not required.

The Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, Title III, section 304, requires that for each proposed major regulation with a primary purpose to regulate issues of human health, human safety, or the environment, USDA is to publish an analysis of the risks addressed by the regulation and the costs and benefits of the regulation. NRCS has determined this final rule is not a proposed major regulation; therefore, a risk assessment does not apply to this final rule.

This final rule is neither major nor significant; therefore, it is not subject to the SBREFA 60-day requirement. Accordingly, this final rule is effective with publication in the Federal Register .

This final rule has a potential impact on all programs listed in the Catalog of Federal Domestic Assistance in the Agency Program Index under the Farm Service Agency (FSA) and NRCS. Other assistance programs are also affected.

NRCS is committed to compliance with the Government Paperwork Elimination Act and the Freedom to E-File Act, which require government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. This final rule requires that a program participant must make a written request for an appeal for a program administered by NRCS.

On May 16, 2006, the Chief of NRCS published an Appeal Procedures interim final rule (71 FR 28239). Section 275 of the 1994 Act, 7 U.S.C. 6995, requires USDA agencies to hold informal hearings, at the request of a participant, for the decisions they render. NRCS interprets the “informal hearing” requirement to require the agency to provide opportunity for an informal appeal at the agency level. This final rule amends the interim final rule published May 16, 2006 (71 FR 28239), in response to comments received from the public and during implementation.

NRCS' goal in promulgating the informal appeal procedures is to facilitate, at the agency level, the resolution of disputes arising from adverse technical determinations and program decisions. NRCS' informal appeal process establishes several means through which participants can obtain a review by NRCS personnel who have detailed knowledge of agricultural conservation operations as well as expertise in farm and ranch management. After a decision rendered by NRCS becomes final, participants may pursue the appeals processes set forth at 7 CFR parts 11, 614, and 780, as appropriate.

NRCS received 13 responses with a total of 64 comments from the public in response to the request for comments in the 2006 interim final rule. Of the 13 responses, one response was received from an individual, two responses were from Federal Government employees, eight responses were from state government employees, and two responses were received from non-profit organizations. In addition, NRCS received an additional 18 responses or suggestions from agency personnel and program participants since the 2006 rule was published.

NRCS received 82 comments on the following sections of the 2006 rule: Rule in general—1 comment; 7 CFR 614.2, Definitions—6 comments; 7 CFR 614.4, Decisions not subject to informal appeal procedures—5 comments; 7 CFR 614.6, Agency records and decision notices—2 comments; 7 CFR 614.7, Preliminary technical determinations—11 comments; 7 CFR 614.8, Final technical determinations—10 comments; 7 CFR 614.9, Program decisions—1 comment; 7 CFR 614.10, Appeals before the Farm Service Agency county committee—2 comments; 7 CFR 614.11, Mediation—38 comments; 7 CFR 614.12, Transcripts—1 comment; 7 CFR 614.13, Appealability review—2 comments; 7 CFR 614.14, Computation of time—1 comment; 7 CFR 614.15, Implementation of final agency decisions and 7 CFR 614.16, Participation of third parties in NRCS proceedings—1 comment. A majority of the responses received regarded mediation, with the majority of these comments coming from the eight-state governmental responses.

NRCS received one comment commending the agency for including helpful clarification and better organizing the rule, and one comment from an individual that was not relevant to this rulemaking regarding agri-business mediators. NRCS is making changes to the substance of the existing informal appeals regulation in order to address the comments received since the 2006 rulemaking, as well as to improve the informal appeals process. The following text describes the changes made to each section of the rule.

This section remains unchanged and explains the scope and purpose of the agency's informal appeal regulation. No comments were received on this section.

NRCS received a total of six comments on this section. One comment suggested NRCS clarify who may accept an appeal request and the date an appeal request is considered filed within the definition of “appeal.” NRCS finds merit in this comment and has amended the current definition to reflect that an appeal request is perfected and considered filed when the appropriate accepting official receives the participant's request within the 30 days from the date that the participant receives the adverse decision. The term “agency record” has also been amended to refine this definition and help improve the agency's decisionmaking and documentation process.

NRCS also added several definitions in response to three comments received during rule implementation. Specifically, definitions have been added for the terms “adverse decision” and “agency exhibit” to provide a more precise definition on these terms.

In response to two comments regarding confusion as to the difference between technical determinations and program decisions, NRCS agrees there is some confusion and has amended the terms “Preliminary technical determination,” “Final technical determination,” and “Program decision.” The new definitions limit preliminary and final technical determinations to those decisions issued pursuant to the Highly Erodible Land and Wetland Conservation (HELC/WC) provisions solely. “Program decision” is to be issued to include any type of decision for programs other than those issued pursuant to HELC/WC provisions.

No comments were received on this section. This section sets forth the types of decisions that are appealable. In addition, since promulgation of the 2006 interim rule, new programs have been authorized under Title XII of the Food Security Act of 1985, as amended, and some programs have been repealed. This section amends the current regulation by updating the listing of programs to which these informal appeals apply. NRCS amends this section to ensure the person requesting an appeal is the USDA program participant affected by the adverse decision by adding subparagraph (c)(2) to 7 CFR 614.3(c).

This section provides information on issues that are not considered to be appealable under this final rule. NRCS received a total of five comments.

One commenter stated that denial of appeal rights to the National Appeals Division (NAD) when NRCS denies a participant's request for equitable relief is not in accordance with the statutory construction. NRCS agrees a denial of equitable relief is one example of an agency adverse decision which is subject to NAD's jurisdiction pursuant to 7 U.S.C. 6991(1). This is addressed in section 614.9(e) of the final rule which states that NRCS will provide notice of appeal rights to NAD on program decisions when equitable relief is denied by the Chief or the State Conservationist.

Four other comments received over the implementation period are regarding the interpretation of what constitutes a decision adverse to the individual participant. NRCS is therefore amending these appeal procedures to clarify specifically those issues that cannot be challenged through the appeals process.

NRCS amends this section to clarify that decisions made by the Office of the General Counsel concerning real property title standards issued by the Attorney General are not appealable to NAD.

No comments were received on this section. Under this section, the Chief of NRCS or the FSA Administrator as the Vice President of the Commodity Credit Corporation (CCC), and the Secretary reserve the authority to determine, at any time, any question arising under programs within their respective authority or from reversing or modifying any program decision or technical determination made by NRCS or the CCC.

This section sets forth the agency's policy that all decisions under this part must be based upon an agency record. A total of two comments were received. The agency record is an administrative record comprised of all the documentation, including reports, maps, photographs, correspondence, surveys, etc., reviewed when making his or her decision. In determining which documents are included in the agency record, the decisionmaker will include all documents relevant to the adverse decision. The agency is responsible for compiling the agency record and maintaining it for each decision that has been issued. A copy of the agency record is available to the participant upon request. The completeness of the agency record, as well as the consideration of all relevant facts, is critical to an effective appeal process. Consequently, development of the agency record is being emphasized in this rulemaking.

This section also sets forth agency policy on decision notices including content, deadlines, and methods of delivery. Specifically, NRCS policy requires that an adverse program decision or technical determination must: (1) Be in writing, (2) set forth its factual basis, and (3) explain its application of relevant statue, regulations, and policy. NRCS must send written notice of its decision to the participant via certified mail, return receipt requested, or any other type of delivery notification mailing or delivery including hand delivery, within 10 working days of rendering a technical determination or program decision. This conforms to section 6994 of the 1994 Act, which requires that the Secretary provide written notice of an adverse decision and notice of appeal rights no later than 10 working days after the decision is made.

Two commenters provided that NRCS may not limit the applicability or availability of the NAD formal appeals procedures as implied in the regulation at 7 CFR 614.6(b)(3). NRCS has removed the “if applicable” from this provision.

NRCS received a total of 11 comments on this section, with 2 comments on the preliminary technical determinations more applicable to the actual definition of a preliminary technical determination. NRCS addresses these comments by amending the regulation at 7 CFR 614.7(a) by adding a statement that these types of determination are limited to those rendered under the HELC/WC provisions. Currently, technical determinations include any matter of a technical nature for any type of program regardless of the statutory authority. These comments suggested that it is confusing to include technical determinations for decisions other than those issued under the HELC/WC provisions. NRCS agrees and is changing the regulations to eliminate this confusion. Preliminary technical determinations will include only those initial written technical determinations provided to a USDA program participant authorized under HELC/WC provisions.

Two additional comments were received concerning the option for mediation provided at 7 CFR 614.7(a)(2) regarding the responsibility for notifying the participant of remaining appeals options following mediation of the preliminary technical determination. The rule currently allows a program participant who has been issued a preliminary technical determination to request either mediation or reconsideration with a field visit. If mediation has been selected as the first option, and there is still time remaining to request a field visit, the participant may request this preliminary technical review option. If the participant comes to a mediated agreement during this period, then the rule at 7 CFR 614.11(d) requires waiver of all further appeal rights as to that determination or portion of that determination. If mediation is unsuccessful, and time for any further preliminary appeal options has expired, NRCS will issue a final technical determination that is appealable to either NAD under 7 CFR part 11, or to the FSA county committee as provided at 7 CFR 614.8 and 614.10. Therefore, no changes will be made to this section.

NRCS received one comment on 7 CFR 614.7(a)(2) contending the requirement that a participant request mediation through the designated NRCS official as provided in 7 CFR 614.11(a) is burdensome. This comment will be addressed in 7 CFR 614.11(a) rather than in 7 CFR 614.7(a)(2).

Five other comments requested clarification of whether a field visit is the only option, or if another location for review of the preliminary technical determination is available. Currently, the regulation has been interpreted in a limiting manner that the review must be completed in the field because of the actual wording in the rule. NRCS has reviewed the original basis for this review and reconsideration, and finds that the goal of review and reconsideration as stated in the 2006 rule at 71 FR 28241 is to “improve the accuracy of technical determinations and sufficiency of the administrative record upon which the technical determination is based.” Further, a field visit is useful to develop additional information that was not previously known to NRCS or the participant or to accept what has been found. Therefore, NRCS has determined the field visit to the actual site on the farm is not required to have a successful reconsideration, and is amending 7 CFR 614.7(a)(1) to include either a field visit or office visit are options available to the participant. Regardless of how the reconsideration is conducted, the main purpose is to “afford an adequate informal appeal process at the agency level where such expertise resides [and] is essential to effective program administration.” (See 71 FR 28239, 28243 (May 16, 2006).)

NRCS is also providing additional clarification of 7 CFR 614.7(b) by separating the four major actions needed to complete preliminary technical determination reconsideration.

One commenter stated that NRCS has no authority to require waiver of statutory rights to the informal review as is currently provided at 7 CFR 614.7(d). This provision does not require any participant to waive his or her rights to an informal review. Rather, the regulation allows participants to immediately proceed to their informal appeal rights of the FSA county committee under 7 CFR 614.8(b)(1) or exercise their formal appeal rights to NAD under 7 CFR 614.8(b)(2). The provision is one of “expedited finality” and has been provided for participants who want a final technical determination so that they may begin required actions as determined by NRCS (e.g., wetland restoration) or to proceed with another type of action requiring a final HELC/WC determination, such as a Farm Credit loan.

This section sets forth the informal appeal procedures available when preliminary technical determinations become final. NRCS received a total of 10 comments on this section, with one comment claiming that NRCS precluded a participant's rights to appeal to NAD and 9 comments claiming that the process with technical determinations and program decisions is confusing. NRCS agrees and is amending 7 CFR 614.7 and 614.8 to be limited to appeals of HELC/WC technical determinations and 7 CFR 614.9 limited to programs administered by NRCS to reduce any further confusion.

NRCS received one comment recommending that NRCS clarify the difference between an appeal of a technical determination and an appeal of a program decision. This section sets forth the informal appeals procedures available for program decisions. Currently, program decisions are decisions issued for conservation programs administered by NRCS that relate to the administration of a conservation program. Unlike HELC/WC technical determinations, program decisions are issued as “final decisions” meaning they may be appealed directly to NAD, or if the program decision is made under a Title XII program, additionally, but before NAD, to the FSA county committee.

NRCS agrees and has made changes to this section, as well as in 7 CFR 614.7 and 614.8.

This section provides that any adverse decision issued under a Title XII program may be appealed to the FSA county committee. NRCS received two comments on this section. NRCS received one comment concerning whether a participant must exercise the informal appeal before the FSA county committee prior to requesting a formal appeal from NAD. As provided in the preamble to the 2006 interim final rule (71 FR 28239, 28242), and pursuant to 7 U.S.C. 6995 and 7 CFR part 780, a participant may seek an optional informal review by an FSA county committee of an NRCS final technical determination or program decision made for a conservation program authorized under Title XII. A participant may also choose to forego the FSA county committee appeal option and appeal directly to NAD under 7 CFR part 11.

The other commenter recommended the rule should better explain the FSA county committee's jurisdictional limitations. The authorizing statute, 7 U.S.C. 6932(d)(2)(A), provides that the county committee must provide a method for obtaining review of NRCS adverse technical and program decisions. Both NRCS and FSA appeal procedures explain the requirements that the FSA county committee must adhere to when hearing informal appeals of NRCS adverse decisions. Both agencies have issued further instructions in the applicable policy manual or handbook. NRCS does not believe an amendment to this section is necessary.

NRCS received 38 comments on 7 CFR 614.11, as follows: 7 CFR 614.11(a)—5 comments; 7 CFR 614.11(c)—7 comments; 7 CFR 614.11(e)—10 comments; and 7 CFR 614.11(g)—16 comments.

Five of the comments suggested that participants should be able to request mediation from the mediation service provider rather than through the designated NRCS official as provided in 7 CFR 614.11(a). NRCS agrees and is changing this to the official designated in the decision notice.

Five commenters suggested that NRCS adopt the language in the NAD Rule at 7 CFR 11.5(c)(1) with regard to stays of time on an appeal for mediation in 7 CFR 614.11(c). NRCS agrees and is changing the rule in this section to reflect that a request for mediation stops the running of the 30-day timeframe for requesting an appeal. Two comments suggested that NRCS amend the amount of time allowed for mediation of technical determinations when a field review might be required. NRCS agrees a field visit might require additional time, and this is addressed by allowing the parties to agree to an extension of the 30-day timeframe.

Ten comments were received on 7 CFR 614.10(e) stating a concern that there is no clear guidance on finalizing the mediation settlement agreement where the NRCS representative did not have authority to bind NRCS. The comments provided that NRCS should vest their representative with authority to bind the agency in mediation or have the person that can make those decisions present at the mediation or in contact by telephone. The commenters believed that otherwise, due process was being denied. NRCS believes the current rule provides sufficient safeguards, and no changes will be made to this paragraph.

NRCS received a total of 16 comments on 7 CFR 614.11(g). Of the 16, 8 did not agree with use of any materials other than the mediation agreement in administrative or judicial proceedings. Six comments were concerned about the use of notes or summary reports by one party or the other in the absence of both parties during or after the mediation session with parties not named in the agreement to mediate, and two comments were received concerning whether parties to mediation may participate in further administrative or judicial proceedings.

The commenters suggest that the use of notes or summaries developed during mediation should not be allowed because there is a risk of distorting or taking those notes and summaries out of context. The commenters suggested that NRCS amend this section to include the following: “during mediation, if any party needs to contact an advisor not present, the party will secure the consent of the other party(s) before communicating with that person not present.” NRCS does not agree, as the agency must have the ability to contact officials not present at the mediation, and making such contact does not affect the confidentiality of the mediation process.

Except where the rule provides for NRCS to discuss settlement issues with another USDA official should the NRCS representative not have authority to decide an issue, NRCS finds the rule provides the appropriate confidentiality of the parties in the mediation process. In addition, 5 U.S.C. 574 limits both the disclosure and admissibility of such notes or summaries. Therefore, NRCS declines to amend the final rule.

Regarding the comments on whether any of the mediation participants can testify about or furnish documents of the mediation in administrative or judicial proceedings, NRCS is amending this section to clarify confidentiality expectations as they pertain to further administrative or judicial proceedings. It is noted, however, 5 U.S.C. 574 contains the limitations (with exceptions) to such testimony or provision of documents.

This provision was added in the 2006 interim final rule. One comment suggested that banning recordings of the proceedings by the participant is wrong and does not comport with the NAD rules. NRCS disagrees with this comment. The State Conservationist's hearing is an informal appeal hearing, not a formal administrative hearing held by NAD. In order to maintain the informal atmosphere and to encourage full participation by both the participant and NRCS, the recording of an informal proceeding is a disincentive to open communication and resolution of the appeal.

This section was added in the 2006 interim final rule that would allow the State Conservationist to make decisions regarding Appealability. Two comments were received. NRCS is amending this section to provide that if the agency decides the decision at issue is not appealable, then NRCS must provide review rights to the participant under the NAD rules at 7 CFR 11.6(a).

This section was added in the 2006 interim final rule. NRCS received one comment regarding time remaining after mediation to request further appeal action. This comment was more adequately addressed under 7 CFR 614.11.

This section was added in the 2006 interim final rule. NRCS received one comment stating that NRCS cannot delay implementation of a NAD determination beyond the 30 days specified in the statute. NRCS' comments on this section in the preamble were not intended to delay implementation of a final administrative decision. As provided in the rule, NRCS will implement all final NAD administrative determinations within 30 days after the decision becomes final. NRCS is amending this section to add new requirements on implementation of NAD final administrative appeal decisions as provided in section 14009 of the Food Conservation and Energy Act of 2008 (Farm Bill). This amendment to the appeals reporting requires the agency to provide a biannual report to the Chairman of the Senate Committee on Agriculture, Nutrition and Forestry and the Chairman of the House Committee on Agriculture on the status of implementing final NAD determinations along with reasons why a decision has not been implemented. The agency must publish these reports on the agency's Web site and keep the site updated with actions taken on any determinations not implemented within the required timeframe.

This is a new section added in the 2006 interim final rule. The only comment received pertains to a correction of a typographical error that repeats the word party in the first sentence. NRCS will correct the error in this final rule.

This section was added in the 2006 interim final rule. No comments were received on this section and no changes have been made.

I. Background II. Discussion A. What action is the NRC taking? B. What is the purpose of the final rule? C. Whom would this action affect? D. Would all Tribes receive advance notifications? E. How and when would Tribes be given the option to receive advance notifications? F. Does a Tribe's decision to receive advance notification affect whether shipments pass through that Tribe's reservation? G. How would licensees determine who the Tribal contacts are? H. How would advance notifications be made to Tribal officials? I. Would Tribes be required to protect the advance notifications? J. Would Tribal officials need to be fingerprinted and undergo a background investigation for access to SGI? K. When do these actions become effective? III. Summary and Analysis of Public Comments on the Proposed Rule IV. Discussion of Final Amendments by Section V. Criminal Penalties VI. Agreement State Compatibility VII. Voluntary Consensus Standards VIII. Environmental Impact: Categorical Exclusion IX. Paperwork Reduction Act Statement X. Regulatory Analysis XI. Regulatory Flexibility Certification XII. Backfit Analysis XIII. Congressional Review Act I. Background

Current NRC regulations in 10 CFR require licensees to inform State governors, or the governor's designee, of certain shipments of irradiated reactor fuel and certain nuclear waste passing through or across the boundary of their States. Section 73.37, “Requirements for physical protection of irradiated reactor fuel in transit,” requires licensees to provide advance notifications for shipments of irradiated reactor fuel in excess of 100 grams in net weight of irradiated fuel, exclusive of cladding or other structural or packaging material, which has a total external radiation dose rate in excess of 100 rems per hour at a distance of 3 feet from any accessible surface without intervening shielding. Section 71.97, “Advance notification of shipment of irradiated reactor fuel and nuclear waste,” requires licensees to provide advance notice for (1) shipments of irradiated reactor fuel in quantities less than that subject to § 73.37; and (2) certain licensed material that is required to be transported in Type B packaging and is being transported to a disposal facility or a collection point for transport to a disposal facility. The advance notification provisions apply if the quantity of licensed material in a single package exceeds the least of the following: (1) 3000 times the A 1 value of the radionuclides as specified in Appendix A, Table A-1 of 10 CFR Part 71, “Packaging and Transportation of Radioactive Material,” for special form radioactive material; (2) 3000 times the A 2 value of the radionuclides as specified in Appendix A, Table A-1 of 10 CFR Part 71, for normal form radioactive material; or (3) 1000 Terabequerel (TBq) (27,000 curies). Certain information provided for shipments of irradiated reactor fuel is considered to be SGI under the NRC regulations and must be protected under the requirements in § 73.21, “Protection of Safeguards Information: Performance requirements,” and § 73.22, ”Protection of Safeguards Information: Specific requirements.”

The NRC first developed these advance notification regulations in 1982 to comply with the NRC Authorization Act for Fiscal Year 1980. The NRC Authorization Act for Fiscal Year 1980 was enacted to deal with concerns expressed by States about their abilities to fulfill their responsibilities to protect public health and safety while waste shipments pass through their jurisdictions. Neither the Atomic Energy Act of 1954, as amended (AEA), nor the notification regulations required licensees to notify Native American Tribes of this type of shipment passing through their Tribal reservations. Tribal officials requested similar notification in the 1990s.

On December 21, 1999 (64 FR 71331), the NRC published an Advance Notice of Proposed Rulemaking (ANPR) to solicit stakeholder input on a possible rulemaking that would consider requiring advance notification to Native American Tribes of transportation of certain types of nuclear waste. Information was sought on minimizing the burden to licensees, identifying the location of Tribal reservations in relationship to shipment routes, and the sharing and protecting of SGI. A total of 44 comment letters were received. Thirty-six of the letters received were from Tribes and Tribal organizations; four letters were received from private citizens; and letters were received from a licensee, an industry association, a State agency, and a Federal agency. Virtually all the commenters favored providing advance notification to Tribal governments with some disagreement on the details of the implementation. Most commenters were in favor of providing Tribal governments the same advance notification that State governments receive regarding high-level radioactive waste shipments. Commenters encouraged the NRC to provide advance notification through more up-to-date means of communication, e.g., via the Internet. Tribal representatives and others encouraged the NRC to communicate directly with Tribal governments during the rulemaking process as well as when implementing procedures for advance notification. The comments received in response to the ANPR were taken into account during the development of this rule.

On November 6, 2000, President Clinton issued Executive Order (E.O.) 13175, “Consultation and Coordination with Indian Tribal Governments.” The E.O. 13175 emphasized the importance of respecting the sovereignty of Tribal governments and working with them on a government-to-government basis. 1 On November 5, 2009, President Obama expressed his commitment to E.O. 13175 at the White House Tribal Nations Conference and Interactive Discussion with Tribal Leaders. During the conference, the President signed an Executive Memorandum on Tribal consultation for the heads of Executive Departments and Agencies, directing Cabinet agencies to take steps to develop regular and meaningful consultation with Tribal governments regarding the implementation of E.O. 13175. While the Executive Memorandum does not directly apply to independent agencies, the NRC has adopted agency practices that are consistent with the principles of consultation and cooperation with Indian Tribal governments articulated in President Clinton's April 29, 1994, guidance and E.O. 13175. The NRC's practice is to conduct its activities in a manner that respects the rights of sovereign Tribal governments, and involves consultation and cooperation with Federally-recognized Tribes on a government-to-government basis.

The NRC is amending its regulations to require licensees to provide to participating Tribal officials, or their designees, advance notice of shipments of irradiated reactor fuel under § 73.37 and other nuclear wastes listed in § 71.97 before crossing the border of Tribal reservations. For the purposes of these regulatory provisions, “Tribal official” is defined as the highest ranking individual that represents Tribal leadership, such as the Chief, President, or Tribal Council leadership of an Indian Tribe. This action would only affect commercial shipments being made by the NRC and Agreement State licensees. This action does not include shipments that are not subject to NRC regulation, including many shipments made by the U.S. Department of Energy (DOE) or the U.S. Department of Defense (DOD).

The purpose of the final rule is to recognize Tribal sovereignty by informing Tribes that choose to receive advance notification of shipments of irradiated reactor fuel and other nuclear wastes passing across their reservations and to recognize Tribal governments' interest in being informed of activities occurring on Tribal reservations.

The final rule would apply to any NRC licensee that ships irradiated reactor fuel. The final rule also affects any licensee that ships other nuclear wastes listed in § 71.97, namely, certain licensed material that is: (a) Required to be transported in Type B packaging; (b) being transported to or across a State boundary enroute to a disposal facility or to a collection point for transport to a disposal facility; and (c) the quantity of licensed material in a single package exceeds the least of the following: (1) 3000 times the A 1 value of the radionuclides as specified in Appendix A, Table A-1 of 10 CFR Part 71, for special form radioactive material; (2) 3000 times the A 2 value of the radionuclides as specified in Appendix A, Table A-1 of 10 CFR Part 71, for normal form radioactive material; or (3) 1000 TBq (27,000 curies).

Finally, the rule affects any Tribe that chooses to receive the advance notifications of shipments passing within or across its Tribal reservation.

No. Given the information protection requirements involved, the NRC believes that Tribes should have the option to decide whether to receive advance notifications of shipments that pass across their Tribal reservations. If a Tribe opts to receive the advance notifications, the Tribe is obligated to protect the schedule and itineraries of the shipments under the SGI requirements in §§ 73.21 and 73.22. If a Tribe opts not to receive the advance notifications, the Tribe has no information protection obligations relating to the shipments. For the purposes of the advance notifications, an “Indian tribe” is defined as an Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe pursuant to the Federally Recognized Indian Tribe List Act of 1994. There are currently 565 Federally-recognized Tribes.

The NRC staff will contact each Federally-recognized Tribe to provide them information on the rule. As part of the information, the Tribe will be asked if they would like to receive advance notifications of irradiated reactor fuel and other nuclear wastes listed in § 71.97 before crossing the border of the Tribal reservation. The Tribe can then notify the NRC as to whether it would like to receive the advance notifications and certify that the SGI information will be appropriately protected. Tribes will be able to change their decision to receive or not receive the advance notifications by informing the NRC at any time. Information will be available on the NRC Web site on how a Tribe can change its decision. In addition, the NRC plans to contact all Federally-recognized Tribes every 5 years to give Tribes an opportunity to change their status in regards to receiving notifications.

No. This rulemaking would only give the Tribe a voluntary opportunity to receive advance notification of shipments that cross their reservation. A Tribe's decision to receive or not receive advance notifications does not bear upon shipment routes, which are reviewed and approved subject to different NRC requirements.

The NRC will maintain a list of Tribal contacts as is done for State governmental contacts. The NRC will work with the Tribes to complete and maintain the list. The Tribal official will designate who is intended to represent the Tribe. The NRC staff currently intends to annually publish a list of Tribal contacts in the Federal Register and post the list on the Web site maintained by the NRC's Office of Federal and State Materials and Environmental Management Programs. The NRC also plans to have a map on the Web site that shows the location of the Tribal reservations. The Web site associated with the map will also provide the necessary contact information for the Tribe.

The methods permitted for communication of advance notifications are detailed in § 71.97(c), “Procedures for submitting advance notification.” Notifications are made in writing. The written notifications could be sent by mail or courier. The SGI may not be transmitted by unprotected telecommunication circuits. Requirements for the transmittal of SGI are contained in § 73.22(f), “External transmission of documents and material.”

Tribes are required to protect some of the information contained in the advance notification as SGI as specified by §§ 73.21 and 73.22. Only individuals that have a “need-to-know” the information and have undergone both a Federal Bureau of Investigation criminal history records check and a background check for determination of trustworthiness and reliability or have been relieved from these checks under § 73.57, “Requirements for criminal history records checks of individuals granted unescorted access to a nuclear power facility or access to Safeguards Information,” or § 73.59, “Relief from fingerprinting, identification and criminal history records checks and other elements of background checks for designated categories of individuals,” may be provided access to the SGI. Basic protection requirements include storing unattended SGI in a locked security storage container. Access to the lock information, such as a combination, must be strictly controlled to prevent disclosure to an individual not authorized to access SGI. Documents containing SGI must be destroyed by burning, shredding, or any other method that precludes reconstruction by means available to the public at large. The specific requirements for the protection of SGI are located in § 73.22. Failure to comply with these regulatory requirements could result in civil enforcement action, including civil monetary penalties, and Federal criminal prosecution.

Section 149 of the AEA requires fingerprinting and submission of fingerprints to the Attorney General for identification and criminal history records check for any individual permitted access to SGI, unless the Commission, by rule, has relieved that individual from the fingerprinting, identification, and criminal history records check requirements. The Commission may relieve individuals from these regulatory requirements “if the Commission finds that such action is consistent with its obligations to promote the common defense and security and protect the health and safety of the public,” 42 U.S.C. 149(b). As allowed by Section 149 of the AEA, the NRC enacted § 73.59 to relieve specific categories of individuals from fingerprinting and criminal history records checks prior to receiving SGI. The categories of individuals covered by this regulation include the governor of a State or his or her designated State employee representative; Federal, State, or local law enforcement personnel; and representatives of foreign government organizations that are involved in planning for, or responding to, nuclear or radiological emergencies or security incidents whom the Commission approves for access to SGI.

The United States has a unique legal relationship with Indian tribal governments as set forth in the Constitution of the United States, treaties, statutes, Executive Orders, and court decisions. Indian tribes exercise inherent sovereign powers over their members and territory. The United States recognizes the right of Indian tribes to self-government and supports Tribal sovereignty and self-determination. As a result, the NRC has determined that exempting Tribal officials, Tribal official designees, or Tribal law enforcement personnel is analogous to exempting the State governor, State governor designees, or State law enforcement personnel from the fingerprinting and background check requirements. Furthermore, some Tribes have emergency response responsibilities similar to States. Revising the regulations permits the Commission and licensees to more efficiently provide SGI relating to advance notification of shipments to Tribes who determine this information enables them to be more effective in their day-to-day efforts to ensure the protection of nuclear materials and respond to emergencies within their territories. Therefore, the Commission has determined that the rule helps the Commission fulfill its obligations to promote the common defense and security and to protect the health and safety of the public.

The Tribal official, Tribal official designee and Tribal law enforcement personnel are considered trustworthy and reliable to receive SGI by virtue of their occupational status which is subject to direct oversight by Tribal Government authorities in their day-to-day job functions. Under the final rule, if the Tribe decides to participate in the advance notification of shipment program, the Tribal official, Tribal official designee, or Tribal law enforcement personnel who need-to-know this SGI information to perform their job function, may have access to SGI information regarding advance notification of shipments affecting their territories without undergoing fingerprinting or a criminal history check. In addition, the NRC has extended the relief to cover other types of SGI. Revising the regulations permits the Commission to more efficiently provide SGI to Tribes when it is determined that the Tribe has a need-to-know. The NRC believes that exempting Tribal officials, Tribal official designees, or Tribal law enforcement personnel from the fingerprinting requirement is analogous to exempting the State governor, State governor designees, or State law enforcement personnel from the fingerprinting and background check requirements. Providing the relief also recognizes the right of Indian tribes to self-government and supports Tribal sovereignty and self-determination. Relief from the fingerprinting requirement cannot be provided by Commission order, it can only be provided by rule. By including the relief in this rulemaking for all types of SGI, a future rulemaking will not need to be conducted, thus saving NRC resources. Tribal officials will still need to have an established need-to-know before they would be given access to any other types of SGI. This rulemaking establishes need-to-know for the advance notifications for irradiated reactor fuel and nuclear waste shipments that pass within or across the boundary of a Tribal reservation.

The final rule adds Tribal official, his or her designee, and Tribal law enforcement personnel to the list of categories of individuals that are granted relief from the fingerprinting, identification and criminal history records checks, and other elements of background checks. All individuals granted access to SGI are required to abide by the requirements in §§ 73.21 through 73.23 for proper management and protection of SGI.

The final rule will be effective 60 days after publication in the Federal Register . However, licensees will not need to comply with the Tribal advance notification provisions in 10 CFR 71.97 and 73.37(f) for 1 year after the rule is published in the Federal Register . This date was inserted into the regulatory text. This provides time for the NRC to work with the Tribes and develop the list of Tribal contacts, develop a map showing the location of Tribal reservations, provide training on protection of SGI to the Tribes, and provide time for licensees to develop procedures and conduct training on the new requirements.

The proposed rule was published on December 6, 2010 (75 FR 75641), for a 75-day public comment period that ended on February 22, 2011. The NRC received comments from 10 entities. The commenters on the proposed rule included Tribes, a Tribal organization, individuals, companies, and a Federal agency. Copies of the public comments are available in the NRC's PDR, 11555 Rockville Pike, Rockville, Maryland 20852 or at http://www.regulations.gov under Docket ID NRC-1999-0005.

In general, most of the commenters expressed support for the rulemaking. There were no comments received in opposition to the rule. Many of the comments received were related to implementation. The Commission specifically requested input on two subjects: (1) The best method for informing Tribes of the obligations of possessing SGI; and (2) whether the relief from fingerprinting should be applied generally to access other types of SGI. A discussion of the comments and the NRC's responses follow.

Comment 1: In the proposed rule, the NRC specifically invited comment on the best method for informing Tribes of the obligations of possessing SGI. Two commenters addressed this topic directly, and two other commenters addressed the training aspect. One commenter noted that when working with Indian tribes, there is no “one size fits all” approach. The commenter noted that once this rule is final, it will be important first to identify Tribes that would likely be impacted by shipments from NRC licensees to inform them of the rule change and their ability to receive advance notifications. The commenter stated that once the interested Tribes are identified, the NRC should convene a meeting (or training course) for the interested Tribes to inform them of their options for participating, the obligations of possessing SGI should the Tribe choose to receive the advance notifications, and to develop a range of options to inform the Tribes. Another commenter indicated that the NRC should carefully consider the methods used to inform the Tribal governments of their responsibility in possessing SGI, as failure to comply with these requirements could result in civil or criminal liability. The commenter noted that the mechanisms should be reasonable, effective, and based on further research. The commenter suggested that the NRC should first determine whether this material is the type that would lend itself to Webinars or short-term orientation training. The commenter suggested that after selecting a mechanism by which to disseminate the material, the NRC should attempt to gain insight into the Tribal governments' perspectives on the material by conducting surveys to determine if the material is comprehensible, or alternatively, whether it contains complex legal provisions and unclear obligations. The commenter noted that both parties should anticipate the appropriate costs and the time commitments involved with such training. Another commenter noted that training is likely to be the biggest expense. The commenter noted that Tribes should be afforded opportunities for training regarding the obligations for possessing SGI, and the NRC should consider developing both distant learning opportunities and a training of trainers program to share with Tribal leaders and Tribal law enforcement agencies. One commenter noted that effective security training is as important as the decision to share the information itself. The commenter suggested that the NRC use Web-based mechanisms as well as more traditional methods of communication, such as information packets and training courses. The commenter pointed out that the NRC should customize its outreach to each Tribal government based on the Tribal government's capacity and level of engagement. The commenter pointed out that the NRC's outreach effort could be incorporated into existing procedures where an NRC staff member contacts individual Tribes. The commenter indicated that the NRC should offer each participating Tribe training options. Participating Tribes could choose from a range of training options, including technologically advanced options, like Webinars, and more traditional options such as training packets and training courses. The commenter noted that Tribes are willing to make a good-faith effort to carry out their obligations regarding SGI possession and that while training courses may require more resources, the nature of the responsibility involved justifies such attention to training.

Response: The NRC agrees that there is no one-size-fits-all approach that will work. The NRC is considering several different mechanisms to inform the Tribes of the Agency's SGI protection requirements. Initially, the NRC plans to contact by letter all 565 Federally-recognized Tribes when the final rule is published in the Federal Register . This initial contact will include a copy of the final rule and information on the protection of SGI, as well as a request to inform the NRC if the Tribe wants to receive the advance notifications. For those Tribes that express interest, more detailed training will be available by Webinar, meetings, training classes, compact disk, etc. Decisions on the best mechanism to provide the training will depend on such things as the number of Tribes that will need the training, locations of the Tribes, and the Tribe's preference.

Comment 2: In the proposed rule, the NRC specifically invited comment on whether the relief from fingerprinting should be applied generally to access other types of SGI. Only one commenter addressed this topic. The commenter felt that the relief from fingerprinting should be expanded and should be applied generally to other types of SGI based on the presumption that the established information protection procedures employed are presumed to meet the general performance requirement.

Response: The NRC has decided to expand the relief to all types of SGI. The SGI includes security-related information such as security plans, alarm information, lock combinations, information related to response forces, adversary characteristics, and other types of information listed in §§ 73.22 and 73.23. The United States has a unique legal relationship with Indian tribal governments as set forth in the Constitution of the United States, treaties, statutes, Executive Orders, and court decisions. Indian tribes exercise inherent sovereign powers over their members and territory. The United States recognizes the right of Indian tribes to self-government and supports Tribal sovereignty and self-determination. As a result, the NRC has determined that exempting Tribal officials, Tribal official designees, or Tribal law enforcement personnel is analogous to exempting the State governor, State governor designees, or State law enforcement personnel from the fingerprinting and background check requirements. Furthermore, some Tribes have emergency response responsibilities similar to those of States. Revising the regulation permits the Commission to more efficiently provide SGI to Tribes when it is determined that the Tribe has a need-to-know. Need-to-know is determined on a case-by-case basis. Factors in the decision can include a determination that the information enables the Tribe to be more effective in its day-to-day efforts to ensure the protection of nuclear materials and respond to emergencies within its territories. Therefore, the Commission has determined that the rule helps the Commission fulfill its obligations to promote the common defense and security and to protect the health and safety of the public. Individuals would still need to have an established need-to-know before they would be given access to any other types of SGI. This rulemaking establishes need-to-know for the advance notifications for irradiated reactor fuel and nuclear waste shipments that pass within or across the boundary of a Tribal reservation.

Relief from the fingerprinting requirement cannot be provided by Commission order; it can only be provided by rule. By including the relief in this rulemaking, a future rulemaking will not need to be conducted. As noted elsewhere in the Statement of Considerations, the Tribal official would have to certify that the Tribe has the necessary protection measures in place and that they will protect the SGI in accordance with the requirements in 10 CFR Part 73 (§§ 73.21 through 73.23).

Comment 3: Most of the commenters expressed support for the rulemaking. One commenter noted that the transportation of nuclear waste shipments has always been of concern to Tribal government officials and community members as the potential long-term effects of a transportation accident and possible contamination of Tribal ecosystems poses a high risk to cultural continuity. One commenter noted that the rule is meaningful because it will increase the Tribal government's ability to perform its responsibilities in protecting public health and safety, as well as recognize Tribal sovereignty. Another commenter expressed support because the NRC's approach acknowledges that sovereign Tribal nations require the same information provided to the States in order to protect health and the environment. The commenter noted that the Tribe's all-hazard Fire Department can be more prepared for very unlikely incidents involving nuclear waste if the Tribe is informed of the shipments. One commenter commends the NRC for its understanding of the unique legal relationship between the Federal government and Tribal governments as the basis for amending the regulations, and for adhering to the principles of consultation and cooperation articulated in E.O. 13175. Commenters noted that Tribal governments exercise regulatory jurisdiction over a broad range of activities on their lands and that Tribal government officials, just like State officials, are charged with protection of the public and have a need-to-know the type and amount of hazardous materials that traverse through their jurisdictions. Commenters noted that notification to Tribal authorities will acknowledge the rights and sovereignty of Tribal governments as well as the responsibility that tribes have for the welfare and safety of natives and non-natives within their jurisdictional boundaries. Commenters noted that notification to Tribal governments will allow Tribal law enforcement and other officials to prepare for safety and security of shipments as well as develop emergency preparedness plans in the event of a transportation accident. One commenter noted that the rule acknowledges a Tribe's sovereign right to be notified of these risks in order to protect the health and safety of its citizens. Several Tribes indicated that they wanted to receive the advance notifications.

Response: The NRC acknowledges the support for the rule. No additional response is necessary.

Comment 4: There were several questions related to the notifications and how enforcement would occur. One commenter wanted to know: (1) How licensees will know if their shipment will pass through Tribal lands subject to the notification requirements; (2) whether the licensee would be in violation if it notified a Tribe that had originally requested notifications but had recently decided not to receive the advance notifications; and (3) whether a licensee would be in violation for failing to notify a Tribe that had recently decided to receive the notifications.

Response: The NRC will maintain a list of those Tribes that want to receive the notifications. The list will be published annually in the Federal Register and posted on the NRC Web site. The NRC plans to place a map on the Web site that will denote the location of the Tribal reservations of those Tribes that decide to participate and receive the advance notifications. A licensee will need to check the map to see if the route traverses any of the reservations in order to determine whether it will need to contact any Tribes. A licensee would be in violation if it provided safeguards information to a Tribe that was not participating in the advance notification program. A licensee would also be in violation if it did not provide information to a Tribe that should receive notifications. If the map had not been updated before the notifications were or were not provided, the licensee would not be in violation, as it would have had no method of knowing. The NRC will update the list and map promptly upon receiving notification from a Tribe of any change in the decision to receive advance notifications.

Comment 5: Several commenters expressed support for the provision that allows flexibility for the Tribe to decide if it wants to receive the advance notifications or not, particularly as there is a resource requirement for safeguarding the information. One commenter noted that this option should be explained clearly to the Tribal governments. Another commenter noted that accommodations should be made to assist the Tribes in implementing this rule. These accommodations would include assistance with implementing personnel safeguard protocols. One commenter noted that the provision presents implementation challenges. The commenter suggested that the NRC should contact the Tribes at preestablished times, perhaps once a year, to confirm whether the Tribe would like to continue receiving notifications. The commenter noted that if a Tribe decides to opt out that licensees should be notified and the change reflected in the annual Federal Register notice. The commenter also noted that if a Tribe decides to receive the advance notifications, the NRC should establish a clear procedure for notifying licensees and scheduling training on the protection of the information. The commenter noted that Tribal boundaries should be clearly defined and conveyed to both the licensee and the participating Tribe.

Response: The NRC plans to initially contact the Tribes when the final rule is published in the Federal Register . This initial contact will include a copy of the final rule and information on the protection of SGI, as well as a request to inform the NRC if the Tribe wants to receive the advance notifications (possibly by utilizing a prepaid, self-addressed postcard). Once a year, the NRC will contact those Tribes that choose to receive the notifications. The NRC outreach will include a request to update any contact information and ask if the Tribe wishes to continue to receive the advance notifications. Every 5 years, the NRC plans to contact all of the Federally-recognized Tribes to inform them of the option to receive the advance notifications and the associated responsibilities that accompany those notifications. The NRC will also contact non-participating Tribes when a newly approved route crosses the Tribal reservation. The NRC's Web site will also contain detailed instruction on how a Tribe can choose to opt in or opt out. The list of participating Tribes will be published in the Federal Register once a year and will be posted on the NRC's Web site. Additionally, a map will be posted on the NRC's Web site that shows the location of the Tribal reservations and the routes that surround them. The Web site will also have Tribal contact information. As soon as the NRC receives information from a Tribe on the Tribe's decision to participate and receive the advance notifications or the decision to stop receiving the advance notifications, the NRC will promptly update the information on the NRC's Web site. Information addressing training concerns is detailed in the response to Comment 1.

Comment 6: The NRC received several questions related to route approvals. One commenter wanted to know: (1) For future route approval requests, whether the Tribes will be identified similar to counties and be listed under individual states or treated similar to states; (2) for future route surveys, how the jurisdictions will be determined as not all counties and Tribes are marked along interstate and secondary routes; (3) whether the Tribal emergency response contacts will be listed; and (4) whether current approved routes will need to be resurveyed and amended to show each Tribe. Another commenter noted that the NRC must clearly outline procedures for route changes and enforcement. G1

Response: The Tribes will be identified and listed separately as is done for the States. The licensee should provide the 24-hour contact information that is available for the Tribe's local law enforcement agency in each county along the route. The route plan must be segmented by counties and Tribal reservations for each state. The NRC will have a map on its Web site that denotes the locations of the Tribal reservations. The Tribal emergency contacts will be listed. The currently approved routes will not be resurveyed, but will be amended if a Tribe along the route opts to be notified.

Comment 7: One commenter noted that a letter, post-marked 7 days prior to the 7-day window of transport, is sufficient to constitute notice. The commenter noted that it is unclear what constitutes sufficient notice if the designated Tribal point of contact cannot be reached for schedule changes as schedule changes are typically made via telephone. The commenter indicated that the rule should be clearer about what constitutes notice in these cases and the options for recourse if notice is not provided. The commenter also noted that the rule needs to be explicit on email notification as this is not addressed in the proposed rule.

Response: If the Tribal contact cannot be reached for a schedule change, the licensee can leave a non-SGI voice mail message. Email notification of schedule changes is not prohibited under the rule. Note that if the notification contains SGI, the email must meet the requirements of § 73.22(f).

Comment 8: One commenter noted that the Tribe's law enforcement agency has in place measures to protect SGI and can conduct proper planning, training, and coordination in support of State, local, and railroad police departments once a notification system is in place. The commenter also expressed support for the NRC's requirement to manage this information as SGI on a “need-to-know” basis.

Response: No response is necessary.

Comment 9: One commenter noted that the best method for notification is a phone call to a previously designated individual. The commenter noted that this prevents the creation of an unnecessary paper trail or computer access that may be compromised, and assures the information is provided to the correct individual.

Response: The rule requires that the notification be conducted in writing because it contains SGI, and SGI cannot be transmitted using non-secure devices. Any Tribe deciding to receive the advance notifications would not be required to retain the notification; the Tribe could destroy the notice upon receipt, as long as the destruction is conducted in accordance with § 73.22(i). The notifications of schedule changes may be made by phone, as they typically do not contain SGI.

Comment 10: One commenter did not support additional background investigations for the Tribal Chairman or Tribal Vice Chairman because they are elected officials and have already undergone this procedure prior to taking office. The commenter noted that the Tribe is a sovereign nation and the Tribal leaders are analogous to a State Governor who has been exempted from these additional requirements.

Response: The rule relieves the Tribal official or their designee from the fingerprinting requirement as is done for a governor or the governor's designee. The rule defines the Tribal official as the highest ranking individual that represents Tribal leadership such as the Chief, President, or Tribal Council leadership of an Indian tribe.

Comment 11: One commenter noted that the proposed rule did not contain any discussion about how the rule would be enforced by the NRC on its licensees. The commenter wanted to know: (1) How the NRC will be informed that the licensees have, in fact, notified Tribes of the shipments; and (2) whether there are penalties for non-compliance with the advance notification requirements. The commenter noted that enforcement needs to be addressed before moving forward and that the NRC needs to inform licensees of their obligation to provide the advance notification to the Tribes impacted by their shipments. Two commenters urged the NRC to implement effective oversight mechanisms to ensure compliance by licensees. One of the commenters noted that this should include specific remedies for failure to provide adequate notification.

Response: The licensee is not required to inform the NRC when they have provided the advance notifications to the States and Tribes. The licensee is subject to NRC inspection. As part of routine inspections, the NRC would check records to see if the required notifications have been made. If the required notifications have not been made, the licensee would be subject to a notice of violation. Depending on the severity, the violation could result in a civil penalty.

Comment 12: One commenter stated that the rule should establish a consultation process that provides for timely input from Tribal governments on route planning and disaster preparedness to ensure greater communication and strategic cooperation. The commenter indicated that it is vital that the NRC make every effort to respect the sovereign jurisdiction of Tribal nations and coordinate with them on matters that affect the health and safety of their citizenry.

Response: The NRC is not directly involved in developing the routes and would therefore not engage in a consultation with the Tribes or with the States through which a route crosses. The NRC does verify contact information after a route is submitted to the NRC. The NRC does not currently plan any consultation with the Tribes on disaster preparedness related to this rulemaking, since the rule is limited to notification requirements. However, the NRC periodically conducts emergency exercises during which the agency coordinates with the Tribes located within the emergency planning zones of NRC facilities. In the unlikely case of an accident and release of radioactive material from a waste shipment, the Federal response would include coordination with the affected Tribes.

Comment 13: One commenter requested notification of traditional and currently adjudicated homelands (which would include South Dakota, North Dakota, Minnesota, Nebraska, Wyoming, Montana, Kansas, and Wisconsin). Another commenter requested that Tribal boundaries should be clearly defined and conveyed to both the licensee and the participating Tribe.

Response: For implementation purposes for this rule, the NRC decided to require licensees to give advance notification to participating Federally-recognized Tribes when a shipment of irradiated reactor fuel and other radioactive wastes crosses the external boundary of the Tribal reservation. This definition provides a clearly defined area that can be used by the licensee to evaluate their routes and provide notification to the interested Tribal governments. The NRC expects to provide information (e.g., a map) on the NRC's Web site to delineate the locations of Tribal reservations and Tribal contact information to aid the licensee compliance with the regulatory requirements.

The licensee will not be required to provide advance notification to participating Tribal governments for traditional and currently adjudicated homelands outside the external boundary of a Tribal reservation. These are not clearly defined areas, and some cases are currently under dispute. For areas outside the external Tribal reservation boundaries, the current regulations require that the licensee provide notice to the applicable State government.

Comment 14: One commenter noted that DOE has for more than 27 years recognized the need to include Tribes as necessary parties for radioactive waste management and transportation activities including emergency management planning components. The DOE indicated that it has provided advance notice of DOE shipments to Tribal officials for a number of years and has not experienced any resulting security problems or concerns. The DOE noted that the NRC's proposed amendments are consistent with DOE's current practice regarding advance notification of DOE shipments. The DOE noted that it supports the NRC's proposal to amend its regulations so that NRC licensees would be required to provide notification to Tribes. The DOE noted that the proposed amendments respect Tribal sovereignty, do not pose an increased threat to security, and can enhance safety. The DOE further indicated that advance notification helps ensure the preparedness of law enforcement and emergency response personnel along a shipping route, and the DOE believes that providing advance notification to States and Tribes enhances the safety of its shipments.

Response: No response is necessary.

Comment 15: One commenter asked if the rule changes will impact emergency response and first responder protocols for the licensee.

Response: The rule should not impact emergency response and the first responder protocols.

Comment 16: One commenter suggested that the NRC should create a system that continually seeks to update any outdated technology, policies, or procedures and that performs an annual review of the system's effect on both the Tribal governments, as well as licensees, to determine whether the regulation is costing either party unexpected financial loss.

Response: The NRC does not plan to conduct such reviews on the rule's ongoing impact. However, a regulatory analysis of the rule that provides an estimated cost to States and Tribes was completed as part of the rulemaking process. Tribes have the option to opt out and not participate in receiving the advance notifications. If a Tribe felt that receiving the notifications would have too great of a financial impact, the Tribe could decide not to receive the notifications.

Comment 17: One commenter stated that the NRC used plain language effectively and that the rule is clear.

Response: No response is necessary.

Comment 18: One commenter noted that the regulatory analysis is accurate and supports the rule. One commenter noted that the cost and burden to the NRC or its licensees in implementation of a rule change should not be a consideration in amending the regulation. The commenter noted that as an agency of the Federal Government, the NRC has a responsibility to protect Tribal lands and peoples. The commenter noted that licensees must be cognizant of the risks that their activities could pose to every segment of the population, and licensees have an ongoing duty to ensure the safety and security of Tribal communities. The commenter stated that because of the high-risk nature of the licensees' products and activities, notification to appropriate Tribal government officials should be part of the licensees' standard business process.

Response: The NRC prepares a regulatory analysis to support most rulemakings. The analysis lays out both the costs and benefits of the rule so that the NRC can make an informed decision.

Comment 19: One commenter noted that it is not clear whether the proposed rule change encompasses all current and potential Federal spent nuclear fuel and high-level radioactive waste campaigns. The commenter stated that the origin and destination of these materials is relevant because the fiduciary duty to Tribes is borne by all Federal entities responsible for these shipments, including the DOE and DOD. The commenter stated that all similar spent nuclear fuel and high-level radioactive materials shipments and potential impacts need to be addressed by the NRC, and appropriate Federal agencies. Another commenter requested that the rule include shipments from the DOE and DOD. Another commenter noted that it is unclear whether nuclear waste shipments going to a Federal repository or interim storage facility would be subject to this rule. The commenter believed that once waste leaves a commercial nuclear power plant for Federal disposal, the shipments are considered to be DOE shipments. The Commenter noted that the language must be clarified to ensure that any shipment originating from an NRC-licensed facility (i.e., all commercial power plants) would be covered by the rule provisions, even if the DOE takes possession of the material and it becomes a DOE shipment.

Response: Under the AEA and the Energy Reorganization Act of 1974, as amended, the NRC has authority over shipments of NRC-licensed material. The DOE and DOD may transport DOE and DOD titled spent nuclear fuel and high-level radioactive waste shipments outside of the NRC's regulatory authority. These DOE and DOD spent nuclear fuel and high-level radioactive waste shipments are not licensed by the NRC for transportation. In some circumstances Congress mandated that the DOE follow the NRC notifications of State and local governments prior to transportation of spent nuclear fuel or high-level radioactive waste for disposal at a repository or for monitored retrievable storage. The mandate does not include Native Tribes; however, the DOE has a policy in place to provide notification to Federally-recognized Tribes in advance of any shipments of spent nuclear fuel or high-level radioactive material.

Comment 20: One commenter noted that certain Tribes have designated their lands as nuclear-free zones. In order to more fully achieve the NRC's stated goal of respecting Tribal sovereignty, the commenter encouraged the NRC and its licensees to establish alternative transportation routes that do not involve these territories.

Response: Although the NRC does approve the routes proposed by the licensee, the licensee is responsible for designating the routes for nuclear waste shipments for which advance notification will be required under this rule. With respect to these shipments, regulations of the U.S. Department of Transportation in 49 CFR Part 397, Subpart D, “Routing of Class 7 (Radioactive) Materials,” and Subpart E, “Preemption Procedures,” govern a carrier's selection of the highway route. These regulations also contain the procedures which must be followed by a State or Indian tribe to designate a highway route over which these shipments may or may not be transported. See also the Federal hazardous material transportation law at 49 U.S.C. 5112 and 5125(c).

In particular, 49 CFR Part 397, Subpart D sets forth the standards for the States and Indian tribes to follow when designating specific highway routes for transportation of Class 7 (radioactive) materials. In particular, 49 CFR 397.103, “Requirements for State routing designations,” requires the routing agency to select routes to minimize radiological risk and consult with affected local jurisdictions and other affected States to ensure consideration of all impacts and continuity of designated routes. A list of State-designated preferred routes is available upon request to Federal Motor Carrier Safety Administration, Office of Enforcement and Compliance (MC-EC), 1200 New Jersey Ave. SE., Washington, DC 20590-0001.

Comment 21: One commenter noted that the Tribes' resources and experience vary with regard to navigating government-to-government relations of this nature. The commenter indicated that the NRC needs to make a good-faith effort in these inaugural stages as some Tribes are able to assist the NRC with advanced tools, such as digital mapping of their areas, while others are struggling with funding for even older, more established projects.

Response: The NRC is aware that the Tribes' resources and experience vary which is why all Tribes will be initially contacted by letter. The NRC will offer different methods for conducting training on protection of SGI so that Tribes can select the appropriate method to fulfill their needs.

Comment 22: One commenter noted that there is no provision in the rule concerning feedback or review and that feedback on training, notification processes, and general implementation issues would be very valuable to successful execution of the rule. The commenter noted that feedback would also help facilitate dialogue with the Tribal governments over other issues in nuclear transportation. The commenter noted that the proposed rule may benefit from an institutionalized review procedure, particularly in the initial years.

Response: Although the NRC does not have an institutionalized review procedure, it does request feedback when it conducts training and outreach efforts during public meetings.

Comment 23: One commenter encouraged the NRC to coordinate with other government agencies that regularly work with sovereign Tribal governments, and particularly with the DOE. The commenter encouraged the NRC to make use of the methods and contacts that the DOE currently employs in its regular communication with Tribal governments as such coordination would likely reduce the labor required to maintain an accurate list of Tribal government contacts. The commenter also noted that out of respect for the sovereignty of Tribes and Tribal governments, coordination with other government agencies and consistent communication procedures would also reduce the administrative burden on the Tribes themselves.

Response: The NRC does coordinate with other Federal agencies on a case-by-case basis. For example, the NRC worked with the Bureau of Indian Affairs (BIA) and the National Council of American Indians in developing the list of Federally-recognized Tribes contacted about this rule and for other activities, including the creation of an NRC database encompassing all 565 Federally-recognized Tribes. The NRC frequently coordinates with DOE in areas of mutual interest, including DOE's Tribal outreach.

Comment 24: One commenter suggested that the NRC work with the DOE and other agencies to develop a central database of Tribal information that can be easily accessed by licensees. The commenter noted that accurate information about the recognized geographical boundaries of Tribes is of utmost importance to successful implementation of the rule. The commenter stated that the NRC should work with the DOE and BIA to create and regularly update a map of Tribal jurisdictions. The commenter noted that the map could be made available to licensees on the NRC's Web site. The commenter indicated that the NRC should also coordinate with other agencies to acquire information on cultural holidays or events that could result in a particular Tribal government being closed and not receiving its necessary notification.

Response: The NRC is currently developing and will maintain a United States map that shows the Tribal reservations, using a State-by-State presentation, and the contacts for those Tribes that choose to receive the notifications. The NRC will coordinate with DOE and BIA as appropriate. Additionally, the NRC has already developed a calendar of Tribal days of significance for internal use and will consider adding the information to the NRC's Web site.

Comment 25: One commenter noted that a primary concern about this rule is that the additional dissemination of nuclear waste transportation information could threaten information security. The commenter believes that the rule adequately safeguards against this concern by making the advance notification voluntary, ensuring security in a manner commensurate with State procedures, and providing clear equipment and training requirements. The commenter stressed that Tribal governments are just as invested in preventing harmful uses of nuclear waste as State governments and that the rule not only recognizes Tribal sovereignty, but also their stake in this decision-making process.

Response: The NRC agrees with the commenter that the rule provides adequate protection of the information contained in the advance notifications.

The definition for Indian tribe is based on the term as defined in E.O. 13175. The definition of Tribal official describes the highest ranking individual that represents Tribal leadership, such as the Chief, President, or Tribal Council leadership.

Current paragraph (a) is renumbered as paragraph (a)(1) and revised to reflect shipments within or across the State boundary instead of through or across. This change is made for consistency of rule language. Paragraph (a)(2) is added to require licensees to provide advance notification to Tribal officials or their designee of the shipment of licensed material within or across the boundary of the Tribe's reservation.

Paragraph (c) is revised to require notifications to be made to the office of each appropriate Tribal official or his or her designee. Paragraph (c) is also revised to indicate how the list of Tribal officials will be made available.

Paragraph (d) is revised to include arrival at Tribal reservation boundaries.

Paragraph (e) is revised to require that revision notices be provided to Tribal officials or their designee if schedule information previously provided will not be met.

Paragraph (f) is revised to require that cancellation notices be provided to each Tribal official or his or her designee that had previously been notified of an advance shipment.

The definition for Indian tribe is based on the terms as defined in E.O. 13175. The definition for Tribal official is added to describe the highest ranking individual that represents Tribal leadership, such as the Chief, President, or Tribal Council leadership.

Paragraph (a)(2) is revised to include Tribal law enforcement agencies in the list of agencies whose information protection procedures are presumed to meet the general performance requirements for the protection of SGI.

Paragraph (f) is revised to require that advance notification of irradiated fuel shipments be provided to participating Tribes if a shipment crosses Tribal reservation boundaries.

Paragraph (g) is revised to add Tribal officials and Tribal employees to the list of individuals that must protect schedule information against unauthorized disclosure as specified in §§ 73.21 and 73.22.

New paragraph (l) is added to include Tribal official, Tribal official's designee, and Tribal law enforcement personnel to the categories of individuals that are relieved from the requirement for fingerprinting, identification and criminal records checks, and other elements of background checks.

For the purposes of Sections 223 and 234 of the AEA, the Commission is amending 10 CFR Parts 71 and 73 under one or more of Sections 161b, 161i, or 161o of the AEA. Violations of the rule could result in civil enforcement action, including civil monetary penalties, and Federal criminal prosecution.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register (62 FR 46517; September 3, 1997), this final rule is a matter of compatibility between the NRC and the Agreement States, thereby providing consistency among the Agreement States and the NRC requirements. The NRC staff analyzed the final rule in accordance with the procedure established within Part III, “Categorization Process for NRC Program Elements,” of Handbook 5.9 to Management Directive 5.9, “Adequacy and Compatibility of Agreement State Programs” (a copy of which may be viewed at http://www.nrc.gov/reading-rm/doc-collections/management-directives/ ).

The NRC program elements (including regulations) are placed into four compatibility categories (see the Compatibility Table in this section). In addition, the NRC program elements can also be identified as having particular health and safety significance or as being reserved solely to the NRC. Compatibility Category A are those program elements that are basic radiation protection standards and scientific terms and definitions that are necessary to understand radiation protection concepts. An Agreement State should adopt Category A program elements in an essentially identical manner to provide uniformity in the regulation of agreement material on a nationwide basis. Compatibility Category B are those program elements that apply to activities that have direct and significant effects in multiple jurisdictions. An Agreement State should adopt Category B program elements in an essentially identical manner. Compatibility Category C are those program elements that do not meet the criteria of Category A or B, but the essential objectives of which an Agreement State should adopt to avoid conflict, duplication, gaps, or other conditions that would jeopardize an orderly pattern in the regulation of agreement material on a nationwide basis. An Agreement State should adopt the essential objectives of the Category C program elements. Compatibility Category D are those program elements that do not meet any of the criteria of Category A, B, or C, and, thus, do not need to be adopted by Agreement States for purposes of compatibility.

Health and Safety (H&S) are program elements that are not required for compatibility but are identified as having a particular health and safety role (i.e., adequacy) in the regulation of agreement material within the State. Although not required for compatibility, the State should adopt program elements in the H&S category based on those of the NRC that embody the essential objectives of the NRC program elements because of particular health and safety considerations.

Compatibility Category NRC are those program elements that address areas of regulation that cannot be relinquished to Agreement States under the AEA, or provisions of 10 CFR. These program elements are not adopted by Agreement States. The following table lists the parts and sections that are being revised and their corresponding compatibility categorization under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs.”

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies, unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this final rule, the NRC is requiring that advance notification be provided to participating Tribal governments for shipments of irradiated reactor fuel and other nuclear wastes listed in § 71.97 that pass within or across Tribal reservations. This action does not constitute the establishment of a standard that establishes generally applicable requirements.

The NRC has determined that this final rule is the type of action described in categorical exclusion 10 CFR 51.22(c)(3). Therefore neither an environmental impact statement nor an environmental assessment has been prepared for this final rule.

This final rule contains new or amended information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq .). These requirements were approved by the Office of Management and Budget (OMB), approval numbers 3150-0008 and 3150-0002.

The burden to the public for these information collections is estimated to average 0.422 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collection. Send comments on any aspect of these information collections, including suggestions for reducing the burden, to the Information Services Branch (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail to INFOCOLLECTS.RESOURCE@NRC.GOV; and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-10202, (3150-0151), Office of Management and Budget, Washington, DC 20503. You may also email comments to Chad_S_Whiteman@omb.eop.gov or comment by telephone at 202-395-4718.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

The Commission has prepared a regulatory analysis on this regulation. The analysis examines the costs and benefits of the alternatives considered by the Commission. The analysis is available for inspection in the NRC's PDR, One White Flint North, 11555 Rockville Pike, Room O-1F21, Rockville, MD 20852 and can be found at http://www.regulations.gov by searching on Docket ID NRC-1999-0005.

Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Commission certifies that this rule would not, if promulgated, have a significant economic impact on a substantial number of small entities. The amendments will apply to reactor licensees and a few licensees who possess large sources of byproduct materials. The majority, if not all, of these licensees are not “small entities” under either the Regulatory Flexibility Act or the NRC's size standards (10 CFR 2.810).

The NRC has determined that the backfit rule, which is found in the regulations at 10 CFR 50.109, 70.76, 72.62, 76.76, and in 10 CFR Part 52, does not apply to this final rule because this amendment would not involve any provisions that would impose backfits as defined in 10 CFR Chapter I. Therefore, a backfit analysis is not required.

In accordance with the Congressional Review Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs of OMB.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553; the NRC is adopting the following amendments to 10 CFR parts 71 and 73.

On May 14, 2012, we issued Emergency AD 2012-10-52, which requires removing HET turbochargers, P/Ns 406610-0005 and 406610-9005, before further flight. This action was prompted by a report of an HET turbocharger causing an engine in-flight power rollback. Upon investigation, the turbocharger was found to have incorrectly located oil passages in the center housing, causing insufficient oil flow to the bearings. This condition, if not corrected, could result in turbocharger bearing seizure, failure of the turbocharger turbine shaft or wheel, and damage to the airplane.

We reviewed Hartzell Engine Technologies Alert Service Bulletin (ASB) No. 047, dated May 8, 2012. The ASB indentifies the part numbers and serial numbers of affected turbochargers and describes procedures for removing them from service.

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other turbochargers of the same design. We are evaluating whether the affected population needs to expand to include supplemental type certificate and parts manufacturer approval installations and may take further action.

This AD requires removing the affected turbochargers from service before further flight.

In the previously sent emergency AD, applicability paragraph (c)(2) inadvertently stated “Turbochargers with P/N 406610-0005 or P/N 406610-9005 overhauled or repaired on or later than January 1, 2012, with the same turbocharger center housing P/N and date code H-0112.” That paragraph in this AD is clarified to state “Turbochargers with P/N 406610-0005 or P/N 406610-9005 overhauled or repaired on or later than January 1, 2012, with turbocharger center housing P/N 409836-0005 and date code H-0112.” Applicability paragraph (c)(3) of the previously sent emergency AD, referenced this same turbocharger center housing P/N, which also needs to be referenced in paragraph (c)(2).

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because the affected turbochargers need to be removed from service before further flight. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2012-0565 and Directorate Identifier 2012-NE-16-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

We estimate that this AD affects 80 airplanes of U.S. registry with affected turbochargers installed. We also estimate that it will take about 4 work-hours to remove a turbocharger from service. The average labor rate is $85 per work-hour. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $27,200.

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

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

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

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

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

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

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

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

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

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class D and Class E airspace at Leesburg, FL. Leesburg Regional Airport has been renamed Leesburg International Airport to be in concert with the FAAs aeronautical database. Accordingly, since this is an administrative change, and does not affect the boundaries, altitudes, or operating requirements of the airspace, notice and public procedures under 5 U.S.C. 553(b) are unnecessary.

The Class D airspace, Class E surface airspace, and Class E airspace extending upward from 700 feet or more above the surface of the earth designations are published in Paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.9V, dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

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

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A. Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace for the Leesburg, FL, Class D and E airspace area.

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

On April 10, 2012, the FAA published in the Federal Register a notice of proposed rulemaking to amend Class E airspace in the Tallahassee, FL area (77 FR 21508). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E airspace extending upward from 700 feet above the surface in the Tallahassee, FL area. Tallahassee Commercial Airport has been abandoned and controlled airspace serving the airport removed. Airspace reconfiguration is necessary for the continued safety and management of IFR operations within the Tallahassee, FL, airspace area.

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

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace in the Tallahassee, FL area.

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

On March 22, 2012, the FAA published in the Federal Register a notice of proposed rulemaking to amend Class E airspace at Orlando, FL (77 FR 16783). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found that the geographic coordinates for the 3 airports under this designation needed to be adjusted. This action makes that adjustment. Class E airspace designations are published in paragraphs 6005 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E surface area airspace and Class E airspace extending upward from 700 feet above the surface at Orlando, FL, to provide the controlled airspace required to accommodate the new Area Navigation Global Positioning System, Standard Instrument Approach Procedures developed for Orland Executive Airport. This action is necessary for the safety and management of IFR operations at the airport. This action also adjusts the geographic coordinates of Orlando Executive Airport, Orlando International Airport, and Kissimmee Municipal Airport to be in concert with the FAAs aeronautical database.

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

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Orlando Executive Airport, Orlando, FL.

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

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

After a recent review of aeronautical data, the National Flight Data Center (NFDC) identified seventeen compulsory reporting points published in FAA Order 7400.9V, Airspace Designations and Reporting Points, that did not match the geographic position information contained in the FAA's aeronautical database for the reporting points. When these compulsory reporting points were updated in the aeronautical database, the corresponding part 71 amendment actions were not also accomplished, in error. The reporting points include fourteen Domestic reporting points, one Alaskan low altitude reporting point, and two Hawaiian reporting points. To overcome any confusion or flight safety issues associated with conflicting compulsory reporting point information published, the FAA is amending the seventeen part 71 reporting points identified by NFDC. Accordingly, since this is an administrative correction to update compulsory reporting point information currently contained in the FAA's aeronautical database, notice and public procedures under Title 5 U.S.C. 553(b) are unnecessary.

The FAA amends Title 14 Code of Federal Regulations (14 CFR) part 71 by amending the geographic position information for fourteen Domestic reporting points, one Alaskan low altitude reporting point, and two Hawaiian reporting points. Specifically, the FAA amends the ALASK, BOGGY, CROAK, DOLPH, HEMLO, HERIN, HOBEE, IDAHO, SEDAR, TITON, TROUT, UTAHS, VERMO, and VIPER Domestic reporting points; the CORVA Alaskan low altitude reporting point; and the BATES and FISHE Hawaiian reporting points in part 71.

Domestic Low Altitude Reporting Points, Other Domestic Reporting Points designated at all altitudes, Alaskan Low Altitude Reporting Points, and Hawaiian Reporting Points are listed in paragraph 7001, 7003, 7004, and 7006, respectively of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends existing Domestic, Alaskan, and Hawaiian Reporting Points contained in the NAS.

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

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

In a notice published in the Federal Register of April 11, 2007 (72 FR 18263), FDA announced that a food additive petition (FAP 7M4768) had been filed by Durand-Wayland, Inc., c/o Hyman, Phelps & McNamara, P.C., 700 13th St. NW., suite 1200, Washington, DC 20005-5929. The petition proposed that the food additive regulations in part 179 (21 CFR part 179) be amended to provide for the safe use of a carbon dioxide laser for etching information on food, excluding meat and poultry. The intended technical effect of the carbon dioxide laser is to etch information, such as the price look-up code printed on an adhesive label placed on the surface of individual, fresh produce items sold at retail, directly onto the surface of food. The carbon dioxide laser therefore obviates the need for an adhesive label.

In a letter dated April 27, 2007, Hyman, Phelps & McNamara, P.C., informed FDA that Sunkist Growers, Inc., 14130 Riverside Dr., Sherman Oaks, CA 91423-2313, had joined Durand-Wayland, Inc., as co-petitioner of FAP 7M4768. The letter explained that Hyman, Phelps & McNamara would represent both petitioners with regard to FAP 7M4768.

Subsequent to the filing of the petition, the petitioners amended the petition by requesting a response to the proposed use of the carbon dioxide laser for etching information on the skin of fresh, intact citrus fruit not intended for commercial juice production, while the other requests in the petition remained under review. The petitioners submitted a letter dated September 1, 2011, requesting withdrawal of all remaining uses of the petition other than to etch information on the skin of fresh, intact citrus fruit not intended for commercial juice production. On December 29, 2011, the petitioners communicated to FDA that, generally, citrus fruit intended solely for commercial juice production would not be laser etched, and that laser-etched citrus fruit would generally be intended for sale in the fresh market. However, certain circumstances (e.g., a cancelled order, expired shelf-life) could arise that would preclude laser-etched citrus fruit from being sold into the fresh market. In such circumstances, laser-etched citrus fruit could be sold for commercial juice production. To allow for this possibility, the petitioners requested that the proposed use not be limited to fruit not intended for nor used in commercial juice production. The petitioners assert that this use should be allowed because they contend there is no material difference between etched and non-etched citrus fruit. This final rule is a complete response to the petition.

A source of radiation used to treat food meets the definition of “food additive” under section 201(s) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 321(s)). While a source of radiation such as a carbon dioxide laser is not added to the food literally, the source is used to treat food and can affect the characteristics of the food.

Under section 409(c)(3)(A) of the FD&C Act (21 U.S.C. 348(c)(3)(A)), a food additive cannot be approved for a particular use unless a fair evaluation of the data available to FDA establishes that the additive is “safe” for that use. FDA's food additive regulations in 21 CFR 170.3(i) define “safe” as “a reasonable certainty in the minds of competent scientists that the substance is not harmful under the intended conditions of use.“

To fairly evaluate the safety of the carbon dioxide laser used to etch information on the skin of fresh, intact citrus fruit, the Agency must identify the various effects that may result from etching the fruit and assess whether any of these effects pose a public health concern. In doing so, FDA has determined that the two primary areas of possible public health concern are the potential chemical effects and the potential microbiological risk from etching the food. Each of these areas is discussed in detail within this document.

The low energy carbon dioxide laser that is the subject of this petition emits an infrared pulsed light with a wavelength of 10.6 micrometers (μm). The infrared energy produced by the carbon dioxide laser is non-ionizing and falls within the infrared energy spectrum that is commonly used for food processing, such as cooking, toasting, and grilling. The carbon dioxide laser beam is integrated with a dot-matrix type printer head that etches information by removing the pigmented top layer from the surface of food and revealing a contrasting sublayer. The etching penetrates the food to an average depth of 50 μm, which is about the first two to three epidermal cell layers of the food's surface.

To limit the etching depth (i.e., how far the laser penetrates the fruit) and the total surface area of the fruit that is etched, the petitioners have specified the maximum energy per laser etched area to be 9.8 × 10 −3 joules per square centimeter (J/cm 2 ) and a maximum total surface area of fruit etched by the laser to be 0.122 cm 2 . The petitioners have also proposed a limit on the total energy to which the citrus fruit is exposed from the use of the carbon dioxide laser to be 1.5 × 10 −3 J. Studies that evaluated the chemical and microbiological effects of the carbon dioxide laser on fresh produce, which are discussed in section III.B and III.C of this document, were consistent with these limits. To ensure that the use of the carbon dioxide laser for etching information on citrus fruit is safe, FDA is specifying these limits as conditions of safe use in the resulting regulation.

One of the issues considered by FDA in evaluating the safety of a carbon dioxide laser used to etch information on the skin of fresh, intact citrus fruit is the potential formation of chemical products in the fruit generated by the laser etching process. To determine whether the use of a food additive is safe, FDA typically considers the chemical identity and amount of the additive that will be ingested compared to what is known regarding its toxicity. In the case of substances added directly to food, the Agency estimates the amount of the additive that will be ingested from the proposed use levels of the additive in particular foods and the consumption patterns of those foods. Information about the chemical structure of an additive, an assessment of the likely consumption of the additive, and information regarding the toxicity of the additive, forms the basis for evaluating its safety. Similarly, for the petitioned use of the carbon dioxide laser for etching the skin of fresh, intact citrus fruit, the Agency considered the potential exposure to new chemical substances that may be generated in the laser-etched fruit in evaluating its toxicological safety.

To demonstrate the safety of the laser etching process, the petitioners provided a study that compared the chemical effects in tomatoes, potatoes, and apples exposed to the carbon dioxide laser etching system to those cooked with infrared heat. The study included chemical analyses that showed that use of the carbon dioxide laser to etch information on foods does not generate any new chemical substances that are not also typically generated by conventional cooking. Although this study was not conducted specifically on citrus fruit, the results are relevant for evaluating the potential chemical effects in fruits and vegetables exposed to laser etching in general, and therefore, support a determination that the proposed use of a laser to etch the skin of fresh, intact citrus fruit is safe.

Furthermore, the dietary exposure to any substances generated in the citrus fruit by the laser etching process is expected to be negligible due to the insignificant amount of substances formed, the very small portion of the surface area of the citrus fruit that is etched (0.122 cm 2 ), and the fact that the skin of citrus fruit is normally not consumed (Refs. 1 and 2). Based on this information, FDA concludes that any chemical effects generated by the laser etching process leading to the formation of products in the fruit are of no toxicological concern (Ref. 3).

The petitioners submitted data from a controlled study that evaluated whether the petitioned use of the carbon dioxide laser for etching information on the skin of fresh, intact citrus fruit increased the microbiological risk from changes to the surface of laser-etched fruit compared to fruit that had not been laser etched. The study assessed the ability of Salmonella bacteria to infiltrate, survive, or grow on the surface of fresh Valencia oranges in the area that was etched by the carbon dioxide laser under the proposed conditions of use. Salmonella bacteria were inoculated on the surface of oranges under typical conditions of commercial storage of fresh oranges. The study utilized Salmonella because it is a human pathogen commonly associated with fresh produce contamination. Valencia oranges were used in the study because they are a fresh citrus fruit and, compared to other types of citrus fruit, have a higher hydrogen-ion concentration (pH) that is more advantageous for Salmonella growth.

According to the study's results, the recovery of viable Salmonella bacteria from the oranges after etching by the carbon dioxide laser and subsequent storage for 29 days was comparable to the recovery of Salmonella from control oranges that were not etched by the carbon dioxide laser. The amount of viable Salmonella bacteria decreased with storage time and followed a similar pattern of decline over the duration of storage under all treatment conditions. The study also evaluated the presence of viable Salmonella in the juice portion of inoculated and etched oranges. Salmonella was not detected in the juice portion of any sound, decay-free oranges that had been etched by the laser.

FDA evaluated the results of the study and concluded that Salmonella bacteria present on orange surfaces prior to etching by the carbon dioxide laser, and that contaminate orange surfaces after laser etching, do not infiltrate, survive, or grow during subsequent storage to a level that presents a potential public health hazard significantly greater than the survival or growth of Salmonella bacteria on oranges that are not etched by the carbon dioxide laser (Ref. 4).

As stated earlier, on December 29, 2011, the petitioners requested that the proposed use not be limited to citrus fruit not intended for nor used in commercial juice production because certain circumstances, such as a cancelled order or expired shelf-life, may arise that would preclude citrus fruit that is already laser etched from being sold in the fresh market, but such fruit could still be sold for commercial juice production. In these circumstances, the preferred alternative would be to use the laser-etched citrus fruit for commercial juice production. FDA concludes that no additional safety data or analysis is necessary because the evidence submitted by the petitioners has established that there is no material difference between etched and non-etched citrus fruit. Specifically, the Salmonella study results provided by the petitioners demonstrated the microbiological similarities between the untreated and laser-etched oranges, and the results from the same study showed no detection of Salmonella in the juice portion of laser-etched oranges. In addition, juice processors are required to comply with the Hazard Analysis and Critical Control Point regulation for juice (part 120 (21 CFR part 120)) (the juice HACCP regulation). Specifically, § 120.24(a) (21 CFR 120.24(a)) requires juice processors to include in their HACCP plans control measures that will consistently produce, at a minimum, a 5-log reduction in the pertinent microorganism, which is the most resistant microorganism of public health significance that is likely to occur in the juice. Juice processors must achieve the 5-log reduction through treatments applied directly to the juice, except that citrus juice processors may use treatments applied to the surface of the fruit, provided that the 5-log reduction process begins after culling and cleaning as defined in § 120.3(a) and (f), and the reduction is accomplished within a single production facility (§ 120.24(b)). FDA concludes that laser-etched citrus fruit, which has been otherwise cleaned and culled in accordance with the requirements of part 120, can be eligible to be used to make citrus juice where treatments applied only to the surface of the fruits are used to achieve the 5-log pathogen reduction control measure. In addition, § 120.11(b) requires the juice processor to validate that the HACCP plan, including any processes used to achieve the 5-log pathogen reduction requirements of § 120.24, is adequate to control food hazards that are reasonably likely to occur. If validation reveals that the HACCP plan is no longer adequate to achieve the 5-log pathogen reduction and otherwise meet the requirements of part 120, the juice processor must modify the HACCP plan immediately. Based on the data submitted by the petitioners demonstrating that there is no material difference between etched and non-etched citrus fruit, and the additional controls for the growth of pertinent microorganisms provided by the juice HACCP regulation, FDA has no safety concerns regarding the possible use of laser-etched citrus fruit for commercial juice production, and this use is not excluded from the scope of the final rule.

Based on the data and studies submitted in the petition and other relevant information in the Agency's files, FDA concludes that the proposed use of a carbon dioxide laser for etching information on the surface of fresh, intact citrus fruit is safe under the conditions proposed in this petition. Therefore, the food additive regulations should be amended as set forth in this document.

In accordance with § 171.1(h) (21 CFR 171.1(h)), the petition and the documents that FDA considered and relied upon in reaching its decision to approve the petition are available for inspection at the Center for Food Safety and Applied Nutrition by appointment with the information contact person (see FOR FURTHER INFORMATION CONTACT ). As provided in § 171.1(h), the Agency will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.

The Agency has previously considered the environmental effects of this rule as announced in the notice of filing for FAP 7M4768 (72 FR 18263). No new information or comments have been received that would affect the Agency's previous determination that there is no significant impact on the human environment and that an environmental impact statement is not required.

This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

Any person who will be adversely affected by this regulation may file with the Division of Dockets Management (see ADDRESSES ) either electronic or written objections by (see DATES ). Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provisions of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection. It is only necessary to send one set of documents. Identify documents with the docket number found in brackets in the heading of this document. Any objections received in response to the regulation may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

FDA's review of this petition was limited to section 409 of the FD&C Act. This final rule is not a statement regarding compliance with other sections of the FD&C Act. For example, the Food and Drug Administration Amendments Act of 2007, which was signed into law on September 27, 2007, amended the FD&C Act to, among other things, add section 301(ll) of the FD&C Act (21 U.S.C. 331(ll)). Section 301(ll) of the FD&C Act prohibits the introduction or delivery for introduction into interstate commerce of any food that contains a drug approved under section 505 of the FD&C Act (21 U.S.C. 355), a biological product licensed under section 351 of the Public Health Service Act (42 U.S.C. 262), or a drug or biological product for which substantial clinical investigations have been instituted and their existence has been made public, unless one of the exceptions in section 301(ll)(1) to (ll)(4) of the FD&C Act applies. In its review of this petition, FDA did not consider whether section 301(ll) of the FD&C Act or any of its exemptions apply to the laser-etching source. Accordingly, this final rule should not be construed to be a statement that a food that has been laser etched, if introduced or delivered for introduction into interstate commerce, would not violate section 301(ll) of the FD&C Act. Furthermore, this language is included in all food additive final rules and therefore should not be construed to be a statement of the likelihood that section 301(ll) of the FD&C Act applies.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 179 is amended as follows:

The regulatory history for this action includes both a Notice of proposed rulemaking and Temporary final rule published in the Federal Register on May 24, 2011 and July 7, 2011 respectively. On April 3, 2012, we published a notice of proposed rulemaking (NPRM) entitled “Special local regulations for marine events, Swim Event, Lake Gaston; Littleton, NC” in the Federal Register (77 FR 19954). We received no comments on the proposed rule. No public meeting was requested, and none was held.

On August 11, 2012 from 7:30 a.m. to Noon, the Organization to Support the Arts, Infrastructure, and Learning on Lake Gaston, also known as O'SAIL, will sponsor “The Crossing” on the waters of Lake Gaston, adjacent to Littleton, North Carolina. The swim event will consist of approximately 350 swimmers entering Lake Gaston at the Morning Star Marina on the south bank of Lake Gaston, west of the Eaton Ferry Bridge, and swimming north along the western side of Eaton Ferry Bridge to the Waterview Restaurant. A fleet of spectator vessels is expected to gather near the event site to view the competition. To provide for the safety of participants, spectators and other transiting vessels, the Coast Guard will temporarily restrict vessel traffic in the event area during this event.

In an effort to enhance safety of event participants the channel in the vicinity of Eaton Ferry Bridge will remain closed during the event on August 11, 2012 from 7:30 a.m. to Noon. The Coast Guard will temporarily restrict access to this section of Lake Gaston during the event.

The Coast Guard did not receive comments in response to the notice of proposed rulemaking (NPRM) published in the Federal Register . Accordingly, the Coast Guard is establishing special local regulations on the specified navigable waters listed in this regulation.

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

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

Although this regulation will restrict access to the area, the effect of this rule will not be significant because the regulated area will be in effect for a limited time, from 7:30 a.m. to 12 p.m. (Noon), on August 11, 2012. The Coast Guard will provide advance notification via maritime advisories so mariners can adjust their plans accordingly. The regulated area will apply only to the section of Lake Gaston in the immediate vicinity of Eaton Ferry Bridge. Coast Guard vessels enforcing this regulated area can be contacted on marine band radio VHF-FM channel 16 (156.8 MHz).

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The Coast Guard received no comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of recreational vessels intending to transit the specified portion of Lake Gaston from 7:30 a.m. to Noon on August 11, 2012.

This rule will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule will only be in effect for four and one-half hours from 7:30 a.m. to Noon. The regulated area applies only to the section of Lake Gaston in the vicinity of Eaton Ferry Bridge. Vessel traffic may be allowed to pass through the regulated area with the permission of the Coast Guard Patrol Commander. In the case where the Patrol Commander authorizes passage through the regulated area, vessels shall proceed at the minimum speed necessary to maintain a safe course that minimizes wake near the swim course. The Patrol Commander will allow non-participating vessels to transit the event area once all swimmers are safely clear of navigation channels and vessel traffic areas. Before the enforcement period, we will issue maritime advisories so mariners can adjust their plans accordingly.

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 rule. 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 the person listed in the FOR FURTHER INFORMATION CONTACT , above.

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

This rule will not call for a 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 Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INTFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

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

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

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

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

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves implementation of regulations within 33 CFR part 100 that apply to organized marine events on the navigable waters of the United States that may have potential for negative impact on the safety or other interest of waterway users and shore side activities in the event area. This special local regulation is necessary to provide for the safety of the general public and event participants from potential hazards associated with movement of vessels near the event area. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule. This rule is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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

On February 2, 2011, VA published a proposed rule (76 FR 5733) to revise 38 CFR 3.810 to clarify the circumstances under which a veteran may be entitled to more than one clothing allowance. Proposed paragraph (a)(2)(ii) explained that a veteran who uses more than one prosthetic or orthopedic appliance or medication would be eligible for a clothing allowance for each such appliance or medication if each appliance or medication “[a]ffects a distinct article of clothing or outergarment.”

On November 16, 2011, VA published the final rule (76 FR 70883). In the final rule, VA stated that it was revising proposed paragraph (a)(2)(ii) in order to “clarify that the references to garments or clothing in this regulation are to types of garments, such as shirts, rather than to individual garments, such as a specific shirt” and to make clear that “more than one clothing allowance is payable when more than one type of article of clothing or outergarment is affected.” The final rule revised paragraph (a)(2)(ii) to state that a veteran who uses more than one appliance or medication would be eligible for a clothing allowance for each such appliance or medication if each appliance or medication “[a]ffects more than one type of article of clothing or outergarment.”

VA has determined that the language of the final rule could be construed to mean that each individual appliance or medication used by a veteran must affect more than one type of article of clothing or outergarment in order to qualify for a clothing allowance. As explained in the final-rule notice, however, VA did not intend to impose such a requirement, but intended only to clarify that each appliance or medication must affect a distinct type of article of clothing or outergarment, such as shirts, in order to qualify for a clothing allowance. Requiring each appliance or medication to affect more than one type of article of clothing or outergarment would impose an unintended restriction on eligibility for the clothing allowance and would create significant inconsistencies in VA's clothing-allowance regulation. To correct this inadvertent error, VA is amending 38 CFR 3.810(a)(2)(ii) by replacing the words “more than one type” with the words “a distinct type”. This change will make clear that an appliance or medication only needs to affect a distinct type of clothing or outergarment in order to qualify for a clothing allowance. This change does not alter the intended meaning of the regulation as explained in the proposed rule and the final rule notice, but would eliminate the potential for confusion or misinterpretation created by the ambiguous language included in the final rule.

Pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b), VA has determined that notice and prior opportunity for comment on this correcting amendment are unnecessary and contrary to public interest. As stated above, this correction is needed to accurately reflect the intent of the final rule and codified regulation and ensure that the inadvertent error does not adversely affect claimants. We previously provided public notice in the Federal Register and considered public comments on the proposed rule. See 76 FR 5733 and 76 FR 70883. VA's intent and interpretation of § 3.810(a)(2)(ii) has not changed. This correction merely ensures clarity of VA's intent and interpretation regarding the eligibility for a clothing allowance. For these reasons, VA has also determined pursuant to 5 U.S.C. 553(d) that there is good cause to make this change effective on the date of its publication.

For the reasons set out in the preamble, 38 CFR part 3 is corrected by making the following correcting amendment:

This supplementary information section is arranged as follows:

Indiana submitted a plan to address regional haze on January 14, 2011, and supplemented it on March 10, 2011. This plan was intended to address the requirements in CAA section 169A, and EPA's Regional Haze Rule as codified at 40 CFR 51.308. This rule was promulgated on July 1, 1999 (64 FR 35713). Further significant provisions were promulgated on July 6, 2005, providing further guidance on provisions related to BART.

EPA proposed a limited approval of Indiana's submittal on January 26, 2012 (77 FR 3975). That action described the nature of the regional haze problem and the statutory and regulatory background for EPA's review of Indiana's regional haze plan. The proposal provided a lengthy delineation of the requirements that Indiana intended to meet, including requirements for mandating BART, consultation with other states in establishing goals representing reasonable further progress in mitigating anthropogenic visibility impairment, and adoption of limitations as necessary to implement a long term strategy (LTS) for reducing visibility impairment. Indiana's control strategy addresses the regional haze rule for the first implementation period that ends 2018.

Of particular interest were EPA's findings regarding BART. Using modeling performed by the Lake Michigan Air Directors Consortium (LADCO), Indiana identified one non-electric generating unit (non-EGU) source, Alcoa in Warrick County, as having sufficient impact to warrant being subject to a requirement representing BART.

Indiana developed source-specific limits to mandate BART for Alcoa to comply with EPA's regional haze rule. These limits are adopted into regulation 326 of the Indiana Administrative Code (IAC), Article 26, Rule 2, of which include sulfur dioxide (SO 2 ), nitrogen oxide (NO X ), and particulate matter (PM) emission limits applicable to the Alcoa facility in Warrick County. In the proposed rulemaking, EPA proposed to conclude that the emission reductions from 326 IAC 26-2 would suffice to address the BART requirement for non-EGUs.

The publication of EPA's proposed rule on January 26, 2012 (77 FR 3975) initiated a 30-day public comment period that ended on February 27, 2012. During the public comment period on the proposed rulemaking on the Indiana regional haze plan we received comments from the United States Forest Service (FS) and the United States National Park Service (NPS). These comments and EPA's responses are addressed in detail below.

Comment #1: FS continues to disagree with the alternative BART scenario for the Alcoa facility. FS believes that emission reductions that could be used for reasonable progress purposes should not be creditable for alternative measures/BART purposes. FS further comments that requiring emission controls for Boilers 2 and 3, which are subject to BART, would be more appropriate for reasonable progress purposes instead of taking credit for emission reductions from Boiler 1, which is not subject to BART.

Response #1: As stated in 40 CFR 51.308(e)(2)(iv), the pertinent requirement is that the emission reductions of the alternative measure be “surplus to reductions resulting from measures adopted to meet requirements of the CAA as of the baseline date of the SIP.” This point is explained in the preamble of the BART guidelines. 70 FR 39143. Therefore, EPA finds the reductions at Boiler 1 to be a creditable part of Indiana's alternative BART limits in lieu of full BART control of boilers 2 and 3 and the potlines.

The BART guidelines state that “(2) The EPA does not believe that anything in the CAA or relevant case law prohibits a State from considering emissions reductions required to meet other CAA requirements when determining whether source by source BART controls are necessary to make reasonable progress.” This rule further states, “(3) * * * in lieu of BART programs be based on emissions reductions `surplus to reductions resulting from measures adopted to meet requirements as of the baseline date of the SIP.' The baseline date for regional haze SIPs is 2002 * * *” 70 FR 39143.

Comment #2: For the Alcoa facility, FS comments that there is no technical reason that the controls for Boilers 2 and 3 cannot achieve 92 percent or greater efficiency with wet Flue Gas Desulfurization (FGD) to meet BART.

Response #2: EPA agrees with FS that wet FGD emission control technology commonly achieves a 92 percent or higher emission reduction. Alcoa used the 92 percent reduction level for the BART analysis for Boilers 2 and 3. However, Indiana is applying flexibility authorized in the regional haze rule to require less control of Boilers 2 and 3 than the control equipment can achieve, requiring 90 percent control of these Boilers, while requiring additional, compensating control of Boiler 1, which still results in an overall improvement in visibility.

Comment #3: FS comments that the increase in the sulfur content of coke for the BART-subject potlines (#2-#6), actually results in increased SO 2 emissions with no control technology or alternative to offset the increase. The FS accepts that low sulfur coke may not be available after 2013, but asserts that if increased emissions from the facility occur, then Alcoa should look for an alternative to either control emissions from the potlines or offset those emissions if control technologies are too expensive.

Response #3: The FS comment appears to reflect a misunderstanding of the situation. Indiana's plan describes a BART determination that reflects an increase in sulfur content of coke used in the potlines, but Indiana's submittal does not actually increase the SO 2 emission limits that apply to these units. EPA did not agree with Indiana's rationale for determining BART to reflect an increase in potline emissions, but EPA's proposed, and now final, approval of Indiana's BART determination for the potlines is based on the fact that the actual SO 2 limits in Indiana's plan do not allow the SO 2 emissions increase that the FS asserts to be allowed by Indiana's plan.

Comment #4: FS comments that “Indiana continues to disagree with the need for a factor analysis of additional NO X control technologies.” FS notes Indiana's comparison of its proposed BART limits against new source performance standards (NSPS) limits, but finds that this comparison does not address BART requirements in lieu of conducting a full analysis of all feasible control technologies.

Response #4: Alcoa in fact did conduct a five factor BART analysis, as required by the Indiana BART rule and the BART guidelines. Alcoa identified low NO X burners (LNB), LNB combined with over-fire air, selective catalytic reduction (SCR) and selective non-catalytic reduction (SNCR) systems as feasible technologies to control NO X from boilers. Alcoa concluded that SCR and SNCR were not cost effective. Indiana reached the same conclusions regarding these controls, and EPA agrees. Indiana set limits that are significantly tighter than the NSPS, and notes the state did not conduct a complete and adequate analysis of BART for the Alcoa facility.

Comment #5: NPS believes that EPA should apply its economic incentive policy to Indiana's regional haze SIP in accordance with policy stated in a letter to Wisconsin regarding Wisconsin's regional haze SIP. NPS provides what it considers to be quotes from EPA's letter that advise Wisconsin not to take credit for various reductions that are or will be required by other regulatory requirements.

Response #5: EPA's letter to Wisconsin does not include the statements that NPS attributes to EPA. EPA finds the reductions that Indiana takes credit for to be fully creditable. The primary applicability of the economic incentive policy to the Wisconsin plan related to the question of whether the baseline emissions of a subsequently shutdown boiler should be included in determining a limit on the combined emissions of multiple boilers. This situation does not apply in Indiana, and so the actual comments in EPA's letter to Wisconsin are not germane to Indiana.

EPA is finalizing the limited approval of Indiana's regional haze plan submitted by IDEM on January 11, 2011, and March 10, 2011, addressing regional haze for the first implementation period. The revisions seek to address CAA and regional haze rule requirements for states to remedy any existing anthropogenic and prevent future impairment of visibility at Class I areas.

Indiana's plan satisfies a number of elements of the regional haze requirements. Most notably, EPA concludes that Indiana has satisfied the requirements for BART in 40 CFR 51.308(e) for non-EGUs and for PM from EGUs. Indiana's plan identifies the Class I areas that the state's emissions affect. Indiana demonstrates that the state has consulted with other states as appropriate in establishing reasonable progress goals and identifying the reductions need in Indiana to meet those goals. For these reasons, and for the SIP strengthening effect of Indiana's plan, EPA is granting limited approval of Indiana's plan.

In conjunction with the above actions, EPA is approving regulation 326 IAC 26-2 for incorporation into the state implementation plan. These limits on Alcoa's emissions of SO 2 , NO X , and PM are state enforceable and, with this SIP approval, are now Federally enforceable. It should be noted that rule 326 IAC 26-2 contains an erroneous citation, citing limits in 326 IAC 7-4-10(a)(4) rather than 326 IAC 7-4-10(a)(3). EPA nevertheless approves the rule for several reasons: (1) The pertinent limits are already an approved part of Indiana's SIP and are therefore already enforceable; (2) the State's intent is clear; and (3) Indiana intends to correct this reference.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 10, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

The public may inspect the rule and state-specific technical support information at the following location:

The following is an outline of the preamble.

The following are abbreviations of terms used in the preamble.

The purpose of this action is to promulgate initial air quality designations for 12 counties in Illinois, Indiana and Wisconsin for the 2008 primary and secondary NAAQS for ozone, in accordance with the requirements of Clean Air Act (CAA) section 107(d). Whenever the EPA establishes a new or revised NAAQS, section 107(d) requires the EPA to designate all areas of the country as to whether the areas are meeting or not meeting the new or revised NAAQS. In an action signed on April 30, 2012, the EPA designated all other areas of the country for the 2008 ozone NAAQS (77 FR 30088; May 21, 2012). At that time, the EPA did not designate 12 counties in Illinois, Indiana and Wisconsin because the EPA was still evaluating them for inclusion in the Chicago-Naperville, IL-IN-WI nonattainment area. The EPA has now completed that evaluation. The EPA is designating eight of the counties and parts of three of the counties as the Chicago-Naperville, IL-IN-WI nonattainment area. The EPA is designating the remaining county and parts of counties as unclassifiable/attainment. The Chicago-Naperville, IL-IN-WI nonattainment area is also being classified by operation of law as a Marginal area according to the severity of its air quality problem. The designation for each of these 12 counties is provided in the tables at the end of this notice (amendments to 40 CFR 81.314, 315, and 350). For areas designated as nonattainment, the tables include the area's classification.

State areas designated as nonattainment are subject to planning and emission reduction requirements as specified in the CAA. Requirements vary according to an area's classification. The EPA will be proposing shortly an implementation rule to assist states in the development of state implementation plans for attaining the ozone standards.

This rule also corrects inadvertent errors in the regulatory text regarding the designation of three areas in the ozone designation rule signed on April 30, 2012. The affected areas are the Kentucky portion of the Cincinnati, OH-KY-IN nonattainment area, the partial Kenton County, KY unclassifiable/attainment area, and Crittenden County, AR.

Ground-level ozone, O 3 , is a gas that is formed by the reaction of volatile organic compounds (VOCs) and oxides of nitrogen (NO X ) in the atmosphere in the presence of sunlight. These precursor emissions are emitted by many types of pollution sources, including power plants and industrial emissions sources, on-road and off-road motor vehicles and engines, and smaller sources, collectively referred to as area sources. Ozone is predominately a summertime air pollutant. However, high ozone concentrations have also been observed in cold months, where a few high elevation areas in the Western U.S. have experienced high levels of local VOC and NO X emissions that have formed ozone when snow is on the ground and temperatures are near or below freezing. Ozone and ozone precursors can be transported to an area from sources in nearby areas or from sources located hundreds of miles away. For purposes of determining ozone nonattainment area boundaries, the CAA requires the EPA to include areas that contribute to nearby violations of the NAAQS.

On March 12, 2008, the EPA revised both the primary and secondary NAAQS for ozone to a level of 0.075 parts per million (ppm) (annual fourth-highest daily maximum 8-hour average concentration, averaged over 3 years) to provide increased protection of public health and the environment. 1 The 2008 ozone NAAQS retain the same general form and averaging time as the 0.08 ppm NAAQS set in 1997, but are set at a more protective level.

Ozone exposure has been associated with increased susceptibility to respiratory infections, medication use by asthmatics, doctor visits, and emergency department visits and hospital admissions for individuals with respiratory disease. Ozone exposure may also contribute to premature death, especially in people with heart and lung disease. The secondary ozone standard was revised to protect against adverse welfare effects including impacts to sensitive vegetation and forested ecosystems.

When the EPA promulgates a new or revised NAAQS, the EPA is required to designate areas as nonattainment, attainment, or unclassifiable, pursuant to section 107(d)(1) of the CAA. The CAA requires the EPA to complete the initial area designation process within 2 years of promulgating the NAAQS. However, if the Administrator has insufficient information to make these designations within that time frame, the EPA has the authority to extend the deadline for designation decisions by up to 1 additional year.

By not later than 1 year after the promulgation of a new or revised NAAQS, each state governor is required to recommend air quality designations, including the appropriate boundaries for areas, to the EPA. The EPA reviews those state recommendations and is authorized to make any modifications the Administrator deems necessary. The statute does not define the term “necessary,” but the EPA interprets this to authorize the Administrator to modify designations that did not meet the statutory requirements or were otherwise inconsistent with the facts or analysis deemed appropriate by the EPA. If the EPA intends to make any modifications to a state's initial recommendation, the EPA is required to notify the state of any such intended modifications to its recommendation not less than 120 days prior to the EPA's promulgation of the final designation. These notifications are commonly known as the “120-day letters.” If the state does not agree with the EPA's intended modification, it then has an opportunity to respond to the EPA to demonstrate why it believes the modification proposed by the EPA is inappropriate. Even if a state fails to provide any recommendation for an area, in whole or in part, the EPA still must promulgate a designation that the Administrator deems appropriate.

Section 107(d)(1)(A)(i) of the CAA defines a nonattainment area as, “any area that does not meet (or that contributes to ambient air quality in a nearby area that does not meet) the national primary or secondary ambient air quality standard for the pollutant.” If an area meets either prong of this definition, then the EPA is obligated to designate the area as “nonattainment.” Section 107(d)(1)(A)(iii) provides that any area that the EPA cannot designate on the basis of available information as meeting or not meeting the standards should be designated as “unclassifiable.” Historically for ozone, the EPA designates the remaining areas that do not meet the definition of a nonattainment area or an unclassifiable area as “unclassifiable/attainment” indicating that the areas either have attaining air quality monitoring data or that air quality information is not available because the areas are not monitored, and the EPA has not determined that the areas contribute to a violation in a nearby area.

The EPA believes that section 107(d) provides the agency with discretion to determine how best to interpret the terms “contributes to” and “nearby” in the definition of a nonattainment area for a new or revised NAAQS, given considerations such as the nature of a specific pollutant, the types of sources that may contribute to violations, the form of the standards for the pollutant, and other relevant information. In particular, the EPA believes that the statute does not require the agency to establish bright line tests or thresholds for what constitutes “contribution” or “nearby” for purposes of designations. 2 Similarly, the EPA believes that the statute permits the EPA to determine the most appropriate application of the term “area” for a particular NAAQS.

Section 301(d) of the CAA authorizes the EPA to approve eligible Indian tribes to implement provisions of the CAA on Indian reservations and other areas within the tribes' jurisdiction. The Tribal Authority Rule (TAR) (40 CFR Part 49), which implements section 301(d) of the CAA, sets forth the criteria and process for tribes to apply to the EPA for eligibility to administer CAA programs. The designations process contained in section 107(d) of the CAA is included among those provisions determined to be appropriate by the EPA for treatment of tribes in the same manner as states. Under the TAR, tribes generally are not subject to the same submission schedules imposed by the CAA on states. As authorized by the TAR, tribes may seek eligibility to submit designation recommendations to the EPA.

As discussed above, in 2008 the EPA revised both the primary and secondary NAAQS for ozone. On December 4, 2008, the EPA issued guidance for states and tribal agencies to use in developing area designation recommendations for the 2008 ozone NAAQS. ( See memorandum from Robert J. Meyers, Principal Deputy Assistant Administrator, to Regional Administrators, Regions I-X, titled, “Area Designations for the 2008 Revised Ozone National Ambient Air Quality Standards.”) The guidance provided the anticipated timeline for designations and identified important factors that the EPA recommended states and tribes consider in making their recommendations. These factors include air quality data, emissions data, traffic and commuting patterns, growth rates and patterns, meteorology, geography/topography, and jurisdictional boundaries. In the guidance, the EPA asked that states and tribes submit their designation recommendations, including appropriate area boundaries, to the EPA by March 12, 2009. Later in the process, the EPA issued two new guidance memoranda related to designating areas of Indian county. 3 (There are no areas of Indian country affected by this action.)

Under the initial schedule, the EPA intended to complete the initial designations for the 2008 ozone NAAQS on a 2-year schedule, by March 12, 2010. On September 16, 2009, the EPA announced that it would initiate a rulemaking to reconsider the 2008 ozone NAAQS for various reasons, including the fact that the 0.075 ppm level fell outside of the range recommended by the Clean Air Scientific Advisory Committee, the independent group of scientists that provides advice to the EPA Administrator on the technical bases for the EPA's NAAQS. The EPA signed the proposed reconsideration on January 6, 2010 (75 FR 2938; January 19, 2010). Because of the significant uncertainty the ozone NAAQS reconsideration created regarding the continued applicability of the 2008 NAAQS, the EPA determined there was insufficient information to designate areas within 2 years of promulgation of the NAAQS. Therefore, the EPA used its authority under CAA section 107(d)(1)(B) to extend the deadline for designating areas by 1 year, until March 12, 2011 (75 FR 2936; January 19, 2010). The EPA has not taken final action on the proposed reconsideration; thus, the current NAAQS for ozone remains at 0.075 ppm, as established in 2008.

After the March 12, 2011, designation deadline passed, WildEarth Guardians and Elizabeth Crowe (WildEarth Guardians) filed a lawsuit seeking to compel the EPA to take action to designate areas for the 2008 ozone NAAQS. WildEarth Guardians and Elizabeth Crowe v. Jackson (D. Ariz. 11-CV-01661). The EPA and WildEarth Guardians settled the case by entering into a consent decree that requires the EPA Administrator to sign a final rule designating areas for the 2008 ozone NAAQS by May 31, 2012.

On September 22, 2011, the EPA issued a memorandum to clarify for state and local agencies the status of the 2008 ozone NAAQS and to outline plans for moving forward to implement them. The EPA indicated that it would proceed with initial area designations for the 2008 NAAQS, and planned to use the recommendations states made in 2009 as updated by the most current, certified air quality data from 2008-2010. While the EPA did not request that states submit updated designation recommendations, the EPA provided the opportunity for states to do so. Several states chose to update their recommendations, and some requested that the EPA base designations for their areas on certified air quality data from 2009-2011, and committed to certify the 2011 data earlier than the May 1 deadline for annual air monitoring certification under 40 CFR 58.15(a)(2) so that the EPA would have sufficient time to consider the data in making decisions on designations and nonattainment area boundaries. The states of Illinois, Indiana, and Wisconsin did not submit updated designation recommendations.

On or about December 9, 2011, the EPA sent letters to Governors and Tribal leaders notifying them of the EPA's preliminary response to their designation recommendations and to inform them of the EPA's approach for completing the designations for the 2008 ozone NAAQS. The EPA requested that states submit any additional information that they wanted the EPA to consider by February 29, 2011, including any certified 2011 air quality monitoring data. Two days prior to those letters, on December 7, 2011, Illinois sent a letter to the EPA submitting the state's 2011 certified air quality monitoring data for consideration in the designation process. The data, when considered with data from the two previous years (2009 and 2010), indicated a violation of the 2008 ozone NAAQS at a monitor in Lake County, Illinois (which is in the Chicago-Naperville-Michigan City, IL-IN-WI consolidated statistical area). Given the timing of Illinois' submission of the certified data, the EPA was not able to consider the information in the December 9, 2011, letters. After reviewing the 2011 air quality data and assessing contributions to nonattainment from nearby areas, the EPA sent letters on January 31, 2012, notifying Illinois, Indiana, and Wisconsin that it intended to designate certain counties (or parts thereof), identified in those letters, as nonattainment for the 2008 ozone NAAQS. On April 30, 2012, the EPA Administrator signed a final rule designating almost all areas in the United States, including Indian country. At that time, the EPA did not designate the Illinois, Indiana, and Wisconsin counties identified in the January 31, 2011, notification letters because the necessary 120-day period had not yet elapsed following the January letters notifying the states that the EPA intended to modify the states' recommendations.

Although not required by section 107(d) of the CAA, the EPA also provided an opportunity for members of the public to comment on the EPA's 120-day response letters to states and tribes. For the notification letters sent on or about December 9, 2011, the EPA announced a 30-day public comment period in the Federal Register on December 20, 2011 (76 FR 78872). The comment period was subsequently extended until February 3, 2012 (77 FR 2677; January 19, 2012). On February 14, 2012 (77 FR 8211), the EPA reopened the public comment period for the limited purpose of inviting comment on the EPA's revised responses to Illinois, Indiana, and Wisconsin. State and tribal recommendations and the EPA's 120-day response letters were posted on EPA's Web site at http://www.epa.gov/ozonedesignations and are available in the docket for the designations action. Comments from the states, tribes and the public, and EPA's responses to significant comments, are also in the docket.

The EPA based the designations in this action on the most recent 3 years of certified air quality monitoring data available at the end of January 2012 when the EPA notified Illinois, Indiana, and Wisconsin of its revised responses to their designation recommendations. Thus, the EPA considered ozone monitoring data for the 2009-2011 period for Illinois and for the 2008-2010 period for Indiana and Wisconsin.

Under 40 CFR 58.16, states are required to report all monitored ozone air quality data and associated quality assurance data within 90 days after the end of each quarterly reporting period, and under 40 CFR 58.15(a)(2) states are required to submit annual summary reports and a data certification letter to the EPA by May 1 for ozone air quality data collected in the previous calendar year. States generally had not completed these requirements for calendar year 2011 ozone air quality data when the EPA notified states of our intended designations on December 9, 2011. For purposes of the designations promulgated on April 30, 2012, several states recommended that the EPA consider monitoring data from 2009-2011 in making final decisions and certified their 2011 data early for this purpose. In the letters to these states, the EPA indicated it would need the certified data by February 29, 2012, in order to have sufficient time to consider it in making final decisions. On December 7, 2011, Illinois sent a letter to the EPA submitting the state's 2011 certified air quality data for consideration in the designations. Although there was not sufficient time for the EPA to consider the 2011 data from Illinois in the December 9, 2011, letters, the EPA subsequently considered the data and sent letters to Illinois, Indiana, and Wisconsin on January 31, 2012, revising the intended designation for 12 counties in the Chicago-Naperville, IL-IN-WI area. Indiana and Wisconsin did not request that the EPA consider their 2011 monitoring data or early certify such data.

In accordance with CAA section 181(a)(1), each area designated as nonattainment for the 2008 ozone NAAQS is classified by operation of law at the same time as the area is designated by the EPA. Under Subpart 2 of part D of Title I of the CAA, state planning and emissions control requirements for ozone are determined, in part, by a nonattainment area's classification. The ozone nonattainment areas are classified based on the severity of their ozone levels (as determined based on the area's “design value,” which represents air quality in the area for the most recent 3 years). 4 The possible classifications are Marginal, Moderate, Serious, Severe, and Extreme. Nonattainment areas with a “lower” classification have ozone levels that are closer to the standard than areas with a “higher” classification. Areas in the lower classification levels have fewer and/or less stringent mandatory air quality planning and control requirements than those in higher classifications. The EPA established the air quality thresholds that define the classification categories in a rule titled, “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: Nonattainment Area Classifications Approach, Attainment Deadlines and Revocation of the 1997 Ozone Standards for Transportation Conformity Purposes” (77 FR 30160; May 21, 2012). Based on those thresholds, the Chicago-Naperville, IL-IN-WI area is classified as a Marginal area.

As discussed in the April 30, 2012, final rule, states may request that an area be reclassified to a higher or lower classification pursuant to section 181(a)(4), within 90 days of promulgation of the designation, if the area would have been classified in another category if the design value in the area were 5 percent greater or 5 percent less than the level on which such classification was based. The Chicago-Naperville, IL-IN-WI nonattainment area is being designated as a Marginal area, which is the lowest classification category. Therefore, the only possible reclassification would be to a higher classification. Marginal areas with an air quality design value of 0.082 ppm or more are eligible to request reclassification to a higher classification under section 181(a)(4). Because the 2009-2011 design value for the Chicago-Naperville, IL-IN-WI nonattainment area is 0.076 ppm, the nonattainment area is not eligible to be reclassified under that provision. However, the EPA notes that under section 181(b)(3), the EPA must grant any state request to reclassify an area into a higher classification.

Information providing the basis for this action is provided in the docket for this rulemaking, Docket ID NO. EPA-HQ-OAR-2008-0476. The applicable EPA guidance memoranda and copies of correspondence regarding this process between the EPA and the states, tribes and other parties are available for review at the EPA Docket Center listed above in the addresses section of this document, and on the EPA's ozone designation Web site at http://www.epa.gov/ozonedesignations. State-specific information is available from the EPA Regional Office.

This rule also corrects inadvertent errors in the regulatory text for two areas in Kentucky and one area in Arkansas in the ozone designation rule signed on April 30, 2012 (77 FR 30088; May 21, 2012). The affected areas are the Cincinnati, OH-KY-IN nonattainment area (specifically related to Boone and Campbell counties), the partial Kenton County, KY unclassifiable/attainment area, and Crittenden County, AR. These corrections are set forth in the regulatory text at the end of this notice.

The Technical Support Document for the Cincinnati, OH-KY-IN nonattainment area, which is part of the record for the April 30, 2012, designations rule, states, “All of the census tracts in Boone, Campbell, and Kenton Counties are included in the nonattainment area for the 2008 8-hour ozone NAAQS, excluding census tracts 706.01 and 706.04 in Boone County, 637.01 and 637.02 in Kenton County, and 520.01 and 520.02 in Campbell County.” In the regulatory text for the Cincinnati, OH-KY-IN nonattainment area, 2000 Census tracts 706.01 and 706.04 in Boone County, KY and 2000 Census tracts 520.01 and 520.02 in Campbell County, KY were inadvertently listed as being part of the nonattainment area. These 2000 Census tracts were also correctly listed in the regulatory text as designated unclassifiable/attainment. The EPA is removing the erroneous duplicative listings under the Cincinnati, OH-KY-IN nonattainment area. For the partial Kenton County unclassifiable/attainment area, this action corrects a typographical error that incorrectly numbered one of the component 2000 Census tracts as 637.04 rather than 637.02.

The Technical Support Document for the Memphis, TN-MS-AR nonattainment area, which is part of the record for the April 30, 2012, designations rule, states, “Based on the assessment of the factors described above, the EPA is designating the following counties as nonattainment for the Memphis, TN-MS-AR area because they are either violating the 2008 ozone NAAQS or contributing to a violation in a nearby area: Crittenden County, Arkansas, and Shelby County, Tennessee in their entireties and the portion of DeSoto County that is included in the Memphis MPO boundary.” In the regulatory text for the April 30, 2012, designations rule, Crittenden County, AR was correctly listed as part of the Memphis, TN-MS-AR nonattainment area. However, the county was also inadvertently listed as an unclassifiable/attainment area. The EPA is correcting that error by removing the duplicative entry for Crittenden County, AR as an unclassifiable/attainment area.

Upon promulgation of a new or revised NAAQS, the CAA requires the EPA to designate areas as attaining or not attaining the NAAQS. The CAA then specifies requirements for areas based on whether such areas are attaining or not attaining the NAAQS. In this final rule, the EPA assigns designations to areas as required.

This action responds to the CAA requirement to promulgate air quality designations after promulgation of a new or revised NAAQS. This type of action is exempt from review under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011).

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). This rule responds to the CAA requirement to promulgate air quality designations after promulgation of a new or revised NAAQS. This requirement is prescribed in the CAA section 107. The present final rule does not establish any new information collection requirements.

This final rule is not subject to the Regulatory Flexibility Act (RFA), which generally requires an agency to prepare a regulatory flexibility analysis for any rule that will have a significant economic impact on a substantial number of small entities. The RFA applies only to rules subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act (APA) or any other statute. This rule is not subject to notice-and-comment requirements as provided under CAA section 107(d)(2)(B).

This action contains no federal mandate 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. It does not create any additional requirements beyond those of the CAA and ozone NAAQS (40 CFR 50.15). The CAA establishes the process whereby states take primary responsibility in developing plans to meet the ozone NAAQS.

This final 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. The CAA establishes the process whereby states take primary responsibility in developing plans to meet the ozone NAAQS. This rule will not modify the relationship of the states and the EPA for purposes of developing programs to implement the ozone NAAQS. Thus, Executive Order 13132 does not apply to this rule.

Subject to the Executive Order 13175 (65 FR 67249, November 9, 2000) the EPA may not issue a regulation that has tribal implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or the EPA consults with tribal officials early in the process of developing the proposed regulation and develops a tribal summary impact statement.

The EPA has concluded that this action does not have tribal implications. The EPA is not designating any areas of Indian country in this final rule.

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

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 NTTAA of 1995, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards (VCS) 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 VCS bodies. The NTTAA directs the EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable VCS.

This action does not involve technical standards. Therefore, the EPA did not consider the use of any VCS.

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 U.S.

The CAA requires that the EPA designate as nonattainment “any area that does not meet (or that contributes to ambient air quality in a nearby area that does not meet) the national primary or secondary ambient air quality standard for the pollutant.” By designating as nonattainment all areas where available information indicates a violation of the ozone NAAQS or a contribution to a nearby violation, this action protects all those residing, working, attending school, or otherwise present in those areas regardless of minority or economic status.

The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the U.S. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the U.S. prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register .This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective July 20, 2012.

Section 307(b)(1) of the CAA indicates which Federal Courts of Appeal have venue for petitions of review of final actions by the EPA. This section provides, in part, that petitions for review must be filed in the Court of Appeals for the District of Columbia Circuit: (i) when the agency action consists of “nationally applicable regulations promulgated, or final actions taken, by the Administrator,” or (ii) when such action is locally or regionally applicable, if “such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.”

This rule designating the final few areas for the 2008 ozone NAAQS is “nationally applicable” within the meaning of section 307(b)(1). This rule, along with a rule signed on April 30, 2012, establishes designations for areas across the U.S. for the 2008 ozone NAAQS. At the core of this rulemaking is the EPA's interpretation of the definition of nonattainment under section 107(d)(1) of the CAA, and its application of that interpretation to areas across the country.

Thus, any petitions for review of final designations must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date final action is published in the Federal Register .

For the reasons set forth in the preamble, 40 CFR part 81, is amended as follows:

States which have received final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must change their programs and ask EPA to authorize their changes. Changes to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change their programs because of changes to EPA's regulations codified in Title 40 of the Code of Federal Regulations (CFR) parts 124, 260 through 268, 270, 273, and 279.

Idaho's hazardous waste management program received final authorization effective on April 9, 1990 (55 FR 11015, March 29, 1990). Subsequently, EPA authorized revisions to the State's program effective June 5, 1992 (57 FR 11580, April 6, 1992), August 10, 1992 (57 FR 24757, June 11, 1992), June 11, 1995 (60 FR 18549, April 12, 1995), January 19, 1999 (63 FR 56086, October 21, 1998), July 1, 2002 (67 FR 44069, July 1, 2002), March 10, 2004 (69 FR 11322, March 10, 2004), July 22, 2005 (70 FR 42273, July 22, 2005), February 26, 2007 (72 FR 8283, February 26, 2007), and December 23, 2008 (73 FR 78647, December 23, 2008).

This final rule addresses a program revision application that Idaho submitted to EPA in October 2011, in accordance with 40 CFR 271.21, seeking authorization of changes to the State program. On February 29, 2012, EPA published a proposed (77 FR 12228) stating the Agency's intent to grant final authorization for revisions to Idaho's hazardous waste management program. The public comment period on this proposed rule ended on March 30, 2012.

EPA received two comments during the public comment period which ended March 30, 2012. One commenter questioned whether Idaho's failure to object to the U.S. Department of Energy (DOE)'s decision concerning replacement capability for the disposal of remote-handled low-level radioactive waste ((LLW) generated at the Idaho National Laboratory (INL) rendered the Idaho hazardous waste program ineligible for RCRA authorization. The commenter was particularly concerned that the DOE based its decision, a Finding of No Significant Impact (FONSI), for the Remote-Handled Low-Level Radioactive Waste Onsite Disposal (RHLLWOD) on an Environmental Assessment (EA) under the National Environmental Policy Act (NEPA) rather than on a more detailed Environmental Impact Statement (EIS). EPA does not agree with the commenter. The RHLLWOD will not be used for hazardous waste or mixed waste. Mixed waste is defined at 42 U.S.C. 1004(41) as waste that contains both hazardous waste and source, special nuclear, or by-product material subject to the Atomic Energy Act of 1954, 42 U.S.C. 2011 et seq. EPA's RCRA regulations at 40 CFR 261.4(a)(4) expressly exclude source, special nuclear or byproduct material as defined by the Atomic Energy Act of 1954 from the definition of solid waste. A waste that is not a solid waste cannot be a hazardous waste subject to Subtitle C regulation under RCRA. Consequently, the RHLLWOD, which only handles source, special nuclear or byproduct material and does not handle solid waste, hazardous waste, or mixed waste, is not subject to RCRA or to the Idaho authorized hazardous waste program.

The second commenter, on behalf of the Shoshone-Bannock Tribes, questioned whether Idaho, in implementing its authorized hazardous waste program, was appropriately regulating phosphate (mineral processing) plants within the state. In response to this commenter's concerns, EPA reviewed its own work in regulating mineral processing facilities and revisited Idaho's implementation of the authorized program under the State Review Framework. The State Review Framework is designed to ensure that EPA conducts oversight of state and EPA direct implementation of compliance and enforcement programs to ensure programs are carried out in a nationally consistent manner.

Regulation of mineral processing wastes is an area in which national consistency has been challenging for EPA given the complexity of the processes and wastes in this sector. EPA began to place emphasis on the sector in the fall of 2000. In November 2000, EPA issued an enforcement alert to the regulated community giving notice that some mineral processing facilities might be failing to properly identify and manage hazardous waste regulated under RCRA. In 2003, EPA proposed the sector as an enforcement priority for fiscal years (FYs) 2005 through 2007, (December 10, 2003, 68 FR 68893).

EPA collaborated extensively with states in the development of a strategic plan establishing mineral processing as a strategic initiative and finalized the national strategy to include mineral processing. Mineral processing was proposed as an enforcement and compliance priority on February 9, 2007, at 72 FR 6239, for FYs 2008 through 2010 (finalized as a priority on October 12, 2007, 72 FR 58084) and on January 4, 2010 (75 FR 146). On February 22, 2010, EPA finalized the proposal as a National Enforcement Initiative—Reducing Pollution from Mineral Processing Operations—for FYs 2011 through 2013.

From 2004 to 2007, as EPA explained in an enforcement update ( October 2007, FY08-FY10 Compliance and Enforcement National Priority: Mineral Processing and Mining ), EPA completed numerous inspections of phosphoric acid and mineral processing facilities. Additional inspections took place from 2007 to 2010. EPA's enforcement work is ongoing and states, including Idaho, have actively supported the national initiative and EPA's work in moving the initiative forward.

With respect to Idaho's authorized hazardous waste program, EPA's findings in the 2010 State Review Framework Final Report (SRF) show the state to have an active and responsive program. Data reviewed by EPA at the time of the SRF showed over 200 regulatory inspections conducted under the authorized program and penalties assessed totaling $172,600. EPA found that Idaho continued to place a high priority on compliance monitoring and enforcement at permitted treatment, storage and disposal facilities.

As to the phosphate plants in Idaho about which the commenter expressed concerns, the State has conducted inspections on a near annual basis since the year 2000. On several occasions those inspections led to enforcement actions. The State has also been involved in EPA lead inspections at these facilities and has conducted compliance assistance visits as part of the state's effort to support the EPA national initiative. The implementation of the state's authorized program and the support of the EPA national initiative for mineral processing facilities indicate that Idaho has been compliant with the parameters of the authorized program for mineral processing facilities and has complied with the memorandum of agreement (MOA) between EPA and the state for the authorized program.

EPA appreciates the concerns expressed by the commenter on behalf of the Shoshone-Bannock Tribes concerning Idaho's implementation of its authorized program in regulating phosphate mining and process plants in the state. While EPA does not agree with the conclusions drawn by the commenter, EPA takes the concerns raised seriously and construes those concerns as appropriate for addressing under the EPA national initiative for this sector. EPA does not think an assessment of Idaho's authorized program by the EPA Office of the Inspector General (OIG) is necessary at this time given the ongoing national initiative. EPA has an obligation to continue to evaluate the state authorized program for compliance with the regulations authorizing the state's program and will continue to carry out that obligation.

EPA has made a final determination that Idaho's revisions to its authorized hazardous waste management program meet all of the statutory and regulatory requirements established by RCRA for authorization. Therefore, EPA is authorizing the revised State of Idaho hazardous waste management program for all delegable Federal hazardous waste regulations codified by Idaho as of July 1, 2010, as described in the Attorney General's Statement in the October 2011 revision authorization application, and as discussed in section E of this rule. Idaho's authorized program will be responsible for carrying out the aspects of the RCRA program described in its revised program application subject to the limitations of RCRA, including the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA, and which are not less stringent than existing requirements, take effect in authorized States before the States are authorized for the requirements. Thus, EPA will implement those requirements and prohibitions in Idaho, including issuing permits, until the State is granted authorization to do so.

The effect of this action is that a facility in Idaho subject to RCRA will have to comply with the authorized State program requirements in lieu of the corresponding Federal requirements in order to comply with RCRA. Additionally, such persons will have to comply with any applicable Federal requirements, such as, for example, HSWA regulations issued by EPA for which the State has not received authorization, and RCRA requirements that are not supplanted by authorized State-issued requirements. Idaho continues to have enforcement responsibilities under its State hazardous waste management program for violations of this program, but EPA retains its authority under RCRA sections 3007, 3008, 3013, and 7003, 42 U.S.C. 6927, 6928, 6934 and 6973, and any other applicable statutory and regulatory provisions, which includes, among others, the authority to:

• Conduct inspections; require monitoring, tests, analyses, or reports;

• Enforce RCRA requirements; suspend, terminate, modify or revoke permits; and

• Take enforcement actions regardless of whether the State has taken its own actions.

On October 25, 2011, Idaho submitted a program revision application requesting authorization for all delegable Federal hazardous waste regulations codified as of July 1, 2010, and these are the rules EPA authorizes through this final action. Idaho incorporated the delegable federal regulations by reference in the following provisions of the Idaho Administrative Procedures Act (IDAPA): 58.01.05.001 through 58.01.05.010; 58.01.05.011 with the exception of the 4th sentence; 58.01.05.012; 58.01.05.013; 58.01.05.015 through 58.01.05.018; 58.01.05.356.01; and 58.01.05.998. This authorization revision includes the following federal rules for which Idaho is being authorized for the first time: Exclusion of Oil-Bearing Secondary Materials Processed in a Gasification System to Produce Synthesis Gas (73 FR 57, January 2, 2008); NESHAP: Final Standards for Hazardous Waste Combustors (Phase I Final Replacement Standards and Phase II) Amendments (73 FR 18970, April 8, 2008); F019 Exemption for Wastewater Treatment Sludges from Auto Manufacturing Zinc Phosphating Processes (73 FR 31756, June 4, 2008); Revisions to the Definition of Solid Waste (73 FR 64668, October 30, 2008); Academic Laboratories Generator Standards, Alternative Standards for Hazardous Waste Determination and Accumulation (73 FR 72912, December 1, 2008); Expansion of RCRA Comparable Fuel Exclusion (73 FR 77954, December 19, 2008); OECD Requirements; Hazardous Waste Technical Corrections and Clarifications (75 FR 12989, March 18, 2010); and Withdrawal of the Emission Comparable Fuel Exclusion (75 FR 33712, June 15, 2010). The federal regulation for the Export of Shipments of Spent Lead-Acid Batteries (75 FR 1236, January 8, 2010), which the State adopted, is not being authorized as part of this action. EPA does not authorize states to administer the Federal government's export functions in any section of the RCRA hazardous waste regulations. See additional details about the Federal government's import and export functions in this final rule in section F labeled “Where Are the Revised State Rules Different From the Federal Rules?”

Under RCRA 3009, EPA may not authorize State rules that are less stringent than the Federal program. Any State rules that are less stringent do not supplant the Federal regulations. State rules that are broader in scope than the Federal program requirements are not authorized. State rules that are equivalent to, and State rules that are more stringent than, the Federal program may be authorized, in which case they are enforceable by EPA. This section discusses certain rules where EPA has made the finding that the State program is more stringent and will be authorized and discusses certain portions of the Federal program that are not delegable to the State because of the Federal government's special role in foreign policy matters.

EPA does not authorize States to administer Federal import and export functions in any section of the RCRA hazardous waste regulations. Even though States do not receive authorization to administer the Federal government's import and export functions, found in 40 CFR part 262, subparts E, F and H, State programs are still required to adopt the Federal import and export provisions to maintain their equivalency with the Federal program. The State amended its import and export rules to include the Federal rule on Organization for Economic Cooperation and Development (OECD) Requirements; Export Shipments of Spend Lead-Acid Batteries (75 FR 1236, January 8, 2010). The State's rule is found at IDAPA 58.01.05.006. EPA will continue to implement those requirements directly through the RCRA regulations.

EPA has found that the State's Emergency Notification Requirements, (IDAPA 58.01.05.006.02), are more stringent than the Federal program. This is because the State's regulations require that the State Communications Center be contacted along with the Federal Center. EPA has found that the State's statutory requirement requiring hazardous waste generators and commercial hazardous waste disposal facilities to file annual hazardous waste generation reports, Idaho Code section 39-4411(4) and 39-4411(5), to be more stringent than the Federal program. EPA will authorize and enforce these more stringent provisions.

Idaho will continue to issue permits for all the provisions for which it is authorized and administer the permits it issues. If EPA issued permits prior to authorizing Idaho for these revisions, these permits would continue in force until the effective date of the State's issuance or denial of a State hazardous waste permit, at which time EPA would modify the existing EPA permit to expire at an earlier date, terminate the existing EPA permit for cause, or allow the existing EPA permit to otherwise expire by its terms, except for those facilities located in Indian Country. EPA will not issue new permits or new portions of permits for provisions for which Idaho is authorized after the effective date of this authorization. EPA will continue to implement and issue permits for HSWA requirements for which Idaho is not yet authorized.

Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste management program into the Code of Federal Regulations (CFR). This is done by referencing the authorized State rules in 40 CFR part 272. EPA is reserving the amendment of 40 CFR part 272, subpart N for codification of Idaho's program at a later date.

Idaho is not authorized to carry out its hazardous waste program in Indian country, as defined in 18 U.S.C. 1151. Indian country includes:

1. All lands within the exterior boundaries of Indian reservations within or abutting the State of Idaho;

2. Any land held in trust by the U.S. for an Indian tribe; and

3. Any other land, whether on or off an Indian reservation, that qualifies as Indian country.

Therefore, this action has no effect on Indian country. EPA retains jurisdiction over “Indian Country” as defined in 18 U.S.C. 1151 and will continue to implement and administer the RCRA program on these lands.

This final rule revises the State of Idaho's authorized hazardous waste management program pursuant to section 3006 of RCRA and imposes no requirements other than those currently imposed by State law. This final rule complies with applicable executive orders and statutory provisions as follows:

This action authorizes revisions to the federally approved hazardous waste program in Idaho. This type of action is exempt from review under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), and Executive Order 13563 (76 FR 3821, January 21, 2011).

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). This final rule does not establish or modify any information or recordkeeping requirements for the regulated community.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA), 5 U.S.C. 601 et seq., generally requires Federal agencies 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 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 final rule on small entities, small entity is defined as: (1) A small business, as codified in the Small Business Size Regulations at 13 CFR part 121; (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. EPA has determined that this action will not have a significant impact on small entities because the final rule will only have the effect of authorizing pre-existing requirements under State law and imposes no additional requirements beyond those imposed by State law. After considering the economic impacts of this action, I certify that this action will not have a significant economic impact on a substantial number of small entities.

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. This action imposes no new 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 or 205 of the UMRA. This action is also not subject to the requirements of section 203 of the UMRA because it contains no regulatory requirements that might significantly or uniquely affect small government entities.

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 final rule authorizes pre-existing State rules. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicited comment on the proposed action from State and local officials but did not receive any comments from State or local officials.

This action does not have tribal implications, as specified in Executive order 13175, because EPA retains its authority over Indian Country and does not authorize the state to implement its authorized program in Indian Country within the state's boundaries. Thus, EPA has determined that Executive Order 13175 does not apply to this final rule. EPA specifically solicited comment on the proposed rule from tribal officials and received one comment on behalf of the Shoshone-Bannock Tribes. That comment is discussed in section B of this preamble.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to EO 13045 because it approves a State program and is authorizing pre-existing State rules.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not a “significant regulatory action” as defined 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 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 bodies. The NTTAA directs EPA to provide Congress, through the OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This action does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

Executive Order 12898 (59 FR 7629, February 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 action 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 action authorizes pre-existing State rules which are equivalent to, and no less stringent than existing federal requirements.

Congressional Review Act (CRA), 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective July 11, 2012.

This action is issued under the authority of sections 2002(a), 3006 and 7004(b) of the Solid Waste Disposal Act, as amended, 42 U.S.C. 6912(a), 6926, 6974(b).

This is a summary of the Commission's Report and Order, FCC 12-21, adopted on February 15, 2012 and released on February 15, 2012. The full text of document FCC 12-21 is available for inspection and copying during normal business hours in the FCC Reference Information Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554. The complete text may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554, (202) 488-5300, facsimile (202) 488-5563, or via email at fcc@bcpiweb.com. The complete text is also available on the Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0215/FCC-12-21A1.pdf. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau 202-418-0530 (voice), 202-418-0432 (TTY).

The Commission will send a copy of document FCC 12-21 to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

Document FCC 12-21 contains modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, will invite the general public to comment on the information collection requirements contained in document FCC 12-21 as required by the PRA of 1995, Public Law 104-13 in a separate notice that will be published in the Federal Register . In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how it might further reduce the information collection burden for small business concerns.

The rules adopted herein establish recordkeeping requirements for a large variety of businesses, including small business entities. First, the seller must secure a written agreement between itself and the consumer showing that the consumer agrees to receive, from the seller, autodialed or prerecorded telemarketing calls to a wireless number and/or prerecorded calls to a residential line. The prior express written consent requirement applies to autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded calls to residential lines only. Limiting the written consent requirement to telemarketing calls significantly reduces the compliance burden for all entities, including small entities. The Commission allows the seller the flexibility to determine the type of written agreement that it will secure from the consumer. The Commission does not require a particular form or format for this written agreement or its retention. In adopting the written consent requirement for autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls to residential lines, the Commission also concluded that consent obtained pursuant to the E-SIGN Act, Electronic Signatures in Global and National Commerce Act 15 U.S.C. 7001 (2000), will satisfy the requirement of its revised rule, including permission obtained via an email, Web site form, text message, telephone keypress, or voice recording. Accepting consent pursuant to the E-SIGN Act relieves all businesses, including small entities, from the economic impact of generating and retaining a paper document to evidence their compliance. The E-SIGN Act also provides additional flexibility in obtaining electronic consent producing minimal additional recordkeeping efforts. To the extent that the calling parties previously relied on an established business relationship in lieu of express consent, the Commission notes that it stated that such telemarketers had to be prepared to provide clear and convincing evidence of the existence of such a relationship. Hence, a record of written consent will replace the previously required record of an established business relationship. Because of these factors, any additional recording keeping costs should be minimal. Second, telemarketers and sellers, including small business entities, that initiate telemarketing calls using prerecorded messages, must provide an automated, interactive opt-out feature at the outset of such a call. This rule obligates telemarketers and sellers to retain records of providing this feature and to retain records of consumers opting out of receiving these autodialed or prerecorded telemarketing messages. Such records should demonstrate the telemarketer's and seller's compliance with the provision and utilization of the automated, interactive opt-out feature. The Commission allows the telemarketers and sellers the flexibility to determine how to implement the mechanism. The Commission does not require a particular form or format evidencing this mechanism or its implementation. Third, the FCC revises its abandoned call requirement to require the permissible three percent abandoned call rate to be calculated for every telemarketing calling campaign. There is no additional recordkeeping burden for this revision because the FCC's rule already requires that the seller or telemarketer maintain records establishing compliance with the abandoned call rules. Moreover, all of these revised rules are consistent with analogous requirements under the FTC's TSR, with which many telemarketers must already comply; therefore, the additional burden of complying with the FCC's new requirements is substantially mitigated. The Commission identified alternatives to the rules adopted in document FCC 12-21, but it rejects these alternatives because they are more costly to small businesses. Finally, to the extent that there are compliance costs resulting from the Commission's action, it finds that the implementation periods it adopts here—30 days from publication of OMB approval for the abandoned call rule, 90 days from publication of OMB approval for the automated, interactive opt-out requirement, and one year from publication of OMB approval for the written consent requirement and phase-out of the EBR exemption—should allow covered entities time to find cost-efficient ways to comply with these changes, to the extent they have not already made such changes to comply with the FTC's rules.

1. Based on substantial record support and evidence of continued consumer frustration with unwanted telemarketing robocalls, and in furtherance of the statutory goal of maximizing consistency with the FTC's telemarketing rules, the Commission adopts the consumer protection measures proposed in the 2010 TCPA NPRM, published at 75 FR 13471, March 22, 2010. First, the Commission requires prior express written consent for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines. Second, the Commission eliminates the “established business relationship” exemption as it previously applied to prerecorded telemarketing calls to residential lines. Third, the Commission requires telemarketers to implement an automated, interactive opt-out mechanism for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines, which would allow a consumer to opt out of receiving additional calls immediately during a telemarketing robocall. Fourth, the Commission requires that the permissible three percent call abandonment rate be calculated for each calling campaign, so that telemarketers cannot shift more abandoned calls to certain campaigns, as is possible if calculation is made across multiple calling campaigns. Finally, the Commission adopts an exemption to its implementing rules under the Telephone Consumer Protection Act (“TCPA”) for prerecorded health care-related calls to residential lines, which are already regulated by the federal Health Insurance Portability and Accountability Act.

2. At the outset, the Commission notes that the benefits to consumers of increased protection from unwanted telemarketing robocalls are significant. By enacting the TCPA and its prohibitions on unwanted calls, Congress has already made an assessment that the benefits of protecting consumer privacy are substantial. Congress, through enactment of a second law—the DNCIA—has further determined that there are substantial benefits to consistency in telemarketing regulations by the FCC and the FTC. The FCC further finds that the significant ongoing consumer frustration reflected in its complaint data and the positive consumer response to the FTC's proceeding confirm the need to strengthen its current rules in some respects, and narrow them in others where other legal protections are in place. Moreover, with the exception of the limited group of entities that are outside the FTC's jurisdiction, the FCC expects that many telemarketers affected by the changes in this Report and Order have already incurred the cost of implementing a written consent requirement, have already given up reliance on the EBR as a basis for making prerecorded telemarketing calls to residential lines without prior express consent, have implemented an automated, interactive opt-out mechanism, and are calculating the call abandonment rate on a per-campaign basis. As a result, the Commission finds that increased consumer protection from unwanted telemarketing robocalls will provide substantial benefits to consumers without substantial implementation costs. While these benefits may not be easily quantifiable, nothing in the record persuades the Commission that the costs of complying with its revised rules outweigh the benefits.

3. Based on substantial record support, the volume of consumer complaints the Commission continues to receive concerning unwanted, telemarketing robocalls, and the statutory goal of harmonizing the FCC rules with those of the FTC, the FCC requires prior express written consent for all telephone calls using an automatic telephone dialing system or a prerecorded voice to deliver a telemarketing message to wireless numbers and for prerecorded telemarketing calls to residential lines.

4. As an initial matter, the Commission notes that the TCPA is silent on the issue of what form of express consent—oral, written, or some other kind—is required for calls that use an automatic telephone dialing system or prerecorded voice to deliver a telemarketing message. Thus, the Commission has discretion to determine, consistent with Congressional intent, the form of express consent required. The vast majority of commenters support harmonizing the FCC's rules with those of the FTC by adopting a written consent requirement for autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls to residential lines. For example, Bank of America asserts that the Commission should harmonize its regulations with those of the FTC. Similarly, the National Cable & Telecommunications Association urges that a written consent requirement should apply to telemarketing calls. The National Council of Higher Education Loan Programs and the Educational Finance Council also supports a written consent requirement for telemarketing calls. While a few commenters argue that the Commission should require written consent for all autodialed or prerecorded calls ( i.e., not simply those delivering marketing messages), it concludes that requiring prior express written consent for all such calls would unnecessarily restrict consumer access to information communicated through purely informational calls. For instance, bank account balance, credit card fraud alert, package delivery, and school closing information are types of information calls that the Commission do not want to unnecessarily impede. The FCC takes this action to maximize consistency with the FTC's TSR, as contemplated in the DNCIA, and avoid unnecessarily impeding consumer access to desired information.

5. Since the TCPA's enactment and the adoption of implementing rules, the Commission has continued to receive thousands of complaints regarding unwanted telemarketing robocalls. Furthermore, in its TSR proceeding, the FTC noted that it received over 13,000 comments opposing its proposal to, among other things, adopt an established business relationship (EBR) exemption for prerecorded telemarketing calls. In deciding to amend its rules to require prior written consent for prerecorded telemarketing calls, the FTC also considered its enforcement experience that resulted in multi-million dollar settlements where telemarketers, among other things, failed to secure the appropriate consent for telemarketing calls. In light of the FCC's record and the record amassed by the FTC in its TSR proceeding, the Commission finds that, notwithstanding current consent requirements and other TCPA safeguards, consumers continue to experience frustration in receiving unwanted telemarketing robocalls.

6. The Commission also finds that a written consent requirement would advance Congress' objective under the DNCIA to harmonize the Commission's rules with those of the FTC. As stated previously, the DNCIA provides that “the Federal Communications Commission shall consult and coordinate with the Federal Trade Commission to maximize consistency with the telemarketing rule promulgated by the Federal Trade Commission.” Eliminating the differences between the FCC's rules and those of the FTC where warranted will “maximize consistency” with the FTC's consent requirements.

7. Among the findings Congress made when adopting the TCPA were that: (1) The use of the telephone to market goods and services to the home and to other businesses has become pervasive due to the increased use of cost-effective telemarketing techniques; (2) telephone subscribers considered automated or prerecorded telephone calls, regardless of the content or the initiator of the message, to be a nuisance and an invasion of privacy; and (3) individuals' privacy rights, public safety interests, and commercial freedoms of speech and trade must be balanced in a way that protects the privacy of individuals yet permits legitimate telemarketing practices. While current regulations provide a measure of consumer protection from unwanted and unexpected calls, the complaint data, as noted above, show that the proliferation of intrusive, annoying telemarketing calls continues to trouble consumers. The Commission concludes that requiring prior express written consent for telemarketing calls utilizing autodialed or prerecorded technologies will further reduce the opportunities for telemarketers to place unwanted or unexpected calls to consumers. The Commission believes that requiring prior written consent will better protect consumer privacy because such consent requires conspicuous action by the consumer—providing permission in writing—to authorize autodialed or prerecorded telemarketing calls, and will reduce the chance of consumer confusion in responding orally to a telemarketer's consent request.

8. The Commission further finds that the unique protections for wireless consumers contained in the TCPA supports requiring prior written consent for telemarketing robocalls. Because section 227(b)(1)(A) of the Act specifically protects wireless users, among others, from autodialed or prerecorded calls to which they have not consented, the Commission must ensure that its rules address privacy issues for wireless consumers. In addition, the Commission notes that the substantial increase in the number of consumers who use wireless phone service, sometimes as their only phone service, means that autodialed and prerecorded calls are increasingly intrusive in the wireless context, especially where the consumer pays for the incoming call. Further, the costs of receiving autodialed or prerecorded telemarketing calls to wireless numbers often rest with the wireless subscriber, even in cases where the amount of time consumed by the calls is deducted from a bucket of minutes. Given these factors, the Commission believes that it is essential to require prior express written consent for autodialed or prerecorded telemarketing calls to wireless numbers. One commenter, USAA, appears to suggest that oral consent is sufficient to permit any autodialed or prerecorded calls to wireless numbers.

It argues that its customers may orally provide their wireless phone number as a point of contact and therefore those customers expect marketing and service calls. The Commission disagrees. Consumers who provide a wireless phone number for a limited purpose—for service calls only—do not necessarily expect to receive telemarketing calls that go beyond the limited purpose for which oral consent regarding service calls may have been granted. Moreover, as use of wireless numbers continues to increase, the Commission believes that increased protection from unwanted telemarketing robocalls is warranted.

9. The Commission further concludes that harmonizing its prior consent requirement with that of the FTC will reduce the potential for industry and consumer confusion surrounding a telemarketer's obligations because similarly situated entities will no longer be subject to different requirements depending upon whether the entity is subject to the FTC's or the FCC's jurisdiction. The Commission also finds that requiring prior written consent will enhance the FCC's enforcement efforts and better protect both consumers and industry from erroneous claims that consent was or was not provided, given that, unlike oral consent, the existence of a paper or electronic record can be more readily verified and may provide unambiguous proof of consent.

10. Calls Not Subject to Written Consent Requirement. While the Commission adopts rules to protect consumers from unwanted telemarketing robocalls, it leaves undisturbed the regulatory framework for certain categories of calls. Specifically, consistent with section 227(b)(2)(C) of the Act and its implementing rules and orders, the Commission does not require prior written consent for calls made to a wireless customer by his or her wireless carrier if the customer is not charged. One commenter requests that the Commission clarify that wireless carriers may send free autodialed or prerecorded calls, including text messages, without prior written consent, if the calls are intended to inform wireless customers about new products that may suit their needs more effectively, so long as the customer has not expressly opted out of receiving such communications. As noted above, the Commission addressed this issue in the 1992 TCPA Order, published at 57 FR 48333, October 23, 1992, by concluding that Congress did not intend to prohibit autodialed or prerecorded message calls by a wireless carrier to its customer when the customer is not charged. The Commission based its conclusion on the fact that neither the TCPA nor its legislative history indicates that Congress intended to impede communications between common carriers and their customers regarding the delivery of customer services by barring calls to wireless consumers for which the consumer is not charged. Nothing in the record or the Commission's analysis of consumer complaints provides it a reason to alter its finding.

11. Moreover, while the Commission revises its consent rules to require prior written consent for autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls to residential lines, it maintains the existing consent rules for non-telemarketing, informational calls, such as those by or on behalf of tax-exempt non-profit organizations, calls for political purposes, and calls for other noncommercial purposes, including those that deliver purely informational messages such as school closings. The FCC's rules for these calls will continue to permit oral consent if made to wireless consumers and other specified recipients, and will continue to require no prior consent if made to residential wireline consumers. Commenters support distinguishing telemarketing calls from non-telemarketing, informational calls. For instance, the National Cable & Telecommunications Association has urged that a written consent requirement should apply only to telemarketing calls and notes that its members make informational, non-telemarketing calls to wireless phones that should not be subject to a written consent requirement. The National Council of Higher Education Loan Programs and the Educational Finance Council also seek clarification that the written consent requirement will be limited to telemarketing calls. Additionally, the Commission notes that many commenters expressed concern about obtaining written consent for certain types of autodialed or prerecorded calls, including debt collection calls, airline notification calls, bank account fraud alerts, school and university notifications, research or survey calls, and wireless usage notifications. Again, such calls, to the extent that they do not contain telemarketing messages, would not require any consent when made to residential wireline consumers, but require either written or oral consent if made to wireless consumers and other specified recipients.

12. While the Commission observes the increasing pervasiveness of telemarketing, it also acknowledges that wireless services offer access to information that consumers find highly desirable and thus do not want to discourage purely informational messages. As was roundly noted in the comments, wireless use has expanded tremendously since passage of the TCPA in 1991. The Commission believes that requiring prior express written consent for all robocalls to wireless numbers would serve as a disincentive to the provision of services on which consumers have come to rely. Moreover, in adopting these rules today, the FCC employs the flexibility Congress afforded to address new and existing technologies and thereby limit the prior express written consent requirement to autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls to residential lines. In addition, the Commission notes that section 227(b)(1)(A) of the Act and its implementing rules continue to require some form of prior express consent for autodialed or prerecorded non-telemarketing calls to wireless numbers. The Commission also maintains the requirement of prior express consent for autodialed or prerecorded non-telemarketing calls to wireless numbers that are not subject to any exemptions under section 227(b)(2) of the Act. The FCC leaves it to the caller to determine, when making an autodialed or prerecorded non-telemarketing call to a wireless number, whether to rely on oral or written consent in complying with the statutory consent requirement.

13. Some commenters also express concern that written consent for autodialed or prerecorded calls to wireless numbers and for prerecorded calls to residential lines that offer certain home loan modifications and refinancing would frustrate their compliance with the American Recovery and Reinvestment Act, also known as the Recovery Act, which established certain outreach requirements designed to prevent foreclosure. These commenters assert that the calls may be interpreted as telephone solicitations because certain fees or charges to the consumer may be involved. These commenters note that calls and messages made pursuant to the Recovery Act also include non-telemarketing information regarding the status of the consumer's loan and repayment options, among other things. In the 2003 TCPA Order, published at 68 FR 44144, July 25, 2003, the Commission articulated a standard in evaluating “dual-purpose” robocalls. The Commission asserted that in evaluating dual-purpose calls, it would determine whether the call includes an advertisement. The Commission provided that if the call, notwithstanding its free offer or other information, is intended to offer property, goods, or services for sale either during the call, or in the future, that call is an advertisement.

14. The Commission believes that the intent of calls made pursuant to the Recovery Act, when the call is made by the consumer's loan servicer, is to fulfill a statutory requirement rather than offer a service for sale. Similarly, the Commission, in analyzing telephone solicitation, states that the application of the prerecorded message rule should turn, not on the caller's characterization of the call, but on the purpose of the message. Again, the Commission believes that the predominant purpose of a “Recovery Act” call, when it is made by the consumer's loan servicer, is compliance with the Recovery Act. In this instance, the FCC finds that the home loan modification and refinance calls placed pursuant to the Recovery Act generally are not solicitation calls and do not include or introduce an unsolicited advertisement, when those calls are made by the consumer's loan servicer, because the primary motivation of the calling party is to comply with that statute's outreach requirements. The FCC notes, however, that should such calls be challenged as TCPA violations because the primary motivation appears to be sending a telephone solicitation or unsolicited advertisement rather than complying with the Recovery Act, the Commission will consider the facts on a case-by-case basis. Further, if a “Recovery Act” robocall is made to a wireless number, prior express consent, which may be either oral or written, is specifically required pursuant to the Act.

15. Content and Form of Consent. With respect to written consent, the Commission has indicated that the term “signed” may include an electronic or digital form of signature, to the extent such form of signature is recognized as a valid signature under applicable federal or state contract law. Under the FTC's rules, prior express consent to receive prerecorded telemarketing calls must be in writing. The FTC's rules require that the written agreement must be signed by the consumer and be sufficient to show that he or she: (1) Received “clear and conspicuous disclosure” of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates. In addition, the written agreement must be obtained “without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.” The FTC has determined that written agreements obtained in compliance with the E-SIGN Act will satisfy the requirements of its rule, such as, for example, agreements obtained via an email, Web site form, text message, telephone keypress, or voice recording. Finally, under the TSR, the seller bears the burden of proving that a clear and conspicuous disclosure was provided, and that an unambiguous consent was obtained.

16. Consistent with the FTC's TSR, the Commission concludes that a consumer's written consent to receive telemarketing robocalls must be signed and be sufficient to show that the consumer: (1) Received “clear and conspicuous disclosure” of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates. In addition, the written agreement must be obtained “without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.” Finally, should any question about the consent arise, the seller will bear the burden of demonstrating that a clear and conspicuous disclosure was provided and that unambiguous consent was obtained.

17. Electronic Consent. In the 2010 TCPA NPRM, the Commission proposed to allow sellers or telemarketers to obtain prior express written consent using any medium or format permitted by the E-SIGN Act, as the FTC permits in the TSR. The FTC specifically found that consent obtained via an email, Web site form, text message, telephone keypress, or voice recording are in compliance with the E-SIGN Act and would satisfy the written consent requirement in the amended TSR. Consistent with the FTC, the Commission now similarly concludes that consent obtained in compliance with the E-SIGN Act will satisfy the requirements of its revised rule, including permission obtained via an email, Web site form, text message, telephone keypress, or voice recording. Allowing documentation of consent under the E-SIGN Act will minimize the costs and burdens of acquiring prior express written consent for autodialed or prerecorded telemarketing calls while protecting the privacy interests of consumers. Because it greatly minimizes the burdens of acquiring written consent, commenters generally support using electronic signatures consistent with the E-SIGN Act. The Commission concludes that the E-SIGN Act significantly facilitates its written consent requirement, while minimizing any additional costs associated with implementing the requirement.

18. The Commission next considers whether to retain the exemption to the prior consent requirement for prerecorded telemarketing calls made to consumers with whom the caller has an established business relationship (EBR). In making the determination here, the Commission is again mindful of the statutory goal of maximizing consistency with the FTC's regulations in this area. As described below, the Commission eliminates the established business relationship exemption for prerecorded telemarketing calls to residential lines.

19. The FCC's Rules. In the 1992 TCPA Order, the Commission allowed, without the need for additional consent, prerecorded telemarketing calls to residential lines when the caller has an established business relationship with the consumer. The Commission concluded, based on the record and legislative history, that a solicitation to someone with whom a prior business relationship exists does not adversely affect consumer privacy interests because a consumer with an established business relationship implicitly consents to the call. Such a solicitation, the Commission reasoned, can be deemed to be invited or permitted by the consumer. In addition, the Commission relied on the legislative history, which suggests that Congress did not intend that the TCPA unduly interfere with ongoing business relationships. The Commission later codified in its rules the EBR exemption for telemarketing calls to residential lines.

20. The FTC's Approach. The FTC has recently taken a different view of whether an established business relationship alone should allow prerecorded telemarketing calls when there is no prior express consent. In its 2008 amendment to the TSR, the FTC terminated its previously announced policy of forbearing from bringing enforcement actions against sellers and telemarketers who, in accordance with a safe harbor that was proposed in November 2004, made calls that deliver prerecorded messages to consumers with whom the seller has an EBR. In reaching this conclusion, the FTC was persuaded by the number of comments opposing its safe harbor rule, lack of consumer confidence in industry assurances to self-regulate and not abuse consumers, consumer privacy concerns, and the difficulty in stopping unwanted calls.

21. At the outset, the Commission notes that there is no statutory barrier to eliminating the established business relationship exemption for prerecorded telemarketing calls. Section 227 of the Act grants the Commission authority to create exemptions to the restrictions on prerecorded calls to residential lines but does not require that the Commission recognize an EBR exemption in this context. Hence, the statute gives the Commission authority to establish—or not establish—an EBR exemption for prerecorded telemarketing calls. While, as noted above, the Commission previously interpreted the statute to permit an EBR exemption and did adopt one, additional experience, the record before it, and evidence of ongoing consumer frustration lead us to conclude that the exemption has adversely affected consumer privacy rights.

22. Based on the record in this proceeding and the volume of complaints filed by consumers that have an established business relationship with the caller, and consistent with the FTC's findings, the Commission concludes that the public interest would be served by eliminating the established business relationship exemption for telemarketing calls. As such, telemarketing calls to residential lines will require prior written consent, even where the caller and called party have an EBR.

23. In general, consumer groups and individual commenters in this proceeding support eliminating the established business relationship exemption. For example, some commenters assert that a reasonable consumer would consider prerecorded telemarketing messages even where an EBR exists to be coercive or abusive of the consumer's right to privacy. Another commenter contends that businesses falsely claim to have an EBR when none exists, or improperly expand the scope of their business relationships with customers to permit calls. One commenter objects to the notion that consumers welcome or expect prerecorded messages from companies with which they conduct business. Two other commenters argue that telemarketing calls should not be “deemed invited” by virtue of an EBR and assert that prerecorded telemarketing calls are intrusive whether or not the caller has a preexisting relationship with the recipient. Business groups and industries, however, support retention of the exemption because, they assert, communication between businesses and their customers would be significantly impeded without it. Another commenter reiterates the Commission's 1992 determination that the exemption does not adversely affect the consumer's privacy interests. The Commission disagrees with commenters advocating retention of the EBR for the reasons described below.

24. The FCC's complaint data shows that thousands of consumers remain unhappy with prerecorded telemarketing messages even when they have an established business relationship with the caller. The Commission finds these complaints to be a clear indication that many consumers do not consider prerecorded calls made pursuant to an established business relationship either invited or expected. Consistent with its data, the FTC has found “compelling evidence that consumer aversion to artificial or prerecorded message telemarketing—regardless of whether an established business relationship exists—has not diminished since enactment of the TCPA, which, in no small measure, was prompted by consumer outrage about the use of artificial or prerecorded messages.” More than 13,000 comments opposing an EBR exemption were received on the issues presented in the FTC's proceeding, and, the FTC concluded, such opposition to artificial or prerecorded telemarketing messages could not be ignored. The FTC subsequently decided to discontinue its recognition of an EBR exemption for prerecorded telemarketing calls.

25. Complaints about EBR-based calls demonstrate that, in many cases, a prior business relationship does not necessarily result in a consumer's willingness to receive prerecorded telemarketing calls and often adversely affects consumer privacy rights. The Commission emphasizes that its decision to eliminate the established business relationship exemption is consistent with the FTC's findings rejecting an EBR exemption and the DNCIA's requirement that the FCC “maximize consistency” with the FTC's approach in this area. In doing so, the FCC ensures that all telemarketers subject to federal law are given clear and consistent guidance regarding the circumstances under which prior express consent must be obtained from consumers before making prerecorded telemarketing calls. The Commission believes that its decision here strikes an appropriate balance between preserving ongoing business relationships and protecting consumer privacy, as intended by Congress. Since the enactment of the TCPA and the FCC's creation of an established business relationship exemption, methods for efficiently obtaining electronic consent have been developed and have been legally recognized by the E-SIGN Act. These newer consent options have significantly facilitated business relationships while, at the same time, allowing consumers to affirmatively choose whether they wish to receive prerecorded telemarketing calls before such calls invade their privacy.

26. While commenters' assertions that eliminating the EBR exemption will impede business communications suggest that there are compliance costs associated with this new rule, commenters do not, however, quantify any such costs. In light of the fact that the FTC's rules have been in place for more than two years, the Commission believes that compliance costs, if substantial, should be known. Commenters have failed to put forward evidence of such costs, however. Nevertheless, elimination of the EBR will require telemarketers to secure consent from consumers in some cases where they would not have obtained consent under the current rules. As with the other changes the Commission adopts in document FCC 12-21, many telemarketers are already required to market without benefit of the EBR for entities under FTC jurisdiction, and given the absence of record evidence on the incremental cost of complying with these changes, the Commission lacks a basis for finding that the costs outweigh the substantial consumer benefits. For those entities that currently rely on the EBR exemption, the Commission notes that its rules require “clear and convincing evidence” that an EBR exists. Although commenters opposing elimination of the EBR exemption have not provided information on compliance costs, the Commission notes that the incremental cost resulting from its action is offset to some degree by the costs that these entities already incur to retain “clear and convincing evidence.” The Commission believes that any additional cost incurred by having to obtain written consent is further lowered by the option of using electronic measures consistent with E-SIGN.

27. The FCC next considers whether to require an automated opt-out mechanism that would allow consumers to bar unwanted prerecorded telemarketing calls. The FTC has recently required such an automated opt-out mechanism, and the FCC now considers how it can maximize consistency with the FTC's approach. The FCC adopts an automated, interactive opt-out requirement for autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls to residential lines.

28. The FCC's Rules. Under the FCC's existing rules, a consumer who does not wish to receive further prerecorded telemarketing calls can “opt out” of receiving such calls by dialing a telephone number (required to be provided in the prerecorded message) to register his or her do-not-call request. Specifically, the FCC's rules require that, at the beginning of all artificial or prerecorded message calls, the message identify the entity responsible for initiating the call (including the legal name under which the entity is registered to operate), and during or after the message, provide a telephone number that consumers can call during regular business hours to make a company-specific do-not-call request.

29. The FTC's Rule. The FTC's TSR, as amended in 2008, requires, with limited exception, that any artificial or prerecorded message call that could be answered by the consumer in person provide an interactive opt-out mechanism that is announced at the outset of the message and is available throughout the duration of the call. The opt-out mechanism, when invoked, must automatically add the consumer's number to the seller's do-not-call list and immediately disconnect the call. Where a call could be answered by the consumer's answering machine or voicemail service, the message must also include a toll-free number that enables the consumer to subsequently call back and connect directly to an automated opt-out mechanism.

30. Based on the record, the FCC revises its rules to require any artificial or prerecorded message call that could be answered by the consumer in person provide an interactive opt-out mechanism that is announced at the outset of the message and is available throughout the duration of the call. In addition, the opt-out mechanism, when invoked, must automatically add the consumer's number to the seller's do-not-call list and immediately disconnect the call. Where a call could be answered by the consumer's answering machine or voicemail service, the message must also include a toll-free number that enables the consumer to subsequently call back and connect directly to an automated opt-out mechanism. The Commission adopts these rules to enable consumers to control their exposure to, and continued participation in, prerecorded telemarketing calls and to harmonize its opt-out rules with the FTC's TSR, consistent with the Congressional intent expressed by the DNCIA. The Commission notes that the TCPA does not require implementation of a particular opt-out mechanism. Rather, the TCPA provides that the Commission shall prescribe technical and procedural standards for systems that are used to transmit any prerecorded voice message via telephone and provides two elements that the Commission must include in its standards.

31. The Commission believes that the automated, interactive opt-out mechanism adopted will empower consumers to revoke consent if they previously agreed to receive autodialed or prerecorded telemarketing calls and stop receipt of unwanted autodialed or prerecorded telemarketing calls to which they never consented. The record developed in the FTC proceeding includes an industry analysis showing, among other things, that consumers are four times more likely to opt out of a prerecorded call that has an automated, interactive opt-out mechanism as opposed to opting out of a prerecorded call that provides a toll-free number for the consumer to call during business hours. This analysis suggests that consumers are reluctant to use toll-free numbers to end unwanted telemarketing calls. The majority of commenters in this proceeding who address this issue support an automated, interactive opt-out mechanism for telemarketing calls. For instance, the National Consumer Law Center states that the Commission's current opt-out mechanism, which requires a separate call to the telemarketer, is far less useful or protective of a consumer's privacy, and thus advocates adopting the more consumer-friendly automated, interactive opt-out mechanism. While a few commenters assert that the Commission should apply the automated, interactive opt-out requirement to non-telemarketing and telemarketing calls alike, the Commission declines to do so at this time because the record does not reveal a level of consumer frustration with non-telemarketing calls that is equal to that for telemarketing calls. The Commission therefore limits the automated, interactive opt-out requirement that it adopts in this Report and Order to autodialed or prerecorded telemarketing calls.

32. The Commission emphasizes that an entity placing an otherwise unlawful autodialed or prerecorded call cannot shield itself from liability simply by complying with the FCC's opt-out and identification rules. Furthermore, the revised rules the Commission adopts in this Order do not alter the current technical and procedural standards as applied to non-telemarketing, informational calls. The Commission maintains its identification and contact information requirements in § 64.1200(b) of the Commission's rules. The Commission also takes this opportunity to stress that the identification and contact information must be valid, verifiable, and actionable.

33. The Commission next decides whether to adopt rules that are consistent with the FTC's method for determining whether a telemarketer's “abandoned” call rate is within the lawful numerical limits for such calls. Based on the record, the Commission modifies its abandoned call rule to require that the three percent call abandonment rate be calculated for each calling campaign.

34. The FCC's Rules. Predictive dialers initiate phone calls while telemarketers are talking to other consumers and frequently disconnect those connected calls when a telemarketer is otherwise occupied and unavailable to take the next call, resulting in a hang-up or dead-air call. Under the Commission's rules, an outbound telephone call is deemed “abandoned” if a person answers the telephone and the caller does not connect the call to a sales representative within two seconds of the called person's completed greeting. The Commission's existing rules restrict the percentage of live telemarketing calls that a telemarketer may drop (or abandon) as a result of predictive dialers. Specifically, a seller or telemarketer would not be liable for violating the two-second restriction if, among other things, it employs technology that ensures abandonment of no more than three percent of all calls answered by the called person (rather than by an answering machine). The Commission's existing call abandonment rule measures the abandonment rate over a 30-day period, but contains no “per-calling-campaign” limitation.

35. The FTC's Rule. As does the FCC's rule, the FTC's TSR deems an outbound telephone call to be “abandoned” if the called person answers the telephone and the caller does not connect the call to a sales representative within two seconds of the called person's completed greeting. Under the TSR, a seller or telemarketer is not liable for violating the prohibition on call abandonment if, among other things, the seller or telemarketer employs technology that ensures abandonment of no more than three percent of all calls answered by a person (rather than by an answering machine) for the duration of a single calling campaign, if the campaign is less than 30 days, or separately over each successive 30-day period or portion thereof during which the calling campaign continues.

36. The Commission revises its rules to match the FTC's and require assessment of the call abandonment rate to occur during a single calling campaign over a 30-day period, and if the single calling campaign exceeds a 30-day period, the Commission requires that the abandonment rate be calculated each successive 30-day period or portion thereof during which the calling campaign continues. The revised requirement will deprive telemarketers of the opportunity to average abandoned calls across multiple calling campaigns, which can result in targeting abandoned calls to less desirable consumers, a form of robocall “redlining.”

37. Several commenters support the proposed rules, and several oppose them. Michigan PSC, NASUCA, and SmartReply generally support the proposed rule and favor harmonization of the Commission's rule with the FTC's rule. Bank of America (BofA) opposes the per-calling campaign measurement because, BofA asserts, it does not engage in the kind of rate manipulation the proposed rule attempts to address. The Newspaper Association of American opposes the per-campaign modification to the Commission's existing rule because it claims that the rule would adversely impact smaller organizations that utilize shorter calling lists. Roylance opposes the proposed rule and instead argues that a per-day measurement should be used to ensure a reduction in the abandoned call rate and that a per-telephone number limitation, without regard to the number of telemarketers or campaigns, should be imposed to ensure that the consumer does not receive more than a certain number of abandoned calls to a certain telephone number. Although BofA claims that it has not calculated the abandoned call rate based upon multiple calling campaigns, no commenter in this proceeding provided industry data regarding the occurrence of averaging over multiple calling campaigns. The Commission notes, however, that the Connecticut Attorney General supported the FTC's per-calling campaign limitation, as did several consumer commenters.

38. The Commission declines to adopt a “per-day” assessment of the abandonment rate instead of the 30-day assessment, as urged by some commenters. In changing its per-day, per-calling campaign assessment to a 30-day, per-calling campaign assessment, the FTC noted that the biggest problem with the per-day calculation is adjusting for the unexpected spikes in answered and abandoned calls. As the FCC has previously noted, a rate measured over a longer period of time will allow for reasonable variations in telemarketing calling campaigns such as calling times, number of operators available, number of telephone lines used by the call centers, and similar factors. This allowance alleviates some of the difficulties experienced by small businesses that use a smaller calling list. Thus, the Commission finds it necessary to maintain the 30-day time period for measurement of abandoned calls. The Commission also declines to adopt a “per-telephone number” assessment of the abandoned call rate instead of the 30-day assessment as noted above by one commenter. The cost of implementing a per-telephone number limitation would outweigh the benefit of the extra measure of protection against abandoned calls.

39. In addition, the FCC will apply the term “campaign” as defined by the FTC. In the 2008 TSR, published at 73 FR 51164, August 29, 2008, the FTC defines “campaign” as “the offer of the same good or service for the same seller.” So long as a telemarketer is offering the same good or service for the same seller, the FCC will regard the offer as part of a single campaign, irrespective of whether telemarketing scripts used to convey the offer use or contain different wording.

40. The Commission next considers whether prerecorded calls subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) should be exempt from its TCPA consent, identification, time-of-day, opt-out, and abandoned call rules. Once again, as contemplated by the DNCIA, the FCC considers the FTC's approach to this issue so that the FCC can “maximize consistency” with the FTC's TSR. The HIPAA statute strives to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, and to simplify the administration of health insurance, among other purposes. HIPAA also gives individuals important controls over whether and how their protected information is used and disclosed for marketing purposes. With limited exceptions, HIPAA requires an individual's written authorization before his or her protected health information can be used or disclosed for marketing purposes. In view of the privacy protections afforded under HIPAA, the FCC exempts from its consent, identification, time-of-day, opt-out, and abandoned call requirements all prerecorded health care-related calls to residential lines that are subject to HIPAA.

41. The FCC's Statutory Authority. The Act provides that the Commission may establish exemptions from the prohibitions on prerecorded voice calls to residential lines. Specifically, section 227(b)(2)(B) of the TCPA provides, in relevant part, that two types of calls may be exempted: “(i) calls that are not made for a commercial purpose, and (ii) such classes or categories of calls made for commercial purposes as the Commission determines (I) will not adversely affect the privacy rights that this section is intended to protect; and (II) do not include the transmission of any unsolicited advertisement.”

42. The FTC's Approach. In its 2008 amendment to the TSR, the FTC exempted health care-related prerecorded message calls subject to HIPAA from its restrictions on such calls, basing its determination on six primary considerations. First, the FTC found that delivery of health care-related prerecorded calls subject to HIPAA is already regulated extensively at the federal level. Second, it found that coverage of such calls by the TSR could frustrate the Congressional intent embodied in HIPAA, as well as other federal statutes governing health care-related programs. Third, the FTC found that the number of health care providers who might call a patient is inherently quite limited—as is the scope of the resulting potential privacy infringement—in sharp contrast to the virtually limitless number of businesses potentially conducting commercial telemarketing campaigns. Fourth, the FTC found that there is no incentive, and no likely medical basis, for providers who place health care-related prerecorded calls to attempt to boost sales through an ever-increasing frequency or volume of calls. Fifth, the FTC concluded that the existing record did not show that “the reasonable consumer” would consider prerecorded health care calls coercive or abusive. Finally, FTC enforcement experience did not suggest that health care-related calls have been the focus of the type of privacy abuses the exemption was intended to remedy. For these reasons, the FTC determined, pursuant to both its authority under the Telemarketing Act and its authority under the FTC Act, that health care-related prerecorded message calls subject to HIPAA should be exempt from the TSR because application of the TSR to such calls “is not necessary to prevent the unfair or deceptive act or practice [that harms consumer privacy] to which the [TSR] relates.”

43. For the reasons discussed herein and consistent with the FTC's action, the FCC exempts from its consent, identification, time-of-day, opt-out, and abandoned call requirements applicable to prerecorded calls all health care-related calls to residential lines subject to HIPAA. Establishing this exemption advances the statutory goal of maximizing consistency with the FTC's rules, and the FCC's record affirmatively supports adopting the FTC's approach. Therefore, pursuant to section 227(b)(2)(B) of the Act, which allows the Commission to establish an exemption for specified prerecorded calls that are commercial in nature if such calls will not adversely affect consumer privacy rights and do not include an unsolicited advertisement, the Commission finds that prerecorded calls to residential lines that are subject to HIPAA should be exempted from the consent, identification, time-of-day, opt-out, and abandoned call requirements under its TCPA rules. Furthermore, the Commission agrees with commenters that assert these calls serve a public interest purpose: to ensure continued consumer access to health care-related information.

44. As has the FTC, the FCC finds that HIPAA's existing protections, which it describes below, already safeguard consumer privacy, and the FCC therefore does not need to subject these calls to its consent, identification, opt-out, and abandoned call rules. The FCC notes at the outset that HIPAA regulations cover all communications regarding protected health information and all means of communication regarding such information. The Department of Health and Human Services (HHS) explains that HIPAA protects individually identifiable health information held or transmitted by a covered entity or its business associate, in any form or media, whether electronic, paper, or oral. In addition to limiting the use or disclosure of health information for treatment, payment, or health care operations or otherwise permitted or required disclosures, HIPAA restricts the use of this information for marketing. Unless the covered entity secures the individual's written authorization, HIPAA allows marketing only if the communication imparts information about a product or service that is included in a health care benefits plan offered by the covered entity, gives information concerning treatment, or describes goods or services for case management or care coordination. It is also noteworthy that HIPAA applies its regulations not only to certain uses or disclosures by the covered entity, but also extends HIPAA obligations, without exception, to third parties to which covered entities disclose protected health information. Violations of HIPAA are subject to civil penalties and criminal penalties, including possible imprisonment.

45. All health care industry commenters support a consent exemption for health care-related prerecorded calls subject to HIPAA. Among those opposing the exemption, one commenter states without elaboration that an exemption should not be established for health care-related prerecorded marketing calls. Although it is unclear from the comment, this commenter may not understand that restrictions imposed by HIPAA would restrain any such marketing calls. A second commenter opposes a HIPAA exemption but misjudges the effect of an exemption, not acknowledging that without an exemption, calls permitted by HIPAA would be prohibited by the FCC's existing rules and not acknowledging that HIPAA provides rigorous privacy protections and penalties.

46. In the FTC's TSR proceeding, concern was raised, in relevant part, whether immunization reminders, health screening reminders, medical supply renewal requests, and generic drug migration recommendations would constitute inducements to purchase goods or services. In the FCC's proceeding, one commenter argues that a call “pushing” flu vaccines would be illegal under the TCPA. Without reaching the merits of this argument, the Commission does believe that an exemption for prerecorded health care-related calls to residential lines is warranted when such calls are subject to HIPAA. With respect to the privacy concerns that the TCPA was intended to protect, the Commission believes that prerecorded health care-related calls to residential lines, when subject to HIPAA, do not tread heavily upon the consumer privacy interests because these calls are placed by the consumer's health care provider to the consumer and concern the consumers' health. Moreover, the exemption the Commission adopts in document FCC 12-21 does not leave the consumer without protection. The protections provided by HIPAA safeguard privacy concerns. Under the second prong of the TCPA exemption provision, which requires that such calls not include an unsolicited advertisement, the Commission finds the calls at issue here are intended to communicate health care-related information rather than to offer property, goods, or services and conclude that such calls are not unsolicited advertisements. Therefore, such calls would satisfy the TCPA standard for an exemption as provided in the Act and the FCC's implementing rules.

47. Third, a commenter anticipates abuse of the HIPAA marketing definition and suggests that robocalling a neighborhood to alert persons that the calling entity will provide immunizations would be allowed under HIPAA. HHS enforcement measures of HIPAA discourage abuse because these measures include civil and criminal penalties. Lastly, one commenter that opposes the HIPAA exemption questions the Commission's authority to adopt such an exemption. Because the Commission concludes that prerecorded, health care-related calls, subject to HIPAA, to residential lines do not constitute an unsolicited advertisement and will not adversely affect the privacy rights that the Act was intended to protect, the Act allows the Commission to establish an exemption for such calls, and it does so in this Report and Order.

48. In sum, based on the record and the HIPAA requirements, the FCC agrees with the FTC approach under the TSR and is persuaded that the HIPAA privacy regulations are rigorous and reflect a statutory mission to protect privacy rights. HHS enforcement measures of HIPAA discourage abuse because these measures include civil and criminal penalties. The FCC therefore adopts an exemption from its TCPA rules for prerecorded health care-related calls to residential lines that are subject to HIPAA. In those instances where the prerecorded health care-related call is not covered by HIPAA, as determined by HHS, restrictions imposed by the TCPA and the FCC's implementing rules will apply as the facts warrant.

49. Finally, the Commission addresses the timing and cost of implementing the rules it adopts in document FCC 12-21. The Commission seeks to ensure that the consumer protection measures it adopts are timely implemented so that consumers can realize the benefits, while allowing a reasonable time for affected parties to implement necessary changes in a way that makes sense for their business models. Each of the FCC's implementation periods is consistent with the implementation periods adopted by the FTC. Specifically, the FCC establishes a twelve-month period for implementation of the requirement that prior express consent be in writing for telemarketers employing autodialed or prerecorded calls or messages to wireless numbers and prerecorded calls or messages to residential lines. This twelve-month period will commence upon publication of OMB approval of the FCC's written consent rules in the Federal Register . In connection with the implementation of the written consent requirement for telemarketing robocalls, the FCC will phase out the established business relationship exemption over the same twelve-month period that follows publication of OMB approval of its written consent rule in the Federal Register . To reiterate, the FCC allows telemarketers twelve months from publication of OMB approval of its written consent rules to cease utilization of the established business relationship as evidence of consumer consent to receive prerecorded telemarketing calls. Second, the FCC establishes a 90-day implementation period for the automated, interactive opt-out mechanism for telemarketing calls, again commencing upon publication of OMB approval of its opt-out rules in the Federal Register . Finally, the FCC establishes a 30-day implementation period for the revised abandoned call rule, also commencing upon publication of OMB approval of its abandoned calls rule in the Federal Register .

50. Based on its review of the record and the considerations noted above, the Commission adopts implementation timetable as described herein. Although industry commenters focused their remarks on the time that would be needed for implementing a prior express written consent requirement for non-telemarketing calls, they did not address implementation where the proposed consent requirement was limited to telemarketing calls. The Commission finds that establishing a twelve-month implementation period for the written consent requirement is appropriate because, as noted in the FTC proceeding, it will take time for businesses to redesign Web sites, revise telemarketing scripts, and prepare and print new credit card and loyalty program applications and response cards to obtain consent from new customers, as well as to use up existing supplies of these materials and create new record-keeping systems and procedures to store and access the new consents they obtain.

51. One commenter in this proceeding supports the use of consent obtained under the Commission's existing rules to authorize continued autodialed or prerecorded calls for a limited period of time. Because allowing telemarketers to rely on such consent pending the effective date of its new written consent requirement would ease the operational and technical transition for autodialed or prerecorded voice telemarketing calls, the Commission finds that it would serve the public interest to permit continued use of existing consents for an interim period. For example, in cases where a telemarketer has not obtained prior written consent under the FCC's existing rules, the Commission will allow such telemarketer to make prerecorded voice telemarketing calls until the effective date of its written consent requirement, so long as the telemarketer has obtained another form of prior express consent. Once the Commission's written consent rules become effective, however, an entity will no longer be able to rely on non-written forms of express consent to make autodialed or prerecorded voice telemarketing calls, and thus could be liable for making such calls absent prior written consent.

52. With respect to the 90-day implementation period for the automated, interactive opt-out mechanism for telemarketing calls, there is no indication in the FCC's record that implementing the proposed opt-out mechanism would be especially burdensome or pose extraordinary technical issues. Moreover, the FTC observed in its proceeding, that industry comments uniformly represent that interactive technology is affordable and widely available. In addition, the FCC believes that the implementation circumstances associated with its revised abandonment rate measurement rules merit a 30-day allotment of time for compliance. None of the commenters on the proposed abandoned call rule requested any delay to give affected entities sufficient time to comply. Having received no input regarding the implementation period needed to implement the abandoned call rule, the Commission believes the appropriate time for implementation of this revised rule is also 30 days after publication of OMB approval of this rule in the Federal Register .

53. In the 2010 TCPA NPRM, the Commission asked for comment on the incremental costs of implementing its proposals to require written consent. With one exception (elimination of the EBR, which the Commission address above), industry commenters do not substantially oppose the proposals the Commission adopt today. As described above, neither telemarketers nor sellers oppose the written consent requirement for telemarketing robocalls—the Commission would have expected such opposition if compliance costs were material. Many, perhaps the vast majority, of telemarketers already have processes in place to comply with this requirement. Hence, with the exception of the limited group of entities that are outside the FTC's jurisdiction, the FCC expects that many telemarketers affected by the changes in this Report and Order have already incurred the cost of implementing a written consent requirement, have already given up reliance on the EBR as a basis for making robocalls without prior express consent, have implemented an automated opt-out mechanism, and are calculating the call abandonment rate on a per-campaign basis. Because there is little record opposition to these changes, other than elimination of the EBR, and because many affected entities should already have processes in place to comply with the changes and of the availability of electronic means to obtain written consent, the Commission finds no reason to conclude that the consumer benefits that will result from these changes are outweighed by the associated costs.

54. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking ( 2010 TCPA NPRM ) released by the Federal Communications Commission (Commission) on January 22, 2010. The Commission sought written public comments on the proposals contained in the 2010 TCPA NPRM, including comments on the IRFA. None of the comments filed in this proceeding were specifically identified as comments addressing the IRFA; however, comments that address the impact of the proposed rules and policies on small entities are discussed below. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

55. The DNCIA provides that “the Federal Communications Commission shall consult and coordinate with the Federal Trade Commission to maximize consistency with the rule promulgated by the Federal Trade Commission.” The FCC notes that the Federal Trade Commission amended its Telemarketing Sales Rule (TSR) in 2008 to require, among other things, that telemarketers secure the consumer's express written agreement to receive prerecorded telemarketing messages, provide an automated, interactive opt-out mechanism, terminate its safe harbor provision allowing prerecorded telemarketing calls to consumers with whom the telemarketer enjoyed an established business relationship, and limit abandoned calls on a 30-day, per campaign period. This Commission has determined to harmonize its rules with the FTC's TSR to protect consumers from unwanted autodialed or prerecorded telemarketing calls, also known as “robocalls.” Despite establishing a National Do-Not-Call Registry and adopting other consumer protection rules, the Commission observes that consumers continue to receive unwanted robocalls. The continued receipt of unwanted robocalls demonstrates a need for the actions taken in this Order. Abuses in telemarketing have motivated the Commission to the objective of bringing an end to consumers receiving unwanted robocalls, encountering difficult or ineffective opt-out procedures, and receiving dead-air calls. In adopting these rules, the Commission fulfills another objective in document FCC 12-21 by acting upon Congress's directive in the DNCIA.

56. In document FCC 12-21, the Commission adopts measures under the Telephone Consumer Protection Act (TCPA) to help consumers protect their privacy from unwanted telemarketing calls. Specifically, to summarize the rules adopted, the Commission revises its rules to require prior express written consent for all autodialed or prerecorded telemarketing calls to wireless numbers and prerecorded telemarketing calls residential lines and to eliminate the established business relationship exemption for prerecorded calls to residential lines while providing more flexibility for purely informational calls. The Commission revises its rules to require an automated, interactive opt-out feature at the outset of any autodialed or prerecorded telemarketing call that could be answered by the consumer in person and is available throughout the duration of the autodialed or prerecorded telemarketing call. In addition, if the called party elects to opt out, the calling party's mechanism must automatically add the consumer's number to the seller's do-not-call list and immediately disconnect the call. The revised rules will also require provision of a toll-free number that enables the consumer to call back and connect directly to an automated opt-out mechanism if the telemarketing call could be answered by an answering machine or voicemail service. Next, document FCC 12-21 revises the Commission's abandoned call rule whereby measurement of abandoned calls will occur over a 30-day period for the duration of a single calling campaign to discourage certain targeted calling campaigns. A campaign consists of the offer of the same good or service for the same seller.

57. Finally, for health care-related entities governed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Commission establishes an exemption from its TCPA rules. The Commission adopts these new rules to further protect consumers from unwanted autodialed or prerecorded telemarketing calls, also known as “robocalls,” and establish consistency with the Federal Trade Commission's Telemarketing Sales Rule (TSR), as required by statute.

58. The Commission believes the rules it adopts in document FCC 12-21 strike an appropriate balance between maximizing consumer privacy protections and avoiding imposing undue burdens on telemarketers. Document FCC 12-21 avoids imposing undue burdens of (1) requiring written consent for informational calls, (2) requiring handwritten consent agreements and handwritten signatures to fulfill the written consent requirement for telemarketing calls, and (3) requiring immediate implementation of the rules adopted herein on large and small telemarketers. For example, a community bank will not have to secure prior express written consent to provide a fraud alert notification to its customer's wireless number. In this instance, prior express oral consent to receive notifications satisfies the Commission's rules. Similarly, while the Commission adopts a prior express written consent requirement for prerecorded or autodialed telemarketing calls to wireless numbers and for prerecorded calls to residential lines, it also allows documentation and signature requirements recognized by the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) satisfies the FCC's rules and avoids the undue burden associated with generating hardcopy documentation to evidence written consent. In 2000, Congress enacted the E-SIGN Act to “facilitate the use of electronic records and signatures in interstate or foreign commerce” by granting legal effect, validity, and enforceability to electronic signatures, contracts, or other records relating to transactions in or affecting interstate or foreign commerce. Finally, the Commission eases the burden on telemarketers by deferring the effective date of the rules adopted. By adopting the rules in document FCC 12-21, the Commission maximizes the consistency between its rules and the FTC's TSR, as contemplated in the DNCIA.

59. There were no comments filed in direct response to the IRFA. Some commenters, however, raised issues and questions about the impact the proposed rules and policies would have on small entities.

60. Prior Express Written Consent Requirement. Commenters expressed a variety of concerns regarding adoption of a prior express written consent requirement for autodialed or prerecorded non-telemarketing calls. American Financial Services Association (AFSA), Bank of American (BofA) and Cross-Industry Group are concerned that requiring written consent to authorize autodialed or prerecorded calls delivering account or loan application or modification information and other informational calls would be too costly for small financial institutions. AFSA argues that the Commission should limit the prior express written consent requirement to telemarketing calls only, or alternatively that account and loan modification calls be exempt from the prior express written consent requirement. Bank of America appears to object to a prior express written consent requirement for account-servicing and loan application calls made to wireless numbers. It cautions that such a requirement would be disadvantageous to individual and small business customers seeking credit approval if Bank of America is unable to communicate with them on their wireless numbers to secure needed information. Cross-Industry Group opposes written consent for autodialed or prerecorded, non-telemarketing calls to wireless services because requiring written consent unnecessarily impedes efficient communication between businesses and consumers. The Commission limits its prior express written consent requirement to telemarketing calls; therefore, the actions it takes impose no new burdens on entities placing autodialed or prerecorded non-telemarketing calls, including home loan modification calls placed pursuant to the American Recovery and Reinvestment Act.

61. The Commission reiterates that it requires prior express written consent for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines only. Prior express consent is not required for purely informational calls, i.e. non-telemarketing. As stated earlier, several commenters expressed concerns about the consent requirement for autodialed or prerecorded non-telemarketing calls. Below you will find a summary of those concerns.

62. Research organizations expressed a concern opposing written consent for autodialed or prerecorded calls that deliver research or survey messages. For instance, Marketing Research Association (MRA) states that small businesses conducting research studies that include cell phone users in their samples would face increased costs if a written consent standard is adopted. The Commission does not require prior express written consent for autodialed or prerecorded informational, non-telemarketing calls to wireless numbers or for informational, non-telemarketing prerecorded calls to residential lines.

63. Similarly, charitable organizations contend that they would be negatively impacted if they had to secure prior express written consent for fundraising calls using autodialed or prerecorded messages. MDS Communications, Inc. asserts that a prior express written consent requirement for calls to cell phones using autodialed or prerecorded messages will have a material, detrimental effect on non-profit organizations that utilize telephone fundraising. Again, the Commission does not require prior express written consent for autodialed or prerecorded informational, non-telemarketing calls to wireless numbers or for prerecorded informational, non-telemarketing calls to residential lines.

64. Likewise, Portfolio Recovery Associates (PRA) predicts that numerous entities, including school boards, non-profit organizations, political candidates, debt collectors, small businesses, and large established companies would be unnecessarily and adversely affected if the written consent requirement is applied to all autodialed and prerecorded calls to mobile telephones, including purely informational calls. The Commission's actions do not require prior express written consent for informational, non-telemarketing calls to wireless numbers.

65. The last comment to address potential burdens on small businesses arising from the consent rules concerns electronic documentation obtained pursuant to the E-SIGN Act. Mark Schwartz states that it is incorrect for the Commission to reason that the burden of requiring a small business to obtain an existing customer's written or electronic consent to send intrastate prerecorded sales calls to that customer is lessened by the E-SIGN Act. He argues that the E-SIGN Act (1) was written for interstate and foreign commerce only and (2) burdens small businesses with determining which technological methods are compliant with the E-SIGN Act. Congress enacted the E-SIGN Act to “facilitate the use of electronic records and signatures in interstate or foreign commerce” by granting legal effect, validity, and enforceability to electronic signatures, contracts, or other records relating to transactions in or affecting interstate or foreign commerce. The Commission believes that by allowing E-SIGN measures to secure written consent, it relieves all businesses, including small businesses, from the burden of securing paper documents from consumers to evidence prior express written consent. Although the E-SIGN Act may be directed to interstate and foreign commerce, the Commission concludes that the measures to affect an electronic signature described in the E-SIGN Act should be allowed here because these measures would significantly facilitate its written consent requirement. With regard to any uncertainty concerning what satisfies the prior express consent requirement, the Commission concludes that consent obtained in compliance with the E-SIGN Act will satisfy the requirements of its revised rule, including permission obtained via an email, Web site form, text message, telephone keypress, or voice recording.

66. Abandoned Calls. Predictive dialers initiate phone calls while telemarketers are talking to other consumers and these dialers frequently disconnect those calls when a telemarketer is unavailable to take the next call. In attempting to “predict” the average time it takes for a consumer to answer the phone and when a telemarketer will be free to take the next call, predictive dialers may either “hang-up” on consumers or keep the consumer on hold until connecting the call to a sales representative, resulting in what has been referred to as “dead air.” Dead-air calls are abandoned calls. The Commission's existing rules limit the percentage of abandoned calls that a telemarketer may incur to three percent (3%) over a thirty day period.

67. Newspaper Association of America (NAA) states that the “per campaign” limitation adopted in this Order has a negative impact on smaller businesses, including newspapers. A campaign consists of the offer of the same good or service for the same seller. NAA believes that small community newspapers would be hampered the most because their telemarketing calling list is less than 5,000. It contends that when calling a small list the algorithm used by predictive dialers is not as precise and results in more abandoned calls. NAA favors the existing abandoned call rule. NAA's concern is not significant because the FTC has already implemented this same abandoned call requirement and the burden, if any, is significantly mitigated by the FTC's action.

68. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. Under the Small Business Act, a “small business concern” is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

69. The Commission's rules on telephone solicitation and the use of autodialers and artificial or prerecorded messages apply to a wide range of entities, including all entities that call residential telephone lines and/or telephone numbers assigned to wireless numbers to advertise. In the IRFA, the Commission concluded that determining the precise number of small entities that will be subject to the rules is not readily feasible and invited comment on such number. None of the commenting parties provided the requested information. Based on the absence of available date in this proceeding, the Commission, like the FTC, believes that determining the precise number of small entities to which the rules adopted herein will apply is not currently feasible.

70. Because its action affects the myriad of businesses throughout the nation that use telemarketing to advertise, the Commission offers these following categories of businesses which it believes will be impacted by rules it adopts in document FCC 12-21. For example the types of business impacted by its rules include, but are not limited to, commercial banks, mortgage brokers, pharmacies, freight airlines, and utility companies that elect to use automated or prerecorded telemarketing calls or health care-related calls.

71. Commercial Banks. SBA defines a commercial bank as a small business if its total assets do not exceed $175 million. This industry comprises establishments primarily engaged in accepting demand and other deposits and making commercial, industrial, and consumer loans. Commercial banks and branches of foreign banks are included in this industry. U.S. Census data for 2007 indicate that, in this industry, there were 6,490 commercial banks that operated for the entire year. Of these, 6,490, 6135 operated with annual receipts of $100,000,000 or less; 189 operated with annual receipts of $100,000,000 to $249,999,999; and 166 operated with annual receipts of more than $250,000,000. Based on this data, it is impossible to state precisely how many commercial banks operated with annual receipts of $175 million or less, but since the data do specifically indicate that 6,135 of 6,490 banks operated with less than $100,000,000 in annual receipts, the Commission concludes that a substantial majority of commercial banks are small under the SBA standard.

72. Mortgage Brokers. SBA defines a mortgage broker as a small business if its annual receipts do not exceed $7 million. Census data for 2007 indicate that in 2007, 17,702 mortgage broker firms operated for the entire year. Of these, 17,363 operated with annual receipts of $5 million or less; 177 operated with annual receipts of between $5 million and $9,999,999; and 132 operated with annual receipts of $10 million or more. While the exact number that operated with annual receipts of $7 million or less cannot be stated precisely, the available data clearly show that a substantial majority of brokerage firms were small by the SBA standard.

73. Pharmacies and Drug Stores. Likewise, pharmacies and drug stores which do not exceed $25.5 million in annual receipts are considered small businesses. U.S. Census data show that 17,217 firms operated in this category during that entire year. Of these 7,217 firms, 14,136 received annual receipts of $5 million or less; 2,311 received annual receipts of between $5 million and $9,999,999; and 770 received annual receipts of $10 million or more. Based on this data, the Commission cannot state precisely how many businesses earned $7.0 million or less in annual receipts. The Commission concludes, however, that a substantial majority of businesses in this category are small under the SBA standard.

74. Freight Airlines. This U.S. industry comprises establishments primarily engaged in providing air transportation of cargo without transporting passengers over regular routes and on regular schedules. Establishments in this industry operate flights even if partially loaded. Establishments primarily engaged in providing scheduled air transportation of mail on a contract basis are included in this industry. For freight airlines, the SBA developed a small business size standard for such companies stating that those companies having 1500 or fewer employees are small. U.S. Census data for 2007 indicate that there were 221 businesses in this category that operated for the entire year. Of these 221, 220 operated with 999 employees or less, and one (1) operated with more than 1000 employees. Based on this data, the Commission concludes that a substantial majority of the freight airlines in this category are small under the SBA standard.

75. Utility Companies. The SBA also developed a small business size standard for utility companies. For electric utility companies, the small business size standard is any electric utility that it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours. U.S. Census does not provide megawatt hours information and does not provide a specific number of small utility companies.

76. Telemarketing Bureaus and Other Contact Centers. This U.S. industry comprises establishments primarily engaged in operating call centers that initiate or receive communications for others—via telephone, facsimile, email, or other communication modes—for purposes such as (1) promoting clients, products or services, (2) taking orders for clients, (3) soliciting contributions for a client; and (4) providing information or assistance regarding a client's products or services. These establishments do not own the product or provide the services they are representing on behalf of clients. The SBA has determined that “Telemarketing Bureaus and other Contact Centers” with $7 million or less in annual receipts qualify as small businesses. U.S. Census data for 2007 indicate that 2,100 businesses in this category operated throughout that year. Of those 2,100 businesses, 1,764 operated with annual receipts of less than $5 million; 145 operated with annual receipts between $5 million and $9,999,999; and 191 operated with annual receipts of $10 million or more. Based on this data, it is not possible to state precisely how many businesses in this category operated with annual receipts of $7 million or less. The Commission concludes, however, that a substantial majority of businesses in this category are small under the SBA standard.

77. The rules adopted herein establish recordkeeping requirements for a large variety of businesses, including small business entities. First, the seller must secure a written agreement between itself and the consumer showing that the consumer agrees to receive autodialed or prerecorded telemarketing calls from the seller. The Commission allows the seller the flexibility to determine the type of written agreement that it will secure from the consumer. The Commission does not require a particular form or format for this written agreement or its retention. The E-SIGN Act also provides additional flexibility in obtaining electronic consent producing minimal additional recordkeeping efforts. To the extent that the calling parties rely on an established business relationship, the Commission notes that it previously stated that telemarketers that claim their prerecorded messages are delivered pursuant to an established business relationship must be prepared to provide clear and convincing evidence of the existence of such a relationship. Because of these factors, any additional recordkeeping costs should be minimal.

78. Second, telemarketers and sellers, including small business entities, that initiate telemarketing calls using autodialed or prerecorded messages, must provide an automated, interactive opt-out feature at the outset of such a call. This rule obligates telemarketers and sellers to retain records of providing this feature and to retain records of consumers opting out of receiving these autodialed or prerecorded telemarketing messages. Such records should demonstrate the telemarketer's and seller's compliance with the provision and utilization of the automated, interactive opt-out feature. The Commission allows the telemarketers and sellers the flexibility to determine how to implement the mechanism. The Commission does not require a particular form or format evidencing this mechanism or its implementation.

79. Thirdly, the Commission revises its abandoned call requirement. There is no additional recordkeeping burden for this revision because the Commission's rule already requires that the seller or telemarketer maintain records establishing compliance with the abandoned call rules.

80. The RFA requires an agency to describe any significant alternatives that it has considered in developing its approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.” As indicated above, various groups will be subject to the Commission's new rules, and some of these entities are classified as small entities.

81. Prior Express Written Consent Requirement. At the outset, the Commission notes that the adopted rules differ from the proposed rules. In the proposed rules, the Commission considered adopting prior express written consent for all autodialed or prerecorded calls to wireless numbers and for all prerecorded calls to residential lines. Here, the Commission adopts prior express written consent for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines only. Limiting the written consent requirement to telemarketing calls significantly reduces the compliance burden for all entities, including small entities. In adopting the written consent requirement for autodialed or prerecorded telemarketing calls to wireless numbers and for prerecorded telemarketing calls to residential lines, the Commission also concluded that consent obtained pursuant to the E-SIGN Act will satisfy the requirement of its revised rule, including permission obtained via an email, Web site form, text message, telephone keypress, or voice recording. Accepting consent pursuant to the E-SIGN Act relieves all businesses, including small entities, from the economic impact of generating and retaining a paper document to evidence their compliance.

82. Elimination of Established Business Relationship Exemption. In document FCC 12-21, the Commission amends its rules to eliminate the established business relationship (EBR) exemption for prerecorded telemarketing calls. Eliminating the established business relationship exemption will be a burden to the calling telemarketer because the calling party will not be able to rely on the EBR as its form of prior express consent. That burden is mitigated because the prior express written consent requirement can be fulfilled using electronic measures including those described in the E-SIGN Act. Securing written consent using electronic measures relieves the calling parties from the task of securing handwritten documentation and handwritten signatures. This reasoning applies equally to small entities. Moreover, with the increasing use of cell phones, the burden of eliminating the established business relationship exemption on telemarketers is further diminished because the EBR never applied to robocalls to cell phones. In addition, because the FTC's TSR already imposes a prior express written consent requirement for telemarketing calls and does not recognize an EBR, many entities have already implemented steps to fulfill this requirement, thereby reducing the burden associated with the rule the Commission adopts in document FCC 12-21.

83. Opt-Out Mechanism. The opt-out provisions in document FCC 12-21 do not impose significant economic impact on small businesses. The Commission did not receive any comments stating that this rule would cause a significant economic impact on small businesses.

84. Abandoned Call. One business concern, the Newspaper Association of America, suggests that the abandoned call rule adopted will present an adverse economic impact on small businesses. The Commission disagrees. Neither NAA nor its membership will be burdened by the abandoned call rule adopted in document FCC 12-21 because these entities are already subject to the FTC's abandoned call provision in the TSR. The abandoned call provision adopted in this Order is identical to the FTC's TSR abandoned call provision. Document FCC 12-21 also rejects an alternate proposal to measure the abandoned calls on a per-campaign, per day basis. Measuring the abandoned call rate on a per-campaign, per-day basis, instead of a per-campaign, 30-day basis, would pose a significant economic burden on all businesses, including small businesses.

The Commission identified alternatives to the rules adopted in document FCC 12-21, but it rejects these alternatives because they are more costly to small businesses.

Pursuant to the authority contained in sections 1-4, 222, 227, and 303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-154, 222, 227, and the Do-Not-Call Implementation Act, Public Law 108-10, 117 Stat. 557, that document FCC 12-21 in CG Docket No. 02-278 IS ADOPTED, and that part 64 of the Commission's rules, 47 CFR 64.1200, is amended. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of document FCC 12-21, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows:

On March 4, 2004, FMCSA published in the Federal Register (69 FR 10288) its Guidance for the use of binding arbitration as an alternative dispute resolution technique in Agency civil penalty forfeiture proceedings in which the only issues remaining to be resolved are the amount of the civil penalty owed and/or the length of time in which to pay it. Under the Guidance's “Night Baseball” format, telephonic hearings were held, during which each party presented to the Arbitrator evidence supporting the penalty it considered appropriate for the case without divulging its proposed penalty. Following the hearing, each party provided the Arbitrator and the opposing party with a sealed envelope containing the amount of the total proposed civil penalty for the case and, if desired, a proposed payment plan. Before opening the envelopes, the Arbitrator issued to the parties an initial written determination of the total civil penalty and payment plan. The Arbitrator then opened the envelopes and selected the proposed civil penalty and payment plan that was closer to his or her determination. The final penalty amount and payment plan were distributed to the parties in a final written decision.

On March 21, 2011, FMCSA published in the Federal Register its proposal to eliminate the “Night Baseball” format from the Guidance (76 FR 15359). Several years of experience with this format have revealed that final civil penalties are rarely identical to the Arbitrator's determination, and occasionally not close at all. In addition, the “Night Baseball” format requires each party to persuade the Arbitrator to accept the wisdom of its position without being able to reveal the civil penalty it is proposing. The Agency sought comment on a new procedure, in which the Arbitrator would determine the amount of the civil penalty following a hearing. The comment period has closed, and FMCSA received no comments. Accordingly, FMCSA is eliminating “Night Baseball” from all proceedings assigned for binding arbitration from this day forward. Following the presentation of evidence by the parties, the Arbitrator will determine the amount of the civil penalty and the payment plan. The maximum civil penalty will be the penalty set forth in the Notice of Claim; there will be a minimum civil penalty in only those cases in which there is a statutory minimum.

The Agency is also revising the Guidance to incorporate typographical corrections and other minor changes, changes necessary to resolve inconsistencies, and changes needed to describe actual practice. For example, although the Chief Safety Officer is the FMCSA Assistant Administrator, the Agency is changing “Chief Safety Officer” to “Assistant Administrator” because that is the term used to describe the decisionmaker in 49 CFR part 386, which includes binding arbitration as one of the options for a Reply to a Notice of Claim.

The Guidance contains “Questions and Answers on FMCSA's Use of Binding Arbitration,” set forth as Issues and Responses. The Responses to Issues 2 and 9 in the 2004 Guidance were inconsistent with each other. The Response to Issue 2 said that “[t]he decision to arbitrate is strictly that of the parties” and that “arbitration must be a completely voluntary process.” On the other hand, the Response to Issue 9 said that if a carrier opted for binding arbitration, the Field Administrator had the burden to demonstrate why the matter should not be so assigned, and the Chief Safety Officer would decide whether the matter should be arbitrated.

In In the Matter of New Metro Trucking Corp., Docket No. FMCSA-2009-0376, Order on Binding Arbitration, May 23, 2011, the Assistant Administrator found that the language in the Response to Issue 9 trumped the language in the Response to Issue 2, thereby limiting the Field Administrator's discretion in objecting to binding arbitration. The Assistant Administrator found that, based on the Guidance as it was then written, the Field Administrator could prevent binding arbitration in only those cases in which binding arbitration had been determined to be inappropriate, as described in the Response to Issue 1: maximum civil penalty cases issued pursuant to section 222 of the Motor Carrier Safety Improvement Act of 1999, or any cases that deal with an interpretation of the regulations or with important policy issues.

Therefore, the Response to Issue 9 effectively removed the voluntariness set forth in the Response to Issue 2. Under the Response to Issue 9, the Chief Safety Officer could assign a matter for binding arbitration if the Field Administrator did not meet his burden, even if the Field Administrator did not wish the matter to be arbitrated. Accordingly, the Agency is eliminating the inconsistency, merging both Responses into Issue 2, and deleting the previous Issue 9 and its Response. Under the Guidance that becomes effective today, the Field Administrator's objection will not be limited. To make meaningful the Response to Issue 2 that the decision to arbitrate is strictly that of the parties, the Agency is permitting the Field Administrator to prevent binding arbitration by objecting to it for any reason. This change is consistent with the Administrative Dispute Resolution Act of 1996 (ADRA) (Pub. L. 104-320, 110 Stat. 3870, October 19, 1996) (now codified at 5 U.S.C. 571-584), which authorizes the use of arbitration “whenever all parties consent.” 5 U.S.C. 575(a)(1).

Finally, the statements in the previous Responses to Issues 2 and 9, concerning the issuance of a Notification of Arbitration, were not accurate. Those two Responses, which stated that if the Chief Safety Officer determined that a case was appropriate for binding arbitration, he or she would notify the parties by issuing a Notification of Arbitration, did not mirror actual practice. The previous Response to Issue 9 provided that the Notification would require each party to return the Notification form indicating agreement or objection. In actual practice, the Chief Safety Officer did not issue a Notification of Arbitration to the parties. As a result, the Agency is eliminating the Notification of Arbitration in the revised Response to Issue 2 to mirror actual practice. If, in its Reply to a Notice of Claim, a respondent requests binding arbitration, the Field Administrator may consent or object. If the Field Administrator objects, the matter will not be referred to binding arbitration; if the Field Administrator consents, the Assistant Administrator will decide whether the case is to be referred to binding arbitration. The Assistant Administrator will inform the parties of his or her decision in an Order on Binding Arbitration.

The revised Guidance reads as follows:

In binding arbitration, the parties agree to use a mutually selected decisionmaker to hear their dispute and resolve it by rendering a decision or award that is binding on the parties. Like litigation, binding arbitration is an adversarial adjudicative process designed to resolve the specific issues submitted by the parties. Binding arbitration differs significantly from litigation, however, in that it does not require conformity with the legal rules of evidence, and the proceeding is conducted in a private rather than a public forum. Binding arbitration awards typically are enforceable by courts, absent defects in the arbitration procedure. The grounds for appeal from arbitration awards, pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16, are generally limited to fraud or misconduct in the proceedings. See 9 U.S.C. § 10.

The process for reaching the final award will be as follows: Each party will present evidence it considers appropriate for the case as a whole. Evidence will be presented in accordance with the procedures established by the parties within the Arbitration Agreement. No evidence shall be offered or accepted concerning whether the violation(s) occurred, because the parties concede the violations as a condition of arbitration. Following the hearing, the arbitrator will determine, in writing, the total civil penalty and, if necessary, a payment plan.

As discussed later in this Guidance, the civil penalty amount may not be set lower than the statutory minimum for any violation, if there is a statutory minimum, or higher than the amount proposed in the Notice of Claim. Because the ADRA requires the parties to agree on a maximum award, FMCSA provides that the maximum award be set at the amount proposed in the Notice of Claim.

The ADRA states that Agencies shall consider not using any form of alternative dispute resolution (ADR), including binding arbitration, if:

(1) A definitive or authoritative resolution of the matter is required for precedential value, and such a proceeding is not likely to be accepted generally as an authoritative precedent;

(2) The matter involves or may bear upon significant questions of Government policy that require additional procedures before a final resolution may be made, and such a proceeding would not likely serve to develop a recommended policy for the agency;

(3) Maintaining established policies is of special importance, so that variations among individual decisions are not increased and such a proceeding would not likely reach consistent results among individual decisions;

(4) The matter significantly affects persons or organizations who are not parties to the proceeding;

(5) A full public record of the proceeding is important, and a dispute resolution proceeding cannot provide such a record; or

(6) The agency must maintain continuing jurisdiction over the matter with authority to alter the disposition of the matter in the light of changed circumstances, and a dispute resolution proceeding would interfere with the agency's fulfilling that requirement. See 5 U.S.C. § 572(b).

Accordingly, unless the Assistant Administrator determines that the use of binding arbitration will be in the best interests of the government, a case will not be submitted to binding arbitration under the circumstances set forth above.

The ADRA includes a number of provisions relating to arbitration. FMCSA's use of binding arbitration will be modeled on these provisions.

1. The decision to arbitrate must be voluntary on the part of all parties to the arbitration ( See 5 U.S.C. § 575(a)(1).)

2. An agreement to arbitrate must be in writing. It must set forth the subject matter submitted to the arbitrator, and must specify the maximum award that may be granted by the arbitrator. ( See 5 U.S.C. § 575(a)(2).)

3. FMCSA shall not require anyone to consent to arbitration as a condition of entering into a contract or obtaining any other benefit. ( See 5 U.S.C. § 575(a)(3).)

4. The Field Administrator who offers to use arbitration has the authority to enter into a settlement concerning the matter after the Assistant Administrator has consented to the use of arbitration. ( See 5 U.S.C. § 575(b)(1) and (2).)

Arbitration agreements are enforceable pursuant to 9 U.S.C. § 4.

1. The parties to an arbitration are entitled to participate in selecting an arbitrator. ( See 5 U.S.C. § 577(a).)

2. An arbitrator shall not have an official, financial, or personal conflict of interest with respect to the issue in controversy, unless that interest is fully disclosed in writing and all parties agree that he/she may serve as the arbitrator. ( See 5 U.S.C. §§ 573 and 577(b).)

1. An arbitrator may regulate the course and conduct of the arbitration hearing. ( See 5 U.S.C. § 578(1).)

2. An arbitrator may administer oaths and affirmations. ( See 5 U.S.C. § 578(2).)

3. An arbitrator may compel the attendance of witnesses and the production of evidence only to the same extent the agency involved is otherwise authorized by law to do so. ( See 5 U.S.C. § 578(3).)

4. An arbitrator may make awards. ( See 5 U.S.C. § 578(4).)

1. The arbitrator shall set the time and place for the arbitration hearing and shall notify the parties of same at least five days before the hearing is to take place. ( See 5 U.S.C. § 579(a).)

2. Parties are entitled to a record of the arbitration hearing. Any party wishing a record shall: (1) Make the arrangements for it; (2) notify the arbitrator and other parties that a record is being prepared; (3) supply copies to the arbitrator and the other parties; and (4) pay all costs, unless the parties have agreed to share the costs or the arbitrator determines that the costs shall be apportioned. ( See 5 U.S.C. § 579(b)(1)-(4).)

3. At any arbitration hearing, parties are entitled to be heard, to present evidence, and to cross-examine witnesses. The arbitrator may, with the consent of the parties, conduct the hearing by telephone, television, computer, or other electronic means, if each party has the opportunity to participate. ( See 5 U.S.C. § 579(c)(1) and (2).)

4. The arbitrator may receive any oral or documentary evidence. The arbitrator, however, may exclude any evidence that is irrelevant, immaterial, unduly repetitious, or privileged. ( See 5 U.S.C. § 579(c)(4).)

5. The arbitrator shall interpret and apply any relevant statutes, regulations, legal precedents, and policy directives. ( See 5 U.S.C. § 579(c)(5).)

6. No party shall have any unauthorized ex parte communication with the arbitrator relevant to the merits of the proceeding, unless the parties agree otherwise. If a party violates this provision, the arbitrator shall ensure that a memorandum of the communication is included in the record, and that an opportunity for rebuttal is allowed. The arbitrator may require the party who engages in an unauthorized ex parte communication to show cause why the issue in controversy should not be resolved against that party for the improper conduct. ( See 5 U.S.C. § 579(d).)

1. An arbitration award shall include a brief informal discussion of the factual and legal bases for the award. Formal findings of fact and conclusions of law are not required. ( See 5 U.S.C. § 580(a)(1).)

2. A final award is binding on the parties and may be enforced pursuant to 9 U.S.C. 9-13. ( See 5 U.S.C. § 580(c).)

3. An arbitration award may not serve as an estoppel in any other proceeding and may not be used as precedent in any factually unrelated proceeding. ( See 5 U.S.C. § 580(d).)

1. Any action for review of an arbitration award must be made pursuant to sections 9 through 13 of title 9, U.S. Code. ( See 5 U.S.C. § 581(a).) A court may vacate an award where the award was procured by corruption, fraud, or undue means; where there was arbitrator partiality, corruption, misconduct, or misbehavior; or where an arbitrator has exceeded his or her powers or so imperfectly executed the these powers that a mutual, final, and definitive award was not made. ( See 9 U.S.C. § 10(a).)

2. A decision by an agency to use or not to use arbitration shall be committed to the discretion of the agency and shall not be subject to judicial review, except that if the agency uses arbitration, a court may vacate the award under section 10 of title 9, U.S. Code ( see 5 U.S.C. § 581(b), if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572 of title 5.

Issue 1: For what types of cases will FMCSA be willing to use binding arbitration?

Response: FMCSA is generally willing to use binding arbitration for the resolution of cases in which the only questions are the amount of the civil penalty and/or the length of time permitted to pay it. FMCSA is generally willing to arbitrate the length of time in which to pay a civil penalty, but not the civil penalty amount, in: (1) maximum civil penalty cases issued pursuant to section 222 of the Motor Carrier Safety Improvement Act of 1999, Pub. L. 106-159, 113 Stat. 1748 (December 9, 1999), 49 U.S.C. 521 note; (2) cases in which the statutorily mandated minimum amount has been assessed; or (3) any cases that deal with an interpretation of the regulations or with important policy issues.

Issue 2: How and by whom will the decision to arbitrate be made?

Response: The decision to arbitrate is that of the parties. As with any other form of ADR, arbitration must be a voluntary process. As a result, if either party objects for any reason, the matter will not be referred to binding arbitration. Even if both parties consent to binding arbitration, however, the Assistant Administrator may decline to refer the amount of the civil penalty to arbitration if he or she determines that it is one of the cases set forth in the Response to Issue 1, above, that FMCSA will not agree to arbitrate. The Assistant Administrator will issue an Order on Binding Arbitration indicating that a matter will or will not be referred to binding arbitration.

In accordance with 49 CFR 386.14(b)(3), a respondent may seek binding arbitration as part of its reply to a Notice of Claim. The Field Administrator in the service center in which the case resides will consent or object to the request for binding arbitration. If the Field Administrator objects, the matter will not be referred to binding arbitration; if the Field Administrator consents, the Assistant Administrator will decide whether the case will be referred to binding arbitration. Referral is contingent upon the respondent's admission of liability that the violation or violations occurred as charged.

Issue 3: Who will have authority to authorize arbitration?

Response: The Assistant Administrator will decide which cases are appropriate for ADR. Again, this class of cases will include only those that involve a monetary dispute and/or the time in which to pay a civil penalty, and do not fall within the category of cases excluded under Response 1, above. The Assistant Administrator has the discretion to delegate this authority to the FMCSA Adjudications Counsel.

Issue 4: Who has the authority to enter into settlement for FMCSA? May this authority be delegated?

Response: The Field Administrator has the authority to settle a case for FMCSA. This authority may be delegated to the Enforcement Program Manager.

Issue 5: How will a cap on the award be established?

Response: The maximum arbitration award will be set at the civil penalty amount assessed in the Notice of Claim, or amended Notice of Claim, if one is issued.

Issue 6: Is there a limitation on the length of time for a payment plan, if the arbitrator orders a payment plan?

Response: The maximum period that the Arbitrator may permit for a payment plan is 60 months from the date of the issuance of the Award.

Issue 7: Who will negotiate the rules and selection of the arbitrator?

Response: The parties must mutually agree upon the arbitrator and will have several options from which to choose, including: (1) Civilian Board of Contract Appeals Judges or representatives from other government agencies who have been trained in arbitration; (2) Uncompensated Neutrals from local communities; and (3) Compensated Neutrals from outside the government, whose costs are to be shared by agreement of the parties. For FMCSA, the decision regarding selection of the arbitrator will be that of the Field Administrator. The parties will establish the procedural rules that will govern any binding arbitration, with input from the selected arbitrator, and include the rules in the Arbitration Agreement.

Issue 8: Who will draft the Arbitration Agreement?

Response: The parties will draft the Arbitration Agreement, with substantive input from the selected arbitrator. A sample Arbitration Agreement is included in Appendix A.

Issue 9: How can FMCSA encourage the efficiency of the arbitration process?

Response: Only single arbitrators (rather than panels of arbitrators) will handle these cases. To ensure maximum efficiency of the arbitration process, subject to the consent and cooperation of the carrier, FMCSA will encourage:

A. The resolution of the controversy by means of document review or by arbitration via telephone conference in appropriate cases, with the consent of the carrier.

B. The arbitrator to establish reasonable deadlines for any hearing and rendering of an award. These timeframes will be incorporated into the Arbitration Agreement.

Issue 10: What is the arbitrator's role?

Response: Consistent with the ADRA, the arbitrator will have the authority to:

• Regulate the course and conduct of arbitration hearings;

• Administer oaths;

• Compel attendance of witnesses and production of evidence, to the extent that the agency is authorized to do so by law;

• Issue awards.

The parties, as part of their Arbitration Agreement, may include any specific additional powers they wish the arbitrator to have and provide the arbitrator broad discretion in terms of efficient case management.

Issue 11: Will FMCSA permit the use of a panel of arbitrators in some circumstances?

Response: Because of the costs of a panel of arbitrators and the lack of complexity in these cases, FMCSA will not agree to a panel of arbitrators.

Issue 12: What selection criteria will be considered in choosing an arbitrator?

Response: The primary criteria for selecting an arbitrator will be: (1) Overall reputation of the arbitrator in terms of competence, integrity, and impartiality; (2) availability of the arbitrator during the period most convenient for the parties; (3) relative cost; (4) the absence of any actual or potential conflict of interest; and (5) geographic proximity of the proposed arbitrator to the parties and to witnesses if the Arbitration Agreement calls for an in-person hearing.

Issue 13: Will FMCSA agree to allow non-attorneys to represent a party, or for a party to appear pro se at the arbitration?

Response: Yes. The Rules of Practice for Motor Carrier, Intermodal Equipment Provider, Broker, Freight Forwarder, and Hazardous Materials Proceedings, 49 CFR part 386, are designed to be readily accessible to small business enterprises and other entities. Carriers often respond to notices of claim without assistance of any counsel. Before approving any Arbitration Agreement entered into by an unrepresented carrier, the arbitrator shall require such carrier to execute a statement acknowledging the risks and limitations inherent in any arbitration.

Issue 14: What should an Arbitration Agreement include?

Response: The Agreement should include the following:

1. The names of the parties.

2. The issues being submitted to binding arbitration.

3. The maximum award that the arbitrator may direct.

4. Any other conditions limiting the range of possible outcomes, including, but not limited to, any statutory minimum for violations, such as the statutory minimum for violations of the Hazardous Materials Regulations, as set forth at 49 U.S.C. § 5123(a).

5. The scope of the arbitration. This will limit time and cost and give the arbitrator power to be a “case manager.” A sample case management provision might read:

“The Arbitrator is expected to assume control of the process and to schedule all events as expeditiously as possible, to ensure that an award is issued no later than __ days from the date of this Agreement. The penalty will be due to FMCSA thirty (30) days after service of the Arbitration Award by the Arbitrator unless a payment plan is ordered by the Arbitrator.”

6. References to all provisions of the 49 CFR 386 rules regarding discovery and the conduct of hearings that the parties may wish to apply to the arbitration process.

7. The name of the arbitrator, the amount of compensation (if any) and how it will be paid. (Note: No Agreement shall provide for deposits in an escrow account to pay for expenses of the proceeding in advance of expenses being incurred.)

8. The date the arbitration will begin.

9. The types of remedies available.

10. A confidentiality provision referring to the ADRA and stating that neither the Arbitration Agreement nor the arbitration award will be considered confidential.

11. The bases for appeal.

12. A statement that the arbitration hearing is open only to parties, their representatives, and the arbitrator and that the hearing is not a public forum.

13. A statement that the arbitrator's decision will be issued in writing, and will state the factual and legal bases for, and the amount of, the penalty awarded by the arbitrator.

14. A statement that the carrier will have thirty (30) days from the date of service of the award to pay the amount awarded unless the arbitrator orders a payment plan.

15. A statement that the arbitration award is final and has the same force and effect as any final agency order and that the failure to pay the determined award triggers the same Agency remedies as would the failure to pay a civil penalty award entered by the Assistant Administrator.

A Sample Arbitration Agreement is included in Appendix A.

Issue 15: How will FMCSA pay the arbitrator?

Response: The ADRA allows an agency to use, with or without reimbursement, the services and facilities of other Federal agencies, State, local and tribal governments, public and private organizations and agencies, and individuals, with the consent of such agencies, organizations, and individuals, and without regard to the provisions of 31 U.S.C. § 1342 (regarding the acceptance of voluntary services). See 5 U.S.C. § 583. In addition, the ADRA permits selection of all ADR neutrals, including arbitrators, to be done non-competitively. See 41 U.S.C. § 253(c)(3). FMCSA and the carrier must agree on the selection of the arbitrator.

FMCSA uses three categories of potential arbitrators: (1) Judges from the United States Civilian Board of Contract Appeals (CBCA) or representatives from other government agencies who have been trained in arbitration; (2) Uncompensated Neutrals from local communities; and (3) Compensated Neutrals from outside the government, whose costs are to be shared by agreement of the parties. If the parties cannot agree on the no-cost option of either a CBCA judge or an Uncompensated Neutral, the parties must agree in advance to share any arbitrator fees and costs, the costs of any transcripts, or other costs, all of which will be paid after the award is issued. FMCSA will not escrow funds or pay in advance for any such costs.

Issue 16: Is FMCSA willing to use “administered arbitration?”

Response: No. Because of the cost implications, FMCSA will not agree to “administered arbitration,” which is arbitration administered by an outside ADR organization.

Issue 17: What must the arbitration award include?

Response: The arbitration award need not be in the form of formal findings of fact and conclusions of law, but must be in writing and at least provide in summary form the monetary amount of the award, if any, and the factual and legal basis for the arbitrator's decision. The award will be subject to the amount set forth in the Notice of Claim as the maximum, to statutory minimums, if any, and to any other limitations agreed upon by the parties.

Arbitration awards are not confidential documents. Awards shall be entered into the FMCSA docket in regulations.gov for the case. Additionally, awards will be posted on FMCSA's Chief Counsel Web site.

Issue 18: Will FMCSA allow arbitration on the documents only, without a hearing?

Response: While the parties to the arbitration are entitled to be heard, to present evidence, and to cross-examine witnesses appearing at a hearing, FMCSA encourages arbitration on the documents only without a hearing. This would have the advantage of saving time and money, and avoiding scheduling conflicts. The Arbitration Agreement, however, should allow the parties to request a hearing either in-person or through telephonic, video- conference, or computer-based means. The Arbitration Agreement should also allow the arbitrator discretion to call for an in-person hearing should the arbitrator determine that credibility may be a factor in the proceeding. The arbitrator may also conduct, with the consent of the parties, all or part of a hearing by telephone, video conferencing, or computer, so long as each party has an equal opportunity to participate.

Issue 19: May an arbitration award be used as a precedent in any other proceeding?

Response: No. The arbitration award may not be used as precedent consistent with 5 U.S.C. § 580(d). Nonetheless, by entering into arbitration, the carrier has admitted, or the Assistant Administrator has found that the carrier has admitted, violating the regulation(s) as charged in the Notice of Claim. These violation(s) may be considered in future enforcement actions by FMCSA.

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).

On February 27, 2012, NMFS published a notice of availability for Amendment 24 and requested public comment (77 FR 11477). On March 30, 2012, NMFS published a proposed rule for Amendment 24 and requested public comment (77 FR 19169). The proposed rule and Amendment 24 outline the rationale for the actions contained in this final rule. A summary of the actions implemented by this final rule is provided below.

This final rule removes the gag, black grouper, and red grouper combined commercial and recreational ACLs and AMs, and specifies the ACLs and AMs for red grouper. This final rule implements in-season commercial and recreational sector AMs for red grouper, as well as post-season overage adjustments. In addition to the actions contained in this final rule, specific to red grouper, Amendment 24 implements a 10-year rebuilding plan, specifies the maximum sustainable yield (MSY) and OY values, revises the definition of minimum stock size threshold (MSST) to be 75 percent of the spawning stock biomass when fishing at the MSY level, specifies commercial and recreational allocations, and establishes a recreational sector annual catch target (ACT). The intent of Amendment 24 and this final rule is to specify ACLs and AMs for red grouper while maintaining catch levels consistent with achieving OY for the red grouper resource.

A total of nine comments were received on Amendment 24 and the proposed rule. One commenter submitted identical comments on Amendment 24 and the proposed rule. One Federal agency stated that they had no comment on Amendment 24. NMFS received one comment of general support and six individual comments opposing one or more of the actions contained in Amendment 24 and the proposed rule. Specific comments related to the actions contained in Amendment 24 and the proposed rule, as well as NMFS' respective responses, are summarized below.

Comment 1: The restrictions on red grouper harvest in Amendment 24 are not necessary because a 4-month closure for shallow-water groupers is currently in place. In addition, the Magnuson-Stevens Act requirement that the Council prepare and implement a plan amendment to rebuild red grouper should not apply because the 4-month closure, implemented through Amendment 16 to the FMP (74 FR 30964, June 29, 2009), was not considered in the Southeast Data, Assessment, and Review (SEDAR) SEDAR 19 stock assessment.

Response: The most recent South Atlantic red grouper stock assessment, SEDAR 19, was completed in 2010 and used data available through 2008. Therefore, SEDAR 19 did not consider impacts of the 4-month prohibition on the harvest, landing, and possession of shallow-water groupers (gag, black grouper, red grouper, scamp, red hind, rock hind, coney, yellowfin grouper, yellowmouth grouper, and tiger grouper) implemented in 2009 through Amendment 16 to the FMP (74 FR 30964, June 29, 2009). However, SEDAR 19 determined that red grouper was overfished and undergoing overfishing, and NMFS notified the Council of the red grouper stock status on June 9, 2010. The Council is required by the Magnuson-Stevens Act to implement a rebuilding plan within 2 years after notification of an overfished stock.

NMFS and the Council must schedule stock assessments several years in advance to allow time for the needed data to be compiled for use by stock assessment scientists. The effect of the 4-month closure and other recent measures implemented to improve the status of red grouper will be evaluated in the next stock assessment, scheduled to begin in 2013.

The Council and NMFS are also required to establish ACLs and AMs based on the best scientific information available. Commercial and recreational aggregate ACLs and AMs for black grouper, gag, and red grouper were established through Amendment 17B to the FMP (75 FR 82280, December 30, 2010). The aggregate ACLs currently in place were computed using landings data for black grouper and red grouper prior to the availability of stock assessments (SEDAR 19) for these two species. This final rule will remove the gag, black grouper, and red grouper aggregate commercial and recreational ACLs and AMs, and implement red grouper ACLs based upon the best scientific information available, which includes SEDAR 19 and the acceptable biological catch (ABC) recommendation from the Council's Scientific and Statistical Committee (SSC). NMFS notes that gag individual ACLs and AMs were previously established through Amendment 16 to the FMP (74 FR 30964, June 29, 2009) and black grouper ACLs and AMs were implemented through the Comprehensive ACL Amendment (77 FR 15916, March 16, 2012) and will remain in effect. The commercial and recreational ACLs and AMs implemented through Amendment 24 are expected to ensure red grouper overfishing does not occur and the stock rebuilds to target levels within the 10-year rebuilding timeframe.

Comment 2: Red grouper allocations should be reexamined using landings through 2010 or 2011. All recreational landings information used for sector allocations should be recalculated using the Marine Recreational Information Program (MRIP) instead of the Marine Recreational Fisheries Statistics Survey (MRFSS). Additionally, NMFS should allocate red grouper as 50 percent for the commercial sector and 50 percent for the recreational sector until the Southeast Fisheries Science Center (SEFSC) and SEDAR complete a new full benchmark assessment utilizing MRIP.

Response: The Council concluded that sector-specific ACLs and AMs are important components of red grouper management because the scientific and management uncertainty are different for each sector. To divide the red grouper stock ACL into sector ACLs, the Council had to make allocation decisions. The Council decided to establish sector allocations by balancing long-term catch history with recent catch history. Accordingly, the Council determined the allocation using 50 percent of average landings from 1986-2008 and 50 percent of average landings from 2006-2008. This resulted in an allocation of red grouper in the South Atlantic as 44 percent for the commercial sector and 56 percent for the recreational sector. The commercial sector landed the majority of red grouper in the early time period (1987-1992) and the for-hire component of the recreational sector landed the majority of fish in more recent years (2006-2008). The Council concluded that this approach was a fair and equitable method to allocate fishery resources and had the additional benefit of using a mathematically transparent formula. The Snapper-Grouper Advisory Panel and the majority of comments received during scoping meetings and public hearings supported the Council's allocation decision.

Landings data from SEDAR 19 were used to determine allocations. SEDAR 19 was completed in 2010, and the most recent year of data used in the stock assessment was 2008. The Council was notified of the red grouper stock status on June 9, 2010, and submitted Amendment 24 to NMFS on December 14, 2011, to meet the 2-year Magnuson-Stevens Act deadline to implement a rebuilding plan. The incorporation of 2010 and 2011 landings data would have delayed the implementation of Amendment 24 past the 2-year deadline.

When the Council determined the appropriate sector allocations and approved Amendment 24 in December 2011, the new MRIP estimates had not yet been released. The MRIP data were not available until January of 2012. If MRIP data indicate that an allocation adjustment is necessary, the Council may take action in a future amendment to revise sector allocations. Further, the red grouper standard SEDAR assessment is scheduled to begin in 2013. During the stock assessment process, SEDAR participants will review the MRIP data for its application in the assessment.

The Regional Administrator, Southeast Region, NMFS has determined that this final rule is necessary for the conservation and management of the species within Amendment 24 and is consistent with the FMP, the Magnuson-Stevens Act, and other applicable law.

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

A final regulatory flexibility analysis (FRFA) was prepared. The FRFA incorporates the IRFA, a summary of the significant economic issues raised by public comments, NMFS' responses to those comments, and a summary of the analyses completed to support the action. The FRFA follows.

No public comments specific to the IRFA were received and, therefore, no public comments are addressed in this FRFA. No changes to the final rule were made in response to public comments.

NMFS agrees that the Council's choice of preferred alternatives would best achieve the Council's objectives while minimizing, to the extent practicable, the adverse effects on fishers, support industries, and associated communities. The preamble to the final rule provides a statement and need for, and the objectives of this rule, and is not repeated here.

The Magnuson-Stevens Act provides the statutory basis for this rule. No duplicative, overlapping, or conflicting Federal rules have been identified. This rule would not introduce any changes to current reporting, recordkeeping, and other compliance requirements.

NMFS expects the 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 it is 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 2005-2009, an annual average of 892 vessels with valid permits to operate in the commercial snapper-grouper fishery landed snapper-grouper, generating dockside revenues of approximately $13.817 million (2009 dollars). Each vessel, therefore, generated an annual average of approximately $15,500 in gross revenues from snapper-grouper during the period of 2005-2009. Gross dockside revenues by area were distributed as follows: $4.196 million in North Carolina, $3.612 million in South Carolina, $3.219 million in Georgia/East Florida, and $2.790 million in the west coast of Florida. Vessels that operate in the snapper-grouper fishery may also operate in other fisheries, the revenues of which cannot be determined with available data and are not reflected in these totals.

Based on average revenue information, all commercial vessels affected by this final rule can be considered to be small entities.

The for-hire fleet is comprised of charterboats, which charge a fee on a vessel basis, and headboats, which charge a fee on an individual angler (head) basis. From 2005-2009, an annual average of 2,018 vessels had valid Federal permits to operate in the snapper-grouper for-hire sector, of which 82 vessels are estimated to have operated as headboats. The charterboat annual average gross revenue 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 annual average gross revenue 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 this final rule can be considered small entities.

NMFS expects this final rule to directly affect all federally permitted commercial vessels 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 final rule would affect a substantial number of small entities.

NMFS considers all entities expected to be affected by the 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, ABC, and ACL would result in an increase in cumulative commercial vessel profits of $990,000 over the first 7 years of the rebuilding schedule with an additional $310,000 generated in years 8 through 10, assuming a discount rate of 7 percent to determine current year (2012) dollars. The corresponding effects on the for-hire vessels would also be an increase in cumulative profits but the magnitude cannot be estimated based on available information. These increases in commercial vessel and for-hire vessel profits are mainly a result of increases in the ACL over time.

To the extent that the action for allocating the ACL between the commercial and recreational sectors would maintain the baseline landings distribution of red grouper between the two sectors, NMFS expects no profit changes to the commercial or for-hire vessels to occur as a direct result of this action.

The preferred alternative of revising the ACL/OY would provide the largest ACL/OY for red grouper, which would increase the profits of the commercial and for-hire vessels. Eliminating the aggregate black grouper, red grouper, and gag quota would tend to ensure that profit increases from the largest ACL/OY alternative for red grouper are realized.

Within Amendment 24, establishing a recreational ACT would have no impacts on the profits of for-hire vessels in the short term, because this measure would not be used to trigger the application of AMs. Should this recreational ACT be used in the future to trigger AMs, then it may be expected to reduce the profits of for-hire vessels. The magnitude of such reduction cannot be estimated with available information.

Implementing in-season and post-season AMs for the commercial sector are expected to limit the increases in the short-term profits of commercial vessels as a result of ACL increases, especially since the most recent landings information suggests that the series of ACLs would likely be exceeded in the near future. However, in the absence of these AMs, regulations could become more restrictive over time, resulting in adversely affecting the long-term profitability of the industry.

Implementing in-season and post-season AMs for the recreational sector may be expected to limit increases in short-term profits of for-hire vessels as a result of ACL increases. However, the 2010 recreational harvest of red grouper was well below the proposed ACL for the recreational sector, suggesting that the proposed AM has a low probability of being triggered in the near future (more current data was not available at the time this analysis was conducted). In effect, the AM for the recreational sector may be expected to have a low likelihood of affecting the profits of for-hire vessels in the near future. Over the long-term, however, these AMs could apply and short-term profits of for-hire vessels may be adversely affected. However, the absence of these AMs could lead to more restrictive regulations that would reduce the long-term profitability of this sector.

Redefining MSY and MSST and establishing a rebuilding schedule for red grouper would not alter the current harvest or use of the resource, and thus would not affect the profitability of small entities.

Defining a rebuilding schedule maximizing the time to rebuild the stock to biomass at MSY would add flexibility in designing management measures that would have the least short-term effects on the profitability of small entities.

The Council considered several alternatives for each action in this final rule. In summary, the Council concluded that their preferred alternatives best meet the purpose and need of Amendment 24 to implement measures expected to prevent overfishing and achieve OY while minimizing, to the extent practicable, adverse social and economic effects. The preferred alternatives also best meet the objectives of the Snapper-Grouper FMP, while complying with the requirements of the Magnuson-Stevens Act and other applicable laws. The following discusses all alternatives to the preferred alternatives and their effects relative to the preferred alternatives.

Six alternatives, including the preferred alternative, were considered for the rebuilding strategy and ABC. The first alternative, the no action alternative, would not establish a rebuilding strategy for red grouper. Within a rebuilding strategy, the specification of targets and limits, such as ABCs, is a crucial component of any management program involving natural resources. Without the designation of these components, as analyzed in the no action alternative, the regulations may not be sufficient to prevent overfishing and rebuild the stock. More restrictive regulations could eventually be imposed, which would substantially reduce industry profits. The second alternative would define a rebuilding strategy that sets ABC equal to the yield at F REBUILD , which is a fishing mortality rate that would have a 70 percent probability of rebuilding success to biomass at MSY in 10 years. This alternative has the highest ABC, which could potentially result in the highest ACL. Therefore, this alternative would provide the best profitability scenario for the commercial and for-hire vessels over the entire rebuilding timeframe. However, it would allow a higher fishing mortality rate than the preferred alternative and result in greater uncertainty that the stock could rebuild within the allowable timeframe. Both this alternative and the preferred alternative would maintain catches at a similar level to what they have been in recent years, but the preferred alternative has a greater probability of rebuilding the stock within the 10-year timeframe. The third alternative would define a rebuilding strategy that sets ABC equal to the yield at 65 percent of F MSY (fishing mortality at maximum sustainable yield). This alternative would provide for a lower ABC, and a potentially lower ACL, than the preferred alternative. Thus, this alternative would potentially result in lower profits to small entities than the preferred alternative.

The fourth alternative would define a rebuilding strategy that sets ABC equal to the yield at F REBUILD-7 , which is a fishing mortality rate that would have a 70 percent probability of rebuilding success to biomass at MSY in 7 years. The fifth alternative would define a rebuilding strategy that sets ABC equal to the yield at F REBUILD-8 , which is a fishing mortality rate that would have a 70 percent probability of rebuilding success to biomass at MSY in 8 years. Each of these alternatives would likely result in lower profits to small entities than the preferred alternative, because they would require more restrictive management measures.

Two alternatives were considered for sector allocation. Under the no action alternative, which would not establish sector allocation, the recreational and commercial sectors would be managed under a combined ACL. The corresponding AMs would also apply to both sectors regardless of which sector lands the majority of fish. Under the second alternative, five sub-alternatives including the preferred sub-alternative were considered. The first sub-alternative would establish a 52 percent commercial and 48 percent recreational allocation; the second sub-alternative, 54 percent commercial and 46 percent recreational allocation; the third sub-alternative, 49 percent commercial and 51 percent recreational allocation; and, the fourth sub-alternative, 41 percent commercial and 59 percent recreational allocation.

All of these alternatives, including the preferred alternative, would base the allocation ratio solely on a sector distribution of landings. No economic valuation was considered due to the absence of sufficient information. In terms of effects on the profits of small entities, the general nature of the various allocation alternatives is to favor one sector over another. The higher the allocation to one sector, the higher would be the profit potential to that sector and the lower would be the profit potential to the other sector. Among the alternatives, the preferred alternative was found to have neutral effects on profits on both the commercial and for-hire vessels, because the resulting allocation would be the same as the historical sector distribution of landings. This historical distribution is the one used as a baseline against which each alternative is compared.

Six alternatives, including the three preferred alternatives, were considered for ACL and OY. The three preferred alternatives are not mutually exclusive but are rather complementary to one another. The first alternative, the no action alternative, would not establish a specific ACL for red grouper. This alternative would not allow for specific management actions to address the overfished/overfishing status of the red grouper stock. The second alternative would specify an ACL for red grouper equal to OY and OY equal to 90 percent of ABC. This alternative would result in lower profit potential to small entities than the preferred alternative. The third alternative would specify an ACL for red grouper equal to OY and OY equal to 80 percent of ABC. This alternative would result in lower profit potential to small entities than the preferred alternative.

Three alternatives, including the preferred alternative, were considered for the commercial sector ACT. The first and second alternatives would set the commercial ACT equal to 90 percent and 80 percent of the commercial ACL, respectively. If ACTs were used to trigger AM applications, these two alternatives would result in lower profits to small entities than the preferred alternative. This rule implements the preferred alternative of not establishing a commercial ACT (no action alternative) because the current method to track commercial harvests is adequate to determine whether the commercial ACL is met or projected to be met.

Four alternatives, including the preferred alternative, were considered for the recreational ACT. ACTs would have economic effects only if they are used to trigger AMs. Amendment 24 specifies that ACTs would not be used to trigger AMs. The following discussion, however, assumes ACTs are used to trigger AMs so that the different economic implications of the alternatives can be described. The first alternative, the no action alternative, would not specify a recreational ACT for red grouper. This alternative would not allow consideration of management uncertainty which is deemed high in the recreational sector. Without consideration of management uncertainty, the probability of exceeding the ACL would be relatively high, increasing the probability of implementing more stringent management measures. The second and third alternatives would specify a recreational ACT equal to 85 percent and 75 percent of the recreational ACL, respectively. The second alternative would likely result in a smaller reduction on the short-term profits of small entities than the preferred alternative because it would provide for higher ACT levels. The third alternative would likely result in the same reduction on the short-term profits of small entities as the preferred alternative because both would result in the same ACTs.

Three alternatives, including the two preferred alternatives, were considered for the commercial AM. The two preferred alternatives are not mutually exclusive but rather complementary to each other. The only alternative to the preferred alternatives is the no action alternative, which would not specify a commercial AM for red grouper. This alternative would retain the current commercial AM specified for the group of species consisting of red grouper, black grouper, and gag. This particular AM could be either more or less restrictive than the preferred AM alternatives specified for red grouper, but it would not allow for the implementation of management measures that would specifically address the overfished and undergoing overfishing condition of the red grouper stock. In addition, the current AM for the aggregate species of red grouper, black grouper, and gag does not provide for post-season AMs. The lack of post-season AMs under the no action alternative would result in higher short-term profits to small entities than the preferred alternative. However, it is expected that the long-term profit environment would be better under the preferred alternatives because they would provide for higher ACLs over time, and therefore higher profits on a more sustainable basis. It should also be noted that a separate commercial sector ACL/AM for black grouper was implemented through the Comprehensive ACL Amendment (final rule published on March 16, 2012, 77 FR 15916), negating the need for the aggregate species ACL/AM.

Four alternatives were considered for the recreational AM. The first alternative is the no action alternative, which would not set a specific recreational AM for red grouper. This alternative would retain the current recreational AM specified for the group of species consisting of red grouper, black grouper, and gag. This particular AM could be either more or less restrictive than the preferred AM alternatives specified for red grouper, but it would not allow for the implementation of management measures that would specifically address the overfished/overfishing condition of the red grouper stock. It should also be noted that a separate recreational sector ACL/AM for black grouper was implemented through the Comprehensive ACL Amendment, negating the need for the aggregate species ACL/AM.

The second alternative would specify a recreational sector AM trigger and includes five sub-alternatives, including the preferred sub-alternative. The first sub-alternative would not specify a recreational sector AM trigger. This sub-alternative would likely result in higher profits to small entities than the preferred sub-alternative. However, it would not address the overfished/overfishing condition of red grouper. The second sub-alternative specifies that AM would be triggered if the mean recreational landings for the past 3 years exceed the recreational ACL. The profit environment for small entities under this sub-alternative may be lower or higher than that of the preferred sub-alternative, depending on whether the trend in landings is upward or downward.

The third sub-alternative specifies that the AM would be triggered if the modified mean (highest and lowest landings dropped) landings for the past 5 years exceed the recreational sector ACL. This sub-alternative would have the same effects on profitability as the second sub-alternative, although the magnitude may be lower. The fourth sub-alternative specifies that the AM would be triggered if the lower bound of the 90 percent confidence interval estimate of the MRFSS landings' population mean plus headboat landings is greater than the recreational ACL. This sub-alternative is likely to produce the same effects on profitability as the first sub-alternative, but the magnitude could be lower or higher.

The third alternative for a recreational sector AM would specify a recreational sector in-season AM and includes two sub-alternatives, of which one is the preferred sub-alternative. The only sub-alternative to the preferred alternative is the no action alternative which would not specify a recreational in-season AM. This alternative would result in higher short-term profits to small entities, but it would not constrain recreational fishing pressure and thus would not aid in addressing the overfished/overfishing condition for red grouper. In the presence of a post-season AM, this alternative would tend to reduce future profits of small entities because of ACL reductions.

The fourth alternative for a recreational sector AM would specify a recreational sector post-season AM if the current fishing year's recreational sector ACL is exceeded, and includes seven sub-alternatives, of which one is the preferred sub-alternative. The first sub-alternative would not specify a recreational sector post-season AM. This sub-alternative would result in higher short-term profits to small entities than the preferred alternative, although the expectation is for long-term profitability to be better under the preferred sub-alternative. The second sub-alternative would compare the recreational sector ACL with the 2011 landings only for the purpose of triggering any 2011 post-season AMs and with the mean of the 2011 and 2012 landings for the purpose of triggering any 2012 post-season AMs. For 2013 and beyond, the most recent three-year running would be used for the purpose of triggering post-season AMs. This sub-alternative may or may not have the same sort of effects on profitability as the preferred alternative, depending on the specific AM measure that would be implemented.

The third sub-alternative specifies monitoring the following year's landings for persistence in increased landings, with the Regional Administrator (RA) taking management actions as necessary. This sub-alternative would likely result in the lower adverse effects on short-term profits than the preferred alternative, although the actual effects would depend on the type of restrictions that would be imposed by the RA. The fourth sub-alternative specifies monitoring the following year's landings for persistence in increased landings, with the RA publishing a notice in the Federal Register to reduce the recreational fishing season as necessary. This sub-alternative would likely result in less adverse effects on short term profits than the preferred sub-alternative to the extent that the post-season AM may not be imposed depending on how persistent the upward trend in landings would be. If a post-season AM were necessary, this sub-alternative could still result in higher profits than the preferred alternative because it would set a specific red grouper recreational season closure date, allowing for-hire vessels to make the necessary changes in their operations.

The fifth sub-alternative specifies monitoring the following year's landings for persistence in increased landings, with the RA publishing a notice in the Federal Register to reduce the recreational bag limit as necessary to prevent harvest from exceeding the recreational ACL. This sub-alternative would likely result in less adverse effects on short term profits than the preferred sub-alternative to the extent that post-season AMs may not be imposed depending on how persistent the upward trend in landings would be. If a post-season AM were necessary, this sub-alternative could still result in higher profits than the preferred alternative since it would allow for-hire vessels to operate year round, although at lower bag limits. The sixth sub-alternative specifies that the RA publish a notice in the Federal Register to reduce the following year's recreational fishing season to ensure landings do not exceed the following fishing season's recreational ACL. There is a good possibility that this sub-alternative would result in the same fishing season length as the preferred alternative, assuming no significant changes in effort would occur in the following fishing year. It is possible that other measures, like a bag limit reduction, may be employed under the preferred alternative to effect a longer season that would provide more fishing opportunities. Whichever of these two sub-alternatives can provide more fishing opportunities may be considered better than the other from the standpoint of profits to small entities.

Two alternatives, including the preferred alternative, were considered for redefining MSY. The first alternative, the no action alternative, would retain the definition of MSY which would not reflect the conclusions of the latest stock assessment. This alternative, like the preferred alternative, would not directly affect the profitability of small entities.

Five alternatives, including the preferred alternative, were considered for redefining MSST. The first alternative, the no action alternative, would retain the definition of MSST as equal to natural mortality times the biomass at MSY. The second alternative would set MSST equal to 50 percent of biomass at MSY. The third alternative would set MSST equal to 85 percent of biomass at MSY. The fourth alternative would set MSST as the minimum stock size at which rebuilding to MSY would be expected to occur within 10 years at the maximum fishing mortality threshold level. All these alternatives, like the preferred alternative, would not directly affect the profitability of small entities.

Five alternatives, including the preferred alternative, were considered for the rebuilding schedule. The first alternative, the no action alternative, would not implement a rebuilding schedule. This alternative would not comply with the Magnuson-Stevens Act requirement to rebuild an overfished red grouper stock. The second, third, and fourth alternatives would establish a rebuilding period of 3 years (shortest), 7 years, and 8 years, respectively. These other alternatives would provide for a shorter rebuilding timeframe than the preferred alternative, and thus may be expected to restrict the flexibility in designing management measures that would minimize the economic effects on the profits of small entities.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as small entity compliance guides. As part of the rulemaking process, NMFS prepared a fishery bulletin, which also serves as a small entity compliance guide. The fishery bulletin will be sent to all vessel permit holders in the South Atlantic snapper-grouper fishery.

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

A mix of small troll and longline vessels and larger longline and purse seine vessels target tunas and related fish in the U.S. Exclusive Economic Zone (EEZ) around American Samoa. In 2002, concerns about potential catch competition and gear conflicts between small and large vessels led to the implementation of two large vessel prohibited areas (LVPA), one around Swain's Island and one around Tutuila, the Manua Islands, and Rose Atoll (67 FR 4369, January 30, 2002).

In 2009, Presidential Proclamation 8337 created the Rose Atoll Marine National Monument (74 FR 1577, January 12, 2009). The monument includes Rose Atoll and surrounding waters to a distance approximately 50 nm around the atoll. The Proclamation prohibits commercial fishing in monument waters.

The monument and the LVPA around Tutuila, the Manua Islands, and Rose Atoll overlap, but the boundaries do not align. This rule aligns some of the boundaries to simplify administration and enforcement of the two areas. This rule modifies the LVPA boundaries, as follows:

(a) Move the existing northernmost LVPA boundary southward to align with the northern boundary of the monument;

(b) Move the eastern LVPA boundary eastward to align with the eastern boundary of the monument; and

(c) Move a portion of the southern LVPA boundary southward to align with the southern boundary of the monument.

The western and most of the southern boundaries of the existing LVPA remain unchanged. Fig. 1 shows the revised boundaries of the LVPA.

On April 20, 2012, NMFS published a proposed rule and request for public comment (77 FR 23654). The comment period for the proposed rule ended on May 11, 2012. NMFS received no public comments.

There are no changes in this final rule.

The Administrator, Pacific Islands Region, NMFS, determined that this action is necessary for the conservation and management of the large vessel pelagic fisheries around American Samoa, and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws.

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

The Chief Council for Regulation of the Department of Commerce certified to the Chief Council for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. NMFS received no comments regarding this certification; as a result, a regulatory flexibility analysis was not required and none was prepared.

For the reasons set out in the preamble, 50 CFR chapter VI is amended as follows:

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

The allocation of Pacific ocean perch, in the Western Aleutian District, allocated as a directed fishing allowance to vessels participating in the BSAI trawl limited access fishery was established as 149 metric tons (mt) by the final 2012 and 2013 harvest specifications for groundfish in the BSAI (77 FR 10669, February 23, 2012).

In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the Western Aleutian District by vessels participating in the BSAI trawl limited access fishery.

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

This action responds to the best available information recently obtained from the fishery. The Acting Assistant Administrator for Fisheries, NOAA, (AA) finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of the Pacific ocean perch fishery in the Western Aleutian District by vessels participating in the BSAI trawl limited access fishery. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of June 5, 2012. The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

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